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No. of Printed Pages : 12 MC0-05

MASTER OF COMMERCE
Term-End Examination
December, 2019
MCO-05 : ACCOUNTING FOR MANAGERIAL
DECISIONS

Time : 3 Hours Maximum Marks : 100

Note : Attempt any five questions. All questions

carry equal marks.

1. "Balance Sheet is a statement of assets and

liabilities or sources and uses of capital or both."

Comment. 20

2. (a) Define budgeting and budgetory control.

Also state the objectives of budgeting. 3, 7

•••
 [2] MCO-05

(b) What is a Cash Budget ? How is it

prepared Explain it with suitable

example. 3, 7

3. In a factory 100 workers are engaged and the

average rate of wages is Z 5 per hour. Standard

working hours per week are 40 and the

standard performance is 10 units per gang

hour. During a week in April, 2017 wages paid

for 50 workers were Z 5 per hour, 10 workers at

Z 3.5 per hour and 40 workers at Z 5.20 per

hour. Actual output was 380 units. The factory

did not work for 5 hours due to breakdown of

machinery.

Calculates 5 each

(a) Labour cost variance

(b) Labour rate variance

(c) Labour efficiency variance

(d) Idle time variance

 [ 31 t MCO-05

4. What is meant by ,transfer Pricing ? Discuss

various methods of Transfer pricing. 5, 15

5. Define reporting to management. Explain

various objectives of reporting. What are the

essentials of successful reporting ? Discuss.

5, 5, 10

6. A company producing a single product and sells

it at Z 10 per unit. Variable cost is Z 6 per unit

and fixed cost is Z 40,000 per annum.

Calculate :

(a) Break-even point in units and vane 8

(b) P/V ratio

(c) Sales volume rsquired to earn a profit of

Z 60,000 per annum 8

(B-29) P. T. 0.
 [4] MC0-05

7. The Balance Sheet of Radha Ltd. is given

below :
Liabilities Z
Equity Share Capital 40,000
8% Preference Share Capital 20,000
Reserves 10,000
Profit and Loss A/c 5,000
10% Debentures 45,000
Creditors 9,000
Outstanding Expenses 2,000
Provision for Taxation 3,000
Proposed Dividend 6,000
1,40,000

Assets
Land 22,000
Building 24,000
Plant and Machinery 38,000
Furniture 5,000
Debtors 22,000
Inventory 13,000
Cash 14,000
Prepaid expenses 2,000
1,40,000
 MCO-05
I5/

Compute : 7, 7, 6

(a) Debt-Equity Ratio

(b) Proprietary Ratio

(c) Capital Gearing Ratio

8. What is a Cash Flow Statement ? How does

cash flow statement differ from funds flow

statement ? How does cash flow analysis help

the management in decision-making ?

Discuss. 5, 7, 8

5 each
9. Distinguish between the following :

(a) Direct and Indirect costs

(b) Product cost and Period cost

(c) Controllable and Uncontrollable costs

(d) Job costing and Process costing

(B-29) P. T. O.
 [61 MCO-05

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 71 MCO-05

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(B-29) P. T. 0.
 8 MCO-05

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 91 MC0-05

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(B-29) P. T. 0.
 [ 10 ] MCO-05

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 MCO-05

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22,000

24,000

38,000
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5,000
r

22,000

13,000

14,000

2,000
1,40,000

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(B-29) P. T. 0.
 [12] MCO-05

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MCO-05 25,000