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RAMAKRISHNA MISSION VIVEKANANDA COLLEGE (AUTONOMOUS)

MODEL EXAMINATIONS – APRIL 2021
Time: 3 Hours III B.Com Maximum Marks: 75
ACCOUNTING FOR DECISION-MAKING
(Subject Code: 18UCOAM17/BM17)
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SECTION-A (10 x 2 = 20)

Answer any TEN questions.

1. State any two limitations of management accounting.

2. What is meant by ratio analysis?
3. State any two objectives of Cash Flow Statement.
4. Define Budgetary Control.
5. What is Margin of Safety?

6. Calculate operating ratio from the following data:

Sales Rs. 9,00,000; Cost of goods sold Rs. 4,50,000; Administrative expenses Rs. 55,000
& Selling expenses Rs.1,70,000

7. Rahul Limited supplies the following information regarding the year ended 31st December
2020. Cash sales Rs.60,000; Credit sales Rs.3,40,000; Returns inward Rs.10,000; Opening
stock Rs.25,000; Closing stock Rs.35,000; Gross Profit Ratio is 25%.
Find out stock turnover ratio.

8. Find out funds from operations from the details given below:
Rs.
Net Profit for the year 2020 1,65,000
Depreciation charged on Fixed Assets 33,000
Profit on sale of land included in the profit 7,000
Preliminary expenses written off 12,000

9. Calculate the value of machinery purchased from the following details:

Rs.
Balance in machinery account as on 1st January 2020 2,90,000
Balance in machinery account as on 31st December 2020 4,00,000
Depreciation charged on machinery for 2020 50,000

10. Direct material cost at 60% capacity level is Rs. 30,000. What will be the amount of direct
material cost at 80% capacity level and 100% capacity level?

11. Calculate Profit-Volume Ratio from the following information:

Year Sales Profit
Rs. Rs.
2019 1,80,000 13,500
2020 2,10,000 19,500

12. Calculate BEP from the following information:

Sales = Rs.7,00,000
Variable Cost = Rs. 4,20,000
Fixed Cost = 1,00,000
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SECTION-B (5 x 5 = 25)
Answer any FIVE questions.
13. Distinguish management accounting from financial accounting.

14. The following are the extracts from the income statements of Natarajan Ltd. for the year ending
31st December 2019 and 2020. You are required to prepare a comparative income statement:
Particulars 31-12 -2019 31-12 -2020
Rs. Rs.
Sales 15,00,000 18,00,000
Cost of goods sold 8,25,000 9,07,500
Operating expenses:
Administration 1,20,000 1,50,000
Selling 90,000 1,20,000
Non-operating expenses:
Interest 60,000 75,000
Income-tax 75,000 1,20,000

15. The following information relates to Raja Limited for the year ending 31st March 2020:
Rs. Rs.
15,000 equity shares of Rs.10 each 1,50,000 Net profit After Tax 3,00,000
10% Preference shares 3,00,000 Dividend paid 1,50,000
Reserves & surplus 7,50,000 Market price per share 20

You are required to Calculate:

(a) Return on Equity shareholders funds
(b) EPS
(c) DPS
(d) Dividend Payout ratio
(e) Retained Earnings ratio

16. You are given the following information:

Current Ratio = 3; Acid-test Ratio = 1.5 & Working capital = Rs.2,00,000
Find out:
(a) Current Assets
(b) Current Liabilities
(c) Liquid Assets
(d) Stock

17. From the following information, Calculate Funds from Operations:

Rs.
Balance of Profit & Loss Account on 31-12-2020 3,25,000
Balance of Profit & Loss Account on 31-12-2019 1,10,000
(a) Depreciation charged on assets 13,000
(b) Preliminary expenses written off 6,000
(c) Amount transferred to General Reserve 17,000
(d) Sale price of a machine ( Book value of Rs.72,000) 78,000
(e) Interim dividend paid 14,000
(f) Goodwill written off 7,000
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18. From the following particulars, Prepare a Production Budget for three months from April to
June 2021:
Estimated Sales
(Units)
April 2021 3,00,000
May 2021 2,60,000
June 2021 1,70,000
July 2021 1,50,000
It is the policy of the company to maintain 50% of the month’s estimated sales as stock at the
beginning of each month.

19. A company has a P/V ratio of 40%. It maintains a margin of safety of 20%. If its annual fixed
costs amount to Rs.1,50,000. Calculate its :
(a) BEP
(b) MOS
(c) Total sales
(d) Total Variable Costs
(e) Profit

SECTION-C (2 x 15 =30)

Answer any TWO questions.

20. From the following details, prepare a Balance Sheet with as many details as possible:
• Stock Velocity = 6
• Capital turnover Ratio = 2
• Fixed Assets Turnover Ratio = 4
• Gross Profit Ratio = 20%
• Debtors Velocity = 2 months
• Creditors Velocity = 73 days
The Gross Profit was Rs.1,20,000. Reserves and Surplus amount to Rs.40,000.
Closing Stock was Rs.10,000 in excess of opening stock.

21. The following are the balance sheets of Vivek Limited on 31st December 2019 and 2020:
Liabilities 2019 2020 Assets 2019 2020
Rs. Rs. Rs. Rs.
Equity Share capital 2,00,000 2,00,000 Goodwill 24,000 24,000
Profit and Loss a/c 32,000 26,000 Buildings 80,000 72,000
General reserve 28,000 36,000 Plant 74,000 72,000
Creditors 16,000 10,800 Bills Receivable 4,000 6,400
Bills Payable 2,400 1,600 Debtors 36,000 38,000
Provision for Taxation 32,000 36,000 Cash 13,200 30,400
Provision for D/Debts 800 1,200 Investments 20,000 22,000
Stock 60,000 46,800
3,11,200 3,11,600 3,11,200 3,11,600
Additional information:
(a) Depreciation charged on plant was Rs.8,000 and on Building was Rs.8,000.
(b) Provision for taxation of Rs.38,000 was made during the year 2020.
(c) Interim dividend of Rs.16,000 was paid during the year 2020.
You are required to prepare a Cash Flow statement for the year ended 31st December 2020
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22. The expenses for the production of 5,000 units in a factory are given as follows:
Per unit
Rs.
Materials 60
Labour 25
Variable Overheads 15
Fixed Overheads (Rs.60,000) 12
Administrative expenses (5% variable) 10
Selling expenses (20% fixed) 8
Distribution expenses (10% Fixed) 5
Total Cost per unit 135
You are required to prepare a budget for the production of 7,000 units.

23. Following information has been made available from the costing records of Vishnu
Automobiles Limited manufacturing spare parts:
Product X Product Y
Direct Material(Rs.) 12 9
Direct Wages 36 Hours @ 25 paise per hour 24 hours @ 25 paise per hour
Selling Price (Rs.) 37.50 30
Variable Overheads: 150% of direct wages
Fixed Overheads: Rs.1,125

The directors want to be acquainted with the desirability of adopting any one of the following
alternative sales mixes in the budget for the next period:
(a) 250 units of X and 250 units of Y
(b) 400 units of Y only
(c) 400 units of X and 100 units of Y
(d) 150 units of X and 350 units of Y
State which of the alternative sales mixes you would recommend to the management.

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