व्यवस्थापन लेखांकन Management Accounting

थोडक्यात सारांश

A fund flow statement (निधी प्रवाह विवरण) shows the sources from which funds (working capital) were obtained and the uses (applications) to which they were put between two balance sheet dates. Here "fund" means net working capital (current assets − current liabilities). It is prepared in two parts: a schedule of changes in working capital and the statement of sources and applications.

महत्त्वाचे मुद्दे

• Flow of funds happens only when a transaction involves one current item and one non-current item, e.g. issue of shares for cash, purchase of machinery for cash.
• Transactions between two current items (e.g. cash paid to creditors) or two non-current items (e.g. shares issued to buy land) cause no flow of funds.
• Sources of funds: funds from operations, issue of shares and debentures, long-term loans, sale of fixed assets and investments, non-trading income.
• Applications of funds: loss from operations, redemption of shares/debentures, repayment of loans, purchase of fixed assets, payment of dividend and tax (when treated as non-current).
• Funds from operations = net profit + non-fund, non-operating debits − non-fund, non-operating credits.
• Increase in a current asset or decrease in a current liability = increase in working capital, and vice versa.
• The fund flow statement is not required by current Accounting Standards (AS 3 requires a cash flow statement), but it is still taught for long-term financial analysis.

महत्त्वाच्या संज्ञा

• Working capital – current assets minus current liabilities.
• Non-current items – fixed assets, long-term investments, share capital, reserves, long-term loans.
• Funds from operations – working capital generated by normal business activities.
• Adjusted P&L account – account prepared to find funds from operations.

नमुने व सूत्रे

Funds from operations:

५ महत्त्वाचे प्रश्न

Q1. What is meant by "flow of funds"?

A change in working capital caused by a transaction that affects one current account and one non-current account, such as issuing shares for cash.

Q2. Distinguish between a fund flow and a cash flow statement.

Fund flow is based on working capital and shows long-term sources and uses; cash flow is based on cash alone, is required by AS 3, and is useful for short-term planning.

Q3. Prepare a schedule of changes in working capital.

Q4. Calculate funds from operations: net profit ₹60,000; depreciation ₹20,000; goodwill written off ₹5,000; profit on sale of machinery ₹3,000.

Funds from operations = 60,000 + 20,000 + 5,000 − 3,000 = ₹82,000.

Q5. Explain the meaning, uses and limitations of a fund flow statement.

Outline: meaning; uses (shows how expansion was financed, judges working capital management, helps plan dividends and borrowing, guides lenders); limitations (not a substitute for P&L and balance sheet, historical, ignores cash changes inside working capital, not required by AS).

परीक्षेसाठी टीप

Balance your schedule: the "increase" and "decrease" columns must total the same after putting the net change on the smaller side. If they don't, recheck each item.

थोडक्यात सारांश

Marginal costing (सीमांत परिव्यय) separates costs into variable and fixed. Only variable costs are charged to products; fixed costs are treated as period costs and recovered from contribution. Cost-Volume-Profit (CVP) analysis studies how changes in sales volume, price and cost affect profit, using tools like P/V ratio, break-even point and margin of safety.

महत्त्वाचे मुद्दे

• Variable cost changes in total with output but stays the same per unit; fixed cost stays the same in total within a range of output.
• Contribution = sales − variable cost; it first covers fixed cost, and the rest is profit.
• P/V ratio (profit-volume ratio) shows contribution as a percentage of sales; a higher ratio means higher profitability.
• Break-even point (BEP): the level of sales where there is no profit and no loss (contribution = fixed cost).
• Margin of safety (MoS): sales above the break-even point; a big MoS shows a sound business.
• Uses for decisions: make or buy, accept a special order below normal price, product mix, shut down or continue, pricing in a slump.
• Limitations: difficult to split semi-variable costs, assumes constant prices and costs, ignores fixed cost in stock valuation, not accepted for external reporting under AS 2.

महत्त्वाच्या संज्ञा

• Marginal cost – the cost of producing one extra unit; equal to variable cost per unit.
• Break-even chart – graph showing total cost and sales lines meeting at BEP.
• Angle of incidence – angle at which sales line cuts the total cost line; a large angle means high profit.
• Key factor (limiting factor) – the factor that limits output, e.g. raw material or machine hours.

नमुने व सूत्रे

• Contribution = Sales − Variable cost = Fixed cost + Profit
• P/V ratio = (Contribution ÷ Sales) × 100 = (Change in profit ÷ Change in sales) × 100
• BEP (units) = Fixed cost ÷ Contribution per unit
• BEP (₹) = Fixed cost ÷ P/V ratio
• Margin of safety = Actual sales − BEP sales = Profit ÷ P/V ratio
• Sales for desired profit = (Fixed cost + Desired profit) ÷ P/V ratio

५ महत्त्वाचे प्रश्न

Q1. What is contribution?

The excess of sales over variable cost. It contributes first towards fixed cost and then towards profit.

Q2. What is margin of safety?

The amount by which actual sales exceed break-even sales. It shows how much sales can fall before the firm makes a loss.

Q3. Selling price ₹100 per unit; variable cost ₹60 per unit; fixed cost ₹2,00,000; actual sales 8,000 units. Find P/V ratio, BEP, margin of safety and profit.

Check: MoS × P/V ratio = 3,00,000 × 40% = ₹1,20,000. ✔

Q4. From the data in Q3, find the sales needed to earn a profit of ₹1,00,000.

Sales = (2,00,000 + 1,00,000) ÷ 40% = ₹7,50,000 (7,500 units).

Q5. Explain marginal costing, its features, advantages and limitations.

Outline: meaning; features (fixed/variable split, stock at marginal cost, contribution focus, fixed cost as period cost); advantages (simple, helps decisions, cost control, profit planning, avoids under/over-absorption); limitations (cost classification difficult, ignores time element, not for external reports, may lead to under-pricing).

परीक्षेसाठी टीप

Always find the P/V ratio first; every other CVP answer comes from it. Verify profit with "MoS × P/V ratio" as a quick check.

थोडक्यात सारांश

A budget (अंदाजपत्रक) is a plan for a future period expressed in money and quantities. Budgetary control is the system of preparing budgets for each department, comparing actual results with budgeted figures, finding the reasons for differences, and taking corrective action. It is a key tool for planning, coordination and control.

महत्त्वाचे मुद्दे

• CIMA: a budget is a quantitative statement for a defined period, which may include planned revenues, expenses, assets, liabilities and cash flows.
• Essentials of budgetary control: clear objectives, budget committee and budget officer, budget manual, budget period, key (limiting) factor, support of top management, flexibility.
• The key factor (principal budget factor) limits activity and is considered first — usually sales, sometimes raw material, labour or machine capacity.
• Classification by function: sales, production, materials, labour, overheads, cash, capital expenditure and master budget (summary of all).
• By flexibility: fixed budget (one level of activity) and flexible budget (several levels of activity).
• By time: long-term, short-term, current.
• Zero-based budgeting (ZBB): every activity is justified from zero, not from last year's figures (Peter Pyhrr, Texas Instruments, 1970s).
• Cash budget forecasts cash receipts and payments to show surplus or shortage in each month.
• Advantages: planning, coordination, control, cost reduction, fixing responsibility, motivation.
• Limitations: based on estimates, rigid if not revised, time and cost, may cause conflict between departments.

महत्त्वाच्या संज्ञा

• Budget manual – document setting out budget procedures, responsibilities and forms.
• Master budget – final summary budget combining all functional budgets.
• Flexible budget – budget that changes with the level of activity.
• Budget variance – difference between budgeted and actual figures.

नमुने व सूत्रे

Flexible budget (capacity 10,000 units at 100%; variable cost per unit: material ₹20, labour ₹10, variable overheads ₹5; semi-variable overheads ₹20,000 fixed + ₹3 per unit; fixed overheads ₹1,00,000):

Cost per unit falls as output rises because fixed costs are spread over more units.

५ महत्त्वाचे प्रश्न

Q1. What is a flexible budget?

A budget designed to change with the level of activity actually attained, showing costs at different capacity levels; it gives a fair comparison of actual cost with budgeted cost.

Q2. What is zero-based budgeting?

A method in which every activity and expense must be justified afresh from zero each budget period, instead of adding to last year's budget.

Q3. Prepare a flexible budget at 60%, 80% and 100% capacity from the data given above.

See the table above. Show the working of semi-variable overheads: at 60%, 20,000 + 6,000 × 3 = 38,000; at 80%, 20,000 + 8,000 × 3 = 44,000; at 100%, 20,000 + 10,000 × 3 = 50,000.

Q4. Explain the essentials and advantages of budgetary control.

Outline: essentials listed above with explanation; advantages – planning, coordination, control, efficiency, responsibility, cost consciousness; one example from a manufacturing unit.

Q5. Distinguish between a fixed budget and a flexible budget. Explain a cash budget.

Outline: fixed vs flexible on basis, activity level, comparison, suitability, revision; cash budget – purpose, receipts and payments method, month-wise format (opening balance, receipts, payments, closing balance), uses.

परीक्षेसाठी टीप

In flexible budgets, split semi-variable costs first and show the working below the table. Write the cost per unit row; it is often asked separately.

थोडक्यात सारांश

Standard costing (प्रमाण परिव्यय) sets in advance what a product should cost (material, labour and overheads) under efficient conditions. Actual costs are compared with these standards, and the differences, called variances, are analysed to find their causes and fix responsibility. It is a powerful tool of cost control.

महत्त्वाचे मुद्दे

• Standard cost is a predetermined cost based on technical study of material, labour and overheads.
• Steps: set standards → record actual costs → compare → calculate variances → find causes → take corrective action.
• A variance is Favourable (F) when actual cost is less than standard, and Adverse (A) when actual cost is more.
• Material variances: cost, price and usage (usage can be split into mix and yield).
• Labour variances: cost, rate, efficiency (and idle time).
• Overhead variances: expenditure, volume, efficiency, capacity.
• Causes of adverse material price variance: price rise, urgent purchases, poor buying. Adverse usage variance: wastage, poor quality material, unskilled workers.
• Causes of adverse labour rate variance: higher-grade workers used, overtime, wage rise. Adverse efficiency variance: poor supervision, machine breakdown, poor material.
• Management by exception: managers attend only to significant variances.

महत्त्वाच्या संज्ञा

• Standard quantity (SQ) – quantity that should be used for actual output.
• Standard price (SP) – price that should be paid per unit of material.
• Standard hours (SH) – hours that should be taken for actual output.
• Standard rate (SR) – rate that should be paid per hour.

नमुने व सूत्रे

• Material Cost Variance (MCV) = (SQ × SP) − (AQ × AP)
• Material Price Variance (MPV) = AQ × (SP − AP)
• Material Usage Variance (MUV) = SP × (SQ − AQ)
• Check: MCV = MPV + MUV
• Labour Cost Variance (LCV) = (SH × SR) − (AH × AR)
• Labour Rate Variance (LRV) = AH × (SR − AR)
• Labour Efficiency Variance (LEV) = SR × (SH − AH)
• Check: LCV = LRV + LEV (when there is no idle time)

(AQ = actual quantity, AP = actual price, AH = actual hours, AR = actual rate. A positive answer is favourable; a negative answer is adverse.)

५ महत्त्वाचे प्रश्न

Q1. What is a variance?

The difference between standard cost and actual cost. It is favourable when actual cost is lower and adverse when actual cost is higher.

Q2. What is management by exception?

A principle under which only significant deviations from standard are reported to management for action, saving managers' time.

Q3. Standard: 2 kg of material per unit at ₹50 per kg. Actual output 1,000 units; actual material used 2,100 kg at ₹48 per kg. Calculate material variances.

SQ for actual output = 1,000 × 2 = 2,000 kg.

Check: 4,200 (F) + 5,000 (A) = 800 (A). ✔

Q4. Standard: 3 hours per unit at ₹20 per hour. Actual output 1,000 units; actual hours 3,200 at ₹22 per hour. Calculate labour variances.

SH for actual output = 3,000 hours.

Check: 6,400 (A) + 4,000 (A) = 10,400 (A). ✔

Q5. Explain standard costing, its advantages and limitations.

Outline: meaning and steps; difference from budgetary control (unit level vs whole business); advantages (cost control, efficiency, pricing, responsibility, management by exception); limitations (setting standards is hard, standards get outdated, costly, may demotivate workers if too strict).

परीक्षेसाठी टीप

Always write the check line (MCV = MPV + MUV). It proves your answer and catches errors before the examiner does.