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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 SUMMER 2015
PROGRAM BBA
SUBJECT CODE & NAME BBA402 MANAGEMENT ACCOUNTING
SEMESTER 4
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.
Q.1 Budgetary control is a strong businesstool that helps companies maximize profits. Explain the
advantages of budgetary control.
Ans : Advantages of budgetary control :
Everybusinessneedstohave abudgetarycontrol system in place for effective and proper financial
planningforthe business.Sometimesthe lackof a proper accountability program in a business may
cause the business to make losses and incur unnecessary expenses. The benefits of budgetary
control in business include the following;
1. The role of the budgetarycontrol ina businessistomonitorandcontrol all income and expenses.
It alsohelpswithmanagingthe demandsforcashand minimizesborrowingof moneytooperate the
business.
2. When there is a budgetary control system
Q.2 The success of a business enterprise depends to a great extent on how efficiently and
effectively it can control costs.
Give the meaning of standard costing. Describe estimated cost and standard cost.
Ans : Meaning of standard costing :
Standard costing is an important subtopic of cost accounting. Standard costs are usually associated
witha manufacturingcompany'scostsof directmaterial,directlabor, and manufacturing overhead.

2. Ratherthan assigning the actual costs of direct material, direct labor, and manufacturing overhead
to a product, many manufacturers assign the expected or standard cost. This means that a
manufacturer's inventories and cost of goods sold will begin with amounts reflecting the standard
costs,not the actual costs,of a product. Manufacturers, of course, still have to pay the actual costs.
As a resultthere are almostalwaysdifferencesbetweenthe actual costsand the standard costs, and
those differences are known as variances.
Standard costing and the related variances is a valuable management tool. If a variance arises,
management becomes aware that manufacturing costs have differed from the standard (planned,
expected) costs. If actual costs are
3. Marginal costing plays a major role in making certain decisions. It provides information to
managementregarding the behaviorof costs and the incidence ofsuch costs on the profitability of
an undertaking. Please explain the advantages of marginal costing.
Answer : What is Marginal Costing?
It is a costing technique where only variable cost or direct cost will be charged to the cost unit
produced.
Marginal costing also shows the effect on profit of changes in volume/type of output by
differentiating between fixed and variable costs.
Salient Points:
Q.4 Variance analysis is a tool for measuring performance and depends on the principle of
management by exception. Explain the uses of variance.
From the following information, calculate sales margin price variance and sales margin volume
variance.
Ans : The uses of variances :
Budgeted sale Actual sale
product Qty.
units
Sales price
per unit (rs)
Standard
price per
unit (rs)
product Qty.
units
sales price
per (rs)
A 600 20 12 A 800 24
B 400 15 9 B 600 12
1000 1400

3. Variance analysis,alsodescribedasanalysisof variance orANOVA,involvesassessingthe difference
between two figures. Its uses are described below :
1. Budget vs. Actual Costs:
Variance analysisisimportanttoassistwithmanagingbudgetsbycontrollingbudgetedversusactual
costs.In program and projectmanagement,forexample,financial dataare generallyassessedat key
intervalsormilestones.Forinstance, amonthlyclosingreportmightprovidequantitativedata about
expenses, revenue and remaining inventory
Calculation of standard margin price variance and sales margin volume variance :
Sales margin volume variance(SMVV) = SM(AQ - BQ)
For A = 8(800 - 600) = Rs. 1600
For B = 6(600-400) = Rs. 1200
Total sales margin volume variance = 1600 + 1200 = Rs. 2800
Q.5 Explain the determinants of working capital requirements.
Ans : Determinants of working capital requirements :
Requirements Of working capital depend upon various factors such as nature of business, size of
business,the flow of businessactivities.However,small organizationrelativelyneedslesser working
capital than the bigbusinessorganization.Followingare the factorswhich affect the working capital
of a firm:
1. Size Of Business:-
Working capital requirement of a firm is directly
Pro. Budgeted
sale price
per unit(rs)
St. cost
per
unit
St. sale
margin
Budgeted
quantity
Budgete
d profit
Actual
sales
price
Actual
sales
margin
Actual
sales
quantit
y(unit)
Actual
profit
(rs)
A 20 12 8 600 4800 24 12 800 9600
B 15 9 6 400 2400 12 3 600 1800
Total 1000 7200 1400 11400

4. Q.6 From the following information prepare (i) a statement of sources and uses of funds and (ii) a
schedule of changes in working capital for M/s. Eshwari & co. Balance sheets as on 31stMarch
2010 and 2011 are:
Additional Information
(i) Depreciation of Rs. 2,500 charged on Land & Buildings
(ii) Building amounting to Rs. 5,000 was sold for Rs. 4,700.
Answer :
Statementof sources and usesof funds
Sourcesof Fund Amount Applicationof Fund Amount
EquityShare Capital 12,500 RedeemablePreference Shares 5,000
Decrease inWorkingCapital 3,750 Purchase of Building 25,000
Dear students get fully solved assignments
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or
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