M.Com. DEGREE EXAMINATION,
NOVEMBER 2017
Second Semester
Commerce with Computer Applications
MANAGEMENT ACCOUNTING
(CBCS 2015 onwards)
Time 3 Hours Maximum 75 Marks
Section A (10 x 2 20)
Answer all questions.
1. What do you mean by management accounting?
2. Specify any two functions of a management accountant.
3. Point out the nature of financial statements.
4. What are the methods used for financial analysis?
5. What are the limitations of cash flow statement?
6. What do you mean by funds from operations?
7. What do you mean by budget manual?
8. What do you mean by ZBB?
9. Write a note on Break even chart.
10. Marginal cost Rs. 2,400; Selling price Rs. 3,000. Calculate
P/V Ratio.
Sub. Code
5MCC2C3
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Section B x 5 25)
Answer all questions.
11. Differentiate between financial a/c and
management a/c.
Or
Describe the objectives of management a/c.
12. Explain the aim of analysis and interpretation.
Or
From the following Balance Sheet of a company, you
are required to prepare a common size Balance
Sheet.
Balance Sheet as on 31st Dec.
Liabilities Rs. Assets Rs.
Equity Share capital 1,25,000 Plant machinery 2,00,000
Preference share capital 50,000 Furniture 12,140
Reserves 55,000 Current assets 1,69,500
P L a/c 35,000
Current liabilities 1,16,640
Total 3,81,640 3,81,640
13. Distinguish between fund flow statement and cash
flow statement.
Or
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Calculate funds from operations from the following
Profit and Loss A/c
Particulars Rs. Particulars Rs.
To Rent 10,000 By Gross 9,86,000
To Salary 25,000
To Depreciation 3,000
To Goodwill written off 10,000
To Preliminary expenses 5,000
To Discount on shares 6,000
To Net profit 9,27,000
Total 9,86,000 9,86,000
14. What are the objectives of a budget?
Or
A factory manufactures two types of products X and
Y. Product X takes 5 hours to make and Y requires
10 hours. In a month of 25 effective days of 8 hours
a day, 1,000 units of X and 600 units of Y were
produced. The company employs 50 workers in the
production department. The budgeted hours are
1,02,000 for the year. Calculate Capacity ratio,
Activity ratio and Efficiency ratio.
15. The P/V ratio of X Ltd. Is 50% and the margin of
safety is 40%. You are required to calculate the net
profit is sales volume is Rs. 10,00,000.
Or
Sales of a product amount to 200 units per month at
Rs. 10 per unit. Fixed overhead is Rs. 400 per
month and variable cost Rs. 6 per unit. There is a
proposal to reduce prices by 10%. Calculate present
and future P/V ratio and how many units must be
sold to earn the present total profit?
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Section C x 10 30)
Answer any three questions.
16. Describe the boundaries of management accounting.
17. From the following Profit and Loss account and Balance
Sheet, prepare a comparative Income statement and a
comparative Balance Sheet.
P L A/c for the year ended 31st Dec., 2015 (in lakhs of Rs.)
Particulars 2013 2014 Particulars 2013 2014

To cost of goods sold 500 640 By sales 700 900
To Administrative expenses 20 20
To Selling expenses 30 40
To Net profit 150 200
Total 700 900 700 900
Balance sheet as on 31st Dec., 2015 (in lakhs of Rs.)
Liabilities 2014 2015 Assets 2014 2015
Rs. Rs. Rs. Rs.
B/P 50 75 Cash 50 70
Creditors 150 200 Debtors 300 450
Tax payable 100 150 Stock 100 200
15% debentures 100 200 Land 100 120
12% preference shares 200 200 Buildings 250 225
Equity shares 300 300 Plant 200 180
Reserves 200 200 Furniture 100 80
Total 1,100 1,325 Total 1,100 1,325
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18. Balance sheets of M/S Black and White as on 1st Jan.
2014 and 31st Dec. 2014 were as follows
Balance sheet as on 31st Dec, 2015
Liabilities Jan. 2014 Dec. 2014 Assets Jan. 2014 Dec. 2014
Rs. Rs. Rs. Rs.
White's loan 25,000 Cash 10,000 7,000
Creditors 40,000 44,000 Debtors 30,000 50,000
Loan from Stock 35,000 25,000
bank 40,000 50,000 Land 40,000 50,000
Capital 1,25,000 1,53,000 Buildings 35,000 60,000
Machinery 80,000 55,000
Total 2,30,000 2,47,000 2,30,000 2,47,000
During the year machine costing Rs. 10,000 (accumulated
Depreciation Rs. 3,000) was sold for Rs. 5,000. The
provision for depreciation against machinery as on 1st
Jan. 2014 was Rs. 25,000 and on 31st Dec. 2014
Rs. 40,000. Net profit for the year 2014 amounted to
Rs. 45,000. Prepare Fund Flow Statement.
19. The following overhead expenses relate to a cost centre
operating at 50% of normal capacity. Draw up a flexible
budget for the cost centre for operating at 100% and
12% of normal capacity. Indicate the basis upon which
you have estimated each item of expenses for the
different operating levels.
Rs.
Foreman 60
Assistant foreman 40
Inspectors 65
Shop labourers 40
Machinery repairs 100
Defective work 25
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Consumable stores 20
Overtime bonus Nil
Machine depreciation 110
20. An analysis of S Ltd., led to the following information
Cost elements Variable cost Fixed cost
(as on sales)
Direct labour 28.4
Direct materials 32.8
Factory overhead 12.6 1,89,900
Distribution overhead 4.1 58,400
General Admin. Overhead 1.1 66,700
Budget sales are Rs. 18,50,000.
You are required to determine
The break even sales volume.
The profit at the budgeted sales volume
The profit if actual sales drop by 10% from budgeted
sales and
The profit if actual sales increased by from
budgeted sales.