**28**answerable questions with

**0**answered.

Roll No……… | |

Total No. of Questions — 8] | [Total No. of Printed Pages — 5 |

Time Allowed : 3 Hours | Maximum Marks : 100 |

All questions are compulsory. |

Working notes should form part of the answer. |

Marks |

1. | Answer any five of the following: | 5x2=10 | |||||||||||||||||||||||||||||||||||||||

(i) | Define the following: | ||||||||||||||||||||||||||||||||||||||||

(a) | Imputed cost | (0) | |||||||||||||||||||||||||||||||||||||||

(b) | Capitalised cost | (0) | |||||||||||||||||||||||||||||||||||||||

(ii) | Calculate efficiency and activity ratio from the following data:
| (0) | |||||||||||||||||||||||||||||||||||||||

(iii) | List the Financial expenses which are not included in cost. | (0) | |||||||||||||||||||||||||||||||||||||||

(iv) | Mention the main advantage of cost plus contracts. | (0) | |||||||||||||||||||||||||||||||||||||||

(v) | A Company sells two products, J and K. The sales mix is 4 units of J and 3 units of K. The contribution margins per unit are Rs.40 for J and Rs.20 for K. Fixed costs are Rs.6,16,000 per month. Compute the break-even point. | (0) | |||||||||||||||||||||||||||||||||||||||

(vi) | When is the reconciliation statement of Cost and Financial accounts not required? | (0) | |||||||||||||||||||||||||||||||||||||||

2. | Mega Company has just completed its first year of operations. The unit costs on a normal costing basis are as under:
Actual fixed overhead was Rs.48,000 less than the budgeted fixed overhead. Budgeted variable overhead was Rs.20,000 less than the actual variable overhead. The company used an expected actual activity level of 72,000 direct labour hours to compute the predetermine overhead rates. Required :
| 15 | (0) | ||||||||||||||||||||||||||||||||||||||

3. | (a) | XP Ltd. furnishes you the following information relating to process II.
| 8 | (0) | |||||||||||||||||||||||||||||||||||||

(b) | The following information is available from the cost records of Vatika & Co. For the month of August, 2009:
Calculate all material and labour variances for the month of August, 2009. | 8 | (0) | ||||||||||||||||||||||||||||||||||||||

4. | Answer any three of the following: | 3x3=9 | |||||||||||||||||||||||||||||||||||||||

(i) | Standard Time for a job is 90 hours. The hourly rate of Guaranteed wages is Rs.50. Because of the saving in time a worker a gets an effective hourly rate of wages of Rs.60 under Rowan premium bonus system. For the same saving in time, calculate the hourly rate of wages a worker B will get under Halsey premium bonus system assuring 40% to worker. | (0) | |||||||||||||||||||||||||||||||||||||||

(ii) | Explain briefly, what do you understand by Operating Costing. How are composite units computed? | (0) | |||||||||||||||||||||||||||||||||||||||

(iii) | The following information relating to a type of Raw material is available:
Calculate economic order quantity and total annual inventory cost of the raw material. | (0) | |||||||||||||||||||||||||||||||||||||||

(iv) | List the eight functional budgets prepared by a business. | (0) | |||||||||||||||||||||||||||||||||||||||

5. | Answer any five of the following: | 5x2=10 | |||||||||||||||||||||||||||||||||||||||

(i) | Explain briefly the limitations of Financial ratios. | (0) | |||||||||||||||||||||||||||||||||||||||

(ii) | What do you understand by Business Risk and Financial Risk? | (0) | |||||||||||||||||||||||||||||||||||||||

(iii) | Differentiate between Factoring and Bills discounting. | (0) | |||||||||||||||||||||||||||||||||||||||

(iv) | Differentiate between Financial Management and Financial Accounting. | (0) | |||||||||||||||||||||||||||||||||||||||

(v) | Y Ltd. retains Rs. 7,50,000 out of its current earnings. The expected rate of return to the shareholders, if they had invested the funds elsewhere is 10%. The brokerage is 3% and the shareholders come in 30% tax bracket. Calculate the cost of retained earnings. | (0) | |||||||||||||||||||||||||||||||||||||||

(vi) | From the information given below calculate the amount of Fixed assets and Proprietor’s fund.
| (0) | |||||||||||||||||||||||||||||||||||||||

6. | The Balance Sheets of a Company as on 31st March, 2008 and 2009 are given below:
Additional information: During the year ended 31
You are required to prepare Cash Flow Statement as per AS 3. | 15 | (0) | ||||||||||||||||||||||||||||||||||||||

7. | (a) | From the following financial data of Company A and Company B: Prepare their Income Statements.
| 8 | (0) | |||||||||||||||||||||||||||||||||||||

(b) | A hospital is considering to purchase a diagnostic machine costing Rs. 80,000. The projected life of the machine is 8 years and has an expected salvage value of Rs. 6,000 at the end of 8 years. The annual operating cost of the machine is Rs. 7,500. It is expected to generate revenues of Rs. 40,000 per year for eight years. Presently, the hospital is outsourcing the diagnostic work and is earning commission income of Rs.12,000 per annum; net of taxes. Required: Whether it would be profitable for the hospital to purchase the machine? Give your recommendation under:
PV factors at 10% are given below:
| 8 | (0) | ||||||||||||||||||||||||||||||||||||||

8. | Answer any three of the following: | 3x3=9 | |||||||||||||||||||||||||||||||||||||||

(i) | Explain the two basic functions of Financial Management. | (0) | |||||||||||||||||||||||||||||||||||||||

(ii) | Explain the following terms: | ||||||||||||||||||||||||||||||||||||||||

(a) | Ploughing back of profits | (0) | |||||||||||||||||||||||||||||||||||||||

(b) | Desirability factor. | (0) | |||||||||||||||||||||||||||||||||||||||

(iii) | What do you understand by Weighted Average Cost of Capital? | (0) | |||||||||||||||||||||||||||||||||||||||

(iv) | There are two firms P and Q which are identical except P does not use any debt in its capital structure while Q has Rs. 8,00,000, 9% debentures in its capital structure. Both the firms have earning before interest and tax of Rs. 2,60,000 p.a. and the capitalization rate is 10%. Assuming the corporate tax of 30%, calculate the value of these firms according to MM Hypothesis. | (0) |