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MBA-III Semester Supplementary Examinations,

May/June 2016(Regulation R12)

Name of the Subject: Management Accounting and Control

Subject Code: 12CMB18

Branch: MBA Max. Marks: 60

SCHEME OF VALUATION

Q.NO KEY POINTS FOR VALUATION ALLOCATIONOF MARKS

TOTALMARKS

1 Meaning and Features of Financial Accounting 4

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Meaning and Features of cost

Accounting4

Differences between Financial and Cost

Accounting4

2.(a)

Machine Hour Rate: Machine hour rate isthe cost of running a machine per hour. It is

one of the methods of absorbing factoryexpenses to production. It is used in those

industries or departments where machineryis predominant and there is little or

practically no manual labour. In such

industries or departments, overhead consistsof indirect expenses in running and operatingthe machine.

Two Advantages:1. It helps to compare the relativeefficiencies and cost of operating different

machines.2. It brings to light the existence and extent

of idle time of machines.3. It enables the management to decide how

far the use of machine work is preferable tomanual work.

4. It is most scientific, practical and accuratemethod of recovery of manufacturingoverheads.

5. Cost reports prepared with the help of

such rate are dependable and can help themanagement in decision-making.

6. It provides useful data for estimating costof production, setting standards and for fixingselling prices for quotations.

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2.(b)

CALCULATION OF MACHINE HOUR RATE

PARTICULARS Rs. RS.

STANDING CHARGES:

Rent - 800x 12 9600Light 120 x 12x 3/20 360

Insurance Premium 4000

Total Standing charges Per Year 13960

Machine Hours in a year - 4000

standing charges per hour 13960/4000 3.49

MACHINE EXPENSES:

Depreciation = cost of asset - scrap

value

working life of the

machine (in hours)

=500000 -(minus) 5000 12.375

10 x 4000

Repair charges - 2000/4000 0.50

Power consumption (25 units per hour

@ 75 paise) 18.75

Machine hour rate 35.12

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QUESTION NUMBER 3 ANSWER: (4 marks For Each Process Account)

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4 Definition/Introduction to Marginal Costing: Marginal

costing is a costing technique where only variable cost or

direct cost will be charged to the cost unit produced.

2

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Applications of marginal costing:

Make or buy decisions

Temporary closure of a business or part of a business

Choosing a channel of distribution for a product

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5 Total Sales (A) TotalCost (B) Profit (A-B)Year ended 31.03.2009 2223000 1983600 239400

Year ended 31.03.2010 2451000 2143200 307800

Change in Profit/Sales 228000 68400

Profit Volume Ratio = change in profit x100

change in sales

= 68400 x100

=30%

228000

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6

(a)

Budget: (3 Marks)

Budgetary Control: (3 Marks)6

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(b)

Cash Budget: (2 Marks)

Purpose: (2Marks)Preparation: (2 Marks)

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7 Meaning of Standard Costing:

Meaning of Budgetary Control:

4

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Differences between Standard Costing and budgetary Control 88

(a)Meaning of Cost Audit: (2 marks)Features of Cost Audit in India: (4 marks)

Verification of cost accounts to ensure that they areproperly maintained and compiled

Ensuring the cost accounts are adhered to the

principles Evaluation of performance of the organization

Submission of report

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8(b) Meaning of Management Audit 2

Qualities of a management auditor 4

PREPARED BY

SURESHKUMAR C,

Assistant Professor MBA

SVCET-Chittoor.