NATIONAL OPEN UNIVERSITY OF NIGERIA
14/16 AHMADU BELLO WAY, VICTORIA ISLAND, LAGOS
SCHOOL OF MANAGEMENT SCIENCES
MARCH/APRIL 2014 EXAMINATION
Course Code: ACC 313 Credit Unit: 3
Course Title: MANAGEMENT ACCOUNTING
Time Allowed: 2 1/2Hrs
Instructions: 1. Attempt question Number one (1) and any other two (2).
2. Question number 1 is compulsory and carries 30 marks, while the other
questions carry equal marks each
3. Present all your points in coherent and orderly manner
1. The following information has been gathered with regard to material X of BODE Ltd.
Normal month usage 24,600
Maximum anticipated monthly usage 27,000
Minimum anticipated monthly usage 6,400
Delivery period from suppliers:
Maximum 3 months
Normal 2 months
Minimum 1.5 months
Re-order quantity (EOQ) 10,000 units
(i) Re-order level
(ii) Minimum stock level
(iii) Maximum stock level. (10marks)
(b) Comment on five factors, which may have to be taken into accounts in setting the
maximum stock level (5marks)
(c) The company required 80,000 units per year which will be used at a
constant rate. The purchasing manager is considering what size to be used.
The holding cost is 20% of the purchase price. The cost per order is N2,500
while the purchase price is N24 per unit. Calculate Economic Order Quantity,
using the formula. (10marks)
2.(a) Define Management Accounting as defined by CIMA (5marks)
(b) Identify and describe five Management Accounting Techniques. (10marks)
3. Peju Limited had an opening stock value of 300 units valued at N8.80 each on 1 April, 2005. The following receipts and issues were recorded during the month
10 April Receipt 1000 units N8.60 per unit
23 April Receipt 600 units N9.00 per unit
29 April Issue 1700 units.
Using the LIFO method, what was the total value of the issue on 29 April 2005?
4.(a) What is Decision Making (5marks)
(b) Mention the stages of decision making process (10marks)
5. Mention ten ways in which management accounting differs from financial accounting. (15 marks)
6.(a) What is differential cost? (3marks)
(b) What are the formulae for: break-even point (units); break-even point (sales value)? (8marks)
(c) Define relevant cost. (3marks)
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