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ASSIGNMENT
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DRIVE
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SUMMER 2015
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PROGRAM
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BBA
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SUBJECT CODE & NAME
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BBA402 MANAGEMENT ACCOUNTING
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SEMESTER
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4
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BK ID
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B1713
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CREDITS
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4
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MARKS
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60
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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.
Q.1 Budgetary control is a strong business tool that helps companies
maximize profits. Explain the
advantages of budgetary control.
Ans : Advantages of budgetary
control :
Every business needs to have a budgetary control system in place for
effective and proper financial planning for the business. Sometimes the lack of
a proper accountability program in a business may cause the business to make
losses and incur unnecessary expenses. The benefits of budgetary control in
business include the following;
1. The role of the budgetary control in a business is to monitor and
control all income and expenses. It also helps with managing the demands for
cash and minimizes borrowing of money to operate the business.
2. When there is a budgetary control system
Q.2 The success of a business enterprise depends to a great extent on
how efficiently and effectively it can control costs.
Give the meaning of standard costing.
Describe estimated cost and standard cost.
Ans : Meaning of standard
costing :
Standard costing is an important subtopic of cost accounting. Standard
costs are usually associated with a manufacturing company's costs of direct
material, direct labor, and manufacturing overhead.
Rather than assigning the actual costs of direct material, direct labor,
and manufacturing overhead to a product, many manufacturers assign the expected
or standard cost. This means that a manufacturer's inventories and cost of
goods sold will begin with amounts reflecting the standard costs, not the
actual costs, of a product. Manufacturers, of course, still have to pay the
actual costs. As a result there are almost always differences between the
actual costs and the standard costs, and those differences are known as
variances.
Standard costing and the related variances is a valuable management tool.
If a variance arises, management becomes aware that manufacturing costs have
differed from the standard (planned, expected) costs. If actual costs are
3. Marginal costing plays a major role in making certain decisions. It
provides information to management regarding the behavior of costs and the
incidence of such costs on the profitability of an undertaking. Please explain
the advantages of marginal costing.
Answer : What is Marginal Costing?
It is a costing technique where
only variable cost or direct cost will be charged to the cost unit produced.
Marginal costing also shows the
effect on profit of changes in volume/type of output by differentiating between
fixed and variable costs.
Salient Points:
Q.4 Variance analysis is a tool for measuring performance and depends
on the principle of
management by exception. Explain the uses of variance.
From the following information, calculate sales margin price variance
and sales margin volume
variance.
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Budgeted sale
Actual sale
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||||||
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product
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Qty.
units
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Sales price per unit (rs)
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Standard price per unit (rs)
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product
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Qty.
units
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sales price per (rs)
|
|
A
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600
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20
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12
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A
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800
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24
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B
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400
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15
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9
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B
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600
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12
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|
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1000
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|
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1400
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Ans : The uses of variances :
Variance analysis, also described as analysis of variance or ANOVA,
involves assessing the difference between two figures. Its uses are described
below :
1. Budget vs. Actual Costs:
Variance analysis is important to assist with managing budgets by
controlling budgeted versus actual costs. In program and project management,
for example, financial data are generally assessed at key intervals or
milestones. For instance, a monthly closing report might provide quantitative
data about expenses, revenue and remaining inventory
Calculation of standard margin price variance and sales margin volume
variance :
|
Pro.
|
Budgeted
sale price per unit(rs)
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St.
cost per unit
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St.
sale margin
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Budgeted
quantity
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Budgeted
profit
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Actual
sales price
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Actual
sales margin
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Actual
sales quantity(unit)
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Actual
profit (rs)
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|
A
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20
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12
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8
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600
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4800
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24
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12
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800
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9600
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B
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15
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9
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6
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400
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2400
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12
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3
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600
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1800
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Total
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|
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1000
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7200
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|
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1400
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11400
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Sales margin volume variance(SMVV) = SM(AQ - BQ)
For A = 8(800 - 600) = Rs.
1600
For B = 6(600-400) = Rs. 1200
Total sales margin volume variance = 1600 + 1200 = Rs. 2800
Q.5 Explain the determinants of working capital requirements.
Ans : Determinants of working capital requirements :
Requirements Of working capital depend upon various factors such as
nature of business, size of business, the flow of business activities. However,
small organization relatively needs lesser working capital than the big
business organization. Following are the factors which affect the working
capital of a firm:
1. Size Of Business:-
Working capital requirement of a firm is directly
Q.6 From the following information prepare (i) a statement of sources
and uses of funds and (ii) a
schedule of changes in working capital for M/s. Eshwari & co.
Balance sheets as on 31stMarch
2010 and 2011 are:
Additional Information
(i) Depreciation of Rs. 2,500
charged on Land & Buildings
(ii) Building amounting to Rs.
5,000 was sold for Rs. 4,700.
Answer :
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Statement
of sources and uses of funds
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|||
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Sources of Fund
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Amount
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Application of Fund
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Amount
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Equity Share Capital
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12,500
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Redeemable Preference Shares
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5,000
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Decrease in Working Capital
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3,750
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Purchase of Building
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25,000
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Dear
students get fully solved assignments
Send
your semester & Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
Call
us at : 08263069601
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