CA Certificate Level-Management Information Chapter Wise Question

Management Information
Chapter -1
Dec-15 (1a)
Differentiate: Product vs Period Cost 6
June- 15 (1a)
Define the following
a) Direct cost
b) Indirect cost
c) Product cost
d) Period cost
e) Cost unit (Dec-14)
f) Semi‐variable Costs, (June-14)
g) Responsibility Accounting,
h) Controllable costs.
i) Define cost object and cost unit. (Dec-13)
j) Fixed cost (June-13)
k) Variable cost
Give at least two examples of cost object and cost unit.
June-14 :What is overhead? Classify different overhead costs with examples

June-13
1. What do you understand by cost objects and cost units? 3
2. Which of the following objects would be suitable cost units for a hotel? 6
i. Bar ii. Restaurant iii. Room/night iv. Meal served
v. Conference delegate vi. Fitness suitevii. Conference room/day
3. Give six examples of cost units applicable to different industries. 4
Dec-11
1. What are the differences between management accounts and financial accounts? 5
2. Define opportunity cost and sunk cost. 4
June-11
1. Explain the purposes served by the segregation of fixed and variable elements of semi‐variable costs. 3
2. How is “Prime cost” different from “Marginal cost”? 2
Dec-10
1. Define product costs and period costs. Responsibility accounting is a technique that helps-controlling costs,
- state briefly how it is done. 4+3
2. Which one of the following items might be a costs unit within the management accounting system of a
university or a college of further education? 3
• Business studies department
• A student
• A college building
• The university itself.
June-10
1. How cost information helps in decision making? 2
2. Define controllable and uncontrollable cost. 2
3. Analyze costs according to their behavior with a graphical presentation.
4. What is a cost unit? Why a cost unit would be different depending on the organization. 4
5. What should be the cost unit for the following organizations: 3
1. Hospital
2. College
3. Power Station
4. Railway
5. College
6. Telephone Company
Md.Sharful Alam Shahed
Octokhan Chartered Accountant
Chapter -2
June-15
Dec-14
1. During periods of rising prices, what will be the effect on the financial statements if FIFO method is used
instead of LIFO method for valuation of inventory? 4
2. Errors occasionally occur during physical counting of the inventory. Identify the effects on the financial
statements of an overstatement of the ending inventory in the current period. If the error is not corrected,
how does it affect the financial statements for the following year? 4
3. Yesinia Company uses the periodic inventory system to account for inventories. Information related to
Yesinia Company's inventory at October 31 is given below:
October 1 Beginning inventory 400 units @ Tk. 10.00 = 4,000
October 8 Purchase 800 units @ Tk. 10.40 = 8,320
Total units and cost 2,000 units Tk. 21,120
Requirement:
i. Show computations to value the ending inventory using the FIFO cost method if 550 units remain on handat
October 31. 4
ii. Show computations to value the ending inventory using the weighted-average cost method if 550
unitsremain on hand at October 31. 4
iii. Show computations to value the ending inventory using the LIFO cost method if 550 units remain on
handat October 31. 4
June-14
Khan & Company was formed on December 1, 2013. The following information is available from Khan’s
inventory record for Product X.
Units Unit Cost
January 1, 2013 (beginning inventory) 16,000 Tk.18.00
Purchases:
January 5, 2013 2,600 Tk.20.00
January 25, 2013 2,400 Tk.21.00
February 16, 2013 1,000 Tk.22.00
March 15, 2013 1,800 Tk.23.00
A physical inventory on March 31, 2013 shows 2,500 units in hand.
Required: Prepare schedules to compute the ending inventory at March 31, 2013 under each of the following
inventory methods: 4x3=12
(a) FIFO, (b) LIFO, (c) Weighted‐average.
Show supporting computations.
Dec-13
1. Describe the advantages and disadvantages of the LIFO method. 4
2. A BC Company buys and sells cartoon boxes. Opening inventory was 500 boxes valued atTk 1,000.
The transactions for latest quarter are shown below:
July A ugust September
2013 2013 2013
Purchase: No. of boxes 2,000 2,400 2,000
Taka 5,000 6,240 5,400
Sales: No. of boxes 2,200 1,800 1,600
Selling price was Tk 3 per cartoon box throughout the quarter. Determine value of closing inventory and gross
profit at 30-09-2013 using periodic weighted average price and FIFO method.
June-13
7. The following information relates to costs of Grade-III workmen of A Ltd.:
Basic pay Taka 200 p.m.
DA Taka 150 p.m.
Fringe benefit Taka 100 p.m.
Number of working days per year 300
Leave rules :
30 days earned leave with full pay.
20 days sick leave with half pay .
Usually sick leave is fully availed by the employees.
Required:
Calculate the standard labour hour rate for workmen of Grade–III from the above data and also calculate the
labour cost per hour if no sick leave is availed during the year. 12
Dec-12
1. Describe advantages and disadvantages of cumulative weighted average pricing. 6
2. A business buys and sells boxes of item. Opening inventory was 400 boxes valued at Tk 1,000.
The transactions for latest quarter are shown below:
Purchase Sales
Boxes Taka Boxes
January, 2012 1,000 2,600 1,100
February, 2012 1,200 3,300 900
March, 2012 1,000 3,000 800
Selling price was Tk 3 per box throughout the quarter. Determine the value of closing inventory and gross profit
at 31-03-2012 using periodic weighted average price and FIFO method. 12
June-12
On 1st November 2011, Edge Limited held 3 pink satin dresses with orange sashes, designed by Mostafa
Kamal. These were valued at Tk.120 each. During November 2011, 12 more of the dresses were purchased as
follows:
A number of the pink satin dresses were sold during November as follows:

Calculate the gross profit from selling the pink satin dresses in November 2011, applying FIFOmethod of
inventory valuation.
Dec-11
On 1 March 2011, LM Ltd held 3 red shirts designed by Arong. These were valued at Tk.120 each.
During March 2011, 12 more of the shirts were delivered as follows:
A number of the red shirts were sold during March as follows:
Requirements:
Calculate the closing inventory and gross profit from selling the shirts in March 2011, applying the following
principles of inventory valuation.
(a) FIFO, (b) Cumulative weighted average pricing.
June-11
a. Indicate whether each of the following costs would be classified as a direct cost or an indirect cost of a car
repairing garage. The repair was worked on in overtime hours due to an unusual repair loads. 6
i. The salary of the garage accountant.
ii.The cost of heating the garage
iii. A can of engine oil used in the repair
iv. A smear of grease used in the repair.
v. An overtime premium paid to the machine carrying out the repair.
vi. An idle time payment made to the machine while waiting for delivery of parts for a number ofjobs.
b. What are the components to be included of a product costs over its life cycle? 3
Dec-10
Following are the information received from the store ledger of Modern fashions Ltd.: 7
May 01, 2010 there was opening stock of materials 100 yds costing Tk.200;
May 03 the store received 400 yds costing Tk.840;
May 04 the store issued 200 yds;
May 09 the store again received 300 yds costing Tk.636;
May 11 the store issued 400 yds;
May 18 the store received 100 yds costing Tk.240;
May 20 the store issued 100 yds.
Using cumulative weighted average pricing, calculate the value of closing inventory.
June-10
The following information is provided by DOX Limited for the month of April, 2009:
Man’s dress:
Stock on 01 April, 2009: 100 units at Tk. 5 per unit.
Purchases:
5‐ Apr ‐09 300 units at Tk. 6
Sales:Price per unit is Tk. 15
6‐ Apr ‐09 250 units
10‐ Apr ‐09 400 units
14‐ Apr ‐09 500 units
Required:
(a) Calculate using FIFO and LIFO methods of pricing the issues:
(i) The cost of sales during the period 4
(ii) The value of closing inventory on 30 April, 2009 4
Chapter -3
Dec-15
(a) Define pre-determined overhead absorption rate. How is it calculated? 4
(b) A company produces two products, Bubble and Squeak, in two production cost centers. The initial
allocation and apportionment of budgeted production overheads has been completed. Extracts from the budget
are as follows:
Machining Finishing
Cost Centre Cost Centre
Production overheads BDT 38,000 BDT 10,350
Machine hours per unit:
Product Bubble 6 2
Product Squeak 4 1
Production overheads are absorbed on a machine hour basis. Budgeted production is 800 units of Bubble and
700 units of Squeak.
Calculate the budgeted production overhead cost per unit of Bubble. 6
Dec-14
1. A company has two production departments and two service departments with production overheads as
shown in the following table:
Production Department Service Department
W X Y Z
Production overheads (Tk. ‘000) 500 600 600 800
Service department Y divides its time between the other departments in the ratio of 3:2:1 (for W, X and Z
respectively)
Department Z spends 40% of its time for servicing department W and 60% of its time for servicing department
X. If all service department overheads are apportioned to production departments, then calculate the total fixed
overhead cost of department W. 6
2. A management consultancy absorbs overheads on chargeable consulting hours.

Budgeted overheads were Tk. 615,000 and actual consulting hours were 32,150. Overheads were under
absorbed by Tk. 35,000.
If actual overheads were Tk. 694,075, what was the budgeted overhead absorption rate per hour? 5
June-14
2(b) ABC Ltd. has been using an overhead absorption rate of Tk.4.50 per labor hour. During the year the
overhead expenditure amounted to Tk.215 and actual 44,000 labor hours were used.
Calculate over absorbed/under absorbed amount? 6
June-13
2 b) A manufacturing company has three production Departments and two Service Departments.
Departmental expenses for the month of December 2012 were as follows:
Production Department Service Department
X 24,000 A- 7,020
Y 19,500 B- 9,000
Z 21,000
Service Department expenses are charged out on a percentage basis, viz.
Prepare a statement showing apportionment of expenses of the two service Departments to the Production
Department. 8
June-12
(a) Mention two reasons for under or over absorbed overhead? 3
(b) A company produces two products, X and Y, in two production cost centers. The initial allocation and
apportionment of Budgeted production overheads has been completed. Extracts from the budget are as follows:
Machining Cost Centre Finishing Cost Centre
Production overheads Tk.38,000 Tk.10, 350
Machine hours per unit:
Product X 6 2
Product Y 4 1
Production overheads are absorbed on a machine hour basis. Budgeted production is 800 units of X and 700
units of Y.
Determine the budgeted production overhead cost per unit of X and Y. 12
Dec-11
A management consultancy absorbs overheads on chargeable consulting hours. Budgeted overheads were
Tk.6,15,000 and actual consulting hours were 32,150. Overheads were under-absorbed by Tk.35,000. If actual
overheads were Tk.6,94,075, what was the budgeted overhead absorption rate per hour? 4
Dec-10
What is scrap? How it is treated in the cost statement? Ascertain the cost and selling price from the following
information: 2+5
Materials consumed Tk.10,000/-
Wages Tk.8,000/-
Works on cost 25% on wages
Office on cost 20% on works cost
Selling on cost 10% on works cost
Profit 10% on cost.
June-10
4. a. What is overhead? Classify different overhead costs with examples. 4
b. ABC Ltd. has been using an overhead absorption rate of Tk. 4.50 per labour hour. Duringthe year the
overhead expenditure amounted to Tk. 215,000, and actual 44,000 labour hours were used.
What is the over absorbed/under absorbed amount? 4
6.a. Discuss the costing methods with their relevant advantage and disadvantages. 4
b. Which method of costing should be appropriate for the following industries: 3
a. Chemical Industry
b. Garments Industry
c. Fitting Kitchen Industry
d. Construction Company
e. Electricity Company
f. Paper Industry
7. ZA Limited maked three types of silver watch – the Diva (D), the Classic (c) and the Pose (P). Atraditional
product costing system is used at present. Although an activity based costing(ABC) system is being
considered. Details of the three products for a typical period are:

Direct labour costs Tk. 6 per hour and production overheads are absorbed on a machine hourbasis. The
overhead absorption rate for the period is Tk. 28 per machine hour.
Calculate the cost per unit for each product using traditional methods, absorbing overheads on the basis of
machine hours. 8
Chapter -4
Dec 15
3(a) Differentiate Marginal Costing and Absorption Costing
June-15
3. (a) Explain the situation whether you are agree or not for the following two statements.
(i) When closing inventory levels are higher than opening inventory levels and overheads are constant,
absorption costing gives a higher profit than marginal costing. 5
(ii) A product showing a loss under absorption costing will also make a negative contribution under marginal
costing. 5
Dec-2013
4(a) Describe the problems with traditional absorption costing. 3
June-12
2(a) In what situations is absorption costing more appropriate than marginal costing? 4
June-2011
a. Absorption costing and Marginal costing the two techniques are not truly alternatives. Explain it. 3
b. Why Marginal costing technique does excludes Fixed Costs. Explain briefly 2
c. Plant I produces a product which costs Tk. 3 per unit when produced in quantities of 10,000 units and
Tk.2.50 per unit when produced in quantities of 20,000 units. You are asked to estimate total fixed costs.
4
Dec-16
2(a) Last period a company reported absorption costing profits of BDT 36,000. Actual fixed production
overheads were BDT 42,000 and the actual production volume of 6,000 units resulted in over absorbed fixed
production overhead of BDT 6,000. A sales volume of 7,100 units was achieved during the period.
Calculate marginal costing profit for the period. 7
2(b) in 2015, Company X produced 17,500 units at a total cost of BDT 16 each. Three quarters of the costs
were variable and one quarter was fixed. The Company sold 15,000 units at BDT 25 each. There were no
opening inventories.
By how much will the profits calculated using absorption costing principles differ from the profit if marginal
costing principles had been used? 7
Dec-15
3(b) A company has just completed its first year of trading. The budgeted production volume of 26,000 units
was achieved and the sales volume was 24,500 units at BDT 40 each.
The following actual cost information is available.
BDT
Variable cost per unit:
Manufacturing 18.5
Selling and administration 9.2
Budgeted Fixed costs
Manufacturing 91,000
Selling and administration 49,000
Calculate the net profit using both absorption and marginal costing. 8
4(a) In a company production for the last year was 17,500 units at a total cost of BDT 16 each. 75% of the costs
were variable and 25% fixed. 15,000 units were sold at the rate of BDT 25 each. There were no opening
inventories.
By how much will the profit calculated using absorption costing principles differ from the profit if marginal
costing principles had been used? 6
June-15
3 (b) A new product has a variable material cost of Tk. 5.50 per unit, a variable labor cost of Tk. 2 per unit and
a fixed overhead absorption rate of Tk. 3.50 per unit.
Production during the first month was 23,000 units and sales were 21,000 units.
Calculate the value of inventory under both marginal costing and absorption costing. 7
Dec-14
Dec-13

June-2012
Dec-11
Chapter -5
1. What is cost-plus pricing? Briefly describe the methods of determining sales prices under cost-plus pricing?
(May-June-16) 1-a
2. Differentiate the mark-up and margin with an example. (May-June-16) 1-b
3. What are the aims of a transfer pricing system? (June-2012)(Marks- 5)
4. What is mark‐up and margin? (June-2011)(Marks-2)
5. Define transfer pricing? (June-2011)(Marks-2)
6. How can the transfer price influence management decisions? Why might a list price less discount be more
appropriate as a transfer price than a list price without discount? (Dec-2010)(Marks-3+3)
7. What are the pricing methods used? Discuss their comparative advantages and disadvantages. (June-
2010)(Marks-4)
Dec-15
4(b) A company requires a 20% annual return on the investment in product F. The budgeted investment in non-
current assets and working capital for product F for the next year is BDT 90,000. The full cost per unit of
product F is BDT 5.00 and budgeted production and sales for next year is 36,000 units. Calculate the profit
margin as a percentage of the sales price of product F? 6

June-15
Dec-13
3. Product Y incurs direct variable production costs of BDT 6 per unit. Fixed production costs amount to BDT
19,000 each period. Variable selling and distribution costs are BDT 4.50 per unit and fixed selling,
distribution and administration costs amount to BDT 22,500 each period. Selling prices are determined on a
marginal cost-plus basis, using a mark-up of 25% of the marginal cost of sales.
Calculate the selling price per unit of product Y and the profit that will result from sales of 30,000 units
each period. 10
June-12
3(b). Division M manufactures product R incurring a total cost of Tk.30 per unit. Fixed costs represent 40% of
total unit costs. Product R is sold to external customers in a perfectly competitive market at a price of Tk.50 per
unit. Division M also transfers product R to Division N. If transfers are made internally then division M does
not incur variable distribution costs, which amount to 10% of the variable costs incurred on external sales. The
total demand for product R exceeds the capacity of division M.
Calculate the transfer price of product R per unit. 10
Dec-11
9. What is marginal cost-plus pricing? Product R incurs direct variable production costs of Tk.9 per unit. Fixed
production costs amount to Tk.18,500 each period. Variable selling and distribution costs are Tk.4.60 per unit
and fixed selling, distribution and administrative costs amount to Tk.22,500 each period. Selling prices are
determined on a marginal cost-plus basis, using a mark-up of 25% of the marginal cost of sales.
Calculate the selling price per unit of product R and the profit that will result from sales of Tk.20,400 units each
period. 3+7

June-11(3)
a. If the full cost is Tk. 14 per unit, calculate the price to achieve a margin of 20% of the selling price
b. The selling price is Tk.27 per unit, determined on the basis of full cost‐plus, if the full cost is Tk.18 per unit,
calculate the mark‐up percentage.
c. A selling price of Tk. 165 per unit earns a mark‐up of 106.25% of the full cost. What is the full cost per
unit?
d. A product selling price is determined by adding 33.33% to its full cost. What percentage margin on sales
price does this represent?
9 Division M Manufactures product R incurring a total cost of Tk. 30 per unit. Fixed costs represent 40% of
the total unit cost. Product R is sold to external customers in a perfectly competitive market at a price of Tk.50
per unit. Division also transfers product R to division N. If transfers are made internally then division M does
not incur variable distribution costs, which amounts to 10% of the variable costs incurred on external sales.
The total demand for product R exceeds the capacity of division M. From the point of view of the company as a
whole, enter the optimum price per unit at which division M should transfer product R to division N.
Find out the transfer price per unit. 6
Jue-10
b. The following variable costs are incurred for producing one unit of X :
Tk. Per Unit
Variable material 8.00
Variable labour at Tk. 14 per hour 42.00
Variable production overhead is incurred at the rate of Tk. 4 per hour. Fixed production overheads of Tk.
60,000 are absorbed on the basis of 25,000 budgeted direct labor hours. Other overheads are recovered at 5% of
total production cost. If the selling price are set to recover full cost plus 50%, what should be the selling price
per unit of product X? 5
Chapter -6
1. Why have many managers in recent years moved toward emphasizing employee participation in the
budgeting process rather than simply imposing the budget on the employees? (June-2014)(Marks-
3)(Manual page-148)
2. (a) Write short notes on the following: (June-14) 4
(i) Incremental Budgeting
(ii) Zero based budgeting
3. Define forecast and budget. How does two differ from each other? What are the essentials of effective
budgeting? (Dec-2010)(Marks-1+1+2)
4. What do mean by zero-based Budgeting? How it is prepared? What are the advantages of zero-based
Budgeting? (Dec-2010)(Marks-2+1+3)
[

June-13
Dec-12
June-12

Dec-10
3. (a) Explain with illustration, the classification of `fixed’, `semi-variable’, and `variable’ expenses. An analysis of
maintenance department costs shows that there is a cost fixed element of Tk.500 per month and a variable element
related to machine hours amounting to Tk.2.25 per machine hour. What is the expected cost for a month when the
planned activity level is: 3+3
(i) 1500 machine hours?
(ii) 1800 machine hours?
(b) The costs of operating the maintenance department of a computer manufacturer, Bits and Dots Ltd. For the last
four months have been as follows: 4
Months Total costs (Tk.) Production volume Units
1 110,000 7,000
2 115,000 8,000
3 111,000 7,700
4 97,000 6,000
Calculate the costs that should be expected in months 5 when the output is expected to be 7,500 units. Ignore
inflation.
Chapter -7
1. How the liquidity position of a company can be assessed? Describe the measures to assess the liquidity
position? May-June-16 3(a)
2. Describe some of the drawbacks of using the operating budget as a control device. May-June-16 4(a)
3. What is the cash operating cycle? Describe the importance of cash operating cycle? (Dec-
14,12)(Marks-6)
4. What is a cash budget? How is it useful in managerial decision making? (June-2013)(Marks-5)
5. Discuss your understanding about cash operating cycle. (Dec-2012)(Marks-5)
6. What are the two methods of preparing Cash Budgeting? (June-2011)(Marks- 2)
7. Distinguish between Cash Budgeting and Cash Flow statement. (June-2011)
8. What is the cash operating Cycle? (June-2010)(Marks-3)
June-16 3
4 (b) Prestige Company, a seller of pressure cooker, has budgeted its activity for March. The budget
information is presented below:
I. Sales are Tk. 550,000. All sales are cash.
II. Merchandise inventory on February 28 is Tk. 300,000
III. Budgeted depreciation for March is Tk. 35,000.
IV. Cash at bank on March 1 is Tk. 25,000.
V. Selling and administrative expenses are budgeted at Tk. 60,000 for March and are paid in cash.
VI. The planned merchandise inventory on March 31 is Tk. 270,000.
VII. The invoice cost for merchandise purchases represents 75% of sales price. All purchases are paid for in
cash.
Required:
From the above information calculate budgeted Cash receipts, Cash disbursements and Net income of
Prestige Company for the month of March. 3x3=9
June-15
6. Mahmud & Company has the following information:
Tk.
Cash Balance, June 30 50,000
Dividends paid in July 60,000
Cash paid for operating expenses in July 185,500
Depreciation in July 12,000
Cash collections on sales in July 510,000
Merchandise purchases paid in July 180,000
Purchase equipment for cash in July 94,500
Mahmud & Company wants to maintain a minimum cash balance of Tk.50,000. Assume that borrowing occurs
at the beginning of the month and repayments occur at the end of the month. Interest of 1% per month is paid in
cash at the end of each month debt is outstanding. Borrowing and repayment is carried out in multiples of
Tk.1,000.
Required: Prepare a cash budget for the month of July. 10
Dec-14
3 (b) A retailing company earns a gross profit margin of 37.5% on its monthly sales of Tk. 20,000. In order to
generate additional cash, the following changes are proposed:
Present Proposed
Inventory holding period 1.5 months 1.0 month
Trade payable payment period 1.0 month 1.3 months
How much additional cash will be generated at the end of the month if the above proposal is materialized? 6
Jue-14 8
(ii) It is management policy to have sufficient inventory in hand at the end of each month to meet half of
next month’s sales demand.
(iii) Suppliers for materials and expenses are paid in the month after the purchases are made/expenses
incurred. Labour is paid in full by the end of each month
(iv) Expenses include a monthly depreciation charge of Tk.2,000.
(v) ‐ 75% of sales are for cash
‐ 25% of sales are on one month’s credit.
(vi) The company will buy equipment costing Tk.18,000 cash in February and will pay a dividend of
Tk.20,000 in March. The opening cash balance at 1 February is Tk.1,000.
Prepare a Cash Budget for February and March and comment on the result. 12
Dec-12
(b) QR Limited is a retail company that has average sales of Tk 14.6m per annum and earns a mark-up of 25%
with the Inventory averages of Tk 2.0m, receivables average of Tk 0.9m and trade payables of Tk 0.6m. If all
sales and purchases are on credit, what is the length of company’s cash operating cycle (to the nearest day)?
6 b) From the following extracts of the draft balance sheet, calculate the current ratio and quick ratio: 5

Jue-12
ii) It is a management policy to have sufficient inventory in hand at the end of each month to meet half of
the next month’s sales demand.
iii) Suppliers for materials and expenses are paid in the month after the purchases are made/expenses
incurred. Labor is paid in full by the end of each month.
iv) Expenses include a monthly depreciation charge of Tk.2,000.
v) 1) 75% of sales are for cash
2) 25% of sales are on one month’s credit.
vi) The company will buy equipment costing Tk.18,000 for cash in February and will pay a dividend of
Tk.20,000 in March. The opening cash balance at 1 February is Tk.1,000.
Prepare a cash budget for February and March with comments on the result. 20
June-11
(c) ABC Co. wishes to arrange overdraft facilities with its Bankers during the period April to June, 2010, when
it will be manufacturing mostly for stock. Prepare a cash budget for the above period from the following data,
indicating the extent of the bank facilities the company will require at the end of each month: 5
(ii) 50% of credit sales are realized in the month of following the sales and the remaining 50% in the second
month following. Creditors are paid in the month following the month of purchase.
(iii) Cash at bank on 1‐4‐2010 estimated Tk. 25,000.

June-10
12
Chapter -8
1. Cost centers and profit centers are usually associated with planning and control in a decentralized company
– Explain. May-June-16 5(a)
2. Define residual income. Evaluate residual income as a measure of performance. (June-2014)(Marks-4)
3. What are some common problems encountered in determining ROI? (June-2014)(Marks-4)
4. Describe the features of effective feedback. (Dec-2013)(Marks-3)(Manual page-184)
5. What is flexible budget? Describe two advantages of flexible budget? (Dec-2013)(Marks-6)
6. What do mean by the following: (Dec-2010)(Marks-6)
i. Cost centre
ii. Revenue centre
iii. Profit centre
June-16 (5)

Dec-15
Required:
a. For CBS, compute the segment margin and the average assets for the year. 4
b. Based on segment margin and average assets, compute the profit margin, asset turnover and ROI. 4
c. Evaluate the ROI performance of CBS. 3
d. Using your answers from part b., compute the residual income of CBS. 3
e. Compute the EVA of CBS. Why are the EVA and RI levels different? 5
f. Based on the data given in the problem, discuss why ROI, EVA and RI may be inappropriate measures of
performance for CBS. 4
June-15
Dec-14
(c) A retailing company's working capital consists of inventory, trade receivables, cash and trade payables. All
working capital balances were the same at the beginning and the end of the year. The sales revenue for the year
was Tk. 900,000.
The financial ratios for the year include the following:
Current ratio 3.4:1
Rate of inventory turnover 15 times p.a.
Receivables collection period 73.0 days
Payables payment period 36.5 days
Gross profit margin 20.0%
Calculate closing cash balance? 6

June-14
9. A retailing company’s working capital consists of inventory, trade receivables, cash and trade payables. All
working capital balances were the same at the beginning and at the end of the year. The sales revenue for the
year was Tk.900,000.
The financial ratios for the year include the following:
Current ratio 3.4:1
Rate of inventory turnover 15 times per annum
Receivables collection period 73.0 days
Payables payment period 36.5 days
Gross margin 20.0%
Calculate the closing cash balance of the company. 10
Dec-13
5 (b) Nicholson sells mobile telephones. The company has employed you as a consultant to install a balanced
scorecard system of performance measurement and to benchmark the results. The financial and operating data
for the year ended 31 December 201X is available:
Taka ‘000
Sales revenue 480
Sales attributable to new products 8
Average capital employed 192
Profit before interest and tax 48
Plant and machinery 13,200
Inventory 1,200
Trade creditors 1,400
Debtors 1,400
Cash 500
Calculate the following performance ratios:
(i) Return on Capital Employed 3
(ii) Return on Sales 3
(iii) Asset Turnover 3
(iv) Current Ratio 3
7 (b) Prepare a budget for 20X6 for the variable direct labour costs and overhead expenses of a production
department flexed at the activity levels of 80%, 90% and 100%, using the information listed below. 14
(i) The variable direct labour hourly rate is expected to be BDT 7.50
(ii) 100% activity represents 60,000 direct labour hours
(iii) Variable costs:
Indirect labour BDT 0.75 per direct labour hour
Consumable supplies BDT 0.375 per direct labour hour
Canteen and other welfare services 6% of direct and indirect labour costs

(c) Calculate the budgeted cost allowance (ie expected expenditure) for 20X6 assuming that 57,000 direct
labour hours are worked. 5
Dec-11
5. From the following details, prepare the balance sheet of STS Ltd.
Stock turnover 6 Gross profit 20%
Capital turnover ratio 2 Debt collection period 2 months
Fixed assets turnover ratio 4 Creditors’ payment period 73 days
The gross profit was Tk.60,000. Closing stock was Tk.5,000 in excess of the opening stock. 8
June-11
6. PQR’s year end working capital comprises inventory valued at cost, trade receivables of Tk. 1,20,000 cash
and trade payables. Its financial performance ratios include the following: 8
Gross profit margin 21%
Current ratio 2.7:1
Receivable Collection Period 25 days
Payable payment Period 30 days
Rate of inventory turnover 10 times
The opening inventory, receivables and payable balance are the same as the closing balances. Calculate
the yearend cash balance.
12. Division M is considering a project which will increase annual profit by Tk. 34,400 but will require average
inventory levels to increase by Tk. 1,56,000. The Current return on investment for the division is 26% and the
imputed interest cost of capital is 16%.
Would the performance measures of ROI and RI motivate the manager of division M to act in the interest of the
company as a whole? 6
Dec-10
7. Following are the information picked up from the books of ABC Ltd.: 7
(a) The closing balance of inventory of the company is Tk.300,000 as on 31 December 2009 which is
Tk.30,000 more than the opening balance of the year.
(b) The total turnover for the year ended 31 December 2008 was Tk.450,000, while the cost of sales was
Tk.270,000.
(c) The year-end receivable was Tk.200,000 with a corresponding closing balance of last year Tk.180,000.
Calculate rate of inventory turnover and receivable collection period.

Chapter -9
1. Write four advantages of standard costing. (Dec-2011)(Marks-4)
2. “Overhead variances should be viewed as interdependent rather than independent.” Give an example.
May-June-16 6(a)
3. What are the points to take into attention for effective variance reporting? (Jue-11)(Mark- 5)
4. Explain any three control ratios. (Jue-11)(Mark- 5)
June-16
(b) Kamal Manufacturing recently experienced a fire, forcing the company to use incomplete information to
analyze operations. Consider the following data and assume that all materials purchased during the period were
used in production:
Direct materials: Direct labour:

Standard price per pound: Tk. 9 Actual hours worked: 40,000
Actual price per pound: Tk. 8 Actual rate per hour: Tk. 15
Price variance: Tk. 20,000F Efficiency variance: Tk. 28,000F
Total of direct-material variances: Tk. Total of direct-labour variances: Tk.
2,000F 12,000U
Dec-14
4. S Limited has extracted the following details from the standard cost card of one of its products.
Labor standard 4.5 hours @ Tk. 6.40 per hour
During March, S Limited produced 2,300 units of the product and incurred wages costs of Tk. 64,150.The
actual hours worked were 11,700.
Calculate labor rate and efficiency variance. 8
June-14
4. Rahman & Company has the following information available for the current year:
Standard
Material 3.5 ft. per unit @ Tk.2.60 per ft.
Labour 5 direct labour hours @ Tk.8.50 per hour
Actual
Material 95,625 ft. used (100,000 ft. purchased @Tk.2.50 per ft.)
Labour 122,400 direct labour hours incurred per unit @Tk.8.35 per hour
Production 25,000 units were produced
Required: From the above information compute the following:
(a) Material price variance 3
(b) Quantity variance 3
(c) Labour rate variance and 3
(d) Efficiency variance. 3
June-13
5. (a) The following information relates to labour costs for the last month:
Budget Labour rate Tk.10 per hour
Production time 15,000 hours
Time per unit 3 hours
Production units 5,000 units
Actual Wages paid Tk.176,000
Production 5,500 units
Total hours worked 14,000 hours
There was no idle time.
What were the labour rate and efficiency variance? 8

5 (b) A company has a budgeted material cost of Tk.125,000 for the production of 25,000 units per month. Each
unit is budgeted to use 2 kg of material. The standard cost of material is Tk.2.50 per kg. Total cost of actual
materials in the month was Tk.136,000 for 27,000 units and 53,000 kg were purchased and used.
What was the material price variance? 8
Dec-12
5. a) Aramex Bangladesh has a budgeted materials cost of Tk. 7 per kg. During the month of November 2,500
kg of the material was purchased and used at a cost of Tk. 18,750 in order to produce 1,250 units of the product.
The budgeted materials cost of Tk. 14,000 had been based upon budgeted production of 1,000 units of the
product.
What was the materials total variance? 6
b) A toiletries product requires raw material with a standard cost of Tk. 0.50 per kg. In November, 2,500 kg of
raw material were purchased at a cost of Tk. 1,500 of which 2,300kg of raw material were used in that month’s
production. If raw material inventory is valued at standard cost and there was no opening inventory of raw
material.
What is the material price variance for November? 6

June-12
5. The following information has been extracted from the books of a manufacturing company:
Particulars Budget Actual
Production 22,000 24,000
Fixed Overheads Tk.44,000 Tk.49,000
Variable Overheads Tk.33,000 Tk.39,000
Number of Days 25 26
Number of man hours 25,000 27,000
Calculate variances on variable overhead efficiency and fixed overhead efficiency. 10
Dec-11
6 b. The following data have been extracted from the standard cost card of product T:
Budgeted production 500 units
Standard production per hour 2 units
Standard rate of wage per hour Tk.1.50
Actual rate of wage per hour Tk.1.60
Total wage paid Tk.432
Actual production 510 units
Abnormal idle time 30 hours
Calculate the total labor cost, rate, efficiency and idle time variances for product T. 8
June-11
10 (b) A company produces a certain chemical; the standard material cost being: 5
40% of material X at TK. 20 per ton
60% of material Y at Tk. 30 per ton.
A standard loss of 10% is expected in production. During a month 171 tons of chemical was produced from
the use of 90 tons of material X Tk.18 per ton and 110 tons of material Y at Tk.34 per ton.
Calculate: i. Material price variance ii. Material yield variance
11 (b) From the following information relating to the month of January, calculate production volume ratio,
capacity ratio and efficiency ratio. 4
Budget Actual
Units Produced 12,000 12,600
Hours Worked 24,000 26,400
Dec-10
5. What do you mean by variance analysis? The standard costs on materials and labor for the making of unit of
acertain products are estimated as under: 3+8
Materials – 80 kg at Tk.1.50 per kg.
Wages – 18 hours at Tk.1.25 per hour.

On completion of unit of the product it was found that 75 kg of material costing Tk.1.75 per kg has been
consumed and the time taken was 16 hours. The wages being Tk.1.50 per hour.
Calculate the material and labor variances.
June-10
10. The following data relates to the production of Product Z:
Extract from the standard cost card of product Z:
Taka
Direct labour
24 hours @ Taka 50 per hour 1,200
Actual result for wages:

Production: 1000 units produced
23,900 hours costing in total 1,314,500
Required: Calculate the labor total, rate and efficiency variances for product Z. 7
Chapter -10
1. What is P/V ratio? How does it relate to the break‐even point? (June-2014)(Marks-4)
2. What is a limiting factor? (June-2013)(Marks-4)
3. What is cost volume profit analysis? 4(June-2013)(Marks-4)
4. Write four limitations of breakeven analysis. (Dec-2012)(Marks-4)
5. What is P/V ratio? How does it relate to the break-even point? (Dec-2011)(Marks-3)
6. Explain briefly what are the underlying assumptions of CVP analysis? (Dec- 15)(mark-4)
7. Why is depreciation expense irrelevant to most managerial decisions, even when it is a future cost?
(Dec- 15)(mark-3)
8. What is an opportunity cost and why is it a relevant cost? (Dec- 15)(mark-4)
9. What is margin of safety (Dec- 14)(mark-4)
June-16 (7)

Dec-15
7 (c) Lisa and Moly make and sell the “Kitchen Mystic,” a wall hanging depicting a witch. The Kitchen Mystics
are sold at specialty shops for BDT50 each. The capacity of the plant is 15,000 Mystics per year. Costs to
manufacture and sell each wall hanging are as follows:
Direct material BDT5.00
Direct labor 6.00
Variable overhead 8.00
Fixed overhead 10.00
Variable selling expenses 2.50
Lisa and Moly have been approached by an English company about purchasing 2,500 Mystics. The company is
currently making and selling 15,000 per year. The English company wants to attach its own label, which
increases costs by BDT.50 each. No selling expenses would be incurred on this order. Lisa and Moly believe
that they must make an additional BDT1.00 on each wall hanging to accept this offer.
Required:
a. What is the opportunity cost per unit of selling to the English organization? 3
b. What is the minimum selling price that should be set? 5
Dec-14
5 (b) W Limited sells one product for which data is given below:
Tk. per unit
Selling price 10
Variable cost 6
Fixed cost 2
The fixed costs are based on a budgeted level of activity of 5,000 units for the period.
Requirement:
a. How many units must be sold if W Limited wishes to earn a profit of Tk. 6,000 for one period? 4
b. What is W Limited's margin of safety for the budget period if fixed costs prove to be 20% higher than
budgeted? 4
c. If the selling price and variable cost increase by 20% and 12% respectively, by how much must sales
volume change compared with the original budgeted level in order to achieve the original budgeted profit
for the period? 6
June-14
(b) The current sales of a manufacturing company is in average 40,000 units at Tk.10 each. The costs are:
Prime costs Tk.2,00,000
Variable overhead Tk.40,000
Fixed overhead Tk.1,00,000
Calculate:
(i) The Break‐even sales in units 3
(ii) The additional sales in units, required to maintain the current profit level if the selling price is reduced by
10%. 4
June-13
6. X Company makes and sells a single product, for which variable costs are as follows:
Taka
Materials 10
Labour 8
Production overhead 6
24
The sales price is Taka 30 per unit and fixed cost per annum is Taka 68,000.
The company wishes to make a profit of Taka 16,000 per annum.
Required:
Determine the sales required to achieve this profit. 10

Dec-12
3 (b) The present cost of a product is as follows:
Taka
Variable costs per unit 450
Fixed costs per unit 100
Total costs per unit 550
The overhead charges were established taking normal operation of 20,000 units of production and sales during a
year. The product is sold at Tk 1000 per unit less 5% commission to the dealers.
You are required to:
i) Calculate the break-even sales in units. 6
ii) Calculate the additional sales in units required to maintain the current profits level if the selling price is
reduced by 10%. 6
Dec-11
3 (b) The current sales of a manufacturing company is in average 40,000 units at Tk.10 each. The costs are:
Prime costs Tk.2,00,000
Variable overhead Tk. 40,000
Fixed overhead Tk.1,00,000
Calculate:
(i) The Break-even sales in units 3
(ii) The additional sales in units, required to maintain the current profits level if the selling price
is reduced by 10%. 3
4. NT Ltd. makes two products, N and T. Unit variable costs are as follows:
N (Taka) T (Taka)
Materials 3 1
Labor (Taka 9 per hour) 9 18
Overhead 2 2
14 21
The sales price per unit is Tk.18 per N and Tk.27 per T. During March 2011 the available labor is limited to
8,000 hours. Sales demand in March is expected to be 5,000 units for N and 3,000 units for T.
Requirement:
Determine the profit-maximizing production mix, assuming that monthly fixed costs are Tk.26,000 and no
inventories are held. 8

June-11(1)
June-10
7. A company has sales of Tk. 12,000,000 @ Tk. 100 per unit, marginal cost per unit Tk. 60 and Fixed costs
Tk. 3,000,000.
Calculate:
i) Break‐even‐point in units and value terms 2
ii) Profit on the sales 2
iii) Margin of safety in case the sales volume is reduced by 10%. 2
9. GPL manufactures two products, the DCON and the ERON, using the same material for each. Annual
demand for DCON is 18,000 units and for ERON is 24,000 units. The variable production cost per unit of
DCON is $ 10 and that of ERON $ 15. The DCON requires 3.5 kgs of raw material per unit, the ERON requires
8 kgs of raw material per unit. Supply of raw material will be limited to 175,000 kgs during the year.
A Sub contractor has quoted prices of $ 17 per unit for the DCON and $ 25 per unit for ERON to supply the
product.
How many of each product should GPL manufacture in order to maximize profits? 7
Chapter -11
1. Does a project that generates a positive internal rate of return also have a positive net present value?
Explain. (June-2014)(Marks-3)
2. What do you understand by Discounted Cash Flow (DCF)? Write the advantages of DCF Method.
(Dec-2012)(Marks-6)
3. Explain the payback method of evaluating capital investments and indicate the circumstances in which
this method is especially useful. (Dec-2010)(Marks- 3)
4. What is Cost of Capital? What is the relationship between Cost of Capital & IRR? (Dec-2010)(Marks-
3)
5. What is the difference between NPV and NTV? (June-2010)(Marks-3)
6. Write two advantages of NPV method and two disadvantages of ARR method. (June-2010)(Marks-3)
7. What is IRR? How it is computed? (June-2010)(Marks-4)
8. Define Payback Period vs Net Present Value (Nov-Dec 15 )
9. In a net present value analysis, how can an analyst explicitly and formally consider the influence of risk
on the present value of certain cash flows? (June-2015)(Marks-3)
10. Why is the profitability index a better basis than net present value to compare projects that require
different levels of investment? (June-2015)(Marks-3)
11. What is payback period? State the drawbacks to the payback period. (Dec-15 )(mark-3)
June-16
7. (a) A project analyst has just completed the following evaluation of a project which has an initial cash
outflow followed by several years of cash inflows:
Internal rate of return (IRR) 15% pa
Discounted payback period (DPP) 7 years
He then realizes that the company's annual cost of capital is 12% and not 10% and revises his calculations.
What will happen to each of the IRR and DPP when the calculations are revised? 10
Dec-15
5
The company uses straight-line depreciation for all capital assets.

Required:
a) Compute the payback period, net present value, and accrual accounting rate of return with initial investment,
for each proposal. Use a required rate of return of 14% 6
b) Rank each proposal 1, 2, and 3 using each method separately. Which proposal is the best? Why? 5
June-15
5(c) Tom Bat became a cricket enthusiast at a very early age. All of his cricket experience has provided him
valuable knowledge of the sport, and he is thinking about going into the batting cage business. He estimates the
construction of a state-of-the-art building and the purchase of necessary equipment will cost Tk.630,000.
Both the facility and the equipment will be depreciated over 12 years using the straight-line method and are
exzpected to have zero salvage values. His required rate of return is 10% (present value factor of 6.8137).
Estimated annual net income and cash flows are as follows:
Revenue Tk. 329,000
Less:
Utility cost 40,000
Supplies 8,000
Labor 141,000
Depreciation 52,500
Others 38,500 280,000
Net income 49,000
Required to calculate: 3x3=9
(i) The net present value.
(ii) The internal rate of return.
(iii) The cash payback period..

8
Dec-14
6. Tk. 50,000 is to be spent on a machine having a life of five years and a residual value of Tk. 5,000. Operating
cash inflows will be the same each year, except for year 1 when the figure will be Tk. 6,000. The accounting
rate of return on the initial investment has been calculated at 30% pa.
Calculate the payback period. 8
June-14
Dec-13

June-13
8. An asset costing Taka 1,20,000 is to be depreciated over ten years to a nil residual value. Profits after
depreciation for the first five years are as follows:
Year Taka
1 12,000
2 17,000
3 28,000
4 37,000
5 8,000
Required:
Calculate the payback period to the nearest month. 10
Dec-11
June-11
Dec-10

June-10
14. A project has the following forecast of cash flows:

Year US$
0 (560,000)
1 298,000
2 256,000
3 168,000
4 140,000
Using two decimal places in all discount factors, calculate the NPV of the project at a cost of capital of 15% in the
table. 6


CA Certificate Level-Management Information Chapter Wise Question

Caricato da

Informazioni sul documento

Titolo originale

Copyright

Formati disponibili

Condividi questo documento

Condividi o incorpora il documento

Opzioni di condivisione

Hai trovato utile questo documento?

Questo contenuto è inappropriato?

Copyright:

Formati disponibili

CA Certificate Level-Management Information Chapter Wise Question

Caricato da

Copyright:

Formati disponibili

Management Information

June-14 :What is overhead? Classify different overhead costs with examples

Md.Sharful Alam Shahed

A number of the red shirts were sold during March as follows:

2. A management consultancy absorbs overheads on chargeable consulting hours.

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Direct materials: Direct labour:

Md.Sharful Alam Shahed

What is the material price variance for November? 6

Md.Sharful Alam Shahed

Actual result for wages:

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

The company uses straight-line depreciation for all capital assets.

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

Md.Sharful Alam Shahed

14. A project has the following forecast of cash flows:

Md.Sharful Alam Shahed

Potrebbero piacerti anche