MBA-III Semester Supplementary Examinations,

May/June 2016(Regulation R12)

Name of the Subject: Management Accounting and Control
Subject Code: 12CMB18
Branch: MBA
Max. Marks: 60
SCHEME OF VALUATION
Q.NO
KEY POINTS FOR VALUATION
ALLOCATION
TOTAL
OF MARKS
MARKS
Meaning and Features of Financial Accounting
1
4
Meaning and Features of cost
Accounting

12

Differences between Financial and Cost

Accounting
2.
(a)

Machine Hour Rate: Machine hour rate is

the cost of running a machine per hour. It is
one of the methods of absorbing factory
expenses to production. It is used in those
industries or departments where machinery
is predominant and there is little or
practically no manual labour. In such
industries or departments, overhead consists
of indirect expenses in running and operating
the machine.
Two Advantages:
1. It helps to compare the relative
efficiencies and cost of operating different
machines.
2. It brings to light the existence and extent
of idle time of machines.
3. It enables the management to decide how
far the use of machine work is preferable to
manual work.
4. It is most scientific, practical and accurate
method of recovery of manufacturing
overheads.
5. Cost reports prepared with the help of
such rate are dependable and can help the
management in decision-making.
6. It provides useful data for estimating cost
of production, setting standards and for fixing
selling prices for quotations.

12

2.
(b)

CALCULATION OF MACHINE HOUR RATE

PARTICULARS
STANDING CHARGES:
Rent - 800x 12
Light 120 x 12x 3/20
Insurance Premium
Total Standing charges Per Year
Machine Hours in a year - 4000
standing charges per hour 13960/4000
MACHINE EXPENSES:
Depreciation = cost of asset - scrap
value
working life of the
machine (in hours)
=500000 -(minus) 5000
10 x 4000

Rs.

RS.

9600
360
4000
13960
3.49

12.375

Repair charges - 2000/4000

0.50

Power consumption (25 units per hour

@ 75 paise)

18.75

Machine hour rate

35.12

QUESTION NUMBER 3 ANSWER: (4 marks For Each Process Account)

Definition/Introduction to Marginal Costing: Marginal

costing is a costing technique where only variable cost or

12

direct cost will be charged to the cost unit produced.

Applications of marginal costing :

Make or buy decisions

Temporary closure of a business or part of a business

Choosing a channel of distribution for a product

5
Year ended 31.03.2009
Year ended 31.03.2010

Total Sales (A)

2223000
2451000

Change in Profit/Sales

228000

Profit Volume Ratio

= change in profit
change in sales
= 68400 x100
228000
=30%

TotalCost (B)
1983600
2143200

10

Profit (A-B)
239400
307800
68400

x100

12

12

6
(a)
6
(b)

Budget: (3 Marks)
Budgetary Control: (3 Marks)
Cash Budget: (2 Marks)
Purpose: (2Marks)
Preparation: (2 Marks)
7
Meaning of Standard Costing:
Meaning of Budgetary Control:
Differences between Standard Costing and budgetary Control
8
Meaning of Cost Audit: (2 marks)
(a) Features of Cost Audit in India: (4 marks)
Verification of cost accounts to ensure that they are
properly maintained and compiled
Ensuring the cost accounts are adhered to the
principles
Evaluation of performance of the organization
Submission of report
8(b) Meaning of Management Audit
Qualities of a management auditor

6
12
6
4
12
8

6
12

2
4

PREPARED BY

SURESHKUMAR C,
Assistant Professor MBA
SVCET-Chittoor.