(IGNOU) M.Com Accounting and Finance - MCO5 Accounting for Managerial Decisions

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(IGNOU) M.Com Accounting and Finance - MCO5 Accounting for Managerial Decisions Question Paper

MASTER OF COMMERCE (MCOM)
Term-End Examination

December, 2006

MCO5 Accounting for Managerial Decisions

Time: 3 hours
Maximum Marks: 100

Note :Attempt any five questions. All questions carry equal marks
1. Explain the meaning of Management Accounting. What is the role of management accountant in a modern business ?(Marks 5, 15)

2. What do you mean by financial statements ? Explain the techniques of financial statement analysis.(Marks5, 15)

3. Define Budget and Budgetary control. State ttre advantages of a budgetary control system.(Marks 8, 12)

4. What do you mean by Zero Based Budgeting ? How does it differ from traditional budgeting ? state the limitations of Zero Based Budgeting.(Marks 5, 5, 10)

5. (a) What is 'Margin of Safety' ? How do you increase margin of safety ?

(b) From the following information, calulate

(i) P / V ratio, and

(ii) Break - even point.(Marks 10, 10)

Year : 2004 2005
Sales (Rs.) : 1,50,000 2,00,000
Profit (Rs.) : 30,000 50,000
6. Explain the concept of differpntial cost. Explain the practical applications of differential costing in a manufacturing concern.(Marks 5, 15)

7. A company produces two products X and Y. The cost information of the two products is as follows :

cost Product X (Rs.) Product Y (Rs.)
Sales Price 200 150
Direct Material 100 80
Direct labour 40 30
Variable Overheads 20 20
Fixed Overheads : Rs. 1,00,000

Alternative sales mix of Product X and Y will be

(a) 2000 units of Product X and 2000 units of Product Y.

(b) 3000 units of Product X and 1000 units of Product Y.

(c) 4000 units of Product X only.

Which of the above sales mix would you recommend to the management ? Give reasons for your answer. (Marks20)

8. How does Cash Flow Statement differ from Income Statement ? From the following information, you are required to compute cash flow from operating activities as per AS - 3 :(Marks 8, 12)

Profit and loss Account for the year ended 31st March, 2005
Rs. Rs.
To Cost of goods sold 2,00,000 By Sales (including cash sales Rs. 50,000) 2,50,000
To Office expenses 10,000 By Profit on sale of land 10,000
To Selling and distribution expenses 3,000 By Interest received 12,000
To Depreciation 4,000
To Loss on sale of plant 2,000
To Goodwill written off 4,000
To Income Tax paid 9,000
To Net profit 40,000
2,72,000 2,72,000
The following is the position of Current Assets and Current Liabilities :

As on 31-3-2004 (Rs.) As on31-3-2005
Stock 20,000 18,000
Sundry Debtors 13,000 10,000
Bills Receivable 8,000 9,000
Creditors 9,000 15,000
Bills Payable 7,000 6,000
Outstanding Expenses 3,000 5,000
9. Write explanatory notes on any two of the following :(Marks 10, 10)

(a) Human Resource Accounting

(b) Disposition of Variances

(c) Marginal Costing vs. Absorption Costing

(d) Responsibility Accounting