NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY/FEBRUARY 2013 EXAMINATION

Course Code: MBA 805                                                                   Credit Unit: 2.

Course Title:  Management Accounting

Time Allowed: 2 Hours.

Instructions: 1. Attempt Question 1 and any other two (2) Questions.

     2. Question 1 is compulsory and carries 30 marks

                           while the other 2 Questions carry 20 marks each.

                       3. Present all your points in coherent and orderly manner.

1. a. What are the qualities that a good management accounting report must    possess?    10 marks

b. Discuss the differences between management accounting and financial accounting.  20 marks

2. a. Discuss in detail the major objectives of budgetary control. 15 marks

b. List the characteristics of a budgetary control system.                               5 marks

3. a. What is marginal costing?                                                                                3 marks

b. What are the areas of application of marginal costing techniques?  5 marks

c. Given the following data relating to one year activities of Joy Limited:

    Calculate the net profit.  

      Sales                                                         2,000 units @ N100

      Production                                              3,000 units

      Fixed factory overheads                      N15, 000.00

      Direct materials per unit                     N15

      Direct labour per unit                          N30

      Variable factory overheads per unit N20

      Fixed selling expenses                         N20, 000.00

      Fixed administration overheads        N15, 000.00    12 marks   

4. a. State the product profitability Decision Rule.                                        3 marks

b. A company produces three products which the following statement has been produced:

                                         X               Y                Z              TOTAL

                                       N                 N               N                 N

     SALES                    32,000        50,000      45,000      127,000

     Less Total Cost    36,000        38,000       34,000      108,000

                                   (4,000)        12,000       11,000        19,000

The total costs comprise (2/3) variable cost elements and (1/3) fixed cost elements. The directors considered that as product X is showing a loss in its operating result, it should be discontinued.

Required:

1. Based on the above data, should product ‘X’ be dropped?

                                                                                                                 13 marks       

2. What are the other factors that should be considered?                4 marks

5. a. Explain the use of High-Low method in the measurement of Cost Behavior.               5 marks

b. The costs of operating the maintenance department of a computer manufacturer, for the last five months have been as follows:

    Month                            Amount (N)           Production Volume (Standard hr)

     January                           120,000.00                                       6,000

     February                         125,000.00                                       7,000

     March                              104,000.00                                       5,000

     April                                121,000.00                                       8,000

     May                                 125,000.00                                       8,500

     What cost should be expected in month 6 (June) when output is expected to be  10, 000     standard hours? 15 marks