DMBA217 MANAGEMENT ACCOUNTING

Description

SESSION	JAN-FEB 2026
PROGRAM	MASTER OF BUSINESS ADMINISTRATION (MBA)
SEMESTER	II
COURSE CODE & NAME	DMBA217 MANAGEMENT ACCOUNTING

 

 

Assignment Set – 1

 

Q.1. Discuss the role of Fund Flow Analysis in financial decision-making and explain how an increase or decrease in working capital impacts fund flow. (5+5 = 10 Marks)

Ans 1.

Role of Fund Flow Analysis in Financial Decision-Making

Fund Flow Analysis, also called the Statement of Changes in Financial Position can be described as a financial instrument that analyzes the source that funds came from and the application to which the funds were allocated during the accounting time. Unlike the balance sheet which displays a static figure at the time of its creation, the flow statements explain the dynamic flow of funds between two balance sheet dates giving insight into investments and financial activities of an organisation which are not visible from financial statements or

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Q.2. Explain Management Accounting and highlight key challenges of implementing management accounting in organisations. (3+7 = 10 Marks)

Ans 2.

Definition of Management Accounting

Management Accounting is the process of identifying, measuring, understanding, analysing, and distributing financial and non-financial information to assist managers with their organizational goals of control, planning and decision-making. Differently from financial accounting which is developed for external users and subject to the strictest accounting standards, management accounting is specifically designed to be used by internal managers and has not having a standardised format. This

 

 

Q.3. From the following Balance Sheets of Joy Ltd prepare a Cash Flow Statement using the Indirect Method. (10 Marks)

Ans 3.

Cash Flow statement outlines the outflow and inflow of cash throughout an accounting period and helps evaluate the liquidity and financial position of a business. In the Indirect Method, cash flow from operations is calculated through the adjustment of net profit to include other non-cash items, like depreciation, goodwill written off, and changes within working capital. Investing activities include purchase and sale of fixed assets, while financing involves the issue of shares or redemption of shares, and the payment of dividends.

 

 

Assignment Set – 2

 

 

Q.4. Compute Labour Cost Variance (LCV), Labour Rate Variance (LRV) and Labour Efficiency Variance (LEV). (10 Marks)

Ans 4.

The analysis of variance in labour is an essential method of costing standard used to assess the difference between planned output and actual performance. This aids organizations in monitoring labour usage, wage payment, as well as production efficiency. The Labour Cost Variance is the sum of the gap between the average cost for labour and actual labour expenditure. The entire variance can be further split into two groups:

 

Q.5. Outline the steps to install a budgetary control system in an organisation, including roles of the Budget Controller and Budget Committee. (6+4 = 10 Marks)

Ans 5.

Steps to Install a Budgetary Control System

A budgetary system of control is the management tool used to use budgets to plan, coordinate, and control organisational activities by measuring actual results against established targets, and taking action for significant deviations. Implementing a successful budgetary control program requires a systematic and carefully sequenced implementation process.

Step 1:

 

 

 

Q.6. ‘The profit is the product of the P/V ratio and the margin of safety’. Comment. (10 Marks)

Ans 6.

It is an essential concept of marginal costing as well as Profit Volume (P/V) analysis which precisely and mathematically demonstrates the connection between two critical managerial accounting concepts, and their combined effect on business profit. Commenting on this statement requires