ACCOUNTING FOR MANAGERS (DEMBA-103)

PART A
OBJECTIVE QUESTIONS (10 questions X 0.5 mark each = 5 marks) 1. The two internal roles of management accounting are a) Supplying information and providing non-monetary awards b) Providing monetary and non-monetary awards c) Supplying information and preparing financial reports d) Supplying information and control procedures 2. Which of the following represents fund from operation? a) Net profit + non-cash expenses b) Net profit + decrease in current liabilities c) Net profit + increase in current assets d) Net profit 3. Which of the following is a liability of a firm? a) Debit balance of discount column of cash book b) Credit balance of bank pass book c) Debit balance of bank column of cash book d) Credit balance of bank column of cash book. 4. Which of the following errors is not disclosed by the Trial Balance? a) Error in casting of subsidiary books b) Error in balancing the account c) Posting to wrong account with correct amount on correct side d) Error in carry forward of total from one page to another 5. Consider the following data pertaining to Basso Ltd., for the year ended March 31, 2007: Particulars Rs. Opening stock 20,000 Closing stock 30,000 Sales 1,45,000 Purchases 80,000 Returns inward 5,000 Returns outward 15,000 Salaries 30,000 Discount allowed by suppliers 4,000 Administrative expenses 7,500 Selling and distribution expenses 6,500 Income from investments 12,000 The net profit of the company for the year ended March 31, 2007 is a) Rs.49,000 b) Rs.37,000 c) Rs.45,000 d) Rs.57,000

6. Consider the following data of AB Ltd. for the month of June 2006: Predetermined overhead rate per machine hour Rs. 25 Actual overheads Rs.5,65,000 Actual machine hours 22,000 hours Standard machine hours 20,000 hours The overhead costs applied by the company were a) Rs.5,65,000 b) Rs.5,50,000 c) Rs.5,25,000 d) Rs.5,10,000 7. The current sales price of a company is Rs.90 per unit. Variable costs are expected to increase from Rs.72 to Rs.75 per unit. Fixed costs of Rs.3,00,000 will not change. How many additional sales units are required in order to maintain an operating income of Rs.3,60,000? a) 8,000 units b) 8,800 units c) 10,800 units d) 7,333 units 8. Depreciation is the process of . a) Apportionment of the cost of the asset over its useful life b) Valuation of assets c) Maintenance of assets in a state of efficiency d) All the above 9. Management Accounting involves a) Preparation of financial statements b) Analysis and interpretation of data c) Recording of transactions d) None of the above 10. Contribution margin is also known as a) Marginal income b) Gross profit c) Net income d) All the above

PART B
SHORT QUESTIONS (5 questions X 1 mark each= 5 marks) 1. The budgeted per unit cost data of a company Material Rs 18 Labour Rs. 9 Variable Overhead Rs. 8 Selling Price. Rs. 50 Budgeted production and sales Rs. 150,000 units. Fixed overheads incurred Rs.400,000. What would be the total profit if price is decreased by 25 % and volume of sales is increased by 30%. ?

2. The costs incurred for the product of a company are as follows: Particulars Rs. Direct materials 75,000 Direct wages 50,000 Direct expenses 25,000 Variable manufacturing overheads 37,500 Fixed administrative overheads 25,000 Fixed selling & distribution overheads 15,000 The prime cost of the product is 3. Define the following terms (any five) Overhead Expenses Indirect Cost Semi-variable Cost Controllable Cost Capital Cost Sunk cost Imputed cost Opportunity cost Replacement cost Incremental Budgeting Transfer Pricing Target Costing Kaizen Costing Zero based budgeting Activity based costing 4. How does SLM differ from WDV Method of depreciation? Give illustrations. 5. What is the purpose of Cash flow statement

PART C
FULL QUESTIONS (5 questions X 3 marks each = 15 marks) 1. What is the difference between job costing and process costing ? 2. Causes and features of Depreciation. 3. Explain the three golden rules of accounting 4. The Following details have been obtained from the cost records of Raja sekhar Ltd Particulars stock of materials 1/12/2010 Stock of materials 31/12/2010 Direct wages Expenses on purchases Purchase of raw Materials Calculate prime cost Amount 75000 91500 52500 1500 66000

5. From following Balance sheet Calculate Current ratio BALANCE SHEET AS ON 31ST MARCH 2012 AMOUNT ASSETS AMOUNT 25000 15000 80000 25000 15000 160000 Building Plant & Machinery Closing stock Debtors Bills receivable Cash TOTAL RS 50000 30000 35000 15000 12000 18000 160000

LIABILITIES Share Capital Reserves Long term Loan from bank Creditors Bills payable TOTAL RS