Get premium membership and access revision papers, questions with answers as well as video lessons.

Got a question or eager to learn? Discover limitless learning on WhatsApp now - Start Now!

Managerial Accounting Question Paper

Managerial Accounting

Course:

Institution: Coast Institute Of Technology question papers

Exam Year:2011

COAST INSTITUTE OF TECHNOLOGY
BUSINESS DEPARTMENT
DBA/DACC 2010&2011
MANAGERIAL ACCOUNTING
END OF TERM EXAMINATION
TIME: 3 HOURS

INSTRUCTION:
1. ATTEMPT ALL QUESTIONS
2. All questions carry equal marks
3. Show all your working

1. a) Explain each of the following as terms as used in network analysis;
i. Crash time
ii. Forward pass
iii. Optimistic time
iv. Backward pass (8 marks)
b) A project has the following activities
Activity Preceding activity Duration (days)
A - 8
B - 10
C - 9
D A, B 12
E B, C 9
F C 11
G C 16
H E, F 14
I D 13
J G 11
REQUIRED
Draw a network diagram for this project and determine the project duration
2. a) Explain the following methods of evaluating investments:-
i. Internal rate of return
ii. Net present value
iii. Payback period
iv. Profitability index (8 marks)
b) The following information relates to machine maintenance cost and hours for six months ended 31st October 2007

Month Maintenance Cost (Shs) machine (hours)
May 13,600 2,100
June 15,800 2,800
July 14,500 2,200
August 16,200 3,000
September 14,900 2,600
October 15,000 2,500
Using linear regression, calculate:-
i. Variable cost per unit
ii. Fixed cost
iii. The estimated maintenance costs for November 2007 when 3,500 hours are expected to be used
3. a) Explain four assumptions of linear programming
b) Makutano Ltd. Manufacturers two product, Mrembo and Nukia. It has 3 machines A, B ,C. Mrembo requires 2 minute for machine A, 3 minute for machine and 1 minute for machine C. Nukia requires 3 minutes for machine A, 2minutes for machine B and 1minute for machine C.
The capacity available is 1,500 minutes of machine A, 1,500 minutes of machine B and 600 minutes of machine c. the contribution per unit of Mrembo is Shs.10 and Nukia is Shs.12
i. Formulate a linear programming model
ii. Present the inequality in (i) above on a graph
iii. Determine the weekly production that maximizes contribution (12 marks)
4. a) The following information shows the number of students and the cost of maintaining them at a medical university
2007 Number of student Total cost (Kshs.)
July 650 17.125,000
August 940 17,800,000
September 1260 18,650,000
October 990 17,980,000
November 1150 18,360,000
The university used the high-low method to estimate costs
REQUIRED
i. Variable cost per unit
ii. Fixed cost for the period
iii. The cost of maintaining 850 students in December 2007 (10 marks)
b) Matendo Ltd intends to invest in either project A or project B. the initial cash outlay is Kshs. 1,000,000 the following are the expected cash inflows from the projects
Year Project A(Shs) project B
1 200,000 450,000
2 400,000 100,000
3 300,000 200,000
4 200,000 350,000
5 150,000 150,000
The company’s cost of capital is 8%
i. Determine the net present value (NVP)
ii. Advice the management on the project to invest in. (10 marks)
5. state any four assumption of the Economic Order Quantity (8 marks)
b) A manufacturer uses 2,000 kgs of material K2 in a year. The following details rslate to the material:-
cost per unit sh 5
Order cost per order sh 5
Carrying cost per unit per year sh 2
Lead time 1 week
Determine
i. The economic order quantity (EOQ)
ii. The numbers of orders to be placed in one year
iii. The time interval between orders
iv. The total inventory cost. (12 marks)
6. Ng’ombe, a meat supplier to institution has placed a daily order of 200kg of meet to be delivered daily. The estimated daily sales are expected to follow the following probability distribution, to which random numbers have been allowed
Demand (kg) Probability Random Numbers
50 0.06 00-05
100 0.10 06-15
150 0.15 16-30
200 0.40 31-70
250 0.16 71-86
300 0.1 87-99
One kg of meat costs sh. 200 and its sold at sh. 300
If Ng’ombe is not able to supply an institution, he is charged a penalty of sh. 60 per kg of meat not supplied. Meat not sold is stored at a cost sh. 10 per kg.
The following random numbers are to be used for daily demand
93, 53. 81, 93, 88, 23,22, 96, 79, 06
a) Simulate a 10 day’s demand
b) Profit or loss for the 10 days
7. Voi electronics has three shops with a total 80 televisions. An order is received from the Voi municipal council for 70 sets to be delivered to 4 schools. The transport costs from shops to schools are shown below together with the availabilities and requirements
School
A B C D
Sets 20 30 15 5 Requirements
2 4 1 6
4 3 3 3
1 2 5 2

Shop I 40 Cost
Shop II 20
Shop III 20
The council wishes to make the most economic deliveries
Required
Advice the council on the most economical delivery plan (20 marks)

Managerial Accounting Question Paper

More Question Papers

Popular Exams