Bachelor of Business Studies (BBS)
Programme objective
The objective of the BBS programme at the FOM is to develop students into competent managers for any sector of organized activity. The programme is based on the principle that graduates will spend a major portion of their life in a constantly changing environment. Therefore, the student should have an opportunity to obtain a broad knowledge of the concepts and reality based skills underlying the operation and management of organizations.
Upon graduation, students should be equipped to function as a manager in business, industry and government.
The graduate should also have a variety of career opportunities in different sectors of business including entrepreneurship and create much needed jobs for others.
The BBS programme specially attempts to:
1. Equip the students with the required conceptual knowledge of business and administration to develop a general management perspective in them.
2. Develop required attitudes, abilities and practical skill in students, which constitute a foundation for their growth into competent and responsible business managers.
3. Encourage entrepreneurial capabilities in students to make them effective change agents in the Nepalese society.
4. Develop necessary foundation for higher studies in management and thereafter take up careers in teaching, research and consultancy.
Curricular structure
The FOM recognizes the need for both breadth and depth in the total academic pattern.
Therefore, the curriculum for BBS degree comprises four separate and distinct course components:
1. A strong foundation allied areas of business such as language, economic analysis, legal environment and quantitative method to prepare graduates to understand, analyze and comprehend the management concepts, theories and practices.
2. Core business studies encompassing and integrating all functional areas to provide graduates with and appreciation of the diversity and inter-relationship of business and management issues.
3. The opportunity to concentrate in one area of specialization such as accounting, finance, human resources management and marketing in order to provide graduates with some degree of functional expertise.
The Second Year Programme
The purpose of the second year programme is to provide basic concepts, tools and understanding of the foundation and core courses.
The foundations courses are required to develop understand business practices.
The core courses provide essentials of learning which are basic in the broad area of business studies.
The second-year programme is therefore organized into the following core and compulsory courses:
Second Year (500)
MGT 205: Business Communication 100
MGT 209: Macroeconomics for Business 100
MGT 212: Cost and Management Accounting 100
MGT 223: Organizational Behavior & Human Resource Management 100
MGT 215: Fundamentals of Financial Management 100
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BBS Second year eBooks | Business Communication | Cost and Management Accounting | Organizational Behavior | Human Resource Management | Fundamentals of Financial Management
Full Marks: 100
Lecture Hours: 150
Pass Marks: 35
Course Objectives
The objectives of the course are to provide the students with in-depth knowledge of cost and management accounting in order to enable them to develop, arrange and classify cost information required for decision making for maximizing the profit and reducing / eliminating losses.
The course further aims at developing a sound base for higher study in accounting besides in practical knowledge required by the middle level managers to handle cost information independently.
Course Description
This course contains conceptual and theoretical foundation of cost and management accounting; It also comprises classification and segregation of cost, accounting for material and labour, allocation, apportionment and absorption of overhead cost, costing in different situations such as service costing, job and contract costing, process costing etc.,
Income statement under variable and absorption costing techniques, standard costing system with material and labour cost variance, flexible budgeting under different levels of activities, overhead cost variance,
Course Details
Unit 1: Conceptual Foundation 15 LHs
Cost accounting and cost accountancy; Meaning, objectives, importance, scope, advantages and limitations of cost and management accounting;
Limitations of financial accounting;
Similarities and dissimilarities in financial, cost and management accounting Concept, importance;
Classification of cost: basic concept of cost, expense, loss cost center, profit center and cost unit, cost classification: based on function, identification, behavior, controllability, decision making, time of recording, monetary expression, planning and control, period and product cost;
Cost segregation and estimation: concept and methods of cost segregation: (i) Two point method; (ii) Least square method; (iii) Estimation of cost
Unit 2: Accounting for Materials 12 LHs
Materials/Inventory: Concept, reasons and objectives for holding material/inventory.
Inventory control: Meaning, importance and techniques;
Economic order quantity: concept, techniques, formula, graphic and trial & error approaches-considering discount under certainty condition;
Re-order, maximum, minimum, average stock levels, danger level and safety stock;
Concept and techniques of perpetual inventory system;
Stock control through ABC analysis and just in time inventory: concept, advantages and limitations; Material productivity and Inventory or material turnover.
Unit 3: Accounting for Labour Cost 15 LHs
Labour Cost: Concept and need for control of labour cost;
Remuneration without premium plan: Features of good remuneration system, time and piece wage system;
Remuneration with premium Plan: Features of premium plan, premium bonus scheme-Halsey and Rowan Plan, Taylor’s Differential Piece Rate, Gant’s Task and Bonus Plan,
Group Bonus Scheme: Priestman’s and Scalon’s Plan
Labour Turnover: Concept, causes and effects, cost of labour turnover: preventive and replacement cost and calculations, labour turnover ratios.
Unit 4: Accounting for Overhead Cost: 8 LHs
Overhead Cost: Meaning, features, importance and classification;
Allocation, apportionment and absorption of overhead: meaning and importance;
Apportionment and absorption of overhead cost based on volume, direct labour hours and machine hours;
Concept, importance, features, elements of Activity Based Costing,
ABC vs Traditional Costing, procedures of absorption of overhead cost under ABC technique;
Unit 5: Costing in Different Situations 42 LHS
Service Costing: Concept, features and scope of service costing;
Preparation of cost sheet for transport service for passenger, hospital, hotel and restaurant services;
Limitations of service costing;
Job Order Costing: Concept and features; measuring direct material, direct labour and manufacturing overhead cost;
Accounting for job order: Preparation of job order cost sheet showing non- manufacturing costs & determination of cost of goods manufactured, cost of goods sold and unit cost.
Batch Costing: Concept and features;
Determination of Economic Batch Quantity (EBQ);
Contract Costing: Concept and features; Similarities and dissimilarities in job and contract costing; Contract costing procedures: preparation of contract account in the case of incomplete, near to completion and complete contract, work certified and work uncertified, contractee’s account, work in progress account and balance sheet; Cost plus contract; Escalation and de-escalation clauses.
Process Costing: Concept, features and application; comparison of job costing and process costing; preparation of process accounts with/without beginning and ending work-inprogress inventory, partial and total transfer of output to next process, accounting for process loss/gain: normal and abnormal loss, abnormal effective/gain and computation of unit costs, and treatment of spoilage, wastage, scrap and defective unit; accounting for inter process profit, reserve for unrealized profit.
Joint Product and By Product Costing: Concept, features and objectives of joint and byproduct, difference between joint product, main product and by-product; Apportionment of joint costs under unit of output and revenue basis; Accounting for joint and by-products.
Unit 6: Accounting for Profit Planning 20 LHs
Absorption Costing: Concept, features, importance and preparation of income statement under absorption costing, treatment of normal capacity and fixed manufacturing overhead rate, treatment of opening and closing stock, over and under absorption of fixed manufacturing overhead and adjustment and limitations of absorption costing.
Variable Costing: Concept, features, use and importance preparation of income statement under variable costing, treatment of manufacturing overheads, treatment of opening and closing stock limitations and treatment of other expenses; limitations of variable costing.
Reconciliation of profit or loss between absorption and variable costing techniques showing the causes of differences.
Cost Volume Profit Analysis: Meaning, importance; assumptions and limitations of CVP analysis;
Contribution margin and ratio, profit volume ratio;
Break even analysis using contribution margin, algebraic and graphic approaches;
Break-even-analysis: under various situations: changes on selling price, fixed cost, variable cost, under step fixed cost, multi-products situations, margin of safety and determination of selling price to realize desired profit ;
Advantages and limitations of break-even analysis;
Unit 7: Cost Accounting for Planning and Control 30 LHs
Standard Costing: Concept of standard cost and standard costing, features, application, advantages and limitations; Difference between standard and budget. Variance Analysis;
Material variances: Concept and calculation of cost, price, usage, mix and yield variances;
Labour variances: Concept and calculation of cost, efficiency, rate, mix, idle time and yield variances.
Overhead Cost Variance: Concept and calculation of capacity, efficiency and spending variances.
Budget: concept, features and importance of budget; budget and budgetary control;
Types of budget: sales budget, production budget, material budget and merchandize purchase budget, labour budget, manufacturing overhead budget, cost of goods manufactured budget, selling/distribution & administrative expenses budget and cost of goods sold budget.
Fixed and Flexible Budgeting: Concept and importance of fixed and flexible budgets; Difference between fixed and flexible budgets; Flexible budgeting for overhead cost control on activity levels and budget allowance for actual level attained.
Unit 8: Cost Reduction 8 LHs
Cost Reduction and Cost Control: Cost reduction-pre-requisites, techniques, steps, responsibility and limitations;
Value Engineering (analysis): Concept, advantages, tools and techniques for cost reduction;
Value Analysis: Concept, objectives, importance, advantages and techniques of value analysis.
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Accounting Equation |
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Journal Entries in Nepali |
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Journal Entries |
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Journal Entry and Ledger |
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Ledger |
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Subsidiary Book |
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Cashbook |
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Trial Balance and Adjusted Trial Balance |
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Bank Reconciliation Statement (BRS) |
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Depreciation |
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Financial Accounting and Analysis (All videos) |
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Accounting Process |
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Accounting for Long Lived Assets |
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Analysis of Financial Statement |
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Cost and Management Accountancy (MGT 212)
Model Question Paper
Full Marks: 100
Time: 3 hours
Candidates are required to give their answers in their own words as far as practicable.
The figures in the margin indicate full marks.
Group A
Brief questions answers [10 × 2 marks = 20 marks]
Attempt all questions
Q: 1. State any two objectives of government accounting.
Q: 2. Mention any two advantages of management accounting.
Q: 3. Briefly explain the classification of cost on the basis of behaviour.
Q: 4. Write in short, the unavoidable causes of labour turnover.
Q: 5. What are the motives of holding inventories?
Q: 6. The following extracted information is given:
Yearly requirements 25,000 units
Purchase price per unit $10
Ordering cost $20 per order
Inventory carrying cost is 10% of purchase price.
Required: Total cost at economic order quantity
Q: 7. A company’s cost structure of two different level of out are given as:
Total cost ($) |
2,00,000 |
3,00,000 |
|
Output (units) |
50,000 |
60,000 |
|
Cost into variable and fixed components.
Q: 8. The Following extracted data particulars of a worker are provided:
Standard time 20 hours
Actual time taken 15 hours
Hourly wage rate $30
Required: Total earning of worker under Halsey Premium Plan.
Q: 9. The following extracted information are provided to you:
Consumption per day 400 – 600 units
Delivery Period 3 – 5 days
Re-order level 4500 units
Required: Minimum stock level
Q: 10. The following extracted information is provided:
Cost Raw material $18000
Direct labour cost for 900 hours @ $10 per hour
Overhead for 4000 hours @ $20,000
Required: Job cost sheet.
Group B
Short questions answer [5 × 10 marks = 50 marks]
Attempt five questions
Q: 11. Pokhara Factory has three production departments and one service department. Other details are as follows:
Particulars |
Production Department |
Service Department |
||
|
A |
B |
C |
S |
Direct materials ($) |
20,000 |
30,000 |
20,000 |
5,000 |
Direct wages ($) |
25,000 |
20,000 |
15,000 |
5,000 |
Labour hours |
3,000 |
2,000 |
2,000 |
– |
Area in squire feet |
400 |
300 |
200 |
100 |
Light points |
5 |
3 |
2 |
2 |
Horse power |
6 |
3 |
2 |
1 |
Fixed assets value (in Lack (Million $) |
10 |
5 |
3 |
2 |
Service rendered by service department |
50% |
30% |
20% |
– |
Other information:
Rent |
$10,000 |
|
Depreciation |
$20,000 |
Electricity light |
$12,000 |
|
General overhead |
$13,000 |
Power |
$20,000 |
|
|
|
Required: (i) Total overhead to each department; (ii) Labour hour rate of production department [8+2 = 10]
Q: 12. A company provided the following particulars:
Selling price per unit $40
Variable cost per unit $24
Fixed cost for the year $240,000
Corporate tax rate is 25%
Required: (i) Profit Volume Ratio (PVR); (ii) BEP in amount; (iii) BEP in amount if variable cost per unit decreases to $20;
(iv) Sales amount to earn after tax profit of $40,000.
(v) If the company desires to sell 10,000 units; what would be the selling price per unit to earn a profit of $20,000. [2×5]
Q: 13. The following extracted details of ABC Manufacturing Company are given:
|
Units |
|
|
Amount ($) |
Normal capacity units |
10,000 |
|
Selling price per unit |
$60 |
Production units |
12,000 |
|
Direct materials per unit |
$20 |
Sales units |
14,000 |
|
Direct labour per unit |
$10 |
Closing stock units |
2,000 |
|
Variable manufacturing overhead per unit |
$5 |
|
|
|
Fixed manufacturing overhead |
$100,000 |
|
|
|
Variable office and selling overhead per unit |
$3 |
|
|
|
Fixed office and selling overhead |
$150,000 |
Required: (i) Income Statement under Absorption costing; (ii) Reconciliation statement [7+3]
Q: 14a. AM Manufacturing House provided following details:
Months |
Jan |
Feb |
Mar |
Apr |
Sales amount ($) |
500,000 |
600,000 |
400,000 |
500,000 |
Selling price per unit is $100. The company has a policy to keep ending inventory of finished goods is 50% of next month sales need. The beginning inventory of finished goods for January is 2500 units. Each unit of finished goods will require three units of raw material.
Required: (i) Production budget for three months ending March;
(ii) Raw material consumption budget for three months ending March. [4+1]
Q: 14b. Enumerate briefly the perpetual inventory system for inventory control. [15]
Q: 15a. ABC Transport Company provides the following particulars:
Cost of vehicle $40,00,000
Estimated life 10 years
Estimated scrap value at the end of 10 years life is $500,000.
The vehicle covers 20,000 km in a year.
Other annual expenses are:
Garage rent |
$15,000 |
|
Other expenses |
$20,000 |
Road License |
$20,000 |
|
Fuel consumption |
10 km per liter |
Insurance charges |
$25,000 |
|
Cost of fuel per liter |
$90 |
Driver’s salary |
$60,000 |
|
|
|
Required: Operating cost sheet showing standing and running charges [5]
Q: 15b. Write briefly the system of wage payment under Taylor’s differential piece rat and Grant Task and bonus scheme. [5]
Q: 16. Define standard costing and differentiate it from budgetary control. [10]
Group C
Long questions answer [2 × 15 marks = 30 marks]
Attempt any two questions.
Q: 17. A company provided the following particulars for the period ended:
Items |
Cost drivers |
Products |
Overhead ($) |
||
|
|
P |
Q |
R |
|
Production units |
– |
5,000 |
4,000 |
3,000 |
– |
Materials purchase cost |
Order executed |
7 |
8 |
3 |
36,000 |
Set up cost |
Production runs |
10 |
9 |
6 |
50,000 |
Maintenance cost |
Machine hours |
7,000 |
4,000 |
2,000 |
26,000 |
Materials handling cost |
Quantity of materials |
4,000 |
3,000 |
2,000 |
18,000 |
Direct material cost per unit ($) |
– |
$4 |
$5 |
$6 |
– |
Direct labour per unit ($) |
– |
$6 |
$5 |
$4 |
– |
Required: Total cost and cost per unit under (i) Traditional costing system based on machine hours
(ii) Activity based costing (ABC) [6+9 = 15]
Q: 18. A product passes through three processes X, Y and Z.
The output of process X becomes input for process Y and the output of process Y becomes input for process Z.
The entire outputs of process Z were transferred to ware house as finished product.
The other details of processes during the period are given as under:
Particulars |
Process X |
Process Y |
Process Z |
Raw material input 2,000 units |
50,000 |
– |
– |
Other material ($) |
20,000 |
30,000 |
34,000 |
Direct labour ($) |
34,000 |
42,000 |
50,000 |
Production overhead ($) |
15,000 |
20,000 |
25,000 |
Normal wastage |
10% |
5% |
10% |
Wastage realized per unit ($) |
10 |
20 |
15 |
Actual output units |
1,820 |
1,700 |
1,600 |
Required: (a) Process accounts; (b) Abnormal loss account; (c) Abnormal gain account [11+2+2 = 15]
Q: 19a. Define cost reduction and explain the areas of cost reduction.
Q: 19b. Describe the methods of apportioning joint cost of the product with suitable examples. [9+6]
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