SVKM'S NMIMS

SARLAANILMODISCH00L0FECONOMICS
Academic Year: 2018-2019
Program: B.Sc.Economics
Year: II Semester: Ill
Subj ect: Managerial Accounts
Batch: 2017-20
Date: 23rd November, 2018
Time: 01:00 pin to 03:00 pin (2 hrs.)
Mark;: 50
No. of pages:i
Final Examination

Instructions:

1. Question No. 1 is compulsory

2. Attempt any Five questions from the remaining

'

3. In all Six questions to be attempted

4. Figures to the right indicate maximum marks,

5. Answer each question on a fresh page

Q1)Apenmanufacturermakesanaveragenetprofitof€25.00perpenonasellingpriceof€
143.00typroducingandselling60,000pens,or60%ofthepotentialcapacity.Hiscostof
sales is:

€
Direct Materials
-` Direct Wages
35.00
12.50
E=1`
Works Overheads (50% Fixed) 62.50
Sales Overheads (25% Variable) 8.00
Duringthecurrentyearheinstead.toproducethesamenumberofpensbutanticipatethathis
fixedchargeswillgoupby10%whileratesofdirectlabouranddirectmaterialwillincrease
by8%and6%respectively.Buthehasnooptionofincreasingthesellingprice.Underthis
situation,heobtainsanotherforafurther20%ofhiscapacity.Whatminimumpricewillyou
recommendforacceptancetoensurethemanufactureranoverallprofitof{16,73,000.

(10 marks)

1`4
 Q2) From the following Cash and Bank Leger . Prepare necessary ledger Accounts and
Balance them.

Cash and Bank Leger

Dr. Cr.
Date Particulars Cash€ Bank= Date Particulars Cash Bank

2011Apr. 1 2011Apr.1
To Balance b/d 400 1,000 By Purchases A/c 700
2 To Ram's A/c 980 3 By Rent A/c 200
3 To Sales A/c 4,000 10 By Sita's A/c 3003,000
7 To Interest A/c 120 8 By Salaries A/c 450
10 To Sales A/c 500 10 By Purchases A/c 1350
25Mayl To Bank A/cByBalanceb/d 2,000 30 By Cash A/c 2,000
30 By Balance c/d II 1,000 Ei='
4,000 5'000 4,000 5,000
3,000 1,000

(8 marks)
Q3) Ankita & company, Solapur bought a Machinery worth € 25,000 on lst April, 2004 and
paid € 5,000 on its installation. The company depreciat;d the Machinery @ 10% p.a. on
original cost on 31 St March, every year.

OnlstOctober2006thecompanysoldapartoftheMachineryfor€7,000theoriginal
cost of which was € 10,000, the company purchased new Machinery for € 20,000 on the same
date.

Show Machinery Account and Depreciation for the year 2004-05, 2005-06 and 2006-
07( Assume the year to b€ a financial year) (8 marks)

Q4 ) A Proforma cost sheet of a company provided the following data:

1€.117
Raw Material Cost per Unit
Direct Labour Cost Per Unit 49 82T6T4365fro
Factory Overheads. Cost per unit
(Includes Depreciation of Rs. 18 per unit at budgeted leve.I of activity)Totalcostperunit

Profit
Selling Price per Unit

Following additional Information is available:

Average Raw Material in stock 4 weeks

Average Work in Progress Stock 2 weeks
% completion with respect to
Materials . :80%
Labour and Overheads :60%
Finished Goods in stock 3 weeks

2j4
 Credit Period allowed to Debtors 6 weeks
Credit Period allowed from supplier 8 weeks
The lag fn payment of wages 1 weeks
Time lag in payment of overheads 2 weeks
The Company sells one-fifth of the output against cash and maintains cash balance of
• €2'50,000.

Prepare a statement showing estiinate' of working capital needed to finance a budgeted

activity level of 78,000 unit of production. You may assume that production is carried on
evenly throughout the year and wages and overheads accrue similarly: (8 marks)

Q5) Super Vision Company furnishes you with the following information about its 1,000 TV
sets manufactured and sold during the year:

Particulars € Particulars 1€6,80,000

Materials 18,00,000 Office and Administration Expenses
Directwnges . 10,00,000 Selling\& Distribution Expenses 1,20,000
Power and Stores 2,40,000 Sale of Scrap 40,000
Indirect Wages 3,00,000 Sale of 1000 TV sets '62,00,000
Factory Lighting 1,20,000 Repairs and depreciation of
Cost of rectifying defective work 60,000 Machinery 2,00,000

Prepare the estimated cost sheet for the next year showing the cost per unit assuming that:

1) Materials cost and direct wages cost will increase by 10% and 15°/o respectively.
2) Factory overheads will te recovered as a percentage of direct wages, as last year.
3) Office overheads and selling overheads will be recovered as percentage of works cost,
as last year, and
4) 1500 TV sets will be produced and sold at € 6,600 each in the next year.

Q6) The monthly budgets for manufacturing overheads a concern for two levels of activities
were as follows:

Capacity 60% 100%

Budget Production qunits) 600 1.()(:'1,

Wages 1,200 2,000

Material 900 1,500
Maintenance 1,100 1,500
Power and Fuel 1,600 2,000
Depreciation 4,000 4,000
Insurance 1,000 1,000

You are required to:

1) IIidicate which of the items are fixed, variable and semi-variable

2) Prepare a budget for 80% capacity; and

3`4
Q7) (a)The Mahendra Cycle Company furnishes you the following information:

First Half q`s.) Second Half (Rs.).

Sales 7,10,000 8,28,000
Profit 31,800 54,800

From the above, you are required to compute the following assuming that the fixed cost
remains the same in both the periods.

a) PIV Ratio
b) Fixedc6st
c) The amount of profit/loss when sales are Rs. 5,48,000, and
d)-The amount of sales required to earn a profit of Rs. 78,000 (4 m4rke )

(b) Pass the Journal Entry:

a) Goods worth € 40,000 sold to Sita @ 5% Trade Discount and 2.5% Cash Discount and
paid 50% cash immediately.b)GoodssoldtoUrmilaworth € 50,000 @ 8% Trade Discount and 5% Cash Discount Eiii=

received 60% amount from her in cash.

(4marks) .
Q8) Explain the following Concept:

(a) Conservatism (b) Opportunity cost (c) Business Entity (d) Marginal Cost. (8 marks)

Eo

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