FM11

Financial and Management Accounting

Assignment I

Assignment Code: 2010FM11B1 Last Date of Submission: 30th September 2010

Maximum Marks: 100

Attempt all the questions. All questions are compulsory and carry equal marks.

Section A

1. (a) What are two basic financial statements? Explain their importance to the various uses?
(b) Why is reconciliation of cost and financial account necessary? State the reasons for difference
between profits shown by both the accounts.

2. (a) Define overtime. How can overtime be controlled? What is his accounting treatment?
(b) Given the meaning and treatment of scrap, waste, spoilage and defective?

3. (a) What is meant by under-absorption and over-absorption of overhead? How will you account for
them in cost account?
(b) Distinguish between job costing and contract costing?

4. Write a shot note:

(a) Unit costing
(b) Limitations of uniform costing
(c) Operating costing
(d) Absorption costing
Section B
5. Case Study

M/s. Raj Oil Mills produce four products. The total cost of inputs during the year ending 31-03-2010 is Rs.
148000.00. The output, sales and additional Processing cost are as under:-

Products A B C D
Outputs(in liters) 8000 4000 4000 2000
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Additional processing cost (after split off) 45000.00 12000.00 1000.00 ------
Sales value 176500.00 18000.00 44000.00 8000.00

In case these products were disposed off at the split off point that is before further processing, the selling
price (per liters) would have been
A B C D
16.00 6.00 8.00 4.00

Prepare a Statement of profitability based on:

1. If the products are sold after further processing is carried out in the mill.
2. If they are sold out at the split off point.

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 FM11

Financial and Management Accounting

Assignment II

Assignment Code: 2010FM11B2 Last Date of Submission: 15th November 2010

Maximum Marks: 100

Attempt all the questions. All questions are compulsory and carry equal marks.

Section A
1. (a) “The Break-even analysis is a useful device of profit planning” Do you agree? Discuss.
(b) Explain the assumptions, utility and limitations of the Cost-Volume-Profit analysis.

2. (a) How is control achieved through Budgeting? Explain.

(b) “Responsibility accounting makes the position of the line manager clearly visible” Explain.

3. (a) Explain briefly profitability Index ? How does it differ from net present value method?
(b) What are the mutually exclusive projects? Explain the conditions when conflicting ranking would be given
by the NPV and IRR method of such projects?

4. (a) Distinguish between standard costing and budgetary control.

(b) “Calculation of variances in standard costing is not an end in itself, but a means to an end” Discuss.

Section B
5. Case Study

M/s. Raj Ltd. is having an installed capacity of 100000 units of a product. It is currently operating at 70%
capacity utilization. The capacity utilization and cost per unit is mentioned below.

Capacity utilization (in %) Cost per unit (in rupees)

60 100
70 97
80 92
90 87
100 82

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The Company has received three offer of export from three different sources as under:-
Source X : 5000 units at rupees 55 per unit
Source Y : 10000 units at rupees 52 per unit
Source Z : 10000 units at rupees 51 per unit.
Advice the company as to whether any or all the export orders should be accepted or not.

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