problem1) describe management accounting as an effective tool of financial control.
problem2) What do you understand by cash from operating activities? How is it computed?
problem3) The “volume-cost-profit relationship provides management with a simplified framework for organizing its thinking on a number of problems.” describe
problem4) Recently a conference speaker discussing budgets & standard costs made the following statement- “Budgets & standard costs are not the same things, they have various purposes & are set up & used in different ways, yet a specific relationship exists between them.”
In the light of above statement, identify the similarities & differences between budgets & standards.
Batty & Co. is presently working at 50% capacity & produces 10,000 units. At 60% working raw material cost increases by 2% & selling price falls by 2%. At 80% working raw material cost increases by 5% & selling price falls by 5%.
At 50% capacity working product costs Rs.180 per unit & is sold at Rs.200 per unit. The unit cost of Rs.180 is made up as follows:
Factory Overheads Rs.30 (40% fixed)
Administration Overheads Rs.20 (50% fixed)
problem1) Prepare a marginal cost statement showing the estimated profit of the business when it is operated at 60% & 80% capacity. Also compute break-even points at these levels.