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THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH


CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING.

Time: Three hours Full Marks: 100

All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q. No.1.

Trial Balance taken from the ledger of Tehzina Ltd. On 31
st
December, 2011 is as follows:-
Debt Tk. Credit Tk.
Accounts Receivable 56,000 Accounts Payable 40,000
Advertising 4,000 Allowance for Depreciation on Bldg. 16,500
Building 60,000 Allowance for Doubtful Accounts 1,150
Cash 20,800 Share Capital 1,90,000
Freight in 3,000 Purchase Discount 950
Insurance 1,200 Sales 2,05,000
Interest expenses 2,200 Interest income 550
Inventory 31.12.2010 54,000
Land 65,500
Office Expense 13,400
Purchases 1,15,400
Sales Return 7,300
Selling Expense 41,200
Supplies Expenses 3,500
Rent, Rates & Taxes 6,650
Total 4,54,150 4,54,150
Adjustments:-
(a) Inventory on hand Tk. 72,850
(b) Allowance for Doubtful Accounts is to be increased to Tk. 2,500
(c) Buildings are depreciated @ 3% p.a
(d) Accrued selling expenses are Tk. 2,200
(e) There are supplies of Tk. 650 on hand
(f) Accrued Rent, Taxes and salaries is Tk. 750
Required:-
(i) A eight column work-sheet.
(ii) Income Statement and Balance Sheet in report form.
[Marks : (12+7+6) = 25]
Q. No. 2.
The cash Account of M/S Dipak and Sons disclosed a balance of Tk. 3,895.82 on 31
st
December, 2011.
The bank statement as of December 31, 2011 showed a balance of Tk. 5,738.73. Upon comparing the
statement with the cash records, the following were developed:
(i) Accompanying the bank statement was a debit memo covering on N.S.F. Cheque of ABC
Company for Tk. 77.32.
(ii) Cheque outstanding as of December, 2011 were as follows:
Cheque No. 157 for Tk. 902.68 and
Cheque No. 162 for Tk. 1,005.00
(iii) Also accompanying the bank statement was a cancelled cheque for Tk. 57.62 of King Company;
the bank had deducted this cheque from the account from the account of M/S. Dipak and Sons
erroneously.
(iv) On December 29, 2011 the bank had collected a non interest bearing note for M/S Dipak & Sons.
The note was for Tk. 152.50; the bank had charged a collection of Tk. 2.50.
(v) A deposit of Tk. 157.63 was in transit; it had been mailed to the bank on December 31, 2011.
(vi) The book keeper of M/S. Dipak & Sons had recorded a cheque received on account from Baker
Company erroneously been recorded a Tk. 90.00 cheque as Tk. 9.00.
Page 2 of 49
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 001. PRINCIPLES OF ACCOUNTING.

Q. No. 2. (contd.)


(vii) The service charge on the account for December, 2011 amounting to Tk. 3.20 a debit memo in this
amount was returned with the bank statement.
Required:
(1) Construct a bank reconciliation statement beginning with bank balance as well as cash balance
using the form where both bank and book balance are brought to a corrected cash balance.
(2) Give the journal entries required as result of the information given above.
[Marks: (15+5) = 20]
Q. No. 3.
(a) Total Accounts receivable for the BANANI CORPORATION were as follows:
On January 1, Tk. 24,000; On January 31, Tk. 25,200. In January Tk. 38,000 was collected on
accounts, Tk. 2,400 was received for cash sales, accounts receivable of Tk. 2,800 were written off
as uncollectible, and allowances on sales of Tk. 400 were made. What amount should be reported
for gross sales on the income statement for January?
(b) The income statement of WEB STAR Co. for the month of July shows net income of Tk. 5,600
based on Fees Earned Tk. 22,000, Wages Expenses Tk. 9,200, Supplies Expenses Tk. 4,800 and
Utilities Expenses Tk. 2,400. In receiving the statement, you discover the following:
(i) Insurance expired during July of Tk. 1,200 was omitted.
(ii) Supplies expenses includes Tk. 1,600 of supplies that are still on hand at July 31.
(iii) Depreciation on equipment of Tk. 600 was omitted.
(iv) Accrued but unpaid wages at July 31 of Tk. 1,200 were not included.
(v) Fees earned but unrecorded totaled Tk. 3,000.
Required: Prepare a correct income statement for July.
(c) Briefly discuss about the users and uses of accounting data.
[Marks: (8+8+4) = 20]
Q. No. 4.
(a) What controls over cash receipts and payments are required and why? Explain.
(b) A fire broke out in the warehouse of B Manufacturing Company on August 15, 2011 has destroyed
all inventory and many accounting records relating to inventory.
The information gathered from different sources to lodge a claim are presented below. All sales and
purchases are on accounts:
January 01, 2011 August 15, 2011
Inventory 1,28,600
Accounts Receivable 1,30,600 1,10,300
Accounts Payable 88,300 1,31,350
Collection on Accounts Receivable
Jan. to Aug. 15, 2011

6,98,500
Payments to suppliers Jan. 01 to Aug. 15 4,88,300
Goods out on consignment at cost 43,500
Summary of previous years sales: 2008 2009 2010
Sales Tk. 6,50,000 Tk. 6,75,000 Tk. 6,90,000
Gross profit on sales Tk. 2,10,000 Tk. 1,85,500 Tk. 2,10,000

Required:
Calculate the inventory loss due to fire to lodge a claim with Insurance Company.
[Marks: (6+14) = 20]
Q. No. 5.
(a) Discuss the Qualitative characteristics of Accounting Information.
(b) Explain the concept of Business Entity and Going Concern.
(c) What is EOQ? Explain its utility.
(d) Differentiate between Preferred Stock and Common Stock.
(e) Distinguish between Depreciation, Amortization & Depletion.
[Marks: (5 x 3) = 15]

= THE END =
Page 3 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT

Time: Three hours Full Marks: 100
Answer THREE questions from each part, where Q. No. 4 and Q. No. 8 are compulsory.
Answer must be brief, relevant, neat and clean.
Use a fresh sheet for answering each question.
All questions must be answered in English.

PART-A: BUSINESS COMMUNICATION

Q. No. 1.
(a) Define Business Communication. What are the communications Components and how do they
interact?
(b) Differentiate between internal and external Communication.
(c) Explain human Communication with examples.
[Marks: (5+5+5) = 15]
Q. No. 2.
(a) Discuss the main points regarding importance of Business Letter.
(b) What are the different parts of a commercial letter?
(c) Suppose your office car is damaged by an accident which was insured. Lodge an insurance claim to
the related insurance company.
[Marks: (4+5+6) = 15]
Q. No. 3.
(a) What is circular letter?
(b) Use imaginary name & address, write a complain letter to the supplier for supplying inferior goods.
(c) Write your C.V. with a forwarding letter to the HR Manager of ABC Co. Ltd. for the post of a
Management Accountant.
[Marks: (3+6+6) = 15]
Q. No. 4.
Write short notes on any FIVE of the following:
(a) Cash Credit;
(b) Visual Communication;
(c) NBR;
(d) Bonded warehouse;
(e) Capital Market;
(f) Proxy to AGM;
(g) Special Trading Arrangement (STA);
(h) Dumping.
[Marks: (5 x 4) = 20]

Page 4 of 49
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 002. BUSINESS COMMUNICATION AND OFFICE MANAGEMENT

PART-B: OFFICE MANAGEMENT

Q. No. 5.
(a) What are the steps in the process of Office Management?
(b) Discuss the Importance and Necessity of Office Management?
(c) Discuss different Organizational Structure of Banking sector, Corporation & Govt. Office with a
diagram.
[Marks: (3+3+9) = 15]
Q. No. 6.
(a) Inter office relationships & co-ordination is must for good office Management. Do you agree
with this view? Explain.
(b) What are the qualities of an office Manager?
(c) Discuss the organogram with a diagram of a hypothetical company.
[Marks: (5+5+5) = 15]
Q. No. 7.
(a) What are the factors and steps of preparing office manual?
(b) What are the methods of job evaluation of an Employee?
(c) Proper training of all office employees is a must Discuss.
[Marks: (5+5+5) = 15]
Q. No. 8.
Write short notes on any FIVE of the following:
(a) E-Commerce
(b) Office decoration;
(c) Office Filing;
(d) Motivation;
(e) Office automation;
(f) Office Security;
(g) Employer-Employee relationship;
(h) Layout of office.
[Marks: (5 x 4) = 20]

= THE END =

Page 5 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUE

Time: Three hours Full Marks: 100
Answer any TEN questions, FIVE from each part.
All questions carry equal marks.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

PART-A: BUSINESS MATHEMETICS
Q. No. 1.
(a) Find the equation and the slope of the straight line joining the points (3, 5) and (2, 3).
(b) A manufacturer of cassette tapes has a fixed cost of Tk. 60,000 and a variable cost of Tk. 4 per
cassette produced. Selling price is Tk. 7 per cassette.
(i) Write the revenue and cost equations.
(ii) At what number of units will break-even occur?
(iii) At what sales volume will break-even occur?
(iv) How much profit will be earned if 25,000 cassettes are produced?
[Marks: (4 + 6) = 10]
Q. No. 2.
(a) The daily cost of operating a hospital (M) is a linear function of the number of inpatients (I) and
outpatients (O) plus a fixed cost (x), i.e. M = x+yo+zi. Given the following information from 3
days, find the values of x, y and z by setting up a linear system of equations and using the matrix
inverse.
Day Cost (Tk,) No. of inpatients(I) No. of out-patients
1 7000 50 10
2 6500 40 10
3 7500 50 15

(b) If x = tan + scc , show that sin =
1 x
1 x
2
2
+


[Marks: (6 + 4) = 10]
Q. No. 3.
(a) In an Accounting class there are 60 students, and in a Mathematics class there are 40 students. Find
the number either in Mathematics class or in Accounting class if
(i) Two classes meet at the same hour.
(ii) If the two classes meet at different hours and 20 students have enrolled in both courses.

(b) Show that
A
A
cot 1
tan

+
A
A
tan 1
cot

= 1 cos . + ecA SecA


[Marks: (5 + 5) = 10]
Q. No. 4.

(a) If = A

7
3
1

0
3
3


(
(
(

(
5
1
2
, = B

3
1
9

2
4
1

(
(
(

(
2
0
4
, then find AB and BA, hence comment
on the equality of AB and BA.
(b) Find the differential coefficient of
x
x
1
sin

with respect to tan


1
x
[Marks: (5 + 5) = 10]
Page 6 of 49
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUE

Q. No. 5.
(a) Carryout the following: (i)
|
|

\
|
+1
2x
x
e
dx e
(ii) dx
x x

\
| 1
cos
1
2

(b) A loan of Tk. 5,00,000 is to be paid in 15 equal installments. Interest being at 12% p.a.
compounded and first payment was made after two years. What amount will be paid in each
installment?
[Marks: (3+3+4) = 10]
Q. No. 6.
Let the Cost Function of a firm be given by the following equation:
C=300x 10x
2
+
3
3
1
x , where C stands for cost and x for output. Calculate the output
(i) at which marginal cost is minimum,
(ii) at which average cost is minimum,
(iii) at which average cost is equal to marginal cost.
[Marks: (4+3+3) = 10]
Q. No. 7.
(a) Evaluate
(i)

+ +
2
1
2
5 2
x
x x
dx (ii)

1
0
x
xe dx

(b) Find the exact area of the region bounded by x axis, y axis, the carve x and the line x=3.
[Marks: (6+4) = 10]

PART-B: BUSINESS STATISTICS

Q. No. 1.
(a) Define business statistics. Distinguish between.
(i) Primary data and Secondary data.
(ii) Quantitative variable and Qualitative variable.
(iii) Questionnaire and Schedule.
(b) What do you mean by frequency distribution? Discuss in brief the rules involved in the
construction of a frequency distribution.
[Marks: (5+5) = 10]
Q. No. 2.
(a) Discuss the different measures of central tendency stating the relative merits and demerits. What
are the criteria of a good measure of central tendency?
(b) For the following marks distribution, calculate mean, median, mode and upper quartile.
Marks obtained 30 32 37 41 43 45 50
No. of students 3 8 5 9 4 5 2
[Marks: (4+6) = 10]
Q. No. 3.
(a) Define mean deviation and standard deviation. Show that standard deviation does not depends on
origin but depends on scale of measurement.
(b) The mean and standard deviation of 20 values are 27.5 and 3.9 respectively. Two new values are
included. What will be the mean and standard deviation of 22 values?
[Marks: (4+6) = 10]
Page 7 of 49
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 003. QUANTITATIVE TECHNIQUE

Q. No. 4.
(a) Define moments, raw moments and central moments. Define skewness and kurtosis. Discuss their
measures is brief.
(b) For the data given below, calculate 1
st
four central moments and calculate the coefficient of
skewness and comment on the shape of the distribution.
Age of workers 2530 3035 3540 4045 4550 5055
No. of workers 30 22 27 35 21 18
[Marks: (4+6) = 10]
Q. No. 5.
(a) Define regression co-efficient. How does if differ from correlation co-efficient?
(b) Fit a linear regression line to the following data:
X 25 32 40 42 48
Y 105 114 130 125 132
[Marks: (4+6) = 10]
Q. No. 6.
(a) Define probability. Explain addition and multiplication law of probability.
(b) If two dice are thrown, what is the probability that the sum is (a) greater than 8, and (b) neither 7
nor11?
[Marks: (4+6) = 10]
Q. No. 7.
Write short notes on the followings:
(a) Co-efficient of Variation.
(b) Standard deviation.
(c) Conditional probability.
(d) Type-I error and Type-II error.
[Marks: (2.5 x 4) = 10]


= THE END =
Page 8 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS

Time: Three hours Full Marks: 100
Answer FIVE questions, taking at least TWO from each Group A and B.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

GROUP-A: BUSINESS ECONOMICS
Q. No. 1.
(a) Define Business Economics and State its Scope of Study.
(b) Distinguish between (i) Economic objectives and social objectives of Firms.
(ii) Business Profit and Economic Profit.
(iii) Free Goods and Economic Goods.
(c) What are the reasons of variation of profit in between the firms?
[Marks: (6+9+5) = 20]
Q. No. 2.
(a) Why Demand Curve Slopes Downward?
(b) Distinguish between:
(i) Shift in Demand and Change in Demand
(ii) Income Effect and Substitution Effect
(c) What are the determinants of Demand of Ready Made Garments in the global market?
(d) What factors influence supply of Electricity in Bangladesh?
[Marks: (4+6+5+5) = 20]
Q. No. 3.
(a) Distinguish between oligopoly and Duopoly with examples.
(b) State how price is determined under Monopolistic competition. Explain with a diagram.
(c) What is price Discrimination?
[Marks: (7+8+5) = 20]
Q. No. 4.
(a) Distinguish between:
(i) Direct Cost and Indirect Cost.
(ii) Marginal revenue and Average revenue.
(iii) Internal and External Economics of Firms.
(b) How would you measure returns to scale?
(c) Calculate average cost, marginal cost, marginal revenue, average revenue and profit from the
following information:
Units of Output Total Cost Variable Cost Fixed Cost Total Revenue
1 250 150 100 150
2 300 200 100 300
3 400 300 100 400
4 450 350 100 500
5 550 450 100 600
6 610 510 100 650
7 670 570 100 700
8 750 650 100 760
[Marks: (9+3+8) = 20]
Page 9 of 49
CMA APRIL, 2012 EXAMINATION
FOUNDATION LEVEL
SUBJECT: 004. BUSINESS ECONOMICS AND INTERNATIONAL BUSINESS

Q. No. 5.
(a) What is the difference between GDP and National Income?
(b) What is the relation between economic growth, employment and poverty reduction?
(c) What are the barriers in the way of Investment expansion in Bangladesh?
(d) How will you treat the following elements in calculating National Income of Bangladesh:
(i) Gross Private Investment
(ii) Government Purchase of goods and Services
(iii) Personal Consumption of goods and Services
(iv) Depreciation Charges
(v) Exports
(vi) Imports
(vii) Value of Shares purchased during the year
(viii) Value of Second hand computer purchased in the country
(ix) Purchase of land during the year
(x) Gains from sale of old cars during the year.
[Marks: (4+7+4+5) = 20]

GROUP-B: INTERNATIONAL BUSINESS
Q. No. 6.
(a) How two countries can be benefited by trade? Explain using comparative advantage theory.
(b) Discus the various strategies that a country can adopt to attract more foreign direct investment.
(c) Why do you think FDI is not attracted to Bangladesh?
[Marks: (10+5+5) = 20]
Q. No. 7.
(a) What do you mean by the term back to back letter of credit?
(b) Describe the mode of Export financing in Bangladesh.
(c) What are the fiscal incentives for exports in Bangladesh now?
[Marks: (5+8+7) = 20]
Q. No. 8.
Write short notes on five of the following:
(i) Non-Tariff Barriers;
(ii) Balance of Trade and Balance of Payment;
(iii) Technology transfer;
(iv) Infant industry arguments;
(v) Monetary and Fiscal Policies;
(vi) Product Life Cycle;
(vii) Multinational Corporation (MNC);
(viii) Social Compliance in Export Industries.
[Marks: (4 x 5) = 20]


= THE END =
Page 10 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.

Time: Three hours Full Marks: 100

All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q. No. 1.
(a) Describe the purpose of the balance sheet. Can you define a subsequent event?
(b) The following is a post-closing trial balance for the Yeasmine Corporation at December 31, 2011,
the end of the companys fiscal year:
Account Title Debits (Tk.) Credits (Tk.)
Cash 80,000 -
Accounts receivable 200,000 -
Allowance for doubtful accounts - 20,000
Inventories 300,000 -
Investments 50,000 -
Prepaid expenses 30,000 -
Note receivable (due in one month) 60,000 -
Land 120,000 -
Building 550,000 -
Machinery 500,000 -
Accumulated depreciationbuildings and machinery - 450,000
Patent (net of amortization) 50,000 -
Accounts payable - 170,000
Salaries payable - 40,000
Interest payable - 10,000
Note payable - 100,000
Bonds payable (due in 10 years) - 500,000
Common shares - 400,000
Retained earnings - 250,000
Totals 19,40,000 19,40,000
The Tk. 50,000 balance in the investment account consists of marketable equity securities of
other corporations. The companys intention is to hold the securities for at least three years. The
Tk. 100,000 note payable is an installment loan. Tk. 10,000 of the principal, plus interest, is due
on each July 1 for the next 10 years. At the end of the year, 100,000 common shares were issued
and outstanding. The company has 500,000 shares authorized.
Required: Prepare a classified balance sheet for the Yeasmine Corporation at December 31,
2011.
[Marks: (5 + 15) = 20]
Q. No. 2.
(a) Briefly explain the following terms:
(i) IFRS and BFRS (ii) IAS and BAS
(b) The BBS Company had the following inventory record for the month of January -2012:
Date Item Description Quantity of Items Unit Price
01/01/2012 M1 - M5 Beginning inventory 5 Tk. 20
05/01/2012 M2, M5 Sale 2 -
11/01/2012 M6 - M14 Purchase 9 Tk. 12
28/01/2012 M1,M3, M6, M7,
M8, M9, M14
Sale 7 -

Page 11 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.
Q. No. 2. (contd..)
Assuming a perpetual inventory system is used; and the store manager determined the cost of
goods sold and the ending inventory as follows:
Method of inventory Cost of goods sold (Tk.) Ending inventory (Tk.)
FIFO 148 60
LIFO 124 84
Weighted average 138 70
Specific identification 140 68
Required: As a professional accountant can you agree with the above report of store manager?
Determine the cost of goods sold and the ending inventory for FIFO, LIFO, Weighted
average and Specific identification.
[Marks: 4 + (4 x 4) = 20]
Q. No. 3.
(a) Cash flow statements are a valuable source of information. However, there may be certain
important non-cash transactions; give 4(four) examples of such transaction.
(b) The following are the Balance Sheets of Moonlight Ltd. as at 30 June 2011 and 2010:
Assets 2011
(Taka)
2010
(Taka)
Liabilities and Equity 2011
(Taka)
2010
(Taka)
Cash in Hand 80,00,000 70,00,000 Accounts Payable 1,01,50,000 95,50,000
Trade Debtors 1,12,80,000 1,16,80,000 Income Tax Payable 3,00,000 5,00,000
Stock in Trade 1,85,00,000 1,71,50,000 Dividend Payable 8,00,000 9,00,000
Fixed Assets 3,30,70,000 2,96,70,000 Finance Lease Obligations 40,00,000
Accumulated
Depreciation
(1,16,50,000) (1,04,00,000) Share Capital 50,00,000 50,00,000
Investment in B Ltd 30,50,000 27,50,000 Share Premium 1,50,00,000 1,50,00,000
Loan Receivable 27,00,000 Un-appropriated Profit 2,97,00,000 2,69,00,000
Total 6,49,50,000 5,78,50,000 6,49,50,000 5,78,50,000
Additional Information:
i) On 30 June 2010, Moonlight Ltd. acquired 25% shares of B Ltd. for Tk.27,50,000. On that date the
carrying value of Bs assets and liabilities, approximately their fair value was Tk.1,10,00,000. B
Ltd. reported income of Tk.12,00,000 for the year ended 30 June 2011.
ii) During financial year 2011, Moonlight lent Tk.30,00,000 to Sunlight Ltd. Sunlight paid the 1
st

installment (including interest) of Tk. 3,00,000 on 1
st
April 2011.
iii) On 2

July 2010, Moonlight Ltd. sold equipment costing Tk.6,00,000 with a carrying amount of
Tk.3,50,000 for Tk.4,00,000.
iv) On 30 June 2011, Moonlight Ltd entered into finance lease for machinery. The PV of the rental
payment is Tk.40,00,000 which equals the fair value. Moonlight Ltd. made the first rental payment
of Tk.6,00,000 when due on 2

July 2011.
v) Net Income for the year 2011 was Tk.36,00,000.
vi) Moonlight Ltd. declared and paid cash dividend as follows:
2011 2010
Declared 15 June 2011 15 June 2010
Paid 30 August 2011 30 August 2010
Amount Tk.8,00,000 Tk.9,00,000
Required:
Prepare the cash flow statement following the IAS-7 (indirect basis). Also show your workings.
[Marks: (4+16) = 20]
Page 12 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 101. INTERMEDIATE FINANCIAL ACCOUNTING.

Q. No. 4.
(a) Sheen Owners Association purchased a truck for transportation use for its own. The following
facts apply for the truck:
Cost of Acquisition of the Truck . Tk. 450,000
Estimated salvage value ... Tk. 50,000
Estimated life:
In years 4 years
In Kilo-meters driven 160,000 kilo meters

Required:
(i) Calculate the depreciation for each year and make a journal entry to record straight-line
depreciation method.
(ii) Depreciation Schedule under Straight-line Method showing annual depreciation,
accumulated depreciation and book value.
(b) An investor purchases bonds with a face value of Tk.100,000. Payment for the bonds includes (i) a
Premium, (ii) accrued interest, and (iii) brokerage fees. How would each of these charges be
recorded and what disposition would ultimately be made of each of these charges?
[Marks: (5+5) + 10 = 20]
Q. No. 5.
(a) Describe the two criteria that must be satisfied before revenue can be recognized?
(b) What is meant by the term materiality in financial reporting?
(c) Discuss the term relevance and reliability as they relate to financial accounting information.
(d) The uncollectible accounts expense is estimated at of 1% of net sales of Tk. 4,000,000 for the
year. The current balance in Allowance for Doubtful Accounts is Tk. 300 credit only. Determine
the following:
(i) The uncollectible accounts expense for the year.
(ii) The adjusting entry to be made on December 31.
(iii) The balance in Allowance for Doubtful Accounts after adjustment.

[Marks: (4+4+4+8) = 20]


= THE END =





Page 13 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 102. COST ACCOUNTING

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
(a) Briefly discuss the impact of automation on application of learning curve.
(b) Standard production in the Buni Food Company is 40 units per hour. For the First week in April, a
workers record shows the following:
Monday (8 hours) 330 units
Tuesday (8 hours) 350 units
Wednesday (8 hours) 310 units
Thursday (8 hours) 320 units
Friday (8 hours) 340 units
Management is considering the adoption of one of two different incentive plans and wants to use
this representative workers record to study earnings using each proposal incentive plan.
With incentive plan A, workers are guaranteed a rate of Tk. 12.40 per hour and a premium of 70%
of the time saved on production in excess of standard.
With incentive plan B, workers are paid Tk. 0.35 per unit when daily output is below standard, Tk.
0.45 per unit when daily output is at standard and up to 5% above standard Tk. 0.50 per unit for all
production when daily output exceeds 5% above standard.
Compute daily earnings and the effective rate per hour for each day using each of the incentive
plans proposed. Critically evaluate both plans from the workers view point.
[Marks: 5+15) = 20]
Q. No. 2.
Satrong Textile Company operates under the weighted average method of processing. It has two
department, Weaving & Finishing, for both department conversion cost added evenly throughout
the process. Direct materials are added at the beginning of the process in the weaving department
and additional direct materials at the end of the Finishing department. The costs and unit
production statistics from October -2011 follow. All unfinished work at the October is 15%
completed to conversion costs. The beginning inventory (October 1) is 80% complete as to
conversion cost to October 1. All completed work is transferred to the next department.
Weaving Finishing
Beginning Inventory
Weaving Tk. 20,000 direct material, Tk. 5,000 conversion cost. Tk. 25,000
Finishing Tk. 60,000 Transferred in costs & 24,000 conversion cost. Tk. 84,000
Costs added during current period
Direct materials 1,00,000 60,000
Conversion costs 60,000 50,000
Physical units
Units in beginning Inventory 1,500 2,000
Units started this month 80,000 70,000
Goods units completed and transferred out 70,000 60,000
Normal Spoilage 3,500 3,000
Abnormal Spoilage 7,000 6,000
Assumption:
(i) Spoilage is assumed at the end of each two process, when the units are inspected. Spoiled
units are disposed of at zero net disposal value.
(ii) Assume that there is no shrinkage, evaporation or abnormal spoilage other than that indicated
in the information given.
Required: Five Basic steps of process costing for both Departments.
[Marks: 20]
Page 14 of 49

CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 102. COST ACCOUNTING

Q. No. 3.
a) Define product cost. Describe three different purposes for computing product cost.
b) Brothers Ltd. is a metal and wood manufacturer, selling products to the home construction market.
Consider the following data for the year 2010:
Particulars Tk.
Sand paper 2,000/-
Materials- handling costs 70,000/-
Lubricants and coolants 5,000/-
Miscellaneous indirect manufacturing labor 40,000/-
Direct manufacturing labor 300,000/-
Direct materials, Jan.1, 2010 40,000/-
Direct materials, Dec.31, 2010 50,000/-
Finished goods, Jan. 1, 2010 100,000/-
Finished goods, Dec.31, 2010 150,000/-
Work in process, Jan 1, 2010 10,000/-
Work in process, Dec.31, 2010 14,000/-
Plant-leasing costs 54,000/-
Depreciation-plant equipment 36,000/-
Property taxes on plant equipment 4,000/-
Fire insurance on plant equipment 3,000/-
Direct materials purchased 460,000/-
Revenues 1,360,000/-
Marketing promotions 60,000/-
Marketing salaries 100,000/-
Distribution costs 70,000/-
Customer service costs 100,000/-
Required:
(i) Prepare an income statement with a separate supporting schedule of cost of goods
manufactured. For all manufacturing items, indicate by V or F whether each is basically a
variable cost or a fixed cost. If in doubt, decide on the basis of whether the total cost will
change substantially over a wide range of units produced.
(ii) Suppose that both the direct materials and plant-leasing costs are tied to the production of
900,000 units. What is the unit cost for the direct materials assigned to each unit produced?
What is the unit cost of the plant-leasing costs? Assume that the plant-leasing costs are a
fixed cost.
(iii) Repeat the computation in requirement (ii) for direct materials and plat-leasing costs,
assuming that the costs are being predicted for the manufacturing of 1,000,000 units next
year. Assume that the implied cost-behavior patterns persist.
[Marks: 4 + {12+2+2} = 20]
Page 15 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 102. COST ACCOUNTING

Q. No. 4.
A Ltd. Company uses perpetual Inventory costing for Inventory item 407, which it purchases for resale.
The company began its operations on January 1 and is in the process of preparing its first financial
statements. Upon examining the inventory ledger and other accounting records, the following
information was gathered pertaining to the first four months of operations:
Purchase Sales
Months Units Cost per units Months Units Months Units
January 2 2,000 Tk. 5/- January 15 500 March 15 600
February 2 1,200 Tk.6/- January 31 700 March 31 800
March 2 1,500 Tk.8/- February 15 600 April 15 700
April 2 1,900 Tk.7/- February 28 900 April 30 700
On April 30, the following additional information was obtained:
(a) Current replacement cost, Tk.6.5 per unit
(b) Net realizable value, Tk.8 per unit
(c) Net realizable value reduced by a normal profit margin, Tk.5 per unit.
Management has not decided which of the following three inventory costing methods should be selected
to evaluate the cost of goods sold: (a) Average method, (b) FIFO method, and (c) LIFO method
Required:
(i) Prepare the perpetual inventory ledger for the item, using each of the above methods.
(ii) Prepare a comparative statement showing the effect of each method on gross profit. The sales price
is Tk.10 per unit.
(iii) Prepare the necessary adjusting journal entry under each of the three inventory costing methods,
assuming that the company decides to show its April 30 inventory at the lower of cost or market.
[Marks: 20]

Q. No. 5.
(a) Distinguish between Controllership and Treasurership according to their function.
(b) Shafee incorporation is a manufacturing concern, the predetermined rate of overhead recovery is
Tk. 40 per machine hour. During the year, total factory overhead to Tk. 88,96,000 and machine
hours actually worked were 1,86,500 only.
Actual production and sales during the year 2011 were 1,20,000 units and 1,05,000 units
respectively. The production shop had 36,000 unfinished units and based on technical estimates
these were considered as 50% complete. Analyze of the data revealed that 37.5% of the unabsorbed
overheads were attributable to initial inaccuracies in the planning and the balance was due to rising
price levels.
Analyze in detail the treatment of unabsorbed overheads in Cost Accounts including adjusting
Journal entry for adjustment of unabsorbed overheads.
[Marks: (5+15) = 20]

= THE END =
Page 16 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT.

Time: Three hours Full Marks: 100
Answer any Three questions from each part.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

PART-A: MANAGEMENT (TOTAL MARKS-50)
Q. No. 1.
(a) How would you explain the meaning of Management?
(b) Analyze the basic managerial roles and skills.
(c) What are the areas of social responsibilities of an organization? Explain.
[Marks: (5+5+6) = 16]
Q. No. 2.
(a) Define (i) committee, (ii) team and (iii) group.
(b) How would you ensure successful operations of a committee?
(c) Analyze the nature of different types of committee.
[Marks: (5+5+6) = 16]
Q. No. 3.
(a) Define a (i) domestic business, (ii) international business and (iii) multinational business with
examples.
(b) What are the basic challenges of international business? Describe.
(c) What do you mean by Global Economy?
[Marks: (5+5+6) = 16]
Q. No. 4.
(a) What is strategic planning?
(b) How would you formulate business level strategy and corporate level strategy?
(c) What are the effects of diversity in an organization?
[Marks: (5+5+6) = 16]
Q. No. 5.
(a) What are the basic roles of a manager to run an organization properly?
(b) How an organization is benefited by Managerial skills?
(c) Identify the nature of Managerial works.
[Marks: (5+5+6) = 16]


Two marks are reserved for neatness and relevance

Page 17 of 49

CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 103. MANAGEMENT AND MARKETING MANAGEMENT.


PART-B: MARKETING MANAGEMENT (TOTAL MARKS-50)
Q. No. 6.
(a) Analyze marketing management in (i) business and (ii) non-business sectors.
(b) Define customers value and consumers satisfaction.
(c) What is product planning? How would you implement it in marketing plan?
[Marks: (5+5+6) = 16]
Q. No. 7.
(a) What is market segmentation?
(b) Explain the variables that should be considered for segmenting market.
(c) State local marketing and niche marketing.
[Marks: (5+5+6) = 16]
Q. No. 8.
(a) What are the characteristics of an advertisement?
(b) Analyze the methods of sales promotion.
(c) How is public relation different from publicity?
[Marks: (5+5+6) = 16]
Q. No. 9.
(a) What are the challenges of new product development?
(b) How would you manage the new product development process?
(c) Describe the stages of product life cycle.
[Marks: (5+5+6) = 16]
Q. No. 10.
Write Short Notes on:
(a) Consumer Behavior
(b) Customer Relationship
(c) Branding
(d) Market Research
[Marks: (4x4) = 16]

Two marks are reserved for neatness and relevance


= THE END =
Page 18 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-I
SUBJECT: 104. INFORMATION TECHNOLOGY

Time: 2 hours 30 minutes Full Marks: 80
Start answering each question from a fresh sheet.
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.

Q. No. 1.
(a) What is the difference between fourth generation language and conventional Programming
Languages?
(b) What is the difference between System software and application software package?
(c) Differentiate between report generator and a query language.
[Marks: (8+7+5) = 20]
Q. No. 2.
(a) What is called Bar Code Scanner?
(b) What is called server and POS (Point of Sales) data of a super store?
(c) How can you reconcile the server and POS data, if difference found?
(d) How can you design a computerized accounting system of a super store?
[Marks: (4x5) = 20]
Q. No. 3.
(a) What do you mean by systems and application software?
(b) How can you choose software and programming language for a manufacturing concern?
(c) Shortly discuss on some application software.
(d) What do you mean by object oriented programming?
[Marks: (4x5) = 20]
Q. No. 4.
(a) Executive support system.
(b) Bandwidth and speed.
(c) Wifi.
(d) Call center & Contact center.
(e) ERP
[Marks: (4 x 5) = 20]


= THE END =

Page 19 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
You have been appointed by the Management of Moon Incorporation to review their books of Accounts
and to indicate what effect in income tax allocation procedures will have on their statements. The
following reconciliation of book income and taxable income are made available:
Amounts in Taka
2003 2004 2005
Reported Book Income before Tax 180,000 270,000 360,000
Add Expenses not deductible for tax purposes - 90,000 -
Excess of Book depreciation over tax depreciation - - 30,000
Deferred revenue tax in the period of collection 48,000 42,000 24,000
2,28,000 402,000 414,000
Less Excess of reported book income on installment sales
over taxable income

(36,000)

(54,000)

(48,000)
Excess of tax depreciation over book depreciation (36,000) (12,000) ___-___
Taxable Income 1,56,000 3,36,000 3,66,000

Required:
(a) Assume tax rates as 40% on taxable income for all the three years. Prepare journal entries for three
years to record the income tax liability. Use separate deferred accounts where necessary.
(b) Assume the rate changed in 2005 to 45%. Prepare the journal entries to record the Income Tax
liability of that year.
[Marks: (15+5) = 20]
Q. No. 2.
Barnali Corporation has its Home Office in Dhaka and a Branch in Chittagong. The Following
information was available from the books of Home Office and the Branch as on 31 December 2010.
Home Office (Tk.) Branch (Tk.)
Inventories as on 1 January 2010 200,000 90,000
Purchases 2,300,000 -
Sales 4,100,000 3,100,000
Other Expenses 304,000 124,000
Inventories as on 31 December 2010 104,000 62,000
The Branch books show the Home Office Account at Tk. 180,000 (Cr.) and the Home Office books show
the Branch Account at Tk. 600,000 (Dr.). The Branch receives all its supplies from the Home Office,
which are invoiced at 25% over cost. During the year, the Home Office sent invoices to the Branch to the
tune of Tk. 20,90,000. The Home Office credits its sells account with the invoice price of the goods sent
to the Branch. The Home Office billed the Branch for Tk. 240,000 on 31 December 2010 representing
the Branchs share of expenses incurred by the Home Office. The said expenses had not been recorded in
the books of the Branch.


Page 20 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I
Q. No. 2. (Contd)


All cash collection made by the Branch is deposited in a local bank in the account of Home Office as
follows:
Amount Date of deposit by Branch Date of Receipt by Home Office
100,000 25 December 2010 31 December 2010
40,000 28 December 2010 02 January 2011
80,000 31 December 2010 03 January 2011
The expenses of the Branch are met by the Home Office from time to time for which amounts are sent in
advance to the Branch. A sum of Tk. 60,000 sent to the Branch by Home Office on 29 December 2010,
which was received by the Branch on 3 January 2011.
Required: Prepare Income Statement, in columnar form after showing the reconciliation of Branch
Account and Home Office Account Balance.
[Marks: 20]

Q. No. 3.
PQR Corporation, a lessor of office machines, purchased a new machine for Tk. 450,000 on December
31, 2004. The machine was delivered the same day (by prior arrangement) to XYZ Company, the lessee.
The information relating to the lease transactions are as under:
(i) The leased asset had an estimated useful life of seven years which coincides with the lease term.
(ii) At the end of lease term, the machine will revert to PQR, at which time it is expected to have a
residual value Tk. 60,000(none of such is guaranteed by XYZ).
(iii) PQRs implicit interest rate (on its net investment) is 12% which is known by XYZ.
(iv) XYZs incremental interest rate is 14% at December 31, 2004.
(v) Lease rentals consist of seven equal annual payments, the first of which was paid on December 31,
2004.
(vi) The lease is appropriately accounted for as a direct financing lease by PQR and as a capital lease
by XYZ. Both the lessor and lessee follow the Calendar years and depreciate all plant assets on the
straight line basis.
Present value of Taka 1 at 12% for 7 years is 0.4523.
Present value of annuity of Taka 1 in advance for 7 years @ 12% is 5.1114.
Required:
(i) Compute the annual rental of the lease (Round to nearest Taka).
(ii) Compute the amounts of the minimum lease payments receivable and unearned interest revenue
that PQR should disclose at the inception of the lease on December 31, 2004.
(iii) What expense should XYZ record for the year ended December 31, 2005?
[Marks: (5+5+5) = 15]
Page 21 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 201. ADVANCED FINANCIAL ACCOUNTING-I

Q. No. 4.
(a) From the following particulars of a Commercial Bank compute the amounts of statutory reserve
required:
Profit before tax Tk. 29,30,507
Profit after tax Tk. 19,62,907
Balance of statutory reserve fund Tk. 5,00,000
Balance of share premium Tk. 50,000
Paid-up share capital Tk. 10,00,000
(b) Redraft the following Balance Sheet of City Bank as on December 31, 2008 as per IAS-30s
format:
Liabilities Taka Assets Taka
Accumulated Depreciation 1,65,000 Investment (cost) 30,00,000
Borrowings 7,00,000 Money at short call notice 3,00,000
Provision for Bad Debts 25,000 Cash in hand 60,000
Fixed Deposits 9,50,000 Loans, cash credits and overdrafts 70,00,000
Bills Payable 8,00,000 Cash with other Banks 15,00,000
Current Account 80,00,000 Cash with Bangladesh Bank 13,00,000
Savings Bank Deposit 30,00,000 Bills discounted and purchased 5,00,000
Sundry Creditors 30,000 Premises 13,00,000
Branch Adjustment 50,000 Non-Banking assets 50,000
Statutory Reserve 3,50,000
New Statutory Reserve 49,000
Proposed Dividend 75,000
Provision for Taxation 1,00,000
Surplus of profit & loss A/c 1,81,000
Paid-Up share capital 5,00,000
Rebate on Bills discounted 5,000
Unclaimed Dividend 30,000
1,50,10,000 1,50,10,000
[Marks: (5+15) = 20]

Q. No. 5.
(a) Mention the two methods of recognizing profit from a long-term construction contract. Under what
circumstances should a company use the completed contract method?
(b) Define Statutory Reserve and Capital Reserve.
(c) Give four different transactions originating with the branch that affect the reciprocal accounts.
(d) Define Contract as per IAS-11. Under what condition percentage of completion accounting
recommended for construction contractors?
(e) What do you mean by IFRS? What is the relationship of IFRS with the IAS?
[Marks: (5 x 5) = 25]

= THE END =

Page 22 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 202. MANAGEMENT ACCOUNTING

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
The Diagold Cutting Company requires 10 machine hours per unit in the Cutting Department. The
following costs are assumed to be related to the operations of a cutting machine at a normal capacity of
10,000 units per year (with a maximum capacity of 12,000 units per year):
Variable costs:
Electricity (10,000 units x 10 MH*/UNIT x Tk.5/MH Tk. 500,000
Repairs & maintenance (10,000 UNITS x 10 MH/unit x Tk. 2/MH) 200,000
Fixed costs:
Depreciation (Tk. 2,000,000/5 years) 400,000
Insurance 100,000
Total costs at 10,000 units
*MH = machine hours.
Tk. 1,200,000
Required:
(a) What are the variable, fixed, and total costs per unit if the normal production of 10,000 units per
year is achieved?
(b) What is the variable, fixed, and total cost per unit if only 8,000 units are produced per year?
(c) What is the implication of producing less units (8,000 units) than normal capacity (10,000 units)
for managerial decision making?
(d) Which costs are relevant and which costs are irrelevant to a decision to expand production from
normal capacity (10,000 units) to maximum capacity (12,000 units)?
(e) Suppose a second cutting machine, identical in every respect to the first one, is under consideration
for possible purchase. Total production for the year is still expected to be equal to normal capacity
(10,000 units with the first cutting machine accounting for 6,000 units and the second cutting
machine accounting for 4,000 units).
(i) What are the total costs of operating each of the two machines?
(ii) What are the variable, fixed, and total costs per unit for each machine?
(iii) What costs are relevant and what costs are irrelevant to the decision to acquire a second
cutting machine?
(f) Under what condition would both the variable costs and fixed costs be relevant in a decision to
acquire a second cutting machine?
[Marks: (2+3+3+3+6+3) = 20]
Q. No. 2.
(a) The following data are available in a manufacturing company for a yearly period:
Fixed expenses Tk.
Wages and salaries 9,50,000
Rent, rates and taxes 6,60,000
Depreciation 7,40,000
Sundry administrative expenses 6,50,000
Semi-variable expenses (at 50% of capacity)
Maintenance and repairs 3,50,000
Indirect labour 7,90,000
Sales department salaries etc. 3,80,000
Sundry administrative expenses 2,80,000
Variable expenses (at 50% of capacity)
Materials 21,70,000
Labour 20,40,000
Other expenses 7,90,000
98,00,000

Page 23 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 202. MANAGEMENT ACCOUNTING
Q. No. 2. (Contd.)

Assume that the fixed expenses remain constant for all levels of production, semi-variable
expenses remain constant between 45% and 65% of capacity, increasing by 10% between 65%
and 80% capacity and by 20% between 80% and 100 capacity.
Sales at various levels are:
Tk. (in lakhs)
50% capacity 100
60% capacity 120
75% capacity 150
90% capacity 180
100% capacity 200
Prepare a flexible budget for the year and forecast the profit at 60%, 75%, 90% and 100% of
capacity.
[Marks: 20]
Q. No. 3.
Two competing business, A Ltd. and B Ltd. sells the same type of product in the same type of market.
For the year ending 31
st
December, 2011, their budgeted Profit and Loss Accounts are as follows:
A Ltd. B Ltd.
Tk. Tk. Tk. Tk.
Sales 6,00,000 6,00,000
Less:
Variable Cost 4,80,000 4,00,000
Fixed overheads 60,000 5,40,000 1,40,000 5,40,000
Budgeted Net Profit 60,000 60,000
Required:
(i) Prepare a Profit/Volume Graph.
(ii) Calculate the break-even point of each business.
(iii) Calculate the sales volume at which each of the two companies will make a profit of
Tk. 20,000.
(iv) State which business is likely to earn greater profits in conditions of:
(a) Low demand for the product.
(b) Heavy demand for the product.
Give your reasons.
[Marks: (6+4+4+6) = 20]
Q. No. 4.
(a) The budgeted prices for materials and labor per unit of finished product are Tk. 13.00 and Tk. 5.00
respectively. The production manager is delighted about the following data:
Master (static) Budget Actual Costs Variance
Direct material Tk. 10,40,000 Tk. 9,80,000 Tk. 60,000F
Direct labor Tk. 4,00,000 Tk. 3,76,000 Tk. 24,000F
Is the managers happiness justified?
Required: Prepare a report that might provide a more detailed explanation of why the static
(master) budget was not achieved. Goods output was 68,000 units.
(b) Unilever Ltd. wants to prepare a cash budget for the months of September through December.
From the following information prepare the cash budget and state if the company will need to
invest excess funds or borrow funds during these months:
(1) Sales were Tk. 5,00,000 in June and Tk. 6,00,000 in July. Sales have been forecasted to be
Tk. 6,50,000, Tk. 7,20,000, Tk. 6,30,000, Tk. 5,90,000 and Tk. 5,60,000 for the months of
August, September, October, November and December respectively. In the past, 10% of
sales were on cash basis and the collections were 50% in the first month, 30% in the second
month and 10% in the third month following the sales.
Page 24 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 202. MANAGEMENT ACCOUNTING
Q. No. 4. (Contd.)


(2) Every 4 months 5,000 of dividends from investments are expected. The first dividend
payment was received in January.
(3) Purchases are 60% of sales, 15% of which are paid in cash, 65% are paid 1 month later and
the rest is paid 2 months after purchase.
(4) Tk. 80,000 dividends are paid twice a year in March and September.
(5) Monthly rent is Tk. 20,000.
(6) Taxes are paid Tk. 65,000 payable in December.
(7) A new equipment will be purchased in October for Tk. 23,000.
(8) Tk. 15,000 interest will be paid in November.
(9) Tk. 10,000 loan payments are paid every month.
(10) Wages and salaries are Tk. 10,000+5% of sales in each month.
(11) Augusts ending cash balance is Tk. 30,000.
(12) The company would like to maintain a minimum cash balance of Tk. 1,00,000.
Required: Prepare the cash budget and state if the company will need to invest excess funds or
borrow funds during the months of September, October, November, and December.
[Marks: (8+12) = 20]
Q. No. 5.
(a) A business executive once stated Depreciation is one of our biggest sources of cash. Do you
agree that depreciation is a sources of cash? Explain.
(b) HP Hydroelectric Plant Company Ltd. to supply power, light and heat. It is end of 2011. The All
Fixed Company began operations in January, 2010. The company has no variable costs. All of its
costs are fixed; they do not vary with output.
The all Fixed Company is located on the banks of a river and has its own hydroelectric plant to
supply power, light and heat. The company manufactures a synthetic fertilizer from air and river
water and sells its product at a price which is not expected to change.
It has a small staff, all hired on an annual salary basis. The output of the plant can be increased or
decreased by adjusting dials on a control panel.
The following are data regarding the operations of the All Fixed Company:
2010 2011
Sales 10,000 tones 10,000 tones
Production 20,000 tones -
Selling price Tk. 300.00 per ton 300.00 per ton
Production costs (fixed) Tk. 28,00,000 Tk. 28,00,000
General and administrative expense Tk. 4,00,000 Tk. 4,00,000
Required:
(i) Prepare an income statement for the year using absorption costing method.
(ii) Prepare and income statement for the year using variable costing method.
(iii) What inventory costs would be carried in the balance sheets in December 2010 and 2011
under each method?
[Marks: (4+6+6+4) = 20]

= THE END =

Page 25 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 203. COMMERCIAL AND INDUSTRIAL LAWS

Time: Three hours Full Marks: 100
Answer any FIVE questions taking at least TWO from each Group A and B.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

PART-A: COMMERCIAL LAWS
Q. No. 1.
(a) An agreement gives birth to a contract Discuss.
(b) Mental acceptance is no acceptance. Explain.
(c) Under what circumstances a person can sue to enforce a contract even though he is not a party to
that contract.
[Marks: (5+5+10) = 20]
Q. No. 2.
(a) What are the three types of delivery?
(b) Distinguish between Rights of Lien and Rights of stoppage in transit.
(c) Narrate the rules regarding sales by Auction.
[Marks: (6+7+7) = 20]
Q. No. 3.
(a) No man should grow rich out of anothers loss Discuss in the light of the Contract Act.
(b) As per the law how the relationship of principle and agent be created?
(c) What is Patent and Design? What are the salient features of Patent and Design Act 1911?
[Marks: (5+7+8) = 20]
Q. No. 4.
(a) When an agreement to sell becomes sales?
(b) What are the circumstances under which the same person can be both a purchaser and a seller?
(c) What are the main objectives of Arbitration and Conciliation Act 1995?
[Marks: (5+5+10) = 20]
Q. No. 5.
(a) What are the main differences between noting and protest and what are the contents of protest?
(b) Discuss the provisions of time for presenting a negotiable instrument.
(c) Under what circumstances a person is liable as a common carrier?
[Marks: (8+6+6) = 20]
Page 26 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 203. COMMERCIAL AND INDUSTRIAL LAWS


PART-B: INDUSTRIAL LAWS

Q. No. 6.
(a) Discuss the provisions of Leave and Holidays under Bangladesh Labour Act 2006.
(b) Differentiate between the followings:
(i) Commercial Establishment and Industrial Establishment
(ii) Probationary and Temporary Worker
(iii) Casual Worker and Badli Worker
[Marks: (8+12) = 20]
Q. No. 7.
(a) What is Lay off? Discuss the rights of laid off workers for compensation as per law.
(b) What are the rules for termination of employment?
(c) Differentiate between Strike and Lockout.
[Marks: (8+5+7) = 20]
Q. No. 8.
(a) What are the acts and omissions that is treated as misconduct as per the Bangladesh Labour Act
2006.
(b) Discuss the grounds on which registration of a trade union may be cancelled.
(c) Under what circumstances compensation is not at all payable even in case of accidents while at
work?
[Marks: (8+6+6) = 20]
Q. No. 9.
(a) Discuss the procedures for election and determination of Collective Bargaining Agent.
[Marks: 20]
Q. No. 10.
(a) State the provision of the Bangladesh Labour Act with regard to the following:
(i) Health, (ii) Safety, (iii) protection against fire and (iv) Rights of Women Workers.
[Marks: 20]

= THE END =
Page 27 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 204. TAXATION


Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
(a) Taxation is a way to transfer the resources from private sector to government sector in order to
accelerate economic and other development. Explain the statement in the light of purposes of
taxation.
(b) According to the Income Tax Ordinance 1984, differentiate between the following:
(i) Income year and Accounting year.
(ii) Universal self-assessment and Assessment after hearing.
[Marks: (4+4) = 8]
Q. No. 2.
Ms. Afsana Hoque is the Head of Accounts of a multinational company in Bangladesh. She has joined
the company on July 01, 2010. She has received the following income for the year ended on 30
th
June,
2011:
(a) Basic pay Tk. 1,50,000 per month.
(b) Rent-free accommodation fully furnished by the company, the annual rental value of the
house is Tk. 5,00,000;
(c) Full-time company car for her own office use and for her family;
(d) Company pays Tk. 20,000 per month for her two school going children which is paid to the
school authority directly;
(e) She received two festival bonuses each equivalent to basic pay during the Eid time which she
spent partly for her family and partly for the poor people in her village;
(f) Drivers salary of the full-time car Tk. 10,000 per month paid to her drivers bank account as
he is the companys employee;
(g) Company paid Tk. 2,00,000 to her during the year being the reimbursement of various utility
bills of her house.;
(h) Personal mobile bill paid by the company Tk. 5,000 per month;
(i) She was paid Tk. 2,00,000 for her overseas travels for the official trip out of which she saved
25% during the year;
(j) Bill paid by the company for the membership of an international club Tk. 2,50,000;
(k) Medical allowance Tk. 10,000 per month during the year; actual medical expense was Tk.
1,00,000;
(l) Entertainment allowance Tk. 10,000 per month; actual expense in this regard Tk. 1,50,000;
(m) She has contributed 10% of her basic salary to a recognized provident fund. Her employer
also contributed the same amount. Interest on the said fund @ 18% is Tk. 1,800 during the
period;
(n) She has contributed 2% of her basic pay to a group insurance scheme.
The employer of Ms. Afsana Hoque has deducted tax at source at the rate of Tk. 60,670 per month. She
also received pretax interest on savings certificate Tk. 80,000 and an amount of Tk. 8,000 was deducted
at source. She sold a land (purchased 3 years ago) at a price of Tk. 20,00,000 and Tk. 40,000 was paid as
tax on transfer of property.
Page 28 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 204. TAXATION.
Q. No. 2. (Contd.)

During the year she has claimed the following expenditures as her investment allowance:
1. Purchase of debenture from the primary market Tk. 1,00,000;
2. Insurance premium Tk. 20,000 (Policy value Tk. 2,50,000);
3. Household expense Tk. 2,00,000;
4. Payment to income tax lawyer Tk. 25,000;
5. Purchase of Savings Certificate Tk. 1,50,000;
6. Contributed Tk. 50,000 to the Deposit Pension Scheme;
7. Donated to Government Zakat Fund Tk. 25,000;
8. Donated to Ahsalnia Mission Cancer Hospital Tk. 10,000;
9. Installment paid for a 5 katha plot to the Bashundhara Group Tk. 40,000.
You are required to calculate the total income and tax liability of Ms. Afsana Hoque for the assessment
year 2011-2012.
[Marks: 22]
Q. No. 3.
(a) In accordance with the provisions of Income Tax Ordinance 1984, distinguish between:
(i) Revision under section (u/s) 120 and Revision u/s 121A;
(ii) Appeal u/s 153 or 157 and Appeal u/s 158;
(iii) Reference u/s 160 and Reference u/s 162.
(b) Discuss the limitations of the carry-forward of losses.
(c) What are the penalties those can be imposed for: (i) non-submission of return in time, (ii)
concealment of income, (iii) non-compliance of certain obligations, (iv) improper use of TIN.
(d) What do you know about the exemption of income earned by Private Power Generation
Companies?
[Marks: (9+3+4+4) = 20]
Q. No. 4.
The profit and loss account of Beacon Pharmaceuticals for the year ended on June 30, 2011 reports net
income of Tk. 20,00,000. A careful scrutiny of accounts and supporting documents revealed the
following facts:
(a) During the year the company sold some of its pharmaceutical supplies that remained unused for a
long time in the storeroom. The company sold the supplies for a loss of Tk. 1,50,000 as the expiry
period is very close and charged such loss against current years profit.
(b) The company recovered Tk. 20,000 from bad debt that was written off earlier and was allowed as
deduction. The amount so recovered was credited to sundry debtors account.
(c) The company had Tk. 80,000 interests due to Bangladesh Development Bank in the year 2006-
2007 and such interest was shown as allowable deduction in that year. Still such interest remains
unpaid.
(d) The company has a trading liability with one overseas company to the tune of Tk. 1,50,000 which
has been totally waived by the overseas company under special agreement during the year. But the
company is yet to show it in its accounts.
(e) During the year, the company sold an equipment for Tk. 1,80,000 which was purchased at a total
cost of Tk. 1,30,000 and had a written down value of Tk. 90,000 on the date of sale. The company
reported Tk. 90,000 as gain on sale of equipment in the credit side of profit and loss account.
(f) Due to a sudden fire on the factory building, the extended portion of the building is totally
destroyed and compensation received from the insurance company totaled Tk. 2,50,000. In
addition, the company realized an additional sum of Tk. 30,000 by selling the scrap. The extension
was constructed at a total cost of Tk. 4,00,000 and depreciation charge to date amounts to Tk.
80,000. The loss has been charged in the profit & loss account.
(g) The company sold a scientific apparatus used for scientific research for Tk. 80,000 which was
originally purchased at Tk. 1,50,000 and fully depreciated. The sale proceed is not recorded at all.
Page 29 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-II
SUBJECT: 204. TAXATION.
Q. No. 4. (Contd.)

(h) The company have had export quota for exporting garments to EU countries. As the company has
recently changed the line of operation (switched from garments manufacturing to pharmaceuticals),
it transferred the export quota to another garments manufacturer for an annual sum of Tk. 70,000.
The export value of such quota is Tk. 25,00,000. Such income is not reported at all.
(i) Bonus and commission to the field representatives amounted to Tk. 3,00,000 at the rate of 5
months pay including 1 months pay as festival bonus. But the general practice of bonus and
commission for the similar business is two months pay as commission plus 1 months pay as
festival bonus.
(j) Sum of Tk. 1,20,000 paid to an institution for scientific research, which is not approved by NBR.
(k) Sum of Tk. 5,00,000 expended for establishing a hospital for the benefit of employees without any
charge. The company has charged it in the profit & loss account as hospital expenditure and not
claimed any other deduction or allowance.
(l) Salary of Tk. 5,00,000 and rent of Tk. 80,000 were paid without deduction at source.
(m) Payment of brokerage and commission of Tk. 60,000 made to a non-resident without deducting tax
at source.
(n) Annual perquisites enjoyed equally by the MD, the Chairman and 5 Members of Board of
Directors amount to Tk. 25,50,000.
(o) Accounting depreciation charged to the amount is Tk. 2,50,000 but tax depreciation amounts to Tk.
3,00,000.
(p) Value of the free sample distributed was Tk. 3,00,000. Annual turnover during the year was Tk.
1,30,00,000.
(q) Expenditure on foreign travels for holidaying and recreation of the employees and their dependants
to the extent of the amount equivalent to three months basic salary of Tk. 3,60,000; actual
expenditure being Tk. 4,00,000 and that the travel was not oftener than once in two years.
(r) Sum of Tk. 50,000 expended to train employees (Bangladeshi citizen) in connection with a scheme
approved by the NBR and shown in profit & loss account.
(s) The company charged a sum of Tk. 2,00,000 for visits abroad as a member of trade delegation
sponsored by the government in the profit & loss account.
(t) Annual membership fee of Tk. 1,50,000 is paid to Bangladesh Pharmaceutical Society, which is a
professional institution, recognized by the NBR and charged in profit & loss account.
(u) Expenditure on publicity and advertisement amounting to Tk. 3,00,000 charged in profit & loss
account was accepted by the NBR.
(v) Entertainment expenditure, Tk. 1,50,000.
Required: Compute the taxable income of the company.
[Marks: 30]
Q. No. 5.
(a) Define prohibited goods as per the Customs Act 1969. What are the consequences of importing
prohibited goods as per the Act?
(b) Mr. Anwar imported some processed mushrooms from Thailand. C&F value of the goods were
US$ 5,000 with an exchange rate of US$1 = Tk. 82.50. Insurance cost was 1% of C&F value.
Border taxes on this import were as follows: Customs duty @ 25%, Supplementary duty @ 20%,
Value added tax (VAT) @ 15%, Advance income tax (AIT) @ 5%, Regulatory duty @ 5% and
Advance trade VAT (ATV) @ 3%. Compute the amount of Customs duty, Supplementary duty,
VAT, AIT, Regulatory duty and ATV. Also compute the total tax incidence as a percent of
assessable value.
(c) Critically evaluate the necessity of gift tax in terms of revenue generated from such tax to
Government exchequer. Mention the gifts which are exempted from gift tax.
(d) Under what situations, Input Tax Credit is not allowed under the Value Added Tax Act, 1991?
[Marks: (4+8+3+5) = 20]

= THE END =
Page 30 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONA LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q.No.1.
The statements of financial positions of X and its subsidiary Y Ltd. as at 31/12/10 are
summarized below:-
X Y
Assets Tk. Tk. Tk. Tk.
Non-Current Assets:
Intangible assets 2,000
Property, plant & equipment 29,000 24,800
Investment in Y 21,000 --------
50,000 26,800

Current Assets:
Inventories 12,000 18,000
Trade Receivables 24,750 21,000
Trading A/C with Y 4,000 0
Interest Receivable from Y 250 0
Bank Balance 20,000 0
61,000 39,000
Total 1,11,000 65,800
Equity:
Ordinary shares of Tk. 1 each 40,000 8,000
Retained Earnings 21,000 11,000
61,000 19,000
Non current liabilities
Interest bearing borrowings 30,000 20,000
Current liabilities:
Trade payables 20,000 18,300
Interest payables 0 500
Current a/c with X 0 2,000
O/D 0 6,000
20,000 26,800
Total 1,11,000 65,800
Notes:
(1) X acquired 6,000 ordinary shares in Y on 1/1/2007. The price paid was Tk. 11,000. The
balance on Ys retained earnings at the date of acquisition by X was Tk. 5,000.This
included an intangible asset of Tk. 1,000 (see note 4 below). Goodwill on consolidation is
retained at cost in the group statement of financial position. There has been no evidence of
impairment since acquisition. X made a long term loan of Tk. 10,000 to Y on the same
date.
(2) On 31
st
December, 2010 there was cash in transit from Y to X of Tk. 2,000.
(3) On 31
st
December, 2010 the inventory of Y included Tk. 4,800 of goods purchased from
X. X had invoiced these goods at cost plus 25%.
(4) The intangible asset of Y does not satisfy the recognition criteria laid down in IAS -38.
IAS -38 is to be followed in preparing the consolidated accounts.
(5) It is the groups policy to value non-controlling interests as it proportionate share of the
fair value of the subsidiarys identifiable net assets.
Required: Prepare a consolidated statement of financial position for the X group as at 31
st

December, 2010.
[Marks : 20]
Page 31 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONA LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II

Q. No. 2.
(a) Explain why EPS is regarded as so important that a separate International Accounting
Standard is issued on its calculation.
(b) State the general limitations of the EPS accounting ratio and its specific limitations for
investors who are comparing the performance of different entities.
(c) Dancer Ltd., a listed entity has 10,00,000 ordinary shares in issue throughout 2010. The
profits after tax for the period total Tk. 8,00,000. The company has two convertible
financial instruments in issue:
(i) Tk. 5,00,000.00, 10% loan stock, each Tk. 1,000 of stock having the right to convert into
2,000 ordinary shares.
(ii) 4,00,000 convertible Tk. 1 preference shares, paying a dividend of Tk. 0.10 per share.
Each preference share is convertible to 2 ordinary shares.

Calculate the basic and diluted earnings per share for Dancer Ltd. assuming a tax rate of 30%.
[Marks: (6+6+8) = 20]
Q. No. 3.
(a) Define an ordinary share, a potential ordinary share, warrants or options as per BAS-33.
Also give examples of potential ordinary shares as per BAS-33.
(b) Karim Afroza & Co Ltd. issues 4 million convertible bonds at January 1, 2010. The bonds
mature in three years and are issued at their face value of Tk. 10. The bonds attract interest
arrears. Each bond can be converted into 2 ordinary shares. The company can settle the
principal amount of the bonds in ordinary shares or in cash.
When the bonds are issued, the interest rate for a similar debt without the conversion rights
is 10%. At the issue date the market price of an ordinary share is Tk. 4. Ignore taxation.
The company is likely to settle the contract by issuing shares.
Profit attributable to ordinary Tk.
Shareholders to December 31, 2010 33 million
Ordinary shares outstanding 10 million
Allocation of proceeds of bond
Liability 30 million
Equity 10 million
Total 40 million
Required: Calculate basic and diluted EPS for the year to December 31, 2010.
(c) Entity A has a profit after tax of Tk. 15 million for the year to December 31, 2010. These
appropriations of profit have not been included in this amount:
Tk.(in
million)
(i) Arrears of cumulative preference dividend for 2 years ended
31/12/10
4
(ii) Ordinary dividends 5
(iii) Preference share premium payable on redemption-appropriation
of profit
1
(iv) Exceptional profit (net of tax) 4
These share transactions occurred during the year ended 31/12/10. The entity had 3
million ordinary shares of Tk. 1 outstanding at 1/1/10.
Date Ordinary shares
issued/purchased

Jan-1 2,50,000 Issued at Tk. 5 per share, Tk. 1 paid to
date: entitled to participate in dividends
to extent paid-up.
Page 32 of 49
April-1 6,00,000 Full market price Tk. 3 per share issue.
July-1 (4,00,000) Purchase of our shares at Tk. 3.5 per
share
Required: Calculate basic earnings per share.
[Marks: (5+10+5) = 20]
CMA APRIL, 2012 EXAMINATION
PROFESSIONA LEVEL-III
SUBJECT: 301. ADVANCED FINANCIAL ACCOUNTING-II

Q. No. 4
(a) Define temporary differences between deferred tax liabilities and deferred tax assets.
(b) From the following information of Data Ltd. compute current tax expense, deferred tax
liability at 31/12/10 showing separately the carrying amount and tax base:-
2010 Tk.
Accounting profit 8,775.00
Tax rate 40%
Depreciation for accounting purpose 4,800.00
Depreciation for tax purpose 8,100.00
Charitable donations 500.00
Fine for environment solution 700.00
Product development costs 250.00
Health care benefits 2,000.00
Accounts Receivable 500.00
Inventory 2,000.00
Investments 33,000.00
Property, plant & equipment (PPE)
(Carrying value)* 37,200.00
Accounts payable 500.00
Long term debt 12,475.00
Share Capital 5,000.00
Retained Earning (Carrying Value) 39,685.00
Retained Earning (Tax Base) 17,135.00
* Property, plant & equipment consist of building & motor vehicles. Buildings & vehicles
are depreciated @ 5% and 10% on straight line basis for tax purpose.
For accounting purposes @ 20% and 25% on straight line basis. Tax Base of PPE is
Tk. 12,900.00. Deferred tax liability on 31/12/09 was Tk. 8,600.
[Marks: (6+6+8) = 20]
Q. No. 5.
(a) Discuss at least six codes of ethics should be followed by the practicing Cost and
Management Accountants of Bangladesh.
(b) Explain the accountability of independent branch and head office relating to financial
reporting.
(c) Define Human Resource Accounting, Methods involved in Human Resource Accounting.
[Marks: (6+6+8) = 20]
==THE END==
Page 33 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 302. ADVANCED COST ACCOUNTING

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q.No.1.
(a) Theres no reason for me to get excited about the choice between the weighted-average and FIFO
methods in my process-cost system. I have long-term contracts with materials suppliers at fixed
prices. Do you agree with this statement made by a plant controller? Explain.

(b) M/s. Zaber and Zaker Manufacturing Company makes three joint products, ZA, ZK and ZZ.
Material enters Process I and after a time it emerges in two different forms. One of these forms
enters Process X, where it is transformed into Product ZA and the other enters Process II. From
Process II, come Product ZK, ready for sale and a residue which is sent trough Process III, from
which Product ZZ emerges.
During a past period, the statistical records show that costs were incurred in the several processes
as follows:
Process I (including material) Taka 365,800
Process II 130,000
Process III 89,600
Process X 20,000
Total costs of all products 605,400
During the same period the production and sales records were as follows (there were no beginning
inventories):
Production Sales
Product ZA 2,800 kg 2000 kg brought Tk. 100,000
Product ZK 20,000 kg 15,000 kg brought Tk. 300,000
Product ZZ 42,000 kg 40,000 kg brought Tk. 400,000
At the end of the period, the market prices of the inventories were:
Product ZA Tk. 40 a kilogram
Product ZK Tk. 30 a kilogram
Product ZZ Tk. 8 a kilogram
The accountant was instructed to treat ZK and ZZ as joint products and ZA as a by product in the
allocation of costs. He was also instructed to assume a profit or loss margin of 25 percent and an
estimated selling expense of 10 percent, both on sales value, for product ZA.
Required:
Show the allocation of cost to products, to goods sold and to the end-of-the-period inventories.
[Marks: (4+16) = 20]
Q. No. 2.
(a) Define Service Cost. To what industries is this method of costing applicable?
(b) M/s. Emerging Consulting Ltd. has been asked to provide the services of two consultants to a
government department for the coming fiscal year. The consultants will still be in the employ of
the company, who will invoice the government department on a quarterly basis for their services.
Page 34 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 302. ADVANCED COST ACCOUNTING
Q. No. 2. (Contd..)

Emerging Consulting Ltd. proposed the names of Mr. Pavel and Mr. Novel as two consultants for
the government department. The following cost data are available:
Mr. Pavel Mr. Novel
Gross Annual Salary Tk. 4,250,000 Tk. 3,500,000
Leave entitlement per year 6 weeks 5 weeks
Public holidays per year 10 days 10 days
Working day 8 hours 8 hours
Employers pension contribution % if salary 8% 6%
Cost of company car bought at start of contract Tk. 1,346,400 Tk. 1,366,000
Other information:
(i) 10% of each consultants working time is non-chargeable.
(ii) Overheads associated with the project amount to Tk. 4,440,000 and are to be charged to each
consultants cost upon the basis of Tk. 1,500 per hour by Pavel and Tk. 1,000 per hour
worked by Novel.
(iii) It is envisaged that Pavels company car will last for 2 years and have a residual value of Tk.
600,000 while Novels Company car will last for 3 years and have a residual value of Tk.
400,000.
(iv) The company uses the straight line method of depreciation.
(v) The companys policy for working time is 5 days a week and 52 weeks a year.
Required:
(1) Calculate the cost of the services of Pavel and Novel to the government department on an
hourly basis.
(2) Given that it is company policy to take a profit of 20% contract price charged, calculate the
value of the invoice issued each quarter to the government department for the services of
both Pavel and Novel.
[Marks: 4+(8+8) = 20]
Q.No.3.
(a) The production-volume variance should always be written off to Cost of Goods Sold. Do you
agree? Explain.
(b) Benchmarking against other companies enables a company to identify the lowest-cost-producer.
This amount should become the performance measure for next year. Do you agree?
(c) The Monroe Corporation manufactures lamps. It has set up the following standards per finished
unit for direct materials and direct manufacturing labor:
Direct materials: 10 lbs. at Tk.4.50 per lb. Tk.45.00
Direct manufacturing labor: 0.5 hour at Tk.30 per hour 15.00
The number of finished units budgeted for January 2009 was 10,000;9,850 units were actually
produced.
Actual results in January 2009 were:
Direct materials: 98,055 lbs. used
Direct manufacturing labor: 4,900 hours Tk.154,350
Assume that there was no beginning inventory of either direct material of finished units.
During the month, materials purchases amounted to 100,000 lbs, at a total cost of Tk. 465,000.
Input price variances are isolated upon purchase. Input-efficiency variances are isolated at the time
of usage.
Required:
(i) Compute the January 2009 price and efficiency variances of direct materials and direct
manufacturing labor.
(ii) Prepare journal entries to record the variances in requirement 1.
(iii) Comment on the January 2009 price and efficiency variances of Monroe Corporation.
(iv) Why might Monroe calculate direct materials price variances and direct materials efficiency
variances with reference to different points in time?
[Marks: 3+3+(4+4+3+3) = 20]
Page 35 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 302. ADVANCED COST ACCOUNTING
Q.No.4.
(a) Life Cycle costing tracks and accumulates business function costs of the value chain attributable
to each product from initial R&D to final customer service and support. Explain.
(b) There are 20,000 hours of labor available and 18,000 machine hours. Variable overheads represent
the direct cost of running the machinery.
Particulars Product X Product Y
Expected demand/budgeted output (units) 20,000 10,000
Selling price per unit (Tk.) 150 200
Material cost per unit 50 60
Labor cost per unit @ Tk. 20 per hour (Tk.) 10 15
Variable overhead cost per unit @ Tk. 50 per hour (Tk.) 25 50
Fixed overhead cost per unit @ Tk. 80 per hour (Tk.) 40 60
The company operates a back flush accounting system using two trigger points: purchase of raw
material and completion of goods.
Required:
(i) What is the throughput per unit of Product X and Product Y?
(ii) Which of labor or machine time is the bottleneck resource?
(iii) What is the return per factory hour for Product X and Product Y?
(iv) To which product should priority be given?
(v) What is the cost per factory hour?
(vi) What is the throughput accounting ratio (TAR) for Product X and Product Y?
(vii) Which product has an unacceptable TAR?
(viii) At the end of a period there are 100 units half-finished of each of Product X and Product Y
on the production line. What is the valuation of these units in the costing records?
(ix) When 200 units of each product are completed, what value is transferred to the finished
goods account?
(x) If the second trigger point is adjusted to be when goods are sold, what value is transferred
out of the conversion cost account when 100 units of Product X are completed?
[Marks: (5+15) = 20]
Q. No. 5.
(a) Why is the constant gross-margin percentage NRV method sometimes called a joint-cost-
allocation and a profit-allocation method?
(b) Walton Bangladesh produces car seats for children from newborn to 2 years old. The company is
worried because one of its competitors has recently come under public scrutiny because of product
failure. Historically, Waltons only problem with its car seats was stitching in the straps. The
problem can usually be detected and repaired during an internal inspection. The unit cost of the
inspection is Tk. 50, and the repair cost is Tk. 10. All 100,000 car seats were inspected last year
and 5% were found to have problems with the stitching in the straps during the internal inspection.
Another 2% of the 100,000 car seats had problems with the stitching but the internal inspection did
not discover them. Defective units that were skid and transported to customers needed to be
transported back to Walton and repaired. Transporting cost per unit are Tk. 100, and repair cost are
Tk. 10. However, the out-of-pocket costs (transporting and repair) are not the only costs of defects
not discovered in the internal inspection. For 20% of the external failure, negative word of month
will result in a loss of sales, lowering years sales by Tk. 5,000 for each of the 20% of units with
external failures.
Required:
(1) Determine the costs of quality by identifying (a) appraisal cost (b) internal failure cost (c) external
failure cost (both out-of-pocket and opportunity cost) for Walton Bangladesh.
(2) Walton is concerned with the high up-front cost of inspecting all 100,000 units. It is considering an
alternative internal inspection plan that will cost only Tk. 15 per car seat inspected. During the
internal inspection, the alternative technique will detect only 2.5% of the 100,000 car seats that
have stitching problems. The other 4.5% will be detected after the car seats are sold and shipped.
What are the total costs of quality for the alternative technique?
(3) What factors other than cost should Walton consider before changing inspection techniques?
[Marks: (4+5+6+5) = 20]
= THE END =
Page 36 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES.


Time: Three hours Full Marks: 100
Answer SIX questions taking any THREE from each Part including question no. 5 and 10
which are compulsory.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

PART-A: CORPORATE LAWS
Q. No. 1.
(a) Elaborate the legal procedures to form and register a public limited company (PLC).
(b) What are the procedures to alter any content in the (i) Memorandum and (ii) Articles of
Association of a PLC?
[Marks: (8+7) = 15]
Q. No. 2.
(a) Who is an Independent Director of a PLC? How he is appointed?
(b) Draft an appointment letter of an Independent Director.
[Marks: (8+7) = 15]
Q. No. 3.
(a) A Company is an artificial person created by law with a perpetual succession and a common
seal. Explain this statement and point out the basic features of a Company.
(b) A Limited Company can be formed without the word Limited as the last word of its name.
Explain.
[Marks: (8+7) = 15]
Q. No. 4.
Comment briefly on the following:
(a) The validity of a certificate of incorporation cannot be disputed on any ground whatsoever.
(b) A Companys object clause is of fundamental importance not only to members but also to non-
members.
[Marks: (8+7) = 15]
Q. No. 5.
Write Short Notes on the followings:
(a) Role of CDBL
(b) Dematerialization of Shares
(c) CSR
(d) EGM
[Marks: (4x5) = 20]

Page 37 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 303. CORPORATE LAWS, GOVERNANCE & SECRETARIAL PRACTICES.


PART-B: CORPORATE GOVERNANCE & SECRETARIAL PRACTICES

Q. No. 6.
(a) What are the duties of a Company Secretary?
(b) What are his rights, obligations and qualification as per law?
[Marks: (8+7) = 15]
Q. No. 7.
(a) Discuss the various Returns to be filed to different Authorities every year by a public limited
company and penalties for non compliance there of.
(b) Discuss the rules relating to publishing Annual/Periodical Reports in the Newspapers and
forwarding half yearly and Annual Reports to the shareholders as per SECs guide lines.
[Marks: (8+7) = 15]
Q. No. 8.
(a) Can the Board of Directors grant leave of absence to a Director for any number of consecutive
meetings?
(b) When does the resignation of a Director become effective?
[Marks: (8+7) = 15]
Q. No. 9.
(a) What role should SEC play to rescue the small and medium class investors and bring back
confidence in them?
(b) Do you think that the capital market is over or under regulated by the Govt. Give reasons to your
answers.
[Marks: (8+7) = 15]
Q. No.10.
Write Short Notes on any four:
(a) Proxy;
(b) Record date;
(c) Quorum;
(d) Form IX;
(e) Independent Director;
(f) Minutes.
[Marks: (4 x 5) = 20]


= THE END =
Page 38 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 304. AUDITING

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
(a) What do you mean auditors integrity, objective and independence as general principles of an audit?
(b) What are the key threats to independence of auditor?
(c) As an auditor of a company what step will you take to overcome and reduce the threats during the
course of your audit?
[Marks: (5 x 3) = 15]
Q. No. 2.
(a) Define internal control system?
(b) Who is responsible for implementation of internal control system? An effective internal control can
reduce the risk of auditor Explain.
(c) How does an auditor need to study and evaluate the internal control system of an organization?
(d) Is it possible to remove an auditor before expiry of his term? What are the rights of auditor who is
sought to be removed?
[Marks: (5 x 4) = 20]
Q. No. 3.
(a) You were informed that no provision has been made in accounts for depreciation of plant and
machinery since the directors consider that:
(i) Depreciation already written off earlier years has been excessive;
(ii) Market value of such assets is much higher of its present book value;
(iii) Current years profit is insufficient to cover provision for further depreciation.
As an auditor draft a letter to the Board of Directors of the company giving your views on each
point.
(b) What do you mean by post balance sheet events? Cite 2(two) examples. How are such events dealt
with by the auditors?
[Marks: {(3x3)+6}= 15]
Q. No. 4.
(a) Should the auditor give an unqualified opinion on Financial Statement in case of following:
(i) Stocks record were not properly kept by the management.
(ii) Auditors are appointed after stock taking program but management representation letter were
provided by the management at the time of audit.
(b) What are the factors that should be consisted in determining the use of CAAT?
[Marks: (5+5) = 10]
Page 39 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-III
SUBJECT: 304. AUDITING


Q. No. 5.
(a) BSA 315: Identifying and assessing the risks of material misstatement through understanding the
entity and its environment requires auditors to understand the entitys internal control. An entitys
internal control is made up of several components- State FIVE components of an entitys internal
control and give brief explanation of each component.
(b) BSA 320 Materiality in Planning and Performing an Audit provides guidance on the concept of
materiality in planning and performing an audit. Define materiality and determine how the level of
materiality is assessed.
[Marks: (5+5) = 10]
Q. No. 6.
(a) State the purpose of an engagement letter.
(b) List SIX matters that should be included in an audit engagement letter.
(c) How many parties are involved in an assurance engagement?
[Marks: (2+4+4) = 10]
Q. No. 7.
(a) Discuss the importance of assessing risks at the planning stage of an audit.
(b) Describe THREE substantive procedures an auditor should perform at the year end in confirming
each of the following:
(i) The valuation of inventory;
(ii) The completeness of provisions or contingent liabilities.
[Marks: (4+3+3) = 10]
Q. No. 8.
(a) ISA 500 Audit Evidence explains types of audit evidence that the auditor can obtain. State and
briefly explain, four types of audit evidence that can be obtained by the auditor.
(b) Explain the responsibility of an auditor regarding Going Concern. Mention any four financial
indications which may indicate the risk that continuance as a going concern may be questionable.
[Marks: (5+5) = 10]

= THE END =
Page 40 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 401. FINANCIAL MANAGEMENT

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

Q. No. 1.
Lancaster Engineering Inc.(LEI) has the following capital structure, which it considers to be optimal:
Debt 25%
Preferred Stock 15%
Common Equity 60%
100%
LEIs expected net income this year is Tk. 34,285.72; its established dividend payout ratio is 30 percent;
its marginal tax rate is 40 percent; and investors expect earnings and dividend to grow at constant rate
nine percent in the future. LEI paid a dividend of Tk. 3.60 per share last year, and its stock currently sells
at a price Tk. 60 per share.
LEI can obtain new capital in the following ways:
Common : New Common stock has a floatation cost of 10 percent for up to Tk. 12,000 of new stock and
20 percent for all common stock over Tk. 12,000.
Preferred : New Preferred stock with a dividend of Tk. 11 can be sold to the public at a price of Tk. 100
per share. However, floatation cost of Tk. 5 per share will be incurred for up to Tk. 7,500 of
preferred stock, floatation cost will rise to Tk. 10 per share, or 10%, on all preferred stock
over Tk. 7,500.
Debt: Up to Tk. 5000 of debt can be sold at an interest rate of 12 percent; debt in the range of Tk.
5,001 to Tk. 10,000 must carry an interest rate of 16 percent.
LEI has the following independent investment opportunities:
Project Cost
AT t= 0
Annual Net Cash
Flow
Project Life IRR
A Tk. 10,000 Tk. 2,191.20 7 years 12.0%
B Tk. 10,000 Tk. 3,154.42 5 years 17.4%
C Tk. 10,000 Tk. 2,170.18 8 years 14.2%
D Tk. 20,000 Tk. 3,789.48 10 years 13.7%
E Tk. 20,000 Tk. 5,427.84 6 years ?
a. Find the break points in the MCC schedule
b. Determine the cost of each capital structure component.
c. Calculate the weighted average cost of capital in the internal between each break in the MCC
schedule.
d. Calculate the IRR for Project E.
e. Which project should LEI accept?
[Marks: (5+5+5+3+2) = 20]
Q. No. 2.
SC Co is evaluating the purchase of a new machine to produce product P, which has a short product life-
cycle due to rapidly changing technology. The machine is expected to cost Tk. 10,00,000. Production and
sales of product P are forecasted to be as follows:
Year 1 2 3 4
Production and sales (units/year) 35,000 53,000 75,000 36,000
The selling price of product P (in current price terms) will be Tk. 20 per unit, while the variable cost of
the product (in current price terms) will be Tk.12 per unit. Selling price inflation is expected to be 4% per
year and variable cost inflation is expected to be 5% per year. No increase in existing fixed costs is
expected since SC Co has spare capacity in both space and labour terms.
Page 41 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 401. FINANCIAL MANAGEMENT
Q. No. 2.(Contd.)

Producing and selling product P will call for increased investment in working capital. Analysis of
historical levels of working capital within SC Co indicates that at the start of each year, investment in
working capital for product P will need to be 7% of sales revenue for that year.
SC Co pays tax of 30% per year in the year in which the taxable profit occurs. Liability to tax is reduced
by capital allowances on machinery (tax-allowable depreciation), which SC Co can claim on a straight-
line basis over the four-year life of the proposed investment. The new machine is expected to have no
scrap value at the end of the four-year period.
SC Co uses a nominal (money terms) after-tax cost of capital of 12% for investment appraisal purposes.
Required:
(a) Calculate the net present value of the proposed investment in product P.
(b) Calculate the internal rate of return of the proposed investment in product P.
(c) Advise on the acceptability of the proposed investment in product P and discuss the limitations of
the evaluations you have carried out.
[Marks:(12+3+5)= 20]
Q. No. 3.
The summarized balance sheet of Target Ltd as at March 31 2011 is given below:
Liabilities Amount Assets Amount
Equity share capital (2,00,000
shares @ Tk. 10 each)
Tk. 20,00,000 Fixed Assets Tk. 19,00,000
13% Preference Share capital 1,00,000 Investments 1,00,000
Retained Earnings 4,00,000 Current Assets
12% Debentures 3,00,000 Inventories Tk. 5,00,000
Current Liabilities 2,00,000 Debtors 4,00,000
__________ Bank 1,00,000 10,00,000
30,00,000 30,00,000
Negotiations for takeover of T Ltd result in its acquisition by A Ltd. The purchase consideration consists
of (i) Tk. 3,30,000 13% Debentures of A Ltd for redeeming the 12% Debentures of T Ltd, (ii) 1,00,000
10% Convertible preference shares in A Ltd for the payment of the 13% preference shares capital of T
Ltd. (iii) 1,50,000 equity shares in T Ltd, to be issued at its current market price Tk. 15; and (iv) A Ltd
would meet dissolution expenses (estimated to cost Tk. 30,000).
The break-up figures of eventual dispassion by T Ltd of the assets and liabilities are : Investment Tk.
1,25,000, Debtors Tk. 3,50,000, Inventories Tk. 4,25,000 and payment of current liabilities Tk. 1,90,000.
The project is expected to generate yearly operating CFAT of Tk. 7,00,000 for 6 years. It is estimated
that the fixed assets of T Ltd would fetch Tk. 3,00,000 at the end of the year 6. The firms cost of capital
is 15 per cent. As a financial consultant, comment on the financial prudence of merger of A Ltd.
[Marks: 20]
Q.No. 4.
(a) What is 4T approach of risk management? Discuss the four approaches.
(b) A project with following cash flow is under consideration.
Year Cash flow (in taka)
0 (20,000)
1 8,000
2 12,000
3 4,000
4 2,000
Cost of capital 8%
NPV at 8% Tk. 2,340.
Required: Calculate the MGR and MIRR.
Page 42 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 401. FINANCIAL MANAGEMENT
Q. No. 4. (Contd)

(c) Black Cat Ltd. is considering diversifying its operations away from its main area of business (food
manufacturing) in to the plastic business. It wishes to evaluate an investment project, which
involves the purchase of a moulding machine that Cost Tk. 450,000. The project is expected to
produce net annual operating cash flows of Tk. 2,20,000 for each of the three years of its life. At
the end of this time its scarp value will be zero.
The asset of the project will support debt finance of 40% of its initial cost (including issue cost).
The loan to be repaid in three equal annual installments. The balance of finance will be provided
by a placing of new equity issue. Cost will be 5% of fund raised for the equity placing and 2% for
the loan. The issue costs are allowable for corporate income tax.
The plastic business industry has an average equity beta of 1.368 and an average debt equity ratio
of 1:5 at market values. Black Cats current equity beta is 1.8, and 20% of its long term capital is
represented by debt which is generally regarded as to be risk free. The risk free is 10% p.a. and the
expected return on an average market portfolio is 15%. Corporate income tax rate is 30%, payable
one year in arrears. The machine will attract a 70% initial capital allowance and the balance is to be
written off evenly over the three years and is allowable against tax. The firm is certain that it will
earn sufficient profits against which to offset these allowances.
Required:
(i) Calculate the adjusted present value (APV) and determine whether the project is worthwhile.
(ii) Explain why the adjusted present value technique is sometimes advocated as being a more
appropriate way of evaluating a project than net present value.
[Marks: (4+6+7+3) = 20]
Q. No. 5.
(a) Why must the market port folio be a consideration of all securities, each in proportion to market
value outstanding?
(b) ECRI Corporation is a holding company with four main subsidiaries. The percentage of its
business coming from each of the subsidiaries and their respective betas are as follows:
Subsidiary Percentage of business Beta
Electric Utility 60% 0.70
Cable Company 25% 0.90
Real estate 10% 1.30
International / Special projects 5% 1.50
(i) What is the holding companys beta?
(ii) Assume that the risk free rate is 6 percent and the market risk premium is 5 percent. What is
the holding companys required rate of return?
(iii) ECRI is considering a change in its strategic focus, it will reduce its reliance on the electric
utility subsidiary. So the percentage of its business from this subsidiary will be 50 percent.
At the same time, ECRI will increase it reliance on the international/special projects division.
So the percentage of its business from that subsidiary will rise to 15 percent. What will be the
shareholders required rte of return if they adopt these change?
[Marks: (7+4+4+5) = 20]

= THE END =
Page 43 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING.

Time: Three hours Full Marks: 100
All questions are to be attempted.
Show computations, where necessary.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.
Q. No. 1.
(a) Break-even analysis calculates the sales figures at which the project breaks even. Though break-
even analysis is frequently performed on an accounting profit basis, a finance manager always
looks for financial break-even analysis based on net present value. How does accounting break-
even analysis differ from financial break-even analysis?
(b) How does NPV
strategic
and NPV
annualized
differ from traditional NPV? What are the different real
options embedded with strategic NPV?
(c) As an alternative to NPV, Modified Internal Rate of Return (MIRR) is introduced which handles
the problem of multiple IRRs by combining cash flow until only one change in sign remains? What
is the difference between MIRR and IRR?
(d) The powerful combination of lean manufacturing and Six Sigma is what we are speaking about
when we use the term Lean Six Sigma. Elaborate your understanding about six sigma and lean
manufacturing. How does an organization benefit when Six Sigma approach and Lean
Manufacturing approach work together?
[Marks: (5+5+5+5) = 20]
Q. No. 2.
The AMEX card is a credit card that competes with other credit cards such as Visa and Master Card. The
AMEX card is marketed in Bangladesh by the City Bank Limited. Mr. Mario, FCMA is the manager of
the AMEX card division. He collects the following information on four classes of users of the AMEX
card:
Customers Particulars
A B C D
Annual purchases on retail merchants Tk. 80,000 Tk. 26,000 Tk. 34,000 Tk. 8,000
Customer transaction at retail merchants 800 520 272 200
Membership fees paid Tk. 50 Tk. 0 Tk. 50 Tk. 0
Annual average outstanding balance on
credit card on which interest is paid to the
City Bank.
Tk. 6,000 Tk. 0 Tk. 2,000 Tk. 100
Inquiries to the City Bank 6 12 8 2
Credit card replacement due to loss or theft 0 2 1 0
Customer B does not pay any membership fees because it was issued under a special life-time
promotion program in which annual fees are waived as long as the card is used at least once a year.
Customer D is student group. The City Bank does not charge a membership fee to student credit card
holders at select universities.
The City Bank has an Activity Based Costing (ABC) system that Mr. Mario, FCMA can use in his
analysis. The following data apply to 2010:
(a) Each customer transaction with a retail merchant costs City Bank Tk. 0.50 to process.
(b) Each customer enquiry to City Bank costs Tk. 5.
(c) Replacing a lost card costs Tk. 120.
(d) Annual cost to City Bank of maintaining a credit card account is Tk. 108 (includes sending out
monthly statements).
Page 44 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING.
Q. No. 2. (Contd)

City Bank receives 2.0% of the purchase amount from retail merchants when the AMEX card is used.
Bad debts of the AMEX card in 2010 were 0.5% of the total purchases at retail merchants. Thus, City
Bank nets 1.5% of the total purchases made using the AMEX card.
City Bank had an interest spread of 9% in 2010 on the average outstanding balance on which interest is
paid by its credit card holders. An interest spread is the difference between what City Bank receives from
card holders on outstanding balances and what it pays to obtain the fund so used. Thus, on a Tk. 500
average annual outstanding balance in 2010, City Bank would receive Tk. 45 in interest revenues (9% of
Tk. 500).
Required:
(i) Compute the customer profitability of the four representative credit card users of the AMEX card
for 2010.
(ii) Develop profiles of the (a) profitable card holders, and (b) unprofitable card holders for the City
Bank.
(iii) Should the City Bank charge its credit card holders for making enquiries (such as outstanding
balances of disputed charges) or for replacing lost or stolen cards?
(iv) Mr. Mario, FCMA has an internal proposal that the City Bank should discontinue a sizeable
number of the low volume credit card customers. What factors should he consider in evaluating
and responding to this proposal?
(v) Mr. Mario seeks your advice on an ethical issue he is facing. A chain of gambling casinos (Lucky
Roller) has offered to provide AMEX card holders with money advances of up to Tk. 500 at its
casinos. Mr. Mario observes that from a strict financial perspective, providing money advances to
its customers would be highly profitable. Should AMEX card holders be able to obtain money
advances at Lucky Roller gambling casinos? Explain briefly.
[Marks: (8+5+5+5+5) = 28]
Q. No. 3.
Division L of the NAW Group is based in Farland. The management of Division L purchases products
from various sources, including other divisions of the group, for subsequent resale. The manager of
Division L has requested two alternative quotations from Division O in respect of the year ended 31 May
2013:
1. Quotation 1 Purchasing five million packs of Awaysafe.
2. Quotation 2 Purchasing nine million packs of Awaysafe.
The management of the NAW Group has made a decision that a minimum of 15 million packs of
Awaysafe must be reserved for Homeland customers in order to ensure that customer demand can be
satisfied and the products competitive position is further established in the Homeland market.
The management of the NAW Group is willing, if necessary, to reduce the budgeted sales quantities of
other products in order to satisfy the requirements of Division L. They wish, however, to minimize the
loss of contribution to the group.
The management of Division L is aware of the availability of another product that competes with
Awaysafe which could be purchased at a local currency price that is equivalent to Tk.550 per pack.
The NAW Groups policy is that all divisions are allowed the autonomy to set transfer prices and
purchase from whatever sources they choose. The management of Division O intend to use market price
of Tk. 8.00 less 30% as the basis for each of the quotations.
Division O has the capacity to produce 15 million packs of unbranded Painfree which has the lowest
contribution of Tk. 0.30 per pack with a marginal cost of Tk. 3.20 per pack. But currently Division O has
been selling 11 million packs of unbranded Painfree.
Required:
(i) From the viewpoint of the NAW Group, comment on the appropriateness of the decision by the
management of Division O to use an adjusted market price as a basis for the preparation of
Quotations 1 and 2, and the implications of the likely decision by the management of Division L.
Page 45 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 402. STRATEGIC MANAGEMENT ACCOUNTING.
Q. No. 3. (Contd)

(ii) Recommend the prices that should be quoted by Division O for Awaysafe, in respect of
Quotations 1 and 2, which will ensure that the profitability of the NAW Group as a whole is not
adversely affected by the decision of the management of Division L.
(iii) Discuss the proposition that transfer prices should be based on opportunity costs.
(iv) After much internal discussion concerning Quotation 2 by the management of the NAW Group,
Division O is not prepared to supply nine million packs of Awaysafe to Division L at a price
lower than market price less 30%. All profits earned in Farland are subject to taxation at a rate of
20%. Division O pays tax in Homeland at a rate of 40% on all profits.
Advise the management of the NAW Group whether the management of Division L should be
directed to purchase Awaysafe from Division O, or purchase a similar product from a local
supplier. Supporting calculations should be provided.
[Marks: (5+6+6+10) =27]
Q. No.4.
Following a strategy of product differentiation, Garnier Inc. makes a high-end consumer appliance P440.
Following are the data relating to the years 2009 and 2010 for Garnier Inc.
2009 2010
Units of P440 produced and sold 40,000 42,000
Selling price in Tk. 100 110
Direct Materials in Kgs 1,20,000 1,23,000
Direct material cost per kg in Tk. 10 11
Manufacturing capacity for P440 in unit 50,000 50,000
Conversion costs in Tk. 10,00,000 11,00,000
Selling and customer-service capacity (customer) 30 29
Selling and customers service costs in Tk. 7,20,000 7,25,000
Garnier Inc. produced no defective units and reduced direct material usage per unit of P440 in 2010.
Conversion costs in each year are tied to manufacturing capacity. Selling and customers-service costs are
related to the number of customers that the selling and service functions are designed to support.
Required:
(i) Describe briefly the elements you would include in Garnier Inc.s balanced scorecard.
(ii) Calculate the growth, price-recovery and productivity components that explain the change in
operating income from 2009 to 2010.
(iii) How successful has Garnier Inc. been in implementing its strategy? Explain.
[Marks: (6+14+5) =25]

= THE END =
Page 46 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR

Time: Three hours Full Marks: 100
Answer any THREE questions from Group A and TWO questions from Group B.
All questions carry equal marks.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.

GROUP-A: STRATEGIC MANAGEMENT (TOTAL MARKS-60)
Q. No. 1.
(a) Companys Strategy is the game plan a management is using to stakeout a market position. Do
you agree? Narrate.
(b) What is the most trust worthy signs of good management? Explain.
(c) What do you mean by vision? A vision of a company describes the aspiration for the future a
destination for the organization. Do you support this view? Why?
[Marks: (7+6+7) = 20

Q. No. 2.
(a) Critically enumerate the points we need to size up a companys strength, weakness, opportunities
and threats.
(b) What are the components of an organizations environment? Why should managers make an in-
depth analysis of the components of their organizations environment?
(c) Why should be strategy managers understand the nature of substitute products available in the
industry in which their company is operating business?
[Marks: (7+7+6) = 20

Q. No. 3.
(a) Discuss the problems and prospects of e-commerce business in Bangladesh.
(b) Describe some significant e-commerce strategies of a commercial bank in Bangladesh.
(c) If you like to have strategic alliance with foreign partners how you would make best use of it.
[Marks: (8+6+6) = 20
Q. No. 4.
(a) Cooperative strategies are prevalent in those industries where there are rapid changes in
technology, business environment and customer needs. Explain the significance of this statement
with an example of a relevant industry in Bangladesh.
(b) If a company wants to follow a combination of low-cost strategy, differentiation strategy and focus
strategy for a particular product, what should ideally be the characteristics of the product and also
of the market segment?
(c) What are the entrepreneurial challenges for new generation entrepreneurs in Bangladesh?
[Marks: (7+7+6) = 20
Q. No. 5.
Write short notes on the followings:
(a) Strategic Business Unit (SBU).
(b) Purchasing and Supply Chain Management.
(c) Core Competency.
(d) Fragmented Industry.
[Marks: (4 x 5) = 20

Page 47 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 403. STRATEGIC MANAGEMENT AND ORGANIZATIONAL BEHAVIOUR


GROUP-B: ORGANIZATIONAL BEHAVIOUR (TOTAL MARKS-40)

Q. No. 6.
(a) Sketch a model of Organizational Behavior (OB).
(b) Explain the mode sketched to clarify the concept and significance of OB.
(c) Discuss the role of CMAs to maintain and develop healthy organizational behavior in the
organization.
[Marks: (7+7+6) = 20
Q. No. 7.
(a) Clarify clearly the concept of customer responsive culture.
(b) Narrate the significance of customer responsive culture for a consumer product manufacturing
company.
(c) What are the merits of spiritual organizational culture?
[Marks: (6+7+7) = 20
Q. No. 8.
(a) Why is it necessary to bring about organizational change?
(b) Indicate the probable causes for resistance to organizational change.
(c) What are the approaches to effectively manage organizational change?
[Marks: (6+7+7) = 20
Q. No. 9.
(a) What are the purposes of creating work-team?
(b) What factors are to be considered informing an effective work-team?
(c) What are the probable reasons for the failure of a work-team?
[Marks: (6+7+7) = 20

= THE END =

Page 48 of 49
THE INSTITUTE OF COST AND MANAGEMENT ACCOUNTANTS OF BANGLADESH
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 404. COST AND MANAGEMENT AUDITING


Time: Three hours Full Marks: 100
All questions are to be attempted.
Answer must be brief, relevant, neat and clean.
Start answering each question from a fresh sheet.


PART-A: COST AUDITING (MARKS-50)

Q. No. 1.
(a) Cost Auditor is not required to comment on the authenticity of data furnished by Financial
Auditor Do you agree?
(b) Can the Statutory Cost Auditor be relieved of his liabilities on the plea that he relied on the work of
an internal auditor?
(c) As a Cost Auditor, how would you attempt to evaluate the work of internal audit department of a
manufacturing Company?
[Marks: (4+4+4) = 12]
Q. No. 2.
(a) In the context of Bangladesh, what factors should be considered for the development of Cost Audit
practices in the private sector manufacturing concern? Briefly discuss.
(b) Cost Audit is important for evaluating the appropriate product cost and price. As a Cost Auditor
prepare an audit plan and program for the product costing and pricing of consumer and industrial
products.
[Marks: (8+9) = 17]
Q. No. 3.
(a) Cost audit helps management making the units profitable through controlling of cost of
production, reduction of wastage and overhead expenses. Do you agree to the statement? If yes
please explain how would you be able to reduce the costs through Cost Audit.
(b) What is the importance of reconciliation of financial accounting and cost accounting records?
[Marks: (8+4) = 12]
Q. No. 4.
Do you think that Cost Audit can be implemented in a :
(i) Hotel;
(ii) Hospital and
(iii) Power Plant.
[Marks: (3 x 3) = 9]


Page 49 of 49
CMA APRIL, 2012 EXAMINATION
PROFESSIONAL LEVEL-IV
SUBJECT: 404. COST AND MANAGEMENT AUDITING


PART-B: MANAGEMENT AUDITING (MARKS-50)

Q. No. 5.
(a) Corporate image is an integral part of corporate strategy. Explain.
(b) Distinguish corporate image from product image and brand image.
(c) What is SWOT analysis in corporate planning? Why it is important in designing mid term and long
term planning?
[Marks: (3+5+5) = 13]
Q. No. 6.
(a) A pharmaceutical manufacturing Company has been doing excellent in profitability but often finds
interruption in operation due to liquidity crisis. You have been appointed as Management Auditor
by the Board of Directors to look into the problem. What are the aspects to be reviewed and
covered by you to give a recommendation?
(b) How would you evaluate the effectiveness of a Management Information System?
[Marks: (9+4) = 13]
Q. No. 7.
(a) What is Marketing Audit? What are its essential features?
(b) What do you understand by Corporate Services Audit? Describe the areas of Corporate Service
Audit, the system thereof and the evaluation criteria used in such audit.
(c) Enumerate the circumstances which brought the development of Management Audit.
[Marks: (4 x 3) = 12]
Q. No. 8.
There is a growing thinking that a corporate entity is bound by a social contract and is accountable to the
society it operates and not merely to its shareholders. The entity should actively promote the larger
interest of the community in which it functions.
(a) Discuss the responsibility of the corporate entity in the light of the above statement.
(b) If a commercial organization tries to fulfill the social responsibility, it will affect its objective of
increasing shareholders wealth. Please justify your answer, either yes or no.
[Marks: (6+6) = 12]

= THE END =

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