NATIONAL OPEN UNIVERSITY OF NIGERIA

UNIVERSITY VILLAGE, PLOT 91, CASDASTRAL ZONE, NNAMDI AZIKIWE EXPRESS WAY, JABI, ABUJA.
FACULTY OF MANAGEMENT SCIENCES
JANUARY 2021 EXAMINATION

COURSE CODE: ACC 313

CREDIT UNIT: 3

COURSE TITLE: MANAGEMENT ACCOUNTING

TIME ALLOWED: 2 1/2HOURS

Instructions: 1. Attempt question one (1) and any other three (3).

2. Question 1 is compulsory and carries 25 marks while the other 3 questions carry 15 marks each.

Present all your points in coherent and orderly manner.

QUESTION 1

Ojonugwa Company Limited is deciding whether to buy a machine for N200,000 which will save costs of N60,000 per annum for five years. The machine has a re-saleable value of N30,000 at the end of the fifth year. What would be the Internal Rate of Return (IRR) of the investment project? (25 marks)

QUESTION 2

Explain what you understand by contribution margin and its advantages to a manufacturing industry? What is Margin of Safety in management accounting? (15 marks)

QUESTION 3

Define standard costing and state why it is necessary and not necessary in an organisation. (15 marks)

QUESTION 4

Management accounting is dissimilar to cost accounting. Discuss. (15 marks)

QUESTION 5

Costing technique has different types. List and explain them. What are the advantages of costing technique? (15 marks)