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VIDYA SCHOOL OF BUSINESS MBA Semester II (2012-13) SESSIONAL-I MB 204: MANAGEMENT ACCOUNTING & CONTROL Time: 2 hours Note:

: All questions are compulsory SECTION-A (Answer all questions) Define the following terms: a) Opportunity cost b) Differential cost c) Marginal cost d) Sunk cost e) JIT SECTION-B (Answer all questions) [2X10=20] Q2. L& T Eng. Works Ltd. consumes 50,000/- units of a component per year. The ordering, receiving & handling costs are Rs. 3/- per order while the trucking costs are Rs.12/- per order. Further details are as follows: Interest costs Re. 0.06 per unit per year. Deterioration & obsolescence cost Re. 0.004 per unit per year. Storage cost Rs. 1,000/- per year for 50,000 units. Calculate the EOQ. Q3. Following are the particulars for the production of 2,000 sewing machines of N Co. Ltd. for the year 2004: Cost of materials Rs. 1,60,000/-; wages Rs. 2,40,000/-; manufacturing expenses Rs. 1,00,000/-; salaries Rs. 1,20,000/-; Rent, rates & insurance Rs.20,000/-; Selling expenses Rs. 60,000/-; General expenses Rs.40,000/- & Sales Rs.8,00,000/-. The Co. plans to manufacture 3,000 sewing machines during 2005. You are required to submit a statement of showing the price at which machines would be sold so as to show a profit of 10% on the selling price. The following additional information is supplied to you: a) Prices of materials are expected to rise by 20%. b) Wages rates are expected to show an increase of 5%. c) Manufacturing expenses will rise in proportion to the combined cost of material and wages. d) Selling expenses will remain the same. e) Other expenses will remain unaffected by the rise in output. Q4. Distinguish between Cost and management accounting? SECTION-B (Answer all questions) [3X10=30] Q5. What do you mean by Costing? Classify the various types of costs? [OR] Materials constitute a very important role in the production process of a manufacturing firm. In the above context explain the various objectives of material management in an Organization. Q6. In an automobile industry often the important materials as A category materials, the next level of important material as B and the rest as C category of materials. Explain. [OR] What do you mean by perpetual inventory system? What are the objectives of having a perpetual inventory system? Also enumerate the advantages of a perpetual inventory system? Q7. What is EOQ? Explain with the help of a diagram. [OR] SK Enterprise manufactures a special product Z. The following particulars are available for the year 2004: Annual consumption 12,000 units (360 days); Cost per unit Re. 1/-;Ordering cost Rs. 12/- per order; Inventory carrying cost 24%.;Normal lead time 15 days & Safety stock 30 days consumption. You are required to compute: a) EOQ b) Re-order level c) What should be the level of inventory immediately before the material order is received. Maximum Marks: 60 [5X2=10]

VIDYA SCHOOL OF BUSINESS MBA Semester II (2012-13) SESSIONAL-I MB 204: MANAGEMENT ACCOUNTING & CONTROL Time: 2 hours Note: All questions are compulsory SECTION-A (Answer all questions) Define the following terms: a) Fixed costs b) Differential cost c) Marginal cost d) Sunk cost e) VED Analysis SECTION-B (Answer all questions) [2X10=20] Q2. L& T Eng. Works Ltd. consumes 50,000/- units of a component per year. The ordering, receiving & handling costs are Rs. 3/- per order while the trucking costs are Rs.12/- per order. Further details are as follows: Interest costs Re. 0.06 per unit per year. Deterioration & obsolescence cost Re. 0.004 per unit per year. Storage cost Rs. 1,000/- per year for 50,000 units. Calculate the EOQ. Q3. Following are the particulars for the production of 2,000 sewing machines of N Co. Ltd. for the year 2004: Cost of materials Rs. 1,60,000/-; wages Rs. 2,40,000/-; manufacturing expenses Rs. 1,00,000/-; salaries Rs. 1,20,000/-; Rent, rates & insurance Rs.20,000/-; Selling expenses Rs. 60,000/-; General expenses Rs.40,000/- & Sales Rs.8,00,000/-. The Co. plans to manufacture 3,000 sewing machines during 2005. You are required to submit a statement of showing the price at which machines would be sold so as to show a profit of 10% on the selling price. The following additional information is supplied to you: a) Prices of materials are expected to rise by 20%. b) Wages rates are expected to show an increase of 5%. c) Manufacturing expenses will rise in proportion to the combined cost of material and wages. d) Selling expenses will remain the same. e) Other expenses will remain unaffected by the rise in output. Q4. Distinguish between Cost and management accounting? SECTION-B (Answer all questions) [3X10=30] Q5. What do you mean by Costing? Classify the various types of costs? [OR] Materials constitute a very important role in the production process of a manufacturing firm. In the above context explain the various objectives of material management in an Organization. Q6. In an automobile industry often the important materials as A category materials, the next level of important material as B and the rest as C category of materials. Explain. [OR] What do you mean by perpetual inventory system? What are the objectives of having a perpetual inventory system? Also enumerate the advantages of a perpetual inventory system? Q7. What is EOQ? Explain with the help of a diagram. [OR] SK Enterprise manufactures a special product Z. The following particulars are available for the year 2004: Annual consumption 12,000 units (360 days); Cost per unit Re. 1/-;Ordering cost Rs. 12/- per order; Inventory carrying cost 24%.;Normal lead time 15 days & Safety stock 30 days consumption. You are required to compute: a) EOQ b) Re-order level c) What should be the level of inventory immediately before the material order is received. Maximum Marks: 60 [5X2=10]