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1. Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
“ help.mbaassignments@gmail.com ”
or
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ASSIGNMENT
DRIVE Fall 2015
PROGRAM BBA
SEMESTER IV
SUBJECT CODE & NAME BBA 402 &MANAGEMENT ACCOUNTING
BK ID B1713
CREDITS 4
MARKS 60
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.
Question. 1. Management accounting is sensitive to management needs; however, it assists
themanagement and does not replace it. Write down in detail the scope of
managementaccounting.
Answer:The scope or fieldof managementaccountingisverywide andbroadbasedandit includes a
variety of aspects of business operations. The main aim of management accounting is to help
managementinitsfunctionsof planning, directing, controlling and areas of specialization included
withinthe admitof managementaccounting. The scope of management accounting can be studied
as follows:
1. Financial Accounting: Financial accounting forms the basis for analysis and interpretation for
furnishing meaningful data to the management. The
Question. 2. From the following balance sheets of Dramas Ltd., compute the trend percentages
using 31st December 2005 as the base year.
Assets & Liabilities Amount
2005 2006 2007
Liabilities:
Share capital 2,00,000 2,50,000 3,00,000

2. Reserves 1,00,000 1,50,000 1,50,000
Loans 2,00,000 1,00,000 50,000
Creditors 3,00,000 4,00,000 2,00,000
8,00,000 9,00,000 7,00,000
Assets:
Buildings 2,00,000 2,50,000 3,00,000
Plant 2,00,000 2,50,000 1,00,000
Stock 2,50,000 2,50,000 1,50,000
Debtors 1,00,000 1,00,000 1,00,000
Cash at Bank 50,000 50,000 50,000
8,00,000 9,00,000 7,00,000
Preparation of comparative balance sheet with the increase or decrease in percentage
Conclusions
Answer:Comparative balance sheet refers to comparing the current year balance sheet of a
company over previous year balance sheet so as to get an idea how company has performed this
year in comparison to previous year. Comparative balance sheet can be prepared in the following
way –
1. Firststepfor preparingcomparative balance sheetistolistall the asset and liabilities of the
company.
Question. 3. Working capital requirement is determined by a wide variety of factors.
Elaboratethose factors and explain all of them.
Answer:The factors determining working capital needs of a business firm are as follows:
1. Size of the firm:A large firm needs more working capital than a small firm. In order to
sustain the high volume of production and sales, a large firm has to maintain greater
current assets.
2. Nature of Business:A trading concern has to maintain more inventory than a
manufacturingconcern.Therefore,more working capital is required by a trading concern.
Public utility concerns such as railways, electricity supply concerns, gas agencies require
lessworkingcapital because mostof their transactions are on cash basis. Similarly, hotels
and restaurants need little working capital as stock and debtors are not high.
3. Type of ProductionProcess:A firm using labour intensive technique needs more working
capital to pay wages and salaries. A highly automatic plant will need less working capital
and more fixed capital. Working capital requirements are higher when raw materials
account for a major proportion of the total cost.
4. Length of OperatingCycle:Longeristhe time gap between purchase of raw materials and
receipt of cash from debtors, greater is the need for working capital. That is why firms

3. havinga lengthyandroundaboutmanufacturingprocessrequire more workingcapital.For
example, a heavy engineering firm has a longer operating cycle than a rice mill.
5. InventoryTurnover:Where the inventory is large and its turnover is slow, working capital
required is more. Inventory turnover means the speed with which sales are made. For
example,ajewellerhastomaintainahighinventoryof differenttypesof jewelleryandthe
movementof inventoryisslow.Therefore,the workingcapital requirements of a jeweller
are more than those of a grocer.
There are two concepts of working capital:
(i) GrossWorkingCapital:It referstothe capital invested in the total current or circulating assets of
the enterprise. Current assets are those assets which in the ordinary course of business can be
converted into cash within a short period of normally one accounting year. Examples of current
assetsinclude:cashinhand,billsreceivable,prepaidexpenses,sundrydebtors(lessprovisionforbad
debts),andinventories (raw materials, work-in-process and finished goods), accrued incomes etc.
(ii) Net Working Capital: The term ‘Net working capital’ has been defined in two different ways:
(a) It is the excess of current assets over current liabilities i.e,
Net Working Capital= Current Assets – Current Liabilities
This is the most commonly accepted definition.
This net working capital can be both positive (when current assets> current liabilities) or negative
(whencurrentliabilities>currentassets).Currentliabilitiesare those liabilities that are to be paid in
the ordinary course of business within a short period of normally one accounting year out of the
currentassetsor the income of the business.Examplesof current liabilitiesincludesundry creditors,
bills payable, bank overdraft, outstanding expenses, short-term loans, etc.(
b) It is that portion of a firm’s current assets which is financedby long-term funds. For example: A
businessrequiresinvestmentincurrent assetssuchas cash, bills receivable, short-term investment
etc.to an extentof Rs.20,000. A part of this requirement can be financed by the firm by purchasing
on creditor postponingcertainpaymentsor,inotherwords,bycreationof current liabilities such as
outstandingexpenses,accountspayable.If the amountof currentliabilities comes to Rs.15, 000, the
businesswillstillneedRs.5,000 for itsworkingpurposes.Thisamountmaythenhave tobe financed
from long-term sources of funds.
Question 4.Variance analysis is a tool for measuring performance and depends on the principle of
managementby exception.Explainthe usesof variance. From the following information, calculate
sales margin price variance and sales margin volume variance.

4. Answer:Variance analysis is the quantitative investigation of the difference between actual and
planned behavior. This analysis is used to maintain control over a business. For example, if you
budget for sales to be $10,000 and actual sales are $8,000, variance analysis yields a difference of
$2,000.
Variance analysisisespeciallyeffectivewhenyoureview the amountof avariance on a trendline,so
that sudden changes in the variance level from month to month are more readily apparent.
The SD is more intuitive because it is on the same scale as the data. However, when working with
the normal distribution, the variance is the parameter not the SD. Thus, variances can be more
useful when working with distributions mathematically
Question. 5. Explain the various steps in Budgetary Control. Advantages of Budgetary Control.
Steps in Budgetary Control
Advantages of Budgetary Control
Answer:
Question. 6. Use the following information to prepare:
A schedule of changes in working capital.
A funds flow statement of Sahana& Co.
Balance Sheet of Sahana&
Dear students get fully solved assignments
Send your semester & Specialization name to our mail id :
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or
Call us at : 08263069601