BBA 402 - MANAGEMENT ACCOUNTING

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ASSIGNMENT

DRIVE
FALL 2016
PROGRAM
BBA/ SEMESTER II
SUBJECT CODE & NAME
BBA 402 - MANAGEMENT ACCOUNTING
BK ID
B1713
CREDITS
4
MARKS
60


Note: Answer all questions. Kindly note that answers for 10 marks questions should be approximately of 400 words. Each question is followed by evaluation scheme.



Question. 1. Differentiate between :

a) Standard Costing and Budgetary Control

Answer:Although budgetary control and standard costing both are based on some common principles; both are pre-determined, comparison will be made with the actual costs and both system need a revision of the standards or the budget, these two systems have certain differences which are as follows:

1. Budgetary control deals with the operation

b) Estimated Cost, Historical Cost and Standard Cost

Answer:Estimates are the expressions of of opinion based upon past experiences whereas the standard costs are based upon standard rate that are very carefully developed and set as scientifically as possible. However, both estimated costs and standard costs are related to future period of time but there are some significant



Question. 2. Explain the method to prepare a Fund Flow Statement.
Give an example of Fund Flow Statement.

Answer:STEPS IN PREPARATION OF FUND FLOW STATEMENT 

        I.            Preparation of fund flow statement
      II.            Preparation of statement of changes in working capital.
    III.            Preparation of adjusted profits and loss account (to find out fund from operation or fund lost in operation)


Question. 3. It is estimated that for producing one unit of product X, 10 lbs. of materials are consumed.

The standard price per lb of materials is Re. 0.50. During the month of June, 30,000 lbs.of materials were used for producing 2,900 units of X.

The actual price of materials was Re. 0.48 per lb.
* Calculate the variances.

Compute :
Material Cost Variance
Material Price Variance
Material Usage Variance

Answer:Direct material:
Price variance = ($14 $12) x 2,500 = $5,000 (U)
Quantity variance = [2,500 (600 x 5)] x $12 = $6,000 (F)
Flexiblebudget variance = $5,000 (U) + $6,000 (F) = $1,000 (F)
Direct labor:
Price variance = ($13 $14) x 1,550 = $1,550 (



Question. 4. Given the Balance Sheet of a Company as under

Liabilities
 Rs.
 Assets
 Rs.

 Equity shares of Rs. 10 each
 10,00,000
 Fixed Assets
 15,00,000

 General Reserves
 2,00,000
 Stock
 5,00,000

 7 % Debentures
 3,00,000
 Receivables
 4,00,000

 Term Loan from X Bank
 5,00,000
 Cash
 1,00,000

 Overdraft
 2,00,000

 Creditors and Bills
 3,00,000

 25,00,000
 25,00,000


Calculate :
i) Current ratio
ii) Quick ratio
iii) Debt-equity ratio
iv) Proprietary ratio
v) Solvency ratio






Question. 5. What is Transfer Pricing ? Explain Transfer Pricing options.

Answer:Transfer pricing is the setting of the price for goods and services sold between controlled (or related) legal entities within an enterprise. For example, if a subsidiary company sells goods to a parent company, the cost of those goods paid by the parent to the subsidiary is the transfer price. Legal entities considered under the control of a single corporation include companies that are wholly or majority owned ultimately by the parent corporation. Certain jurisdictions consider entities to be under common control if they share family members on their boards of directors. Transfer pricing can be used as a profit allocation method to


Question. 6. Given S.P (p.u.) Rs. 100, V.C. (p.u.) Rs. 50, Total Fixed Cost : Rs. 1, 00, 000find : i) BEP ; ii) P/V Ratio ; iii) Sales required to earn profit of Rs. 50,000 andiv) New BEP if S.P. is reduced by 15 % due to competition.

From the above calculate :
i) BEP
ii) P/V Ratio
iii) Sales required to earn profit of Rs. 50,000
iv) New BEP if S.P. is reduced by 15 % due to competition


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Send your semester & Specialization name to our mail id :
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