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Accounting for Managerial Decision

MASTER OF COMMERCE


Term-End Examination


June, 2010


MCO-05: ACCOUNTING FOR MANAGERIAL DECISION


Time  3 hours                                                                                                 Maximum Marks 100


 

Note : Attempt any five questions. All questions carry equal marks.

  1. What are the objectives of accounting ? Explain any four accounting concepts and two accounting conventions.                                                                                                                      20



  1. What do you mean by analysis of financial statements ? Explain briefly the various techniques of financial Analysis.                                                                                                              20



  1. Write explanatory notes on :                                                                                        10+10



  • Performance Budgeting

  • Budgetary Control Ratios.



  1. (a) Describe the various methods of transfer pricing.                                                     10+10 (b)Elaborate the essentials of success of responsibility Accounting.



  1. What is the need for cash flow statement ? How will you  prepare a cash flow statement. Give the format of the same.                                                                                                    20



  1. What do you mean by accounting reports ? What are the different types of reports for internal use ? Discuss each one of them.                                                                                        20



  1. The following information is obtained from XY & Co. for the year 2008.                            6+14


Rs.

Sales                                                 20,000

Variable costs                                  10,000

Fixed costs                                       6,000

  • Find the PV Ratio, break-even Point and Margin of Safety at this level.



  • Calculate the effect of :

  • 20% Decrease in fixed costs.

  • 10% increase in fixed costs.

  • 10% increase in selling price together with an increase of fixed overheads by Rs. 1200.



  • 10% Decrease in variable costs.


 

  1. Calculate from the following data :                                                                                     20



  • Material price variance.

  • Material Mix variance.

  • Material yield variance, and

  • Material usage variance.








 

 

Material 

Standard Price per kg RsStandard Weight per unit of out ut kg sActual usage for output of 36 units kgs 

Actual price per kg RsA1027212B141081C531264  9306

  1. XYZ Co. has an annual production of 90,000 units for a component The component cost structure is given below : 8+12


Rs.

Material                                  270    per unit

Labour (25% fixed)                 180    per unit

Variable expenses                   90      per unit

Fixed expenses                       135    per unit

Total                                675    per unit

  • The purchase manager has an offer from a supplier, who is willing to supply the component at Rs. 540. Should the component be purchased and production stopped ? Give Justifications for your answer.

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