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LOYOLA COLLEGE (AUTONOMOUS), CHENNAI 600 034
M.Com.DEGREE EXAMINATION -COMMERCE
FIRST SEMESTER APRIL 2018
CO 1815- ACCOUNTING FOR DECISION MAKING
Date: 30-04-2018 Dept. No. Max. 100 Marks
Time: 09:00-12:00
PART-A
Answer ALL questions. (10 x 2 20)
1. What is Cash flow statement?
2. What do you understand by Contribution?
3. Explain the term ABC.
4. State the common characteristic of relevant cost.
5. State the limitation of Ratio Analysis.
6. Give any two differences between Budgetary Control and Standard Costing.
7. Factory produces 2 units of a commodity in one standard hour. Actual production during a year is 17,000 units and the budgeted production for the year is fixed at 20,000 units. Actual hours operated are 8,000 hrs.Calculate efficiency and activity ratios.
8. Calculate BEP from the following details.
Year Sales Rs. Profit Loss
2006 2,40,000 20,000
2007 3,20,000 40,000
9. Calculate the EPS from the following data, Net profit before tax Rs.50, 000, Tax rate 10%
preference share capital (Rs.10 each) Rs.50,000 and 5,000 equity shares Rs.10 each.
10. Calculate material cost variance from the following date.
Particulars Standard Actual
Quantity 400 kgs 460 kgs
Value Rs.800 Rs.690
PART-B
Answer any FIVE questions. x 10 40)
11. Discuss the Relevant Costing in detail.
12. What do you understand by Ratio Analysis? Examine its significance and utility.
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13. From the following details, calculate funds from operations:
Rs.
Rs.
Salaries
Rent
Refund of tax
Profit on sale of building
Depreciation on plant
Provision for tax
Loss on sale of plant
Closing balance of Profit Loss a/c
Opening balance of Profit Loss a/c
10,000
2,000
10,000
1,000
7,000
5,000
3,000
40,000
15,000
Discount on issue of debentures
Provision for bad debts
Transfer to general reserve
Preliminary expenses written off
Goodwill written off
Proposed dividend
Dividend received
1,000
2,000
4,000
5,000
4,000
5,000
2,000
14. From the following particulars pertaining to assets and liabilities of a company. Calculate
Current ratio Liquid ratio Proprietary ratio Debt-Equity ratio Capital Gearing ratio.
Liabilities
Rs.
Assets
Rs.
5,000 Equity shares of
Rs. 100 each
2,000 Preference
shares of Rs. 100 each
4,000 Debentures
of Rs. 100 each
Reserves
Creditors
Bank overdraft
5,00,000
2,00,000
4,00,000
3,00,000
1,50,000
50,000


Land and Building
Plant and Machinery
Stock
Debtors
Cash and bank
Pre-paid expenses
6,00,000
5,00,000
2,40,000
2,00,000
55,000
5,000
16,00,000

15. Raja Ltd. manufactures and sells 4 types of products under the brand name C D.
The sales mix in value comprises 33 41 and 8 of C D respectively.
The total budget sales are Rs. 60,000 p.m. Operating costs are:
Product A 60% of selling price
Product B 68% of selling price
Product C 80% of selling price
Product D 40% of selling price
Fixed costs Rs. 14,700 p.m.
Calculate the B.E.P for the products on an overall basis.
It has been proposed to change the sales mix as follows:
Total sales per month remaining Rs. 60,000
Product A 25% Product C 30%
Product B 40% Product D
Assume that the proposal is implemented, calculate the Break-Even Point.
16. From the following particulars Calculate cost per unit under ABC Analysis.
Product
Machine hrs/unit
Dir. lab hrs/unit
Annual output(Uts)
Total Mach.hrs
Total dir.labhr
No. of Purchase orders
No.of
set ups
Prod. A
2
4
1,000
2,000
4,000
80
40
Prod. B
2
4
10,000
20,000
40,000
160
60
22,000
44,000
240
100
The cost of activities as follows:
Volume related Rs.1,10,000, Purchase relatedRs.1,20,000, Setup related Rs.2,10,000
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17. A company is organized in two divisions namely A and B division A produces three products
and M. Their data per unit are as follows.
Particulars K L M
Rs Rs Rs
Market price 120 115 100
Variable cost 84 60 70
Direct Labour cost 4 5 3
Maximum sales potential
(Units) 1600 1000 600
Division B had a demand for 600 units of product L. for its use. If division A can't supply product from market at Rs. 112 per unit what should be the transfer price of 600 units of L for division if the total direct labour hours available in division A are restricted to 15,000?
PART-C
Answer any TWO questions. x 20 40)
18. The following are the summarised Balance Sheets of Alacrity Co. as on 31st December 2008 and 2009.
Balance Sheets
Liabilities
2008
2009
Assets
2008
2009
Share capital
General reserve
P L A/c
Bank loan
(long-term)
Sundry creditors
Provision for taxation
2,0 0,000
50,000
30,500
70,000
1,50,000
30.000
5,30,500
2,50,000
60,000
30,600

1,35,200
35,000
5,10,800
Land Buildings
Machinery
Stock
Debtors
Cash
Bank
Goodwill
2,00,000
1,50,000
1,00,000
80,000
500


5,30,500
1,90,000
1,69,000
74,000
64,200
600
8,000
5,000
5,10,800
Additional Information:
Dividend of Rs. 23,000 was paid
Assets of another company were purchased for a consideration of Rs. 50,000 payable in shares. The following assets purchased Stock Rs. 20,000. Machinery Rs. 25,000.
Machinery was further purchased for Rs. 8,000.
Depreciation written off on machinery Rs. 8,000.
Income tax provided during the year Rs. 33,000.
Loss on sale of machinery Rs. 200 was written off to general reserve.
You are required to prepare the cash flow statement. Working notes form part of your answer.
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19. You are given the following information pertaining to the financial statements of XYZ Ltd., as on
31st December, 1999.
On the basis of the information supplied, you are required to prepare the Trading and Profit and Loss
Account for the year ended and a Balance Sheet as on that date.
Net current assets
Issued share capital
Current ratio
Quick ratio (Ratio of Debtors and
Bank balance to Current liabilities)
Fixed assets to shareholders' equity
Ratio of gross profit on turnover
Net profit to Issued share capital
Stock turnover ratio
(Cost of goods sold Closing stock
Average age of outstanding for the year
Rs.2,00,000
6,00,000
1.8
1.35
80%
25%
20%
5 times
36 ½ days
On 31st December, 1999, the current assets consisted only of Stock, Debtors and Bank balance. Liabilities consisted of Share Capital and Current liabilities and assets consists of Fixed assets and Current assets.
20. The standard cost of a certain chemical mixture is
40% Material A at Rs.25 per kg.
60% Material B at Rs.36 per kg.
A standard loss of 10% is expected in production.
During a period, the actual usage and prices were
150 kgs of Material A at Rs.27 per kg.
260 kgs of Material B at Rs.34 per kg.
The actual output was 360 kgs.
Compute all material variances.
21.A company for which you are the cost accountant, manufacturers foods in three separate factories. The projected figures for the next year are as follows:
Trichy Madurai Salem
Rs. Rs. Rs.
Sales 44,00,000 40,00,000 70,00,000
Branch expenses
Salaries 4,20,000 3,80,000 6,20,000
Advertising 80,000 1,50,000 1,00,000
Others 1,00,000 80,000 1,10,000
There is a Central office in Madras which estimated to cost Rs. 15,40,000 and this is to apportioned to the three factories on the basis of the sales figures. Variable costs amount to 75% of sales of each factory. You are required to prepare a comparative profit and loss a/c for the next year and advise whether the Madurai factory should be closed if that would save all the Madurai branch expenses and reduce the Central office expenses from Rs. 15,40,000 to Rs. 12,40,000.