LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034

B.Com. DEGREE EXAMINATION – COMMERCE

SIXTH SEMESTER – APRIL 2016
CO 6608 – FINANCIAL MANAGEMENT

Date: 15-04-2016 Dept. No. Max. : 100 Marks

Time: 09:00-12:00

PART – A (10x2=20 marks)

ANSWER ALL QUESTIONS:
1. Define financial management
2. What are the functions of Financial Management?
3. What is composite leverage?
4. Define capital structure
5. What is meant by WACC?
6. Janaki ltd., issued 12,000 10% debentures of Rs.100 each at par. The tax rate is 50%. Calculate before
tax and after tax cost of debt
7. Calculate the payback period for a project which requires a cash outlay of Rs.1, 00,000 and generates cash
flows of Rs. 25,000 Rs. 35,000, Rs. 30,000, and Rs. 25,000 in the first, second, third and fourth years
respectively.
8. A company is contemplating investment in a project which requires an initial investment of Rs. 2,00,000
generating a cash flow of Rs.80,000 every year for 4 years. Calculate the internal rate of return.
9. Brown ltd. has total sales revenue of Rs.120lakh a year, of which 75% are credit sales. The firm has an
investment opportunity in the money market to earn a return of 18% p.a. if the firm could reduce its float
by 3 days, what would be the annual savings for it?
10. The daily demand for an item X is about 45 units. Every time an order is placed, a fixed cost of Rs. 75 is
incurred. The daily holding cost per unit is Rs. 120. Determine the economic size.

PART–B

ANSWER ANY FOUR QUESTIONS: (4x10=40 marks)

11. Discuss the functions of financial management.

12. Explain the factors affecting capital structure of a firm.
13. The following projections have been given in respect of companies X and Y.
Particulars Company X Company Y
Volume of output and sales 80,000 units 1,00,000 units
Fixed cost Rs. 2,40,000 Rs. 2,50,000
Selling price per unit Rs. 10 Rs.8
Variable cost per unit Rs.4 Rs.8
Interest Rs.1,20,000 Rs.50,000
On the basis of above information calculate
(a) Operating leverage
(b) Financial leverage
(c) combined leverage
14. a) Your company’s share is quoted in the market at Rs.20 currently. The company pays a
dividend of Rs.1 per share and the investors expect a growth rate of 5% per year.
(i) Compute the company’s cost of equity capital.
(ii) If the anticipated growth rate is 6% per annum calculate the indicated market price per share
if company’s cost of equity capital is maintained.

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 (iii) If the company’s cost of capital is 8% and the anticipated growth rate is 5% per annum
calculate the indicated market price, if the dividend of Rs.1 per share is to be maintained.
b) Write short notes on Net operating Income approach. (3 marks)

15. A company was recently formed to manufacture a new product. It has the following capital structure:
Rs.
(i) 9% debentures (Face Value Rs.100) 10,00,000
(ii) 7% preference shares (Face Value Rs.100) 4,00,000
(iii) Equity share (48,000 shares) 16,00,000
(iv) Retained earnings 10,00,000

Total 40,00,000
The market price of equity share is Rs.80 and a dividend of Rs.8 per share is proposed. The Preference
shares can be redeemed at Rs.110 and the debenture can be redeemed at Rs.105 each. The company has
marginal tax rate of 50% and shareholders individual tax rate is 25%. Compute after tax weighted average
cost of capital of the company based on a) Book Value b) Market Value.

16. It is proposed to introduce a new machine to increase the production capacity of department X. two
machines are available, Type ‘A’ and type ‘B’. The following information is available:
Details A(Rs) B (Rs.)
Cost of machine 3,50,000 6,30,000
Estimated life(years) 7 10
Estimated savings in scrap p.a 20,000 32,000
Additional cost of indirect materials p.a 10,000 16,000
Estimated savings in wages:
Employees not required 15 20
Wages per employee per annum 10,000 16,000
Additional cost of maintenance p.a 7,200 12,000
Additional cost of supervision p.a 24,000 36,000
The rate of taxation can be regarded as 50% of profits. Which machine can be recommended for
purchase according to Pay Back Period?
17. X ltd., is carrying on business of purchase and sale of a item. Selling price is Rs.80 and purchase price is
Rs.60. during Dec 2007, Jan 2008, feb2008, and March 2008, its sales were 300 units, 400units,
500units, and 600units respectively. 10% of sales are on cash basis and the balance on one month’s
credit basis. Its office expenses are Rs.3,000 per month. Cash balance on 1.1.2008 Rs.10,000. At the end
of each month, the stock was nil.
Prepare a cash budget for the months Jan, Feb., and March 2008.

PART – C

Answer any TWO questions: (2x20=40 marks)

18. Explain the objectives and goals of financial management
19. Logan ltd. wants to raise RS.2,50,000 as additional capital. It has two mutually exclusive alternative
financial plans. The current EBIT is Rs.8,50,000 which is likely to remain unchanged. The relevant
information is:
Present capital structure: 1,50,000 equity shares of Rs.10 each and 10% bonds of Rs.10,00,000
Tax rate: 50%
Current EBIT: Rs.8,50,000
Current EPS: Rs.2.50
Current market price: Rs. 25 per share
Financial plan I: 10,000 equity shares at Rs.25 per share
Financial plan II: 12% debentures of Rs.2,50,000
You are required to calculate:
(a) earnings per share; (b) financial B.E.P; (C) indifference point between plan I and plan II

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20. X Ltd, is considering investing in a project requiring a capital outlay of Rs.8,00,000. Forecast for annual
net incomes after depreciation but before tax are as follows:
Year 1 2 3 4 5
Profits(Rs.) 4,00,000 4,00,000 3,20,000 3,20,000 1,60,000
Before tax
Depreciation may be taken as 20% on original cost and taxation at 50% of net income. You are required to
evaluate the project according to each of the following methods:
(a) payback method; (b) rate of return on original investment method; (c) rate of return on average
investment method; (d) NPV method taking cost of capital as 10%; (e) P.I method.

21. A company has prepared its annual budget, relevant details which are reproduced below:
(i) Sales Rs.46.80 lakh 78,000 units
(25% cash sales and balance on credit)
(ii) Raw material cost 60% of the sales value
(iii) Labour cost Rs. 6 per unit
iv) Variable over heads Re. 1 per unit
(v) Fixed over heads Rs.5 lakhs
(Including Rs.1,10,000 as depreciation)
(vi) Budgeted stock levels:
Raw materials 3 weeks
Work in progress 1 week (material 100%) labour and
Overheads approx. 50%)
Finished goods 2 weeks
(vii) Debtors are allowed credits for 4 weeks
(viii) Creditors allow 4 weeks credit
(ix) Wages are paid bimonthly
(x) Lag in payment of overheads 2 weeks
(xi) Cash in hand required Rs.50,000
Prepare the working capital budget for the year for the company making whatever assumptions
that you may find necessary.

$$$$$$$

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 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION –COMMERCE
SIXTH SEMESTER – APRIL 2019
CO 6608– FINANCIAL MANAGEMENT

Date: 01-04-2019 Dept. No. Max. : 100 Marks

Time: 09:00-12:00

PART – A

ANSWER ALL THE QUESTIONS: (10 x 2 = 20 marks)

1. Mention any two importance of Financial Management.

2. Brief about the role of Finance Manager.

3. What is operating leverage?

4. What is meant by “Financial Risk”?

5. The current market price of an equity share of a company is Rs. 90. The current dividend per share is

Rs. 4.50. In case the dividends are expected to grow at the rate of 7%, calculate the cost of equity

capital.

6. A company raised preference share capital of Rs. 1,00,000 by issue of 10% preference shares of Rs.

10 each. Calculate the cost of preference capital when they are issued at 10% premium.

7. What is pay-back period?

8. List out any two significance of Capital budgeting.

9. Calculate the average age of receivables:

Rs.

Credit sales for the year 2010 60,000

Accounts receivable as on 1.1.2010 7,000

Accounts receivable as on 31.12.2010 5,000

10. A, a refrigerator manufacturer, purchases 1,600 units of a certain component from B. His annual

usage is Rs. 1,600 units. The order placing cost is Rs. 100 and the cost of carrying one unit for a year

is Rs. 8. Calculate the Economic Ordering Quantity.

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 PART – B

ANSWER ANY FOUR QUESTIONS: (4 x 10 = 40 marks)

11. Explain the objectives and goals of Financial Management.

12. Describe the different types of leverages.
13. A company has a choice of the following three financial plans. You are required to calculate the
financial leverage in each case.
X Y Z
Rs. Rs. Rs.
Equity capital 2,000 1,000 3,000
Debt 2,000 3,000 1,000
Operating profit (EBIT) 400 400 400
Interest @ 10% on debt in all cases.

14. A company issues 10% irredeemable debentures of Rs. 1,00,000. The company is in the 55% tax
bracket. Calculate the cost of debt (before as well as after tax) if the debentures are issued at:
a) Par,
b) 10% discount and
c) 10% premium.

15. Varadhan Ltd. is producing articles mostly by manual labour and is considering to replace it by a
new machine. There are two alternative models M and N of new machine. Prepare a statement of
profitability showing the pay-back period from the following information.
Machine M Machine N
Estimated life of machine 4 years 5 years
Cost of machine Rs. 9,000 Rs. 18,000
Estimated savings in scrap 500 800
Estimated savings in direct wages 6,000 8,000
Additional cost of maintenance 800 1,000
Addition cost of supervision 1,200 1,800

Ignore taxation.

16. From the following information, extracted from the books of a manufacturing company, compute the
operating cycle in days and the amount of working capital required:
Period covered 365 days
Average period of credit allowed by suppliers 16 days
(Rs. In ‘000)
Average total of debtors outstanding 480
Raw material consumption 4,400
Total production cost 10,000
Total cost of sales 10,500
Sales for the year 16,000
Value of average stock maintained:
Raw material 320
Work-in-progress 350
Finished goods 260

17. From the following data, calculate (a) Safety stock, (b) Re-order Level, and (c) Maximum Level in
respect of material ‘A’.

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 Economic Order Quantity 500 units
Lead time 3 weeks
Weekly usage 50 units
Weeks of safety stock desired by firm 2

PART – C
ANSWER ANY TWO QUESTIONS: (2 x 20 = 40 marks)

18. Explain the factors influencing the financial decision of finance manager.

19. From the following capital structure of a company, calculate the overall cost of capital, using (a)
book value weights and (b) market value weights.
Source Book value Market value
Rs. Rs.
Equity share capital ( Rs. 10 per share) 45,000 90,000
Retained earnings 15,000 -
Preference share capital 10,000 10,000
Debentures 30,000 30,000
The after-tax cost of different sources of finance is as follows:
Equity share capital: 14%: Retained Earnings: 13%; Preference share capital: 10%; Debentures: 5%

20. A ltd. is considering the purchase of a machine which will perform some operations which are at
present performed by workers. Machines X and Y are alternative models. The following details are
available:
Machine X Machine Y
Rs. Rs.
Cost of machine 1,50,000 2,40,000
Estimated life of machine 5 years 6 years
Estimated cost of maintenance p.a. 7,000 11,000
Estimated cost of indirect material p.a. 6,000 8,000
Estimated savings in scrap p.a. 10,000 15,000
Estimated cost of supervision p.a. 12,000 16,000
Estimated savings in wages p.a. 90,000 1,20,000
Depreciation will be charged on straight line basis. The tax rate is 30%. Evaluate the alternatives
according to:
(a) Average rate of return method
(b) Net Present value (c) Profitability index method assuming cost of capital being 10%.
(The present value of Re. 1.00 @ 10% p.a. for 5 years is 3.79 and for 6 years is 4.354)

21. A company’s existing capital structure consists of the following:

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 Particulars Amount (Rs.)
Equity Shares of Rs.100 each 20,00,000
Retained Earnings 10,00,000
9% Preference Shares 12,00,000
7% Debentures 8,00,000
Total 50,00,000
The company earns 12% on its capital. The income tax rate is 50%. The company requires a sum of
Rs.25,00,000 to finance its expansion project for which it is considering the following alternatives:
(i) Issue of 20,000 Equity Shares at a premium of Rs.25 per share;
(ii) Issue of 10% Preference Share;
(iii) Issue of 8% Debentures.
It is estimated that the Price Earnings ratios in the case of Equity, Preference shares and Debenture
financing would be 21.4, 17 and 15.7 respectively. Which alternative would you consider to be the
best?

*********

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 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION –COMMERCE [*******]
SIXTH SEMESTER – APRIL 2018
CO 6608– FINANCIAL MANAGEMENT

Date: 17-04-2018 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
PART A
ANSWER ALL THE QUESTIONS (10 X 2= 20 MARKS)
1. What is financial management?
2. Classify the pattern of capital structure.
3. Why is Operating leverage exiting?
4. Illustrate Indifference point
5. Expand the term ‘CAPM’.
6. What is the meaning of WACC?
7. Give formula of redeemable Cost of debt.
8. Akash ltd offers for public subscription equity shares of Rs.10 each at a premium of 10%.
The company pays an underwriting commission of 5% on the issue price. The equity
shareholders expect a dividend of 15%.
(a) Calculate the cost of capital
(b) Calculate the cost of equity capital, if the market price of the share is Rs.20.
9. A projects cost Rs. 1, 00,000and yields annual cash inflow of Rs 20,000 for 7 years Calculate
pay back period.
10. Find out the economic order quantity from the following particulars:
Annual usage Rs. 1,20,000
Cost of placing and receiving one order: Rs. 60
Annual carrying cost = 10% of inventory value

PART B
ANSWER ANY FOUR QUESTIONS (4 X 10 = 40 MARKS)

11. What are the functions of a finance manager?

12. a. Explain the various stages in capital budgeting process
b. Discuss the importance of Capital Budgeting.
13. Discuss the various factors affecting the requirement of Working Capital
Management.
14. Komal Ltd wants to raise Rs. 2,50,000 as additional capital. It has two mutually
exclusive alternative financial plans. The current EBIT id Rs. 8,50,000 which is
likely to remain unchanged. The relevant information is:
Present capital structure: 1,50,000 equity shares of Rs. 10 each and 10% Bonds of
Rs.10,00,000

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 Tax rate : 50%
Current EBIT: Rs. 8,50,000
Current EPS : Rs.2.50
Current market price :Rs. 25 per share
Financial Plan I : 10,000 Equity Shares at Rs. 25 per share
Financial Plan II : 12 % Debentures of Rs.2,50,000
You are required to calculate: (a) Earnings per share (b) Indifference point between
Plan I and Plan II.

15. Calculate the degree of (a) Operating Leverage, (b) Financial Leverage,
(c) Combined
Leverage, from the following information and interpret the results.

Details Company - P Company - QCompany - R

Output in units 3,00,000 75,000 5,00,000

Fixed Cost Rs. 3,50,000 7,00,000 75,000

Variable cost per unit Rs 1.00 7.50 0.10
Interest Expenses Rs 25,000 40,000 Nil
Selling Price per unit Rs 3.00 25.00 .50

16. `From the following particulars. Calculate (a) Net operating cycle, (b) Number of
operating cycles in a year, (c) The amount of Working Capital.

Details

Period Covered 360 days

Average period allowed by suppliers 30 days

Average period allowed to debtors 45 days

Raw material consumed during the year Rs.6,00,000

Average stock of raw material Rs.50,000

Work in progress inventory Rs.5,00,000

Average Work in progress inventory Rs.30,000

Finished goods inventory Rs.8,00,000

Average finished goods stock held Rs.40,000

Total cost of sales Rs.8,40,000

17. A company has to choose any one of the following two mutually exclusive projects.

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Investment required for each project is Rs.15,000 and both have to be depreciated
on straight line method assuming that income tax is @ 50%.

Year Project - A Project - B

1 4,200 4,200
2 4,800 4,500
3 7,000 4,000
4 7,000 5,000
5 2,000 10,000

Calculate Payback Period.

PART C
ANSWER ANY TWO QUESTIONS (2 X 20 =40 MARKS)

18. Discuss briefly the significance and objectives of financial Management.

19. X Co desires to purchase a business and has consulted you and one point on which
you are asked to advise them is the average amount of working capital which will be
required in the first year’s working.
You are given the following estimates and are instructed to add 10% to your computed
figures to allow for contingencies.
Figure for the year
(i) Average amount locked up in stocks: Rs.
Stock of finished goods 5,000
Stock of stores and material 8,000
(ii) Average credit given :
Inland sales - 6 weeks 3,12,000
Export sales – 1 ½ weeks 78,000
(iii) Lag in payment of wages and other outgoings:
Wages - 1 ½ weeks 2,60,000
Stores materials etc. – 1 ½ months 48,000
Rent, royalties etc. – 6 months 10,000
Clerical staff salary – ½ month 62,400
Manager salary - ½ month 4,800
Miscellaneous expenses - 1 ½ months 48,000
(iv) Payment in advance:
Sundry expenses (paid quarterly in advance) 8,000
(v) Undrawn profits on the average throughout the year 11,000

Set up your calculation for the average amount of working capital required.

3
20. A limited is considering investing in a project requiring a capital outlay of Rs.2,00,000.
Forecast of annual income after depreciation but before tax is as follows”

Year PBT in Rs. PVIF at 10%

1 1,00,000 .909

2 1,00,000 .826

3 80,000 .751

4 80,000 .683

5 40,000 .621

Depreciation may be taken as 20% on original cost and taxation at 50% of net income.
Calculate:
(a) Pay-back period
(b) Discounted pay-back period
(c) Rate of return on original investment
(d) Net present value
(e) Profitability index method

21. Neeraon Moody Ltd., has an all equity capital structure consisting of 5000 equity
shares of 100 each. The management plans to raise Rs.3,00,000 for expansion
programme. The expected EBIT after expansion is Rs. 1,50,000. The company has the
following four options:
1) To issue 3000 equity shares of Rs. 100 each
2) To issue 1000 equity shares Rs.100 each and issue 9% preference shares for
Rs.2,00,000
3) To borrow a bank loan for Rs. 3,00,000 at 10% interest p.a..
4) To issue 1000 equity shares of Rs.100 each and for the balance of Rs.2,00,000
a bank loan is raised at 10% p.a.
Suggest the best alternative with the justifications assuming that income Tax of
50% .

**********

4
 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION – COMMERCE
SIXTHSEMESTER – APRIL 2017
CO 6608- FINANCIAL MANAGEMENT

Date: 20-04-2017 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
PART – A

ANSWER ALL THE QUESTIONS: (10 x 2 = 20 marks)

1. What is business finance?

2. What do you mean by liquidity?
3. Define Arbitrage process.
4. What is optimum capital structure?
5. The current market price of an equity share of a company is Rs. 90. The current dividend per share is
Rs. 4.50. In case the dividends are expected to grow at the rate of 7%. Calculate the cost of equity
capital.
6. Define cost of capital.
7. A project has an initial investment of Rs.2,00,000. It will produce cash flows after tax of Rs.50,000
per annum for six years. Calculate the payback period for the project.
8. What is Dividend?
9. Define net working capital.
10. A purchased 1600 units of a certain component from B. his annual usage is 1,600 units. The order
placing cost is Rs. 100 and the cost of carrying one unit for a year is Rs. 8. Calculate the Economic
Ordering Quantity by formula method.
PART – B

ANSWER ANY FOUR QUESTIONS: (4 x 10 = 40 marks)

11. Explain the objectives of Financial Management in detail.

12. What is Leverage? Explain various types of leverages.
13. The following data pertain to Koushik Ltd.
Existing capital structure: 10 lakhs Equity shares of Rs. 10 each, tax rate: 50%
Koushik ltd plans to raise additional capital of Rs. 100 lakhs for financing an expansion
project. It is evaluating two alternative financing plans:
(i) issue of 10,00,000 equity shares of Rs. 10 each, and
(ii) issue of 100 lakh debentures carrying 14% interest.
You are required to compute indifference point.
14. Your company’s share is quoted in the market at Rs. 20 currently. The company pays a dividend of
Rs. 1 per share and the investor’s market expects a growth rate of 5% per year. You are required to
compute:
(i) The company’s equity cost of capital.
(ii) If the company’s cost of capital is 8% and the anticipated growth rate is 5% p.a, the market
price if the dividend of Re.1 is to be maintained.

1
15. A company has an investment opportunity costing Rs. 40,000 with the following expected net cash
inflows (i.e., after tax and before depreciation):
Year Net cash inflows
Rs.
1 7,000
2 7,000
3 7,000
4 7,000
5 7,000
6 8,000
7 10,000
8 15,000
9 10,000
10 4,000
Determine the “Internal rate of return” with the help of 10% discounting factor and 15% discounting
factor which is given below:
Year Present value factor @ Present value factor @
10% 15%
1 0.909 0.870
2 0.826 0.756
3 0.751 0.658
4 0.683 0.572
5 0.621 0.497
6 0.564 0.432
7 0.513 0.376
8 0.467 0.327
9 0.424 0.284
10 0.386 0.247

16. Determine the average rate of return from the following data of two machines A and B.
Machine A Machine B
Rs. Rs.
Original cost 56,125 56,125
Additional investment in net working capital 5,000 6,000
Estimated life in years 5 5
Estimated salvage value 3,000 3,000
Average income-tax rate 55% 55%
Annual estimated income after dep. and tax:
1st year 3,375 11,375
2nd year 5,375 9,375
3rd year 7,375 7,375
4th year 9,375 5,375
5th year 11,375 3,375
36,875 36,875

Depreciation has been charged on straight line basis.

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 17. Prepare a cash budget for the month May, June and July 2009 on the basis of the following
information:
Month Credit sales Credit purchases Wages Manufacturing Office expenses Selling
Rs. Rs. Rs. expenses Rs. expenses
Rs. Rs.
March 60,000 36,000 9,000 4,000 2,000 4,000
April 62,000 38,000 8,000 3,000 1,500 5,000
May 64,000 33,000 10,000 4,500 2,500 4,500
June 58,000 35,000 8,500 3,500 2,000 3,500
July 56,000 39,000 9,500 4,000 1,000 4,500
August 60,000 34,000 8,000 3,000 1,500 4,500

(i) Cash balance on 1st May 2009 Rs. 8,000

(ii) Plant costing Rs. 16,000 is due for delivery in July, payable 10% on delivery and the balance
after 3 months.
(iii) Advance tax of Rs, 8,000 each is payable in March and June.
(iv) Period of credit allowed
(a) by suppliers – two months, and
(b) to customers – one month.
(v) Lag in payment of manufacturing expenses – ½ month.
(vi) Lag in payment of office and selling expenses – one month.

PART – C
ANSWER ANY TWO QUESTIONS: (2 x 20 = 40 marks)
18. A company capital structure consists of the following:
Equity shares of Rs. 100 each Rs. 20 lakhs
Retained Earnings Rs. 10 lakhs
9% Preference shares Rs. 10 lakhs
7% Debentures Rs. 10 lakhs
Total
Rs. 50 lakhs

The company earns 12% on its capital. The income-tax rate is 50%. The company requires a sum of
Rs. 25 lakhs to finance its expansion programme for which following alternatives are available to it:
(i) Issue of 20,000 equity shares at a premium of Rs. 25 per share.
(ii) Issue of 10% preference shares.
(iii) Issue of 8% debentures.
It is estimated that the P/E ratios in the case of Equity, Preference and Debenture financing would be
21.4, 17 and 15.7 respectively.
Which of the three financing alternatives would you recommend and why?
19. The balance sheet of M/s. ABC company shows the following items as at 31st December, 2008:
Rs.
Paid up cap: 4,00,000 equity shares of Rs. 10 each 40,00,000
Reserves and surplus 60,00,000
15% Non-convertible Debentures 20,00,000
14% Institutional loans 60,00,000
Other information about the company as relevant is given below:

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 Year Dividend per Earnings per Market price
ended 31st share share per share
December Rs. Rs. Rs.
2008 4.00 7.50 50.00
2007 3.00 6.00 40.00
2006 4.00 4.50 30.00

You are required to calculate the weighted average cost of capital, using book values as weights and
Earning/Price (E/P) ratio as the basis of cost of equity.
20. Vishnu Ltd is considering two different investment proposals. The details are as under:
Investment Proposal I Proposal II
estimated Rs. 9,500 Rs. 20,000
Inflows
Year 1 Rs. 4,000 Rs. 8,000
Year 2 4,000 8,000
Year 3 4,500 12,000

Suggest the most attractive proposal on the basis of pay Back period, Net Present value
&ProfitabilityIndex Considering the discount Rate as 12%.

21. X Co. desires to purchase a business and has consulted you and one point on which you are asked to
advise them is the average amount of Working Capital which will be required in the first year’s
working.You are given the following estimates and instructed to add 10% to your computed figure
to allow for contingencies
Figure for the year
i. Average amount locked up in Stocks Rs.
Stock of Finished goods 5,000
Stock of stores and materials 8,000
ii. Average Credit given:
Inland Sales – 6 Weeks 3,12,000
Export Sales – 1½ Weeks 78,000
iii. Lag in Payment of wages and other outgoing:
Wages – 1½ Weeks 2,60,000
Stores, Materials, etc. – 1½ months 48,000
Rent, Royalties, etc. – 6 months 10,000
Clerical staff salary – ½ month 62,400
Manager salary – ½ month 4,800
Miscellaneous Expense – 1½ months 48,000
iv. Payment in advance!
Sundry Expense [Paid Quarterly in advance] 8,000
v. Undrawn profits on the average throughout the year 11,000
Setup your Calculations for the average amount of working capital Required

***********

4
 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION –COMMERCE [*******]
SIXTH SEMESTER – APRIL 2018
CO 6609– MANAGEMENT ACCOUNTING

Date: 19-04-2018 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
Section ‘A’
Answer ALL the questions: 10 x 2= 20 Marks
1. What is Management Accounting?
2. What is Ratio Analysis?
3. What is Current Asset?
4. State the meaning of Breakevenpoint.
5. What is Budgeting?
6. Calculate Gross Profit Ratio from the following figures:
Rs.
Sales 10,00,000
Sales returns 1,00,000
Opening stock 2,00,000
Purchase 6,00,000
Purchase returns 1,50,000
Closing stock 65,000
7. Proposed dividend during 2003 Rs. 80,000
Proposed dividend during 2004 Rs. 1,10,000
Dividend paid in 2004 Rs. 80,000
Prepare Proposed Dividend ledger account.
8. From the following find profit:
Rs.
Fixed cost 5,00,000
Variable cost per unit 10
Selling price per unit 15
Output level 1,50,000 units.
9. From the following particulars
Calculate Material cost variance
Material purchased -- 3,000 kgs at Rs. 6 per kg
Standard quantity of material fixed
for one unit of finished product -- 25 kgs at Rs. 4 per kg
Opening stock of material -- Nil
Closing stock of material -- 500 kgs
Actual output during the period -- 80 units.
10. You are required to prepare a production budget for the half year ending June 2000 from the
following information:
Budget sales Actual stock on 31- Desired stock on 30-
Product 6-2000
quantity 12-99

Units Units Units

S 20,000 4,000 5,000

T 50,000 6,000 10,000

1
 Section ‘B’
Answer any FOUR questions: 4 x 10= 40 Marks
11. You are given the following Balance Sheet. Calculate Current ratio, Liquid ratio, Absolute liquid
ratio, Debt equity ratio, Fixed assets ratio and Proprietary ratio.
Liabilities Rs. Assets Rs.

Equity share capital 2,00,000 Goodwill 1,20,000

Reserves 40,000 Fixed assets 2,80,000
P&L A/c 60,000 Stock 80,000
Secured loan 1,60,000 Debtors 40,000
Creditors 1,00,000 Bills Receivable 20,000
Provision for Tax 40,000 Cash 60,000

Total 6,00,000 Total 6,00,000

12. Draw up a flexible budget for production at 75% and 100% capacity on the basis of the following
data for a 50% activity.
Per unit
Rs.
Materials 100
Labour 50
Variable expenses (direct) 10
Administrative expenses (50% fixed) 40,000
Selling and distribution expenses (60% fixed) 50,000
Present production (50% activity): 1,000 units
13. The sales turnover and profit during two years were as follows:
Year Sales Profit
Rs. Rs.
2006 1,40,000 15,000
2007 1,60,000 20,000
Calculate:
(a) P/V Ratio
(b) Break-even point
(c) Sales required to earn a profit of Rs. 40,000
(d) Fixed expenses and
(e) Profit when sales are Rs. 1,20,000.
14. From the following data, calculate all labour variances:
Budgeted labour for computing job X:
8 skilled workers at Rs.10 per hour for 20 hours
12 unskilled workers at Rs.8 per hour for 20 hours
Actual labour for computing job X:
12 skilled workers at Rs.11 per hour for 20 hours
13 unskilled workers at Rs.7 per hour for 20 hours
15. A company manufactures a particular product the standard material cost of which is Rs.10 per
unit. The following information is obtained from the cost records:
Standard Mix:
Quantity Rate Amount
Material Rs.
Units Rs.
A 70 10 700
B 30 5 150
Total 100 850
Less: 15% 15 -

2
 85 850

Actual results for January 2018:

Quantity Rate Amount
Material Rs.
Units Rs.
A 400 11 4,400
B 200 6 1,200

Total 600 5,600

Less: 10% 60 -
540 5,600

Calculate all Material Variances

16. What are the functions of Management Accounting?

17. What are the advantages and limitations of Ratio Analysis?
Section ‘C’
Answer any TWO questions: 2 x 20= 40 Marks

18. The following are the summarized Balance Sheets of Shekar Ltd., on 31-12-16 and 31-12-17.
Balance Sheets
2016 2017 2016 2017
Liabilities Assets Rs.
Rs. Rs. Rs.

Share capital 12,00,000 16,00,000

Debentures 4,00,000 6,00,000 Plant & Machinery 8,00,000 12,90,000

P & L A/c 2,50,000 5,00,000 (at cost)

Land & Building 8,00,000
Creditors 2,30,000 1,80,000 6,00,000
(at cost)
Provision for: Stock 6,00,000 7,00,000
Bad & Doubtful 80,000
12,000 6,000 Bank 40,000
debts
Depreciation on land Preliminary 12,000
40,000 48,000 14,000
and building expenses
Depreciation on Plant 1,22,000
60,000 70,000 Debtors 1,38,000
and Machinery
21,92,000 30,04,000 21,92,000 30,04,000

Additional Information:
(i) During the year, a part of the machinery, costing Rs. 1,40,000 [accumulated
depreciation thereon Rs. 40,000] was sold for Rs. 1,02,000.
(ii) Dividend of Rs. 1,00,000 was paid during the year.
Ascertain:
(1) Changes in working capital for 2017
(2) Funds Flow Statement for 2017
19. The following ratios and other data related to the financial statement of J Co. Ltd for the year
ending 31st March 2018:
Working capital ratio (Current ratio) 1.75
Acid test ratio 1.27
Working capital Rs.33,000
Fixed assets to shareholders equity 0.625

3
 Inventory turnover ratio (based on closing stock) 4 times
Gross Profit Ratio 40%
Earnings per share Re. 0.50
Debt collection period 73 days
No. of shares issued 20,000
Earnings for the year on share capital 25%
The company has no prepaid expenses, deferred charges, intangible assets or long-term
liabilities. You are required to draft the company’s profit and loss account and balance sheet.
20. A newly started Pushpak Co. wishes to prepare cash budget from January. Prepare a cash budget
for the 6 months from the following estimated revenue and expenses.
Production Selling & Distribution
Total sales Materials Wages overhead
Months overhead
Rs. Rs. Rs. Rs.
Rs.
January 20,000 20,000 4,000 3,200 800
February 22,000 14,000 4,400 3,300 900

March 24,000 14,000 4,600 3,300 800

April 26,000 12,000 4,600 3,400 900

May 28,000 12,000 4,800 3,500 900

June 30,000 16,000 4,800 3,600 1,000

Cash balance on 1st January was Rs.10,000. A new machine is to be installed at Rs. 30,000 on
credit, to be repaid by two equal installments in March and April. Sales commission at 5% on total
sales is to be paid within the month following actual sales.
Rs. 10,000 being the amount of 2nd call may be received in March. Share premium amounting to Rs.
2,000 is also obtained with 2nd call.
Period of credit allowed by suppliers – 2 months
Period of credit allowed to customers – 1 month
Delay in payment of overheads – 1 month
Delay in payment of wages – ½ month
Assume cash sales to be 50% of the total sales.
21. The following particulars are extracted from the records of a company:
Details Product A Product B
Sales (per unit) Rs.100 Rs.120
Consumption of material 2KG 3KG
Material cost Rs.10 Rs.15
Direct wages cost Rs.15 Rs.10
Direct expenses Rs.5 Rs.6
Machines hours used 3 2
Overhead expenses:
Fixed Rs.5 Rs.10
Variable Rs.15 Rs.20

Direct wages per hour is Rs.5. Comment on the profitability of each product (both use the same raw
material) when:
i. Total sales potential in units is limited
ii. Production capacity (in terms of machine hours) is the limiting factor
iii. Material is in short supply
iv. Sales potential in value is limited.

**********

4
 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION – COMMERCE
SIXTH SEMESTER – APRIL 2019
CO 6609– MANAGEMENT ACCOUNTING

Date: 03-04-2019 Dept. No. Max. : 100 Marks

Time: 09:00-12:00

SECTION – A
Answer ALL the Questions (10 * 2 = 20)

1. Find out Fixed Assets and Gross Profit from the following information:
Sales Rs.10,00,000
Gross Profit Ratio 25%
Fixed Assets Turnover Ratio (on cost of sales ) 5 times.

2. Find out the Provision for income tax made during the financial year 2003 – 04:
Balance of provision for tax on 1-4-2003 Rs.2,65,000
Balance of provision for tax on 31-3-2004 Rs.2,90,000
Tax paid during 2003-04 Rs.3,00,000.

3. Variable overheads for production of 10,000 units are Rs.60,000.what will be the variable overheads for
production of (a)15,000 units; (b)20,000 units?

4. From the following data calculate:

(a) P/V ratio; (b) Variable Cost and (c) Profit.
Sales Rs.80,000 Fixed expenses Rs.15,000 Break Even point Rs.50,000.

5. Calculate Material Cost variances from the following data;

Particulars Standard Actual

Quantity 400kgs 460kgs

Price Rs.2per kg Rs.1.5per kg

Value Rs.800 Rs.690

6. What is management accounting?

7. State any two advantages of Ratio analysis?

8. State any two uses of funds flow statement?

9. What is budgeting?

10. What is standard cost?

1
 SECTION – B
Answer any FOUR questions (4 * 10 = 40)

11. You are given the following information:

Cash Rs.18,000 Debtors Rs.1,42,000 Closing Stock Rs.1,80,000
Bills payable Rs.27,000 Creditors Rs.50,000 Outstanding expenses Rs.15,000
Tax payable Rs.75,000
Calculate (a) Current Ratio (b) Liquidity Ratio (c) Absolute Liquidity Ratio.

12. Calculate Funds From Operations from the following Profit and Loss a/c.

Particulars Rs. Particulars Rs.

To Expenses paid 3,00,000 By Gross profit 4,50,000

To Depreciation 70,000 By Gain on sale of land 60,000
To Loss on sale of machine 4,000
To Discount 200
To Goodwill (Written Off) 20,000
To Net Profit 1,15,800
5,10,000 5,10,000

13. Draw up a flexible budget for production at 75% and 100% capacity on the basis of the following data for a
50% activity.
Materials per unit Rs.100
Labour per unit Rs.50
Variable expenses (direct) per unit Rs.10
Administrative expenses (50% fixed) Rs.40,000
Selling and distribution expenses (60% fixed) Rs.50,000
Present production (50% activity) : 1,000 units.

14. A.G.Ltd. furnished you the following related to the year 1996.

First half of the year Rs. Second half of the year Rs.

Sales 45,000 50,000

Total cost 40,000 43,000

Assuming that there is no change in prices and variable cost and that the fixed expenses are incurred
equally in the 2 half year periods, calculate for the year 1996:
(a) The profit volume ratio
(b) Fixed expenses
(c) Break even sales and
(d) % of Margin of safety.

2
15. (a) From the following, calculate material price variance, assuming standard price per kg of Rs.8.
Opening stock of material: 50kg at Rs.10 per kg
Material purchased 850 kg at Rs.10 per kg
Closing stock of material 100kg.
(b) The following standards are given
Material A : 20kgs at Rs.20 per kg
Material B : 30kgs at Rs.10 per kg
The actual results were:
Materials A : 25kgs at Rs.18 per kg
Materials B : 28kgs at Rs.11 per kg.
Calculate (1) Materials Mix Variance
(2) Material Sub-Usage Variance
(3) Material Usage Variance.

16. What are the limitations of management accounting?

17. What are the differences between Fund Flow statement and Balance Sheet?

SECTION – C
Answer any TWO questions (2 * 20 = 40)

18. Following are the Ratios relating to the trading activities of Neela Traders Ltd.,Madras.

Receivables turnover = 90days (360 days year)

Inventory turnover = 3 times
Payables turnover = 3 months
Gross Profit Ratio = 25%

Gross profit for the year amounted to Rs.18,000. Closing inventory of the year is Rs.2,000 above the
opening inventory. Bills receivable amount to Rs.2,500 and Bills payable Rs.1,000.Ascertain the
following:

(a) Sales (b) Debtors (c) Closing Inventory (d) Sundry Creditors.

19. The following is the Comparative Balance sheets of Pratima & Co.Ltd.as on 30 th June 1987 and 30th
June 1988.

Liabilities 30-6-1987 30-6-1988 Assets 30-6-1987 30-6-1988

(Rs.) (Rs.) (Rs.) (Rs.)
Share capital 1,80,000 2,00,000 Goodwill 24,000 20,000
Reserve fund 28,000 36,000 Buildings 80,000 72,000
P & L a/c 39,000 24,000 Machinery 74,000 72,000
Trade Creditors 16,000 10,800 Investments 20,000 22,000
Bank Overdraft 12,400 2,600 Inventories 60,000 50,800
Provision for taxation 32,000 34,000 Debtors 40,000 44,400
Provision for doubtful debts 3,800 4,200 Cash 13,200 30,400
3,11,200 3,11,600 3,11,200 3,11,600

3
Additional Information:
(i) Depreciation charged on Machinery Rs.10,000 and on Buildings Rs.8000.
(ii) Investments sold during the year Rs.3000.
(iii) Rs.15,000 Interim dividend paid during January 1988.
(iv) Taxes paid during the year Rs.30,000.
Prepare (a) A Statement of changes in working capital.
(b) A Fund Flow Statement.

20. The sales turnover and profit during two years were as follows:

Year Sales (Rs.) Profit (Rs.)

2007 1,40,000 15,000
2008 1,60,000 20,000
Calculate :
(a) P/V ratio
(b) Break Even Point
(c) Sales required to earn a Profit of Rs.40,000
(d) Fixed Expenses and
(e) Profit when sales are Rs.1,20,000.

21. A newly started Pushpak Co., wishes to prepare cash budget from January. Prepare a cash budget for the 6
months from the following estimated revenue and expenses.

Months Total sales Materials Wages Production Selling & Distribution

(Rs.) (Rs.) (Rs.) Overhead (Rs.) Overhead (Rs.)
January 20,000 20,000 4,000 3,200 800
February 22,000 14,000 4,400 3,300 900
March 24,000 14,000 4,600 3,300 800
April 26,000 12,000 4,600 3,400 900
May 28,000 12,000 4,800 3,500 900
June 30,000 16,000 4,800 3,600 1,000

Cash balance on 1st January was Rs.10,000. A new machine is to be installed at Rs.30,000 on credit,
to be repaid by two equal instalments in march and April.
Sales commission at 5% on total sales is to be paid within the month following actual sales.
Rs.10,000 being the amount of 2nd call may be received in March.
Share premium amounting to Rs.2000 is also obtained with 2nd call.
Period of credit allowed by suppliers – 2 months
Period of credit allowed to customers – 1 month
Delay in payment of overheads – 1 month
Delay in payment of wages – ½ month
Assume cash sales to be 50% of the total sales.




4
 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
SIXTH SEMESTER – APRIL 2016
CO 6609 – MANAGEMENT ACCOUNTING

Date: 18-04-2016 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
PART- A
Answer ALL Questions: (10 x 2 = 20 marks)
1. State any two points of difference between Cost Accounting and Management Accounting.
2. State the modes of expression of ratios.
3. What are the methods of determining Funds from Operations?
4. What are the limitations of Zero Base Budgeting?
5. Define the term ‘Margin of Safety’.
6. From the following particulars, calculate the Net profit ratio:

Gross Profit ratio = 40%

Gross Profit = Rs. 4, 80,000
Administration, selling & distribution expenses = Rs. 1, 80,000
7. Calculate Return on equity share capital:

Rs.
10% Preference share capital (fully-Paid) 4, 00,000
64,000 Equity shares of Rs.10 each (fully-paid) 6, 40,000
Undistributed reserves and surplus 25, 60,000
Net profit after tax 9, 50,000

8. From the following particulars prepare production budget for the year ended June 30, 2015:
Product Sales in units Estimated stock (units)
As per sales budget July 1, 2014 June 30, 2015
A 1,50,000 14,000 15,000
B 1,00,000 5,000 4,500
C 70,000 8,000 8,000

9. Calculate B.E.P in units from the following particulars:

Rs.

Total cost 50,000

Total variable cost 30,000

Sales (5,000 units ) 50,000

10. From the following information, find out the amount of profit earned during the year using marginal costing
technique:
Fixed Cost Rs. 5, 00,000
Variable cost Rs. 10 per unit
Selling Price Rs. 15 per unit
Output level 1, 50,000 units

1
 PART- B
Answer any FOUR Questions: (4 x 10= 40 marks)
11. Enumerate the functions of Management Accounting.
12. Explain how accounting ratios are classified.
13. From the following particulars calculate a) B E P b) Margin of safety for 2015
c) Profit when the desired sales is Rs.1,50,000 d) Sales when the desired profit is Rs.25,000.

Year Total Sales Total Cost

2014 Rs.1,00,000 Rs.96,000
2015 Rs.1,20,000 Rs.1,10,000

14. Find the funds from operations from the following data:
Opening balance of profit and loss A/c: Rs. 60,000
Closing Balance of profit and loss A/c: Rs. 30,000
The following items appeared in Profit and loss A/c:
Interim dividend paid Rs. 20,000; Proposed dividend Rs. 30,000; Depreciation Rs.50,000; Preliminary
expenses Rs.1,000; Loss on sale of machinery Rs. 3,000; General reserve Rs.5,000;
Sinking Fund Rs. 10,000; Salaries paid Rs. 3,000; Profit on sale of car Rs. 4,000; and Tax paid Rs.5, 000.

15. Using the information below, prepare a cash budget showing expected cash receipts and disbursements for the
month of June and balance expected on June 30, 2015:
Budgeted cash balance June 1, 2015 Rs. 1, 20,000. Sales for June Rs.16,00,000, half collected in the month of
sale, 40% in next month, 10% in third month.
Customer receivables as of June 1 Rs. 1, 40,000 from April sales, Rs. 9, 00,000 from May sales.
Merchandise purchases for June Rs. 10, 00,000, 40% payment in the month of purchases,
60% paid in the next month. Wages due in June Rs. 1, 76,000.
Three years insurance policy due in June for renewal Rs. 4,000 to be paid in cash.
Other expenses for June, payable in June Rs.88, 000.
Depreciation for the month of June Rs.4, 000.
Accrued taxes for June, payable in December Rs. 12,000.
Fixed deposit receipts due June 15 – Rs. 3, 50,000 plus Rs.20, 000 interest.

16. X ltd manufacturers a simple product, the standard mix of which is :

Material A 60% @ Rs. 20 per kg.
Material B 40% @ Rs. 10 per kg.
Normal loss in production is 20% of output. Due to shortage of material A, the standard mix was changed.
Actual results for March, 2016 were:
Material A 105 Kg @ Rs. 20 per Kg
Material B 95 Kg @ Rs. 9 per Kg
Input 200 Kg
Loss 35 Kg

165kg

Calculate (i) Material price variance; (ii) Material usage variance (iii) Material mix variance
Material(iv) yield variance.
17. A gang of workers usually consists of 10 men, 5 Women and 5 boys in a factory. They are paid at
standard hourly rates of Rs. 1.25, Re. 0.80 and Re.0.70 respectively. In a normal working week of 40
hours, the gang is expected to produce, 1000 units of output. In a certain week, the gang consisted of
13 men, 4 women and 3 boys. Actual wages were paid at the ratio of Rs.1.20, Re. 0.85 and Re.0.65
respectively. Two hours were lost due to abnormal idle time and 960 units of output were produced.
Calculate labor variances.

2
 PART- C
Answer any TWO Questions: (2 x 20= 40 marks)
18. You are given the following information pertaining to a company:
Current Ratio - 2.5
Liquid Ratio - 1.5
Net Working Capital - Rs. 3, 00,000
Stock turnover ratio (Cost of sales/closing stock) - 6 times
Gross profit ratio - 20%
Fixed assets turnover ratio (on cost of sales) - 2 times
Average Debt collection period - 2 months
Fixed assets/shareholders’ net worth - 0.80
Reserves and Surplus/Capital - 0.50
Draw up the Balance Sheet of the company.
19. A toy manufacturer earns an average net profit Rs. 3 per piece of Rs. 15 by producing and selling
60,000 pieces at 60% of the potential capacity. Composition of his cost of sales is:
Direct materials Rs. 4.00
Direct wages Rs. 1.00
Works overheads Rs. 6.00 (50% Fixed)
Selling overheads Rs. 100 (25% varying)
During the current year, he intends to produce the same number but anticipates that:
(i) His fixed changes will go up by 10%
(ii) Rates of direct wages will increase by 20%
(iii) Rates of direct material will increase by 5%
(iv) Selling price cannot be increased under these circumstances he obtains, an order for a further 20% of
his capacity. What minimum price will you recommend for accepting the order to ensure the
manufacturer an overall profit of Rs. 1, 80,500?

20. A company produces a standard product. The estimated cost per unit are as follows:
Raw materials – Rs. 4.00; Wages – Rs. 2.00; Variable overhead – Rs. 5.00.
The semi-variable costs are:
Indirect materials – Rs.235; Indirect labor – Rs. 156; Repairs – Rs. 570.
The variable costs per unit included in semi-variable are:
Indirect materials – Re. 0.05; Labor – Re.0.08; and Repairs – Re. 0.10.
The fixed Costs are:
Factory – Rs. 2,000; Administration – Rs. 3,000; Selling and distribution – Rs. 5,000.
The above costs are for 70% of normal capacity producing 700 units. The selling price is Rs. 10 per unit.
Prepare flexible budget for 80% and 100% normal capacities from the above information.

21. Prepare a Funds flow statement from the following summarized balance sheets of FTC Ltd. As at 31 st
March 2015 and 2016.
Liabilities 2015 2016 Assets 2015 2016

Rs. Rs. Rs. Rs.

Share capital 4,50,000 4,50,000 Fixed Assets 4,00,000 3,20,000

General Reserve 3,00,000 3,10,000 Investments 50,000 60,000

Profit and loss A/c 56,000 68,000 Stock 2,40,000 2,10,000

Sundry creditors 1,68,000 1,34,000 Debtors 2,10,000 4,55,000

Mortgage loan - 2,70,000 Bank 1,49,000 1,97,000

3
 Provision for Tax 75,000 10,000

10,49,000 12,42,000 10,49,000 12,42,000

Additional information available:

(i) Investments costing Rs.8, 000 were sold during the year for Rs.8, 500 and further investments were purchased
during the year for Rs.18,000.
(ii) The net profit for the year was Rs.62,000 after charging depreciation on fixed assets Rs.70,000 for the year
and provision for taxation Rs.10,000.
(iii) During the year, part of fixed assets costing Rs.10, 000 was disposed for Rs.12, 000 and the profit is included
in the profit and loss account.
(iv) Dividend paid during the year amounted to Rs.40,000.

$$$$$$$

4
 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION – COMMERCE
SIXTHSEMESTER – APRIL 2017
CO 6609- MANAGEMENT ACCOUNTING

Date: 22-04-2017 Dept. No. Max. : 100 Marks

Time:09:00-12:00
PART-A (10 *2 = 20)
Answer all the question
1. Define a “Management Accounting”?
2. Explain clearly the meaning of „Financial Statements?
3. What is Operating profit ratio?
4. State the meaning of Budgetary Control.
5. Define Marginal Costing.
6. Gross profit Rs.4,00,000
Gross profit Ratio is 25%, find out Sales
7. Fixed cost Rs.1, 80,000; P/V ratio 34% calculate BEP sales.
8. Prepare Machinery account and find out Closing balance assets from the following:
Opening Balance assets 8, 00,000
Assets sold 8,000
Loss on sale of assets 2,000
Assets purchased 3, 40,000
Depreciation 80,000
9. Calculate variable and fixed portions from semi variable overhead;
Electricity (fixed 40%) Rs.30, 000
Repairs (Variable 60%) Rs. 3,000
10. Give the meaning of Variance Analysis.

PART-B (4 *10 = 40)

Answer any four questions

11. Explain the tools and techniques used in Management Accounting?

12. What do you mean by Zero Based Budgeting and what are the steps involved in it?.

13. a. Discuss the uses of Fund Flow Statement (5)

1
 b. Calculate funds from operations from the following profit and loss account: (5)
Profit and loss A/c
Rs. Rs.

To Expenses paid and outstanding 3,00,000 By Gross profit 4,50,000

To Depreciation 70,000 By Gain on sale of land 60,000
To loss on sale of machines 4,000
To Discount on Sales 200
To good will 20,000
To Net profit 1,15,800

5,10,000 5,10,000

14. a. Current Ratio 2.5

Acid Test Ratio 1.5
Working capital 1,62,000
Find out:
a. Current Assets
b. Current Liabilities
c. Liquid Assets
d. Stock
b. Discuss the uses of Ratio Analysis
15. a. From the following particulars, prepare a production Budget of a company:
Product Sales (units) Units -1st July 2004 Units -30th June 2005
A 1,20,000 14,000 15,000
B 1,00,000 5,000 14,500
C 60,000 8,000 8,000

b. Discuss the Stages of Budgetary Control.

16. Find out different Labour variances:
Standard Actual
(i) Output 1,000 units 1,200 Units
(ii) Rate of payment Rs.6 Per unit Wage paid with bonus Rs.8,000
(iii) Time taken 50 Hours 40 Hours

2
17. A multipurpose Co. Furnishes you the following data relating to a year:
I half II half
Rs. Rs.
Sales 45,000 50,000
Total Cost 40,000 43,000
Assuming that there is no change in prices and variable costs and that the fixed expenses are incurred
equally in two half years.
Calculate:
1. P/V Ratio
2. Fixed expenses
3. B.E. Sales
4. Percentage of margin of safety.

PART-C (2 *20 = 40)

Answer any two questions
18. Balance sheets of a company as on 31st December, 2008 and 2009.
Liabilities 2008 2009 Assets 2008 2009
Rs. Rs. Rs. Rs.
Share capital 1,39,000 1,45,000 Cash in hand 18,000 15,600
Securities premium 1,000 3,000 Trade debtors 29,800 35,400
Debentures 24,000 12,000 Stock in trade 98,400 85,400
Trade creditors 20,000 23,680 Land 40,000 60,000
Provision for doubtful Good will 20,000 10,000
debts 1,400 1,600
Profit and loss a/c 20,800 21,120

2,06,200 2,06,400 2,06,200 2,06,400

Additional Information:
1. Dividends were paid Rs.7,000
2. Land was purchased for Rs.20,000/- and the amount provided for amortization of Good will
totaled Rs.10,000/-.
3. Debenture loan was repaid Rs.12,000
You are required to prepare Fund Flow Statement and Statement of Changes in Working Capital.

3
19. Using the information given below, compute Trading and profit and loss account and the Balance sheet:
Gross profit Ratio 25%
Net profit Ratio 20%
Stock turnover Ratio 10 times
Net profit/Capital 1/5
Capital/ to Total liabilities ½
Fixed Assets/ Capital 5/4
Fixed Assets/ Total current assets 5/7
Fixed Assets Rs.10,00,000
Closing stock Rs.1,00,000
20. For the production of 10,000 electric automatic irons, the following are budgeted expenses:
Per Unit (Rs.)
Direct materials 60
Direct labour 30
Variable overheads 25
Fixed overheads (Rs.1,50,000) 15
Variable expenses (direct) 5
Selling expenses (10% fixed) 15
Administration expenses 5
(Rs.50,000 rigid for all levels of production)
Distribution expenses (20% fixed) 5
Total cost of sale per unit 160
Prepare a budget for the production of 6,000, 7,000 and 8,000 irons, showing distinctly marginal cost,
total cost and Per Unit Cost.

21. Following information has been made available from the cost records of Automobile Co.,
manufacturing spare components
Direct Materials – XRs. 8 per unit
Y Rs. 6 per unit
Direct Wages – X 24 hours @ 0.25 paise per hour
Y 16 hours @ 0.25 paise per hour
Variable Overheads 150% of direct wages
Fixed Overhead Rs.750
Selling Price X Rs. 25 per Unit
Y Rs. 20 per Unit
The directors want to be acquainted with the desirability of adopting any one of the following alternative sales
mixes in the budget for the next period.
a)250 units of X and 250 units of Y
b)400 units of Y only
c)400 units of X and 100 units of Y
d)150 units of X and 350 units of Y
State which of the alternative sales mixes you would recommend to the management.

***********

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 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com.DEGREE EXAMINATION – COMMERCE
FIFTH SEMESTER – NOVEMBER 2018
CO 5506– HUMAN RESOURCE MANAGEMENT

Date: 27-10-2018 Dept. No. Max. : 100 Marks

Time: 09:00-12:00
SECTION – A
Answer ALL questions: (10x2=20)

1. Define “Human Resource Management”.

2. What is Job Analysis?
3. Differentiate between Selection and Recruitment.
4. What is Mentoring?
5. What are the operational areas of human resource management?
6. What is the role of HR capital in Human resource management?
7. What do you mean by Attrition?
8. Why do companies need succession planning?
9. What do human resource managers do with surplus manpower?
10. Mention any two recent trends in human resource management.

SECTION – B
Answer any FOUR questions: (4x10=40)

11. Explain the importance of human resource management in organizations today.

12. Explain the steps in human resource planning.
13. Describe the various internal and external source of recruitment.
14. Explain in various stages in developing competency among employees.
15. Explain the different types of Interviews.
16. Describe the process of managing grievances in an organization.
17. Explain the role of ERP Technologies in Human resource management.

SECTION – C
Answer any TWO questions: (2x20=40)

18. What are the qualities of a good human resource manager? Describe the difficulties and
challenges faced by human resource managers.
19. Explain in detail the steps involved in the selection process.
20. Define Training. Explain the process of assessing training needs. How do human resource
managers evaluate training effectiveness?
21. Explain the various methods of performance appraisal.

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 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
FIFTH SEMESTER – NOVEMBER 2016
CO 5506 – HUMAN RESOURCE MANAGEMENT

Date: 05-11-2016 Dept. No. Max. : 100 Marks

Time: 09:00-12:00

PART – A

ANSWER ALL THE QUESTIONS: (10 x 2 = 20 marks)

1. What is Job specification?

2. List out the operative functions of Human Resource Management.
3. Define “Job Evaluation”.
4. What is Attrition management?
5. What is meant by Probation?
6. What is Training?
7. Define “Competency Management”.
8. What is meant by Stress Interview?
9. What is Grievance?
10. Mention any two advantages of Performance Appraisal.
PART – B

ANSWER ANY FOUR QUESTIONS: (4 x 10 = 40 marks)

11. Explain the characteristics of Human Resource Management.

12. Bring out the role played by the Human resource manager in an Organisation.
13. Elaborate the various objectives of Human Resource Planning.
14. Explain Retention Management in detail.
15. Describe the merits and demerits of External Source of Recruitment.
16. Explain the essentials of good Training Programme.
17. What is Discipline? Explain the objectives of Discipline.

PART – C

ANSWER ANY TWO QUESTIONS: (2 x 20 = 40 marks)

18. Explain the difficulties and challenges faced by HR Manager.

19. What are the different types of Test? Explain the advantages and disadvantages of Testing.
20. Explain the importance of Training and steps involved in Training.
21. Describe the Traditional and Non-traditional methods of Performance Appraisal.

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 LOYOLA COLLEGE (AUTONOMOUS), CHENNAI – 600 034
B.Com. DEGREE EXAMINATION – COMMERCE
FIFTH SEMESTER – NOVEMBER 2017
CO 5506 – HUMAN RESOURCE MANAGEMENT

Date: 06-11-2017 Dept. No. Max. : 100 Marks

Time: 09:00-12:00

SECTION – A

ANSWER ALL THE QUESTIONS: (10 x 2 = 20 marks)

1. What is Human Resource Management?

2. Mention any two roles played by a Human Resource Manager?
3. What do you mean by the term Human Resource Planning?
4. Define “Job description”.
5. What is Recruitment?
6. List out the different types of testing.
7. What is meant by ERP?
8. Define “On the Job-Training”.
9. Define ‘Performance Appraisal’.
10. What is Grievance?
SECTION – B

ANSWER ANY FOUR QUESTIONS: (4 x 10 = 40 marks)

11. Explain the scope of Human Resource Management.

12. Discuss the problems faced by the Human Resource Manager. How does he overcome them?
13. Describe the uses of Job Analysis.
14. Bring out the steps involved in a Recruitment process.
15. Elaborate the various objectives of training.
16. What do you understand by the term “Development”? Explain the objectives of development.
17. Explain any two methods of Performance Appraisal.

SECTION – C

ANSWER ANY TWO QUESTIONS: (2 x 20 = 40 marks)

18. Describe the various functions of Human Resource Management.

19. Enumerate the process involved in Human Resource Planning. Highlight the objectives of human
resource planning.
20. Discuss in detail the various types of interview and the steps involved in an interview process.
21. What is Competency? Explain the various stages of Competency.

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