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    Time: 3 Hours Maximum Marks: 100 Note: Attempt Any Five Questions. All Questions Carry Equal Marks. Use of Calculators Is Allowed

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    ashishvasekar
    The document is a practice exam for a management accounting and finance course. It contains 8 questions covering various topics like accounting concepts, ratio analysis, budgeting, cash management, and investment analysis. Specifically, question 8 provides a case study analyzing whether a company should introduce a new product given information on costs, revenues, and required return on investment. It involves calculating the expected profits from introducing the new product and determining if it meets the minimum acceptable return.

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    Time: 3 Hours Maximum Marks: 100 Note: Attempt Any Five Questions. All Questions Carry Equal Marks. Use of Calculators Is Allowed

    Uploaded by

    ashishvasekar
    34 views4 pages
    The document is a practice exam for a management accounting and finance course. It contains 8 questions covering various topics like accounting concepts, ratio analysis, budgeting, cash management, and investment analysis. Specifically, question 8 provides a case study analyzing whether a company should introduce a new product given information on costs, revenues, and required return on investment. It involves calculating the expected profits from introducing the new product and determining if it meets the minimum acceptable return.

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    MBA paper

    Original Title

    MS-4 (1)

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    The document is a practice exam for a management accounting and finance course. It contains 8 questions covering various topics like accounting concepts, ratio analysis, budgeting, cash management, and investment analysis. Specifically, question 8 provides a case study analyzing whether a company should introduce a new product given information on costs, revenues, and required return on investment. It involves calculating the expected profits from introducing the new product and determining if it meets the minimum acceptable return.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    34 views4 pages

    Time: 3 Hours Maximum Marks: 100 Note: Attempt Any Five Questions. All Questions Carry Equal Marks. Use of Calculators Is Allowed

    Uploaded by

    ashishvasekar
    The document is a practice exam for a management accounting and finance course. It contains 8 questions covering various topics like accounting concepts, ratio analysis, budgeting, cash management, and investment analysis. Specifically, question 8 provides a case study analyzing whether a company should introduce a new product given information on costs, revenues, and required return on investment. It involves calculating the expected profits from introducing the new product and determining if it meets the minimum acceptable return.

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    You are on page 1of 4

    No.

    of Printed Pages : 4 MS-004

    1/40 MANAGEMENT PROGRAMME


    Term-End Examination
    June, 2018
    0
    MS-004: ACCOUNTING AND FINANCE FOR
    MANAGERS
    Time : 3 hours Maximum Marks : 100
    Note : Attempt any five questions. All questions carry equal
    marks. Use of calculators is allowed.

    1. Explain the various 'Accounting Concepts' and


    discuss their application in preparation of Final
    Accounts.

    2. Distinguish between :
    (a) Profitability Ratio and Profitability Index
    (b) Revenue Expenditure and Capital
    Expenditure
    (c) Intangible Assets and Current Assets
    (d) Amortisation and Depreciation

    3. Explain the concepts of Financial Leverage and


    Operating Leverage. Explain the effect on the
    firms Net Income and EPS if the use of both the
    leverages is considerable.

    4. What do you understand by Budgetary Control ?


    Discuss its significance in a modern business.
    Explain the steps for installing an efficient system
    of budgetary control in an organisation.

    MS-004 1 P.T.O.
    5. Explain the following statements :
    (a) High profit margin need not necessarily
    result in high rate of return on investment.
    (b) As there is no explicit cost of retained
    earnings, these are free of cost.
    (c) Many reasons account for direct material
    variances.
    (d) Companies with very high profits generally
    have a low pay out ratio.

    6. "Irrespective of its size and nature, every business


    organisation has to determine the appropriate or
    optimum cash balance that it would need." In
    the light of this statement, explain the methods
    followed to determine such appropriate cash
    balance.

    7. With the help of the following ratios draw a


    Balance Sheet of a company as on March 31, 2017:
    Current Ratio 2.5
    Liquidity Ratio 1.5
    Net Working Capital Z 3,00,000
    Stock Turnover Ratio
    (Cost of Sales/Closing Stock) 6 times
    Gross Profit Ratio 20%
    Fixed Assets Turnover Ratio
    (On Cost of Sales) 2 times
    Debtor Collection Period 2 months
    Fixed Assets to Shareholder's Net Worth 0.80
    Reserves and Surplus to Capital 0.50

    MS-004 2
    8. A Company manufactures a single product in its
    factory utilising 60% of its capacity. The selling
    price and cost details are given below

    Sales (6000 units) 5,40,000


    Direct Materials 96,000
    Direct Labour 1,20,000
    Direct Expenses 18,000
    Fixed Overheads :

    Factory 2,00,000
    Administration 21,000
    Selling and Distribution 25,000

    12.5% of the Factory overheads and 20% of the


    Selling and Distribution overheads are variable
    with production and sales. Administration
    overheads are wholly fixed.

    Since existing product could not achieve budgeted


    level for two consecutive years, the company
    decides to introduce a new product with marginal
    investment but largely using present plant and
    machinery. The cost estimates of the new product
    are as follows :

    Direct Materials 16 per unit


    Direct Labour 15 per unit
    Direct Expenses 1.5 per unit
    Variable factory overheads 2.0 per unit
    Variable selling and
    distribution overheads 1.5 per unit

    MS 004
    - 3 P.T.O.
    It is expected that 2000 units of the new product
    can be sold at a price of 60 per unit. The fixed
    factory overheads are expected to increase by 10%
    while fixed selling and distribution expenses will
    go up by 12,500 annually. Administration
    overheads remain unchanged. However, there
    will be an increase of working capital to the extent
    of 75,000/ -
    The company considers 20% (pre-tax and pre-
    interest) return on investment is the minimum
    acceptable to justify new investment.
    Should the new product be introduced ?

    MS-004 4

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