Management Accounting question, Hons 3rd Year Exam 2020, Accounting Department

Management Accounting question, Hons 3rd Year Exam 2020, Accounting Department


National University


Subject Code: 232507

Subject: Management Accounting (In English)

Time: 4 hours                      Full Marks: 80

Group A 

Answer any ten questions: 1 × 10 = 10


a. What is management accounting?


b. What is prime cost?


c. What are the elements of cost?


d. What is differential cost?


e. What is activity based costing?


f. Write down the formula of profit volume ratio.


Financial Management question, Hons 3rd Year Exam 2020, Accounting Department


g. What is value chain?


h. What is product cost?


i. What do you mean by flexible budget?


j. What is capital rationing?


k. What is cash budget?


l. What is variance?


২০২০ সালের অনার্স ৩য় বর্ষ পরীক্ষার হিসাববিজ্ঞান বিভাগের উচ্চতর হিসাববিজ্ঞান-১ ( Advanced Accounting-1) প্রশ্ন



Answer any five questions: 4 × 5 = 20


2. Discuss the objectives of management accounting.


3.  Show the differences between variable costing and absorption costing.


২০২০ সালের অনার্স ৩য় বর্ষের হিসাববিজ্ঞান বিভাগের শিল্পোদ্যোগ প্রশ্ন


4. Sales Tk. 12,00,000, CM ratio 40% and MS ratio 25%.

Required: (a) Variable cost in Taka,

(b) Profit in Taka.


5. Amazon Company produces radios for cars. The following cost information is available for the period ended December 31, 2019:

Materials put into production Tk. 1,20,000, of which Tk. 80,000 was for direct materials. Factory labour costs for the period Tk. 90,000, of which Tk. 25,000 was for indirect labour. Factory overhead costs for utilities Tk. 40,000. Work-in-process beginning and ending value were Tk. 12,000 and Tk. 20,000 respectively.

Required: Calculate cost of goods manufactured (show prime costs and total manufacturing costs in your calculations)


২০২০ সালের অনার্স ৩য় বর্ষের হিসাববিজ্ঞান বিভাগের ব্যাংকিং ও বিমা তত্ত্ব, আইন এবং হিসাব প্রশ্ন


6. The monthly budgets for the manufacturing overhead of a concern for two levels of activity are as follows:

Capacity                            60%           100%


Budgeted production units 600     1000

Cost items:                         Taka        Taka

Indirect wages                12,000     20,000

Materials                            9,000     15,000

Maintenance                    11,000    15,000

Power and fuel                 16,000   20,000

Required: Segregate variable costs and fixed costs of the items by using high and low points method.


7. Meghna Ltd. is considering to purchase a new machine. The machine will cost Tk. 3,00,000. The cash inflows per year would be Tk. 80,000. The machines economic life is 10 years and cost of capital is 12%. The tax rate of the company is 45%. Calculate NPV and suggest whether the machine should be purchased or not. Assume PVIFA for Tk. 1.00 @ 12%, 10 years is 5.6502.


8. Delta Company is considering expansion of its plant capacity. Fixed costs amount to Tk 4,20,000 and are expected to increase by Tk. 1,25,000 when plant expansion is completed. The present plant capacity is 80,000 units per year. Capacity will increase by 50% with the expansion. Variable costs are currently Tk. 6 per unit and are expected to go down by Tk. 1 per unit with the expansion. The current selling price is Tk. 20 per unit and expected to remain same under either alternative. Which alternative is better expand or not to expand? Why?


9. Gold Star Ltd. has budgeted sales of its products for the next four months as follows:


Month                              Sales in units

April                                    50,000

May                                      75,000

June                                     90,000

July                                      80,000

The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of-month inventory levels must equal 10% of the following month’s sales. The inventory at the end of March was 5,000 units.

Required: Prepare a production budget for the second quarter.




Answer any five questions: 10×5=50


10. a. Discuss the importance of ethics in business.

b. Discuss the limitations of management accounting.


২০২০ সালের অনার্স ৩য় বর্ষের হিসাববিজ্ঞান বিভাগের ব্যবসায় ও বাণিজ্যিক আইন প্রশ্ন


11. The Apex Company produce different types of leather goods. The sales revenue for the year 2020 Tk. 12,00,000. The cost related different information during the year were as follows:


Particulars                                     Taka

Raw material purchased           50,000

Freight in                                        2,000

Opening work-in-process          80,000

Opening finished goods            40,000

Opening raw materials          2,50,000

Closing work in process           70,000

Closing finished goods             60,000

Closing raw materials             60,000

Productive wages                  1,70,000

Chargeable expenses               50,000

Factory overhead                  2,50,000

Selling expenses                      40,000

General and administrative          expenses                                   10,000

Sale of scrap                              5,000

Prepare a statement showing the following:

i. Prime cost

ii. Cost of goods manufactured

iii. Cost of goods available for use

iv. Cost of goods sold

v. Cost of sales

vi Profit or loss.


12. The following particulars are available from the books of a manufacturing concern:

Normal capacity                 20,000 units

Standard variable manufacturing        cost per unit                                 Tk. 15

Variable marketing expenses                 per unit sold                                 Tk. 5

Fixed factory overhead          Tk. 40,000

Fixed marketing expenses     Tk. 25,000

Selling price per unit                    Tk. 30

Selected data for the company’s operations in the last year were as follows:

Beginning inventory        2,000 units

Sales                                    17,500 units

Production                         18,000 units

Required: Prepare income statement using variable costing and absorption costing.

13. Otobi Ltd. manufactures and sells a single product. The company’s sales and expenses for the last quarter were as follows:

Amount (Taka)

Sales (15,000 units)                9,00,000

Less: Variable expenses.       3,60,000

Contribution margin (CM)   5,40,000

Less: Fixed expenses.           4,32,000

Net operating income          1,08,000


a. What is company’s CM ratio?

b. What is quarterly break even point in units sold and in sales taka.

c. Compute company’s margin of safety in taka and in percentage terms.

d. How many units would have to be sold each quarter to earn a pre-tax profit of Tk. 1,80,000?

e. If company can sell only 15,000 units but wanted to earn a pre-tax profit of Tk. 1,80,000 then what would be the selling price per unit?


14. A company making stock in the first quarter of the year is assisted by its bankers with cash facilities. The following are the relevant budget figures:

Month       Credit     Credit    Wages and

Sales   Purchase    expenses

Taka.        Taka         Taka

November  1,20,000    83,000   10,000

December   1,28,000  96,000    10,000

January       1,80,000  1,40,000   11,000

February     1,16,000   1,20,000  10,000

March             84,000     40,000   12,000

Given the following further information you are required to prepare a cash budget for the quarter January to March. Other information are as follows:

i. Budgeted cash at bank on January 1, Tk. 25,000.

ii. Credit terms of sales are payable by the end of the month following the month of supply. On an average one-half of sales are paid on the due date, while the other half are paid during the next month. Creditors are paid during the month following the month of supply.

iii. Wages and expenses are paid twice in the month of 1st and 16th respectively.

15. From the following data prepare a flexible budget of Jamuna Ltd, producing a single product for 80% and 100% capacity level. The break up of existing unit cost at 70% working level is:

Raw materials. Tk. 8

Wages                 Tk. 4

Variable overhead    Tk. 10

Besides the above, the semi-variable costs for producing 14,000 units are:

Indirect materials     Tk. 47,000

Indirect labour          Tk. 31,200

Repairs                        Tk. 24,200

The variable costs per unit included in semi-variable costs are indirect materials Tk. 1.00, labour Tk. 1.50 and repairs Tk. 1.25.

The fixed costs are:

Factory overhead                 Tk. 26,000

Administrative overhead   Tk. 46,000

Selling overhead  Tk. 42,000 (Tk. 1.00 per unit Variable

Present output: 14,000 units Selling price per unit Tk. 38.

16.Sovon Ltd. manufactures 40,000 parts of specialized products. At this level of activity the cost per parts is as follows:


Direct materials              5

Direct labour                    10

Variable overhead           2

Fixed overhead                8

Total cost per parts An outside supplier has offered to sell 40,000 parts each year to Sovon Ltd. for Tk. 22 per parts. If Sovon Ltd. accepts this offer, the facilities now being used to manufacture the parts could be rented to another company at an annual rental of Tk. 80,000. However, the company has determined that Tk. 6 per unit of the fixed overhead being applied to the parts would continue even the parts are purchased from outside.

Required: Should the parts be purchased from outside or continue to produce in the factory?


17. The standard mix for producing 8,000 bottles of product-M is:

Material A: 1,000 liters @ Tk. 0.20

Material B: 2,000 liters @ Tk. 0.80

During March, 2019, 10,000 bottles of product-M were produced from input of- Material A: 1,500 liters @ Tk. 0.25

Material B: 3,300 liters @ Tk. 0.75

Required: Compute the material price, usage, mix, and yield variance for March.