Accounting for Managerial Decision Making — DU B.A. (V.S.) Modern Office Management Previous Year Question Papers

Define Accounting as the process of identifying, measuring and communicating economic information to permit informed judgments and decisions by users. Explain how accounting acts as a Management Information System (MIS) by collecting raw data and transforming it into meaningful financial reports ? Using the following summarized financial data, calculate and interpret the company’s position : (1) Current Assets : ` 4,00,000 | Current Liabilities : ` 2,00,000 | Inventory : ` 1,20,000 | Credit Sales : ` 10,00,000 | Average Debtors : ` 1,25,000 | Net Profit : ` 1,50,000. (i) Current Ratio and Liquid Ratio. (ii) Debtors Turnover Ratio and Average Collection Period. (iii) Net Profit Ratio. (iv) Briefly comment on the firm’s liquidity and efficiency. (1) (Current Assets) : ` 4,00,000 | (Current Liabilities) : ` 2,00,000 | (Inventory) : ` 1,20,000 | (Credit Sales) : ` 10,00,000 | (Average Debtors) : 1,25,000 | (Net Profit) : ` 1,50,000. 3. (a) Define the Cash Flow Statement as a financial document that tracks the aggregate change in a company’s cash position by recording inflows and outflows during a specific period. (b) Explain the statement’s role in providing a more realistic view of a firm’s liquidity compared to the accrual-based Income Statement, aiding in more accurate managerial decision-making. A factory currently operates at 50% capacity, producing 5,000 units. The cost per unit is : Materials ` 50, Labour ` 30, Variable Overheads ` 20, Fixed Overheads Prepare a Flexible Budget for 70% and 90% capacity. (Note : At 90% capacity, the cost of materials drops by 5% due to bulk discounts, and fixed overheads increase by ` 10,000.) 70% 90% (Flexible Budget) Discuss the marginal costing equation and contribution margin, and analyse their role in managerial decision-making. A manufacturer has the capacity to produce 20,000 units. Present utilisation is 12,000 units for the domestic market at a price of ` 25. Cost structure : Variable ` 12; Fixed ` 8; Total ` 20. An export offer is received for 5,000 units at ` 15 per unit. (Differential Costing) 7. (a) (b) Explain the steps involved in the decision-making process. 8. Write short notes on (any three) : (a) Budgetary Control Merits (b) Ratio Analysis Limitations (c) Cost Classification (d) Spreadsheet use in Accounting.