DBB2203 MANAGEMENT ACCOUNTING JULY – AUGUST 2025

Description

SESSION	JULY – AUGUST 2025
PROGRAM	BACHELOR OF BUSINESS ADMINISTRATION (BBA)
SEMESTER	4
COURSE CODE & NAME	DBB2203  MANAGEMENT ACCOUNTING

 

 

Assignment Set – 1

 

Q1. With the following data for 100 percent activity, prepare a budget at 80% capacity. Production at 100 percent activity is 1000 units.

Direct expenses: Rs. 10 per unit.

Material cost: Rs. 100 per unit.

Factory expenses: Rs. 40,000 (40 percent fixed)

Labour cost: Rs. 40 per unit.

Administrative expenses: Rs. 30,000 (60 percent fixed)

Ans 1.

Flexible Budget at 80% Capacity

Step 1 — Identify behaviour and split mixed costs (at 100% = 1,000 units)

Factory expenses (₹40,000; 40% fixed):

• Fixed portion = 40% × 40,000 = ₹16,000
• Variable portion (₹) = 60% × 40,000 = ₹24,000
• Variable rate per unit = 24,000 ÷ 1,000 = ₹24/unit

Administrative expenses (₹30,000; 60% fixed):

• Fixed portion = 60% × 30,000 = ₹18,000

 

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Q2. From the following data, calculate the materials yield variance. Standard mix

Material A	Material B	Total
400 units @ Rs. 12 = Rs. 4,800	200 units @ Rs. 10 = Rs. 2,000	600 units @ Rs. 10 = Rs. 6,800 of standard cost

 

 Standard loss allowed is 10 percent of output. Actual output is 550 units.

Ans 2.

Given data

Particulars	Material A	Material B	Total
Standard quantity (units)	400	200	600
Standard rate (₹)	12	10	—
Standard cost (₹)	4,800	2,000	6,800
Standard loss	10% of output
Actual output			550 units

 

Step 1: Find standard output for given standard input (600 units)

Let standard output = X units

 

 

 

Q3. A company budgets a production of 10,00,000 units at a variable cost of Rs. 20 each. Fixed costs are Rs. 40,00,000. The selling price is fixed to yield 25 percent profit on total cost. You are required to calculate the breakeven point (units).

Ans 3.

Calculation of Break-Even Point (Units)

Given:

• Budgeted production = 10,00,000 units
• Variable cost per unit = ₹20
• Total fixed cost = ₹40,00,000
• Profit = 25% on total cost

We must first find selling price per unit, then the contribution per unit, and finally the break-

 

 

Assignment Set – 2

 

Q4. The following is the balance sheet of ABC Company.

Liabilities	Amount	Assests	Amount
Equity share of Rs.10 each	5,00,000	Fixed assets	5,00,000
Reserve fund	50,000	Stock	2,00,000
7% debentures	1,50,000	Debtors	1,50,000
Overdraft	1,50,000	Cash	1,00,000
Creditors	1,00,000
Total	9,50,000	Total	9,50,000

 

Calculate:

• Current ratio
• Liquid ratio
• Solvency ratio
• Debt-equity ratio

Ans 4.

Calculation of Financial Ratios

Balance Sheet Summary (₹)

Liabilities	Amount (₹)	Assets	Amount (₹)
Equity Share Capital	5,00,000	Fixed Assets	5,00,000
Reserve Fund	50,000	Stock	2,00,000
7% Debentures	1,50,000	Debtors	1,50,000
Bank Overdraft	1,50,000	Cash	1,00,000
Creditors	1,00,000	—	—
Total	9,50,000	Total	9,50,000

 

1. 1. Current Ratio

Formula:

Step 1 – Current Assets

 

 

 

Q5. Discuss the format of the Cash Flow Statement, with the help of the activities listed. 10

Ans 5.

A Cash Flow Statement is a vital financial report that summarizes the inflow and outflow of cash and cash equivalents during a specific period. It helps stakeholders understand how a company generates and utilizes cash to finance operations, investments, and other business activities. Prepared according to Accounting Standard (AS) 3 (Revised) or IAS 7 under IFRS, this statement provides insights into a company’s liquidity, solvency, and overall financial health. It complements the Income Statement and Balance Sheet by focusing solely on cash-

 

 

Q6. Discuss the concept of transfer pricing, considering the example of a company that deals with the same concept. 10    

Ans 6.

Introduction

Transfer Pricing refers to the pricing of goods, services, or intangible assets transferred between different divisions, subsidiaries, or related entities within the same organization. In multinational corporations (MNCs), it determines the value of internal transactions between the parent company and its foreign subsidiaries. Transfer pricing plays a crucial role in determining profitability, taxation, and performance evaluation across business units. Since these transactions occur within related entities, governments regulate them through arm’s