MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2025

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. (a) Distinguish among variable, fixed and semi-variable costs. Why is this distinction important? (10)

(b) Describe the objectives and importance of Accounting Standards. (10)

2. From the following Trial Balance of a trader, you are required to prepare Trading and Profit & Loss Account for the year ended 31st March, 2023 and Balance Sheet as on that date: (20)

Trial Balance as on 31st March, 2023

Adjustments:

(i) Stock on 31st March, 2023 was valued at 15,000.

(ii) Write off 750 as bad debts.

(iii) Provision for bad and doubtful debts is to be maintained at 5% on sundry debtors.

(iv) Create a provision for discount on debtors and also reserve for discount on creditors @ 2%.

(v) Charge depreciation 20% p.a. on plant and machinery and 5% on furniture.

(vi) Insurance prepaid was 125.

(vii) Goods worth 6,250 were totally damaged in an accident. The insurance company admitted a claim of 5,000 on 28-3-2023.

3. What is a Cash Flow Statement? Explain the techniques of preparing a Cash Flow Statement with hypothetical figures. (5+15)

4. What is meant by Master Budget? Explain its components with the help of hypothetical figures. (5+15)

5. Prepare a Sales Overheads Budget for the quarter ending 31st March, 2023 from the estimates given below: (20)

Commission to counter-salesmen is payable at 1% of sales executed by them.  Travelling salesmen are entitled to a commission at 10% on sales effected through them and a further 5% towards expenses.

Estimated Sales Matrix:

6. How can controllable and uncontrollable costs be handled in a responsibility accounting system? Discuss with the help of appropriate examples. (10+10)

7. (a) Describe the essentials of successful reporting. (10)

(b) Discuss the application of relevant cost in alternative methods of production and plant shut-down decisions. (10)

8. Write notes on any two of the following: (10+10)

(a) Limitations of Financial Accounting

(b) Zero Based Budgeting

(c) Environmental Accounting

(d) Cost-Volume-Profit Analysis

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2025

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. (a) What is standard costing? State the objectives of standard costing. (8)

(b) Elaborate functional classification of Budget with the help of appropriate examples. (12)

2. (a) The following information relates to a manufacturing company: (10)

Targeted sales of product X: 100,000 units. Each unit of product X requires 3 units of material A and 4 units of material B. Estimated opening balance at the commencement of next year are:

Finished product: 20,000 units

Material A: 24,000 units

Material B: 30,000 units

The desirable closing balances at the end of next year are:

Finished products: 28,000 units

Material A: 26,000 units

Material B: 32,000 units

From the above information, prepare a material budget.

(b) Discuss that how (i) the provision for taxation and (ii) provision for dividend will be treated while preparing cash flow statement with the help of hypothetical examples. (10)

3. (a) Distinguish between Standard Costing and Budgeting. (10)

(b) Write short notes on the following: (6 + 4)

(i) Prerequisites for the success of standard costing

(ii) Revision of standards

4. (a) A company is producing a single product and sells it at 10 per unit. Variable cost is 6 per unit and fixed cost 40,000 per annum. Calculate: (12)

(i) Break-even point and

(ii) Sales volume required to earn a profit of 60,000 per annum.

(b) Describe various uses of responsibility accounting. (8)

5. (a) Explain practical application of differential costing. (10)

(b) Discuss application of 'Relevant Cost' in 'Make or Buy decision' and 'Sales Mix Decision'. (10)

6. (a) Prepare a cost sheet for a manufacturing company with the help of hypothetical figures. (10)

(b) Explain any five methods of costing with the help of appropriate examples. (10)

7. (a) Draw income statement in vertical format with the help of imaginary figures. (10)

(b) Draw Balance Sheet in vertical format with the help of imaginary figures. (10)

8. Write notes on any two of the following: (10 + 10)

(i) Profitability Ratios

(ii) Treatment of depreciation in preparing fund flow statement

(iii) Methods of transfer pricing

(iv) Social Accounting

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2024

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Discuss in brief the basic accounting concepts and accounting standards. (20)

2. The following is the Trial Balance of Mr. Mahesh as on 31st December, 2022. Prepare Trading and Profit & Loss Account for the year ended 31st December, 2022 and Balance Sheet as on that date: (20)

Trial Balance as on 31st December, 2022

Adjustments:

1. Wages include 1,000 paid for machinery erection charges.

2. Purchases include the cost of a moped scooter for 5,000 and goods costing 1,000 taken by the proprietor for his personal use for which no entry has been made.

3. Electricity bill outstanding 50.

4. Goods costing 5,000 were destroyed by fire and an insurance claim was received for 4,000.

5. Provide depreciation at 10% on machinery, furniture and moped. Also provide depreciation at 5% on building.

6. Closing stock is 12,000.

3. How does a cash flow statement differ from a funds flow statement? What are the uses of a cash flow statement? (10+10)

4. Explain in brief the different types of budgets with examples. (20)

5. What do you understand by zero based budgeting? How is it different from traditional budgeting? (10+10)

6. (a) Define Variance. What is Variance Analysis? (10)

(b) Write a short note on the uses of Variance Analysis. (10)

7. Explain the application of marginal costing in managerial decision-making. (20)

8. Explain different types of reports that are used in an enterprise. (20)

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2024

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Explain the role of Management Accountant in a modern business organization. (20 Marks)

2. Distinguish between the following (5 + 5 + 5 + 5 = 20 Marks)

(a) Product cost and Period cost

(b) Controllable cost and Uncontrollable cost

(c) Variable cost and Fixed cost

(d) Direct cost and Indirect cost

3. From the following Trial Balance of a Trader, prepare: (20 Marks)

a) Trading and Profit and Loss Account for the year ended 31st March, 2022.

b) Balance Sheet as on that date.

Trial Balance as on 31st March, 2022

Adjustments

a) Closing stock on 31st March, 2022 was valued at ₹15,000.

b) Write off ₹750 as bad debts.

c) Maintain Provision for Bad and Doubtful Debts at 5% on sundry debtors.

d) Create Provision for Discount on Debtors and Reserve for Discount on Creditors @ 2%.

e) Charge depreciation @ 2% p.a. on Plant and Machinery and @ 5% on Furniture.

f) Insurance prepaid was ₹125.

g) Goods worth ₹6,250 were completely damaged in an accident. Insurance claim admitted was ₹5,000 on 28.03.2022.

4. Write a note on the nature and limitations of financial statements. (20 Marks)

5. From the following particulars, compute leverage ratios: (20 Marks)

Balance Sheet of Raja Ltd. (as on March 31, 2022)

6. What is a cash budget? How is it prepared? (5 + 15 = 20 Marks)

7. Write short notes on the following: (5 + 5 + 5 + 5 = 20 Marks)

(a) Fixed Overhead Volume Variance

(b) Sales Volume Variance

(c) Sales Margin Variance

(d) Variable Overhead Efficiency Variance

8. How does Activity Based Costing differ from the traditional costing approach? (20 Marks)

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2023

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. (a) Discuss the emerging role of the management accountant in the corporate decision-making.  10

(b) Briefly explain the financial accounting process citing suitable example.            10

2. Briefly discuss cash flow statements. How are they prepared? Explain their importance to business.    20

3. Write short notes on the following:           10+10

(a) Accounting concepts.

(b) Margin of safety.

4. (a) Ashok Manufacturing Company Ltd. manufactures two products X and Y. In making both these products, same material is used. The supply of material is limited. The data corresponding to these two products are as follows:

Assign profitability ranks to the product X and Y keeping in view the limited availability of raw material. 10

(b) Given:        10

Find out:

(i) P/V (Profit and Volume Ratio) and BEP (Break-Even Point)

(ii) If the company sells 12000 units, then its profit and margin of safety.

5. Differentiate between the following:         10+10

(a) Capital expenditure budget and Master budget.

(b) Liquidity analysis ratio and Profitability analysis ratio.

6. What is responsibility accounting? Explain its applications. How does it differ from conventional cost accounting? 20

7. Prepare income statements using absorption costing method and marginal costing method using the following information:

Stock is valued on the basis of FIFO method.             20

8. (a) Define variance. What are the methods of classification of variances? Explain. 10

(b) Write a note on methods of Transfer Pricing. 10

9. The ABC Company has the following details:

Evaluate:

(a) Debt Equity Ratio.

(b) Debt to Total Fund Ratio.

(c) Debt to Total Assets Ratio.

Also, comment on the outcomes of the above ratios.           5, 5, 5, 5

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2023

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. What are ‘Fixed Budgets’? How do they differ from ‘Flexible Budgets’? Elaborate the steps involved in making a sound budgeting system. 5+5+10

2. Discuss the emerging role of accounting as a part of information systems. Differentiate between cost accounting and management accounting.     10+10

3. Write short notes on the following:           10+10

(a) Accounting standards.

(b) Cost sheet.

4. Atul Ltd. submits you the following information:

Market price of equity shares INR 40. Compute the following ratios: 5, 5, 5, 5

(a) Dividend yield on equity shares.

(b) Earning per share.

(c) Price earnings ratio.

(d) As a financial accountant, share your views on the outcome of above ratios for the profitability of the company.  5. Differentiate between the following:  10+10

(a) Production budget and Material budget.

(b) Activity based costing and Traditional costing approach.

6. (a) A television manufacturer finds that while it costs Rs. 150 per unit to make component XY-006. The same is available in the market at Rs. 120 each. Continuous supply is also fully assured. The breakdown of cost is:

(i) Should the company make it or buy it?     5

(ii) What would be your decision if the supplier offered component at Rs. 105 per unit?   5

(b) From the following data, calculate:          10

(i) Break-even point.

(ii) Margin of safety.

(iii) Profit-Volume ratio.

7. The standard mix of Product X is as follows:

The standard loss in production is 10% of output. There is no scrap value. Actual production for a month was 7240 kgs of ‘X’ from 80 mixes. Actual monthly consumption is as follows:

Calculate:        5×4=20

(a) Material Cost Variance.

(b) Material Price Variance.

(c) Material Mix Variance.

(d) Material Yield Variance.

8. (a) Explain the application of marginal costing in managerial decision-making.   10

(b) ‘The profit is the product of the P/V ratio and the margin of safety’. Comment. 10+10

9. Discuss the concept of ‘cost’. Briefly explain various costs, according to areas of responsibilities citing suitable example.        20

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2022

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Explain any four accounting concepts which guide the accountant at the recording stage.        5+5+5+5

2. Write short notes on the following:           5+5+5+5

(a) Interim dividend.

(b) True and Fair view.

(c) Provision for Taxation.

(d) Preliminary Expenses.

3. Prepare a cash flow statement from the following information under both direct method and indirect method:  10+10

4. What is a cash budget? How is it prepared? Illustrate.      20

5. The following figures relate to the quantity of material required for the production of a product:

Compute:        5+5+5+5

(a) Material Cost Variance.

(b) Material Price Variance.

(c) Material Usage Variance.

(d) Material Mix Variance.    

6. (a) Define Responsibility Accounting. How does it differ from Conventional Cost Accounting?   10

(b) State the features of Responsibility Accounting. 10

7. XYZ Ltd. produces three products and cost data is as follows:

The fixed expenses are estimated at Rs. 6,80,000. The company uses a single raw material in all the products. Raw material is in short supply and the company has a quota for the supply of raw materials to the extent of Rs. 18,00,000 per annum for the manufacture of its product to meet its sales demand.

(a) Calculate the product mix which will give the maximum overall profits keeping the short supply of raw materials.  10

(b) Compute the maximum profit.     10

8. (a) What do you understand by differential costing? How does it differ from marginal costing?   10

(b) Explain the practical applications of differential costing.             10

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2022

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Discuss the accounting conventions with examples.         20

2. Describe briefly the different methods of costing and state the particular industries to which they can be applied. 10+10

3. Victor Ltd. disclosed the following particulars: 20

The directors proposed a dividend of 15% on equity shares and resolved to make the following appropriations:

(a) Transfer to General Reserve as per the provisions of the Section 205.

(b) Transfer to dividend Equalisation Fund Rs. 1,75,000.

(c) Transfer to debenture Redemption Fund Rs. 1,00,000.

(d) Transfer to Investment Allowance Reserve Rs. 1,25,000.

The net profit (before tax) for the year amounted to Rs. 12,50,000. You are required to prepare Profit and Loss Appropriation A/c. Provide for income tax @ 50% and corporate dividend tax @ 12.5%.

4. From the following particulars, compute various leverage ratios:           20

Balance Sheet of Raja Ltd. as on March 31, 2021

5. What is Standard Costing? Write a detailed note explaining the advantages and limitations of standard costing.     20

6. XY Company Ltd. a manufacturer of Product P, uses standard cost system gives you the following details for 1,000 kgs of Product P:

Actual records indicate:

Actual finished production for the month of January is 2,00,000 kgs.          4+4+4+4+4

Calculate:

(a) Material Cost Variance.

(b) Material Price Variance.

(c) Material Mix Variance.

(d) Material Yield Variance.

(e) Material Usage Variance.

7. (a) Explain the application of marginal costing in managerial decision-making.               10

(b) What are the limitations of marginal costing technique? Explain.                       10

8. The cost data of XYZ Ltd. is as follows:       10+10

Calculate:

(1) Break-even point.

(2) Break-even point if sales mix ratio is changed to 30 : 50 : 20.

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2021

Time: 3 Hours

Maximum Marks: 100 (Weightage: 70%)

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. What are financial statements? How far are they useful in decision-making purposes? Discuss the nature and limitations of financial statements.         5+5+10=20

2. Explain the significance of Profit-Volume Ratio, Margin of Safety and Angle of Incidence. What are the various ways to improve P/V Ratio?   5+5+5+5=20

3. What is ‘Standard Costing’? State the objectives of Standard Costing. Compare Standard Costing with Budgeting. 5+5+10=20

4. How is Cash Flow Statement different from Income Statement? What are the additional benefits to different users of accounting information from Cash Flow Statement? Explain them briefly. 10+10=20

5. What are fixed and flexible budgets? Differentiate between these two. Why do accountants prepare these budgets? 5+5+10=20

6. Following information is derived from the financial statements of a company:

Calculate:        5+5+5+5=20

(a) PV Ratio.

(b) Break-even Point.

(c) Sales required to earn a profit of Rs. 16,00,000

(d) Profit when Sales is Rs. 50,00,000.

7. Balance Sheet of a company appears as follows for the year ending on 31st March 2017:

Balance Sheet as at 31st March 2017

Compute:        5+5+5+5=20

(a) Debt-Equity Ratio.

(b) Total Debt-Equity Ratio.

(c) Proprietary Ratio.

(d) Capital Gearing Ratio.

8. A company, newly starting manufacturing operations on 1st January 2019, has made adequate arrangement for funds for fixed assets. It wants you to prepare an estimate of funds required as working capital. It is to be remembered that:

(i) In the first month there will be no sale. In the subsequent month the sale will be 25% in cash and 75% on credit. Customer will be allowed one-month credit.

(ii) Payment for purchase of raw material will be made on one-month credit basis.

(iii) Wages will be paid fortnightly on the 22nd and 7th of each month.

(iv) Other expenses will be paid one month in arrears except that 5% of selling expenses are to be paid immediately on sale being affected.

The estimated sales and expenses for the first six months, spread evenly over the period subject to (i) above are as under:

The article produced is subject to excise duty equal to 10% of the selling price. The duty is payable on March 31, June 30, September 30 and December 31 for sales up to February 28, May 31, August 31 and November 30 respectively. Prepare Cash Budget for each of the six months indicating the requirement of working capital.            20

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2021

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Distinguish among Variable, Fixed and Semi variable costs. Why is this distinction important? Explain it with examples. 10+10

2. What is a ‘Cash Flow Statement’? Explain the techniques of preparing a cash flow statement. How does cash flow analysis help the management in decision making?      5+10+5

3. Define budgetary control. List out the essentials of sound system of Budgeting. Classify Budget on the basis of flexibility. 5+10+5

4. Define Responsibility Accounting. How does it differ from Conventional Cost Accounting? List out various uses of Responsibility Accounting.     5+5+10

5. (a) Define Activity Based Costing. How is Activity Based Costing different from Traditional Costing? Clarify.             5+5

(b) What are the limitations of marginal costing techniques? Explain.      10

6. A company is producing a single product and sells it at Rs. 20 per unit. Variable cost is Rs. 12 per unit and fixed cost is Rs. 80,000 per annum. Calculates: (a) Break-even point, (b) PV Ratio, (c) Sales volume required to earn a profit of           Rs. 60,000/- per annum.           7+7+6

7. During the year 2017, S Ltd. made sales of Rs. 8,00,000. Its gross profit ratio is 25% and net profit ratio is 10%. The stock turnover ratio was 10 times. Calculate: (i) Gross Profit, (ii) Net Profit, (iii) Cost of goods sold, (iv) Operating Expenses.         5+5+5+5

8. The following information is supplied to you:

You are required to calculate the following:

(a) Labour Cost Variance.

(b) Labour Rate Variance.

(c) Labour Efficiency Variance.

(d) Labour Idle Time Variance.           5+5+5+5

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination December, 2020

Time: 3 Hours

Maximum Marks: 100 (Weightage: 70%)

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. Explain different types of Accounting concepts which guide the accountant at the recording stage.     20

2. Explain the nature of cost. Classify the costs according to areas of responsibility.           10+10=20

3. Describe the principal ratios which you consider significant while interpreting the published accounts of company and explain the inferences which may be drawn from their use. 20

4. Explain the concept of Budgetary Control. How does it operate as a tool of management control?             8+12=20

5. (a) What is Performance Budgeting? Explain its objectives by giving suitable examples. 10

(b) M.N. Ltd. wishes to prepare a production budget in respect of three products A, B and C, the sales forecast for which is 83,200 units, 72,840 units and 88,400 units respectively. The estimated requirement of inventory both at the beginning and at the end of the budget period are shown in the following schedule:

You are required to draw up the Production Budget.            10

6. From the following Balance Sheet of P.Q. Ltd. you are required to prepare a Schedule of Changes in Working Capital and a Statement of Flow of Funds:    10+10=20

7. Standard cost of product is:

Total Labour Cost amounted to Rs. 40,000. Calculate Labour Variance.      20

8. ‘‘The effect of increase in sales price is to increase the P/V ratio to bring down the break-even point and to widen the margin of safety.’’ Discuss. 20

9. What do you understand by activity-based costing? How does activity-based costing differ from traditional costing approach?       10+10=20

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MASTER OF COMMERCE (M.COM.)

MCO-05: ACCOUNTING FOR MANAGERIAL DECISIONS Question Paper

Term-End Examination June, 2020

Time: 3 Hours

Maximum Marks: 100

Note: (i) Attempt any five questions. (ii) All questions carry equal marks.

1. What do you understand by 'Financial Statements'? Discuss the utility and significance of financial statements for the various parties interested in a business concern.                       8, 12

2. What is the importance of comparative statements to management? How are these statements prepared? Elucidate. 8, 12

3. Following are the summary of cash transactions extracted from the books of AB Ltd.:   20

Prepare a cash flow statement of the company for the year ended 30th June, 2017 in accordance with AS-3 (revised) by direct method.

4. The following figures are available from sales and costs forecasts of M/s. XY Ltd. for the year ending 31st December, 2017 at 50% (5000 units) capacity utilization:     20

(i) Fixed expenses remain constant for all levels of production and sales.

(ii) Selling price between 50% and 75% capacity is Rs. 25 per unit.

(iii) Semi-variable expenses will remain unchanged at 50% to 65% capacity but will increase by 10% between 65% to 80% capacity and by 30% between 80% to 100% capacity.

(iv) At 90% level material cost increases by 5% and selling price is reduced by 5%.

(v) At 100% both material and labour costs increase by 10% and selling price is reduced by 8%.

(vi) Semi-variable expenses are Rs. 50,000.

(vii) Fixed expenses are Rs. 58,000.

(viii) Variable expenses are:

Materials Rs. 5 per unit

Labour Rs. 2 per unit

Direct expenses Rs. 1 per unit

Prepare a profit forecast statement through flexible budget at 60%. 75%, 90% and 100% capacity.

5. Explain the term 'Budgetary Control' and mention some of its advantages. On what does the success of such control depend? 7, 6, 7

6. What is meant by Standard Costs? How are the standards fixed? Illustrate your answer. 6, 7, 7

7. Define 'Responsibility Accounting'. Discuss its salient features.    10, 10

8. (a) X Products Ltd. produces one standard type of article. Their results during the last five months of the year were as follows:              10

Prime Cost Rs. 5 per unit

Variable Overheads Rs. 1 per unit

Fixed Overheads Rs. 36,000 per annum

Prepare a Cost Statement on the basis of Marginal Costing.

(b) From the following data of AB Ltd., you are required to prepare Profit & Loss Account in traditional form as well as in contribution form: 5, 5

50% of administration expenses and 60% of selling expenses are fixed.

9. What is Break-even Analysis? Discuss the assumptions, uses and limitations of this technique. 5, 5, 5, 5

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