NR

Code No: NR-302/MBA

M.B.A. III-Semester Examinations, December-2007.

COST AND MANAGEMENT ACCOUNTING

Time: 3 hours Max. Marks: 60

Answer any FIVE questions

All questions carry equal marks
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1. What are the functions of management accountant and show how he
helps while decision-making at the top level.

2. From the following information work out the production hour rate of
recovery of overhead in departments P1, P2 and P3.
Rupees
Service
Production Departments
Particulars Total Departments
P1 P2 P3 S1 S2
Rent 1,000 200 400 150 150 100
Electricity 200 50 80 30 20 20
Fine insurance 400 80 160 60 60 40
Plant depreciation 4,000 1,000 1,500 1,000 300 200
Transport 400 50 50 50 100 150
Hours 1,000 2,500 1,800
Expenses of Service Departments S1 and S2 are apportioned as under:
P1 P2 P3 S1 S2
S1 30% 40% 20% __ 10%
S2 10% 20% 50% 20% __

3. From a natural material four products are synthesized - three in a crude

state and one as a by-product. The crude products are further refined
which costs Rs. 2.00, Rs. 1.6 and Re. 1.00 per kg of output respectively.
The selling prices are fixed at Rs.6.00, Rs. 4.50, Rs. 3.50 and Re. 0.50
per kg. respectively to a yield a profit margin of 20 per cent on selling
price. During a costing period the production of these four products is
8,000 units, 5,000 units and 6,000 units of the refined products and
2,000 units of the by-product. Find the actual profitability of each refined
product as a percentage on the selling price, if the joint costs total Rs.
50,800.

Contd….2
Code No: NR-302/MBA -2-

4. State the circumstances in which contribution approach to price is most

suitable. If this approach is adopted, what are the special items of cost or
revenue that have to be considered when quotation for an export order is
made?

5. The following information is taken from the records of a Company

Sales Rs.60,000
Variable cost Rs.30,000
Fixed Cost Rs.15,000
You are required to calculate;
(a) P/V ratio, Break even point and margin of safety at this level
(b) Calculate the effect of 10% increase in sale price
(c) Calculate the effect of 10% decrease in sale price

6. What are different types of budgets? Explain their uses.

7. “Marginal costing is an administrative tool of management to achieve

higher profits”. Discuss.

8. What are comparative statements? Sate the usefulness of these

statements in inter firm comparison.

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