OCTOBER 2012 Time : Three hours

P/ID 37504/PBAD
Maximum : 80 marks

PART A (5 5 = 25 marks) Answer any FIVE questions. All questions carry equal marks. 1. Discuss the accounting. characteristics of management

2. 3. 4. 5. 6.

Explain the accounting concepts and conventions. Differentiate current ratio with liquid ratio. Discuss the methods of preparing cash budget. Explain the different types of variance. Discuss the methods of measuring and evaluating risk. Explain capital rationing. State the functions of accounting reports.

7. 8.

PART B (4 10 = 40 marks) Answer any FOUR questions. All questions carry equal marks. 9. From the following data, calculate BEP Rs Selling price per unit Direct material cost per unit Direct labour cost per unit Direct expenses per unit Overheads per unit Fixed overheads (total) 20 8 2 2 3 20,000

If sales are 20% above the break-even point, determine the net profit. 10. 11. 12. Discuss the various methods of capital budgeting. Explain the various types of accounting reports. Discuss the various stages involved in the installation of management accounting system. Explain the different types of ratios. Discuss the different methods of budgetary control. 2

13. 14.

P/ID 37504/PBAD

PART C (1 15 = 15 marks) Compulsory. 15. A factory is currently working at 50% capacity and produces 10,000 units at a cost of Rs.180 per unit as per details below: Rs. Materials Labour Factory overhead Administrative overhead 100 30 30 (Rs. 12 fixed) 20 (Rs. 10 fixed)

The current selling price is Rs. 200 per unit. At 60% working capital, material cost per unit increases by 2% and selling price per unit falls by 20%. At 80% working, material cost per unit increases by 5% and selling price per unit falls by 5%. Estimate profits of the factory at 60% and 80% working and offer your comments.

P/ID 37504/PBAD