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1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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or
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ASSIGNMENT
DRIVE SPRING 2016
PROGRAM BBA
SUBJECT CODE & NAME BBA 402 - MANAGEMENT ACCOUNTING
BOOK ID B1712
SEMESTER 4
CREDITS 2
MARKS 30
Note: Answer all questions. Kindly note that answers for 10 marks questions should be
approximately of 400 words. Each question is followed by evaluation scheme.
Q1. Differentiate between :
a) Standard Costing and Budgetary Control
b) Estimated Cost, Historical Cost and Standard Cost
Answer: a) Standard Costing and Budgetary Control
Although budgetary control and standard costing both are based on some common principles, both are
pre-determined, and a comparison will be made with the actual costs and both system need a revision
of the standards or the budget. These two systems have certain differences which are as follows:
• Budgetary control is mainly concerned with the operation of the business as a whole, and
hence it is extensive. Standard costing is mainly concerned with the control of expenses, and
hence it is more intensive. Budgetary control deals with
Q2. a) Product X is estimated to require 20 hours per unit. The standard rate per hour is Re.1. During
a month 2000 units were produced. For this 38,000 hours were taken at Rs. 1.05 per hour. Calculate
the variances.
b) In this illustration, if it is assumed that 100 hours is lost due to breakdown of machinery, calculate
the necessary variances.
Answer: Calculation of labour variances
Standard hours x standard rate = total Actual hour x actual rate = total
2000*20 = 40000 * 1 = 40000 38000 * 1.05 = 39900

2. Q3. If : S.P (p.u.) Rs. 100, V.C. (p.u.) Rs. 50,
Total Fixed Cost : Rs. 1, 00, 000
Find : i) BEP
ii) P/V Ratio
iii) Sales required to earn profit of Rs. 50,000
iv) New BEP if S.P. is reduced by 15 % due to competition.
Answer: contribution = s.p – v.c
= 100-50
=50
i) BEP = Fixed
Q4. Given the Balance Sheet of a Company as under :
Liabilities Rs. Assets Rs.
Equity shares of Rs. 10 each 10,00,000 Fixed Assets 15,00,000
General Reserves 2,00,000 Stock 5,00,000
7 % Debentures 3,00,000 Receivables 4,00,000
Term Loan from X Bank 5,00,000 Cash 1,00,000
Overdraft 2,00,000
Creditors and Bills 3,00,000
25,00,000 25,00,000
Calculate :
i) Current ratio
ii) Quick ratio
iii) Debt-equity ratio
iv) Proprietary ratio
v) Solvency ratio
Answer: i) Current Ratio
Current ratio = Current Assets/ Current Liabilities
Current Assets = Stock+ Receivables+ Cash
Q5. What are the uses and limitations of a Cash Flow Statement?

3. Answer: Uses of Cash Flow Statement
By creating a cash flow budget, we can project the sources and applications of funds for the future
periods. We can identify any cash deficit periods in advance so that we can take corrective actions in
advance to alleviate the deficit. This may involve shifting the timing of certain transactions. It may also
determine when money will be borrowed. If borrowing is involved, it will also determine the amount of
cash that needs to be borrowed. Periods of excess
Q6. What is Transfer Pricing? Explain Transfer pricing options.
Answer: Transfer pricing is an important area of management accounting. Many departments are
involved in the production of a product in a manufacturing company. When the products are sold, the
company earns revenue and adds it to profits. If each department is considered separately as a profit
centre, we have to assign a price for the movement of goods between departments. This helps us in
finding out how much each department contributes to the price. Ascribing a price for sales between
departments is called transfer pricing.
Transfer pricing options
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