BBA 3rd Semester
Cost Management Accounting Board Question Paper 2024

Write any two advantages of cost accounting.

What do you mean by inventory management?

Write about the opportunity cost.

Write about unavoidable cost.

What is piece rate wages system?

A manufacturing company provides you the following information of a material:
➢ Annual requirement 40,000 units
➢ Economic order quantity = 4,000 units
➢ Cost per unit of material Rs 20
➢ Carrying cost is 10% of inventory value
Required: Ordering cost per order

The following data are given to you:
➢ Standard time fixed for a job 12 hours
➢ Time rate fixed Rs 40 per hour
➢ Actual time taken by Mr A is 10 hours
Required: Total wages of Mr. A under Halsey Plan

Consider the following information of cost and production units:

The following information of a manufacturing company are presented below:
➢ Actual hours worked 8,200
➢ Fixed overhead (8,000 hours Normal Capacity) Rs 64,000
➢ Actual production 400 units
➢ Standard hours per unit 20
➢ Standard overhead rate per standard hour Rs 15
➢ Actual overhead incurred Rs 122,000
Required: Overhead Capacity Variance

The following overheads are exacted from the company.
Rent Rs 15,000
Depreciation of machinery Rs 50,000
Other information:

Differentiate between variable overhead and fixed overhead.

Differentiate between product cost and period cost with examples.

"Cost-Volume-Profit Analysis is important tools for profit planning." Comment.

A company has installed capacity of 30,000 labour hours the production and sales volume at present have given below:
➢ Production and sales in unit: 100,000 units
➢ Cost of producing one unit:
Direct material Rs 4
Direct labor Rs 3
Manufacturing overhead Rs 5
Total cost Rs 12
➢ Selling price per unit: Rs 15
The company received an offer to supply 20,000 units at a price of Rs 11 per unit and production of four units required one labour hour and fixed manufacturing cost was Rs 240,000.
Required: Differential cost analysis to decide whether the company should or should not accept the offer.

The following information of materials are given:
Standard:

The following are the information of production department:
➢ Cost of machine Rs 300,000 with Rs 30,000 residual value at end of 5 years.
➢ Annual working hours of machine 6,000 hours.
➢ Setting up time = 10% of total machine hours.
➢ Repair and maintenance and lubricating Rs 2 per machine hours
➢ Annual lighting expenses Rs 18,000
➢ Machine attendance annual salary Rs 48,000
➢ Power consumption Rs 3 per 30 minutes working
Required: Overhead rate per machine hour

The following are the information of a Manufacturing Company with Normal Capacity of 30,000 units:
Years
Closing stock units 1,000
Production units 20,000
Sales units 21,000
Fixed factory overhead at Normal Capacity Rs 120,000
Fixed selling and administrative overhead Rs 42,000
Variable selling expenses Rs 2 per unit
Unit selling price Rs 20
Variable cost per unit Rs.
Raw material 4
Direct labour 3
Required: Income Statement under Variable Costing and reconciliation of profit

"Management accounting provides information for decision making and control." Explain briefly.

"The main objective of holding inventory is to maintain efficiency in production and sales operations." discuss.

Following is the information about the New Hotel in Kathmandu:
➢ Total number of single rooms = 40 (100% for 5 months and 60% for 7 months)
➢ Total number of double rooms = 30 (70% for 5 months and 50% for 7 months)
Annual expenses and other information are given below:
➢ Room attendants 4 staff salary = Rs 30,000 per month per staff.
➢ Administrative 3 staff salary = Rs 20,000 per month per staff.
➢ Other staff 2 salary = Rs 15,000 per month per staff.
➢ Electricity charge = Rs 120,000 per year.
➢ Repair charge = Rs 30,000 per year.
➢ Insurance premium = Rs 60,000 per year.
➢ Laundry charge = Rs 10,000 per month
➢ Depreciation on furniture = 25% of Rs 500,000.
➢ Depreciation of land and building = 5% of 8,000,000.
➢ Miscellaneous expenses = Rs 100,000 per year.
➢ Profit 20% on the cost of sales.
Assumed that the double bad room shall be regarded as 1.5 of the single room for the fixing the rate of the room.
Required: a) Statement of operating cost
b) Room charge for single and double rooms per day.

Income Statement of a Manufacturing Company is as follows:
Production and Sales Units: 30,000
Sales Revenue @ Rs 30 per unit Rs 900,000
Less: Variable Cost @ Rs 18 per unit Rs 540,000
Contribution Margin Rs 360,000
Less: Fixed Cost Rs 240,000
Net Income before Tax Rs 120,000
Required: i) Brake-even point in Rs
ii) Break-even point in units
iii) Sales to earn desired profit after tax of Rs 75,000 if tax rate is 25%
iv) Profit when sales are Rs 1,000,000
v) Margin of safety if profit is Rs 150,000
vi) Margin of safety ratio if actual sales is Rs 750,000
vii) Break even ratio if actual sales is Rs 800,000

A renowned organization is planning to prepare functional budget for their decision making from the following information:
Total sales for six months are 400,000 units, which are apportioned as:
Chaitra 20%, Baisakh 15%, Jestha 20%, Ashad 15%, Shrawan 20% and Bhadra 10% respectively. Selling price per unit will be Rs 30
Purchase: One unit of finished goods requires 4 kg of material and rate per kg is Rs 6.
Wages: Each unit of finished goods will need 3 labour hours and rate per labour hour will be Rs 6
Overhead: Variable manufacturing cost will be Rs 3 per unit and fixed manufacturing cost for the year will be Rs 240,000
Selling and administrative expenses will be 20% of sales
Inventory policy: Material: 100% of the next month's production need
Finished goods: 50% of the following month sales
Required for three months from Baisakh to Ashad:
a. Sales budget
b. Production budget
c. Material purchase budget
d. Labour budget
e. Manufacturing overhead budget
f. Selling and administrative expenses budget
g. Cost of goods sold budget
h. "Functional budget is important for the development of organizations", explain.