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MCO-05 December, 2012 Accounting For Managerial Decisions

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December, 2012

MCO-05 : Accounting For Managerial Decisions

1.  Discuss various methods of costing giving examples of Industries where they are applicable.

2.  Distinguish between Reserves and Provisions. Explain the various types of Reserves usually Created by business firms.

3.  Explain the various Techniques of Financial Analysis. In this context, give the format of common size statements.

4.  Distinguish between cash flow and fund flow statement. How will you arrive at cash flow from investing and financing activities ? Explain with example.

5.  (a) Explain three budgetary control ratios with  examples.

(b) Define performance budgeting and state its main objectives.

6.  Write explanatory notes on : 

(a)  Environmental Accounting

(b)  Strategic Cost Management

7.  A retail dealer in Auto Parts is currently selling 15,000 Auto Parts annually. He supplies the following details for the year ended December 31, 2009 :    

Details

Amount (Rs.)

Selling Price Per unit

200

Variable Cost Per unit

120

Fixed costs :

Staff Salaries

3,00,000

General Office Cost

1,00,000

Adversting Cost

80,000

(a)  Calculate the break even point and margin of Safety.

(b)  Assume that 12,000 Auto Parts were sold during the year. Find out the net profit of the firm. Assuming that in 2010 the rate of factory over heads went up by 20%, dist. expenses went down 1 by 10%, and selling expenses went up by 12 —2 %; at what price should the work be quoted so as to earn the same rate of profit on the selling price as in 2009. Show full working. It may be noted that factory overheads are based on direct wages while administration, selling and distribution expenses are based on factory cost.

9.  The standard labour component and the actual labour component engaged in a week for a job are as under :

Details

Skilled workers

Semi skilled workers

Unskilled workers

Standard number of workers in the gang

40

24

16

 Standard wage rate Per

35

25

15

 Hour (Rs.) Actual number of workers engaged in the gang

35

30

15

 Actual wage rate per hour (Rs.)

36

28

14

During the 45 hour working week, the gang produced 3,240 standard labour hours of work. Calculate different labour variances. 

(c)  If it is decided to introduce Selling Commission of Rs. 5 per Auto Part, how many Auto Parts would require to be sold in a year to earn a net income of Rs. 1,20,000.

(d)  Assuming that for the year 2010 an additional Salary of Rs. 1,50,000 is anticipated, and price of one Auto Part is likely to be increased by 10%, what should be the break-even point in number of Auto Parts and Sales revenue.

8.          The following figures have been obtained from the cost records of a manufacturing company for the year 2009 :

Rs.

Cost of materials

2,40,000

 Direct wages

2,00,000

 Factory overheads

1,20,000

 Distribution expenses

56,000

 Admin. Expenses

1,34,400

 Selling expenses

89,600

Profit

1,68,000

A work order was executed in 2010, and the following expenses were incurred :

Cost of materials

32,000

Direct wages

20,000

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