Accounting for Managerial Decision Making — DU B.Com. (Hons.) Previous Year Question Papers

(a) Explain the meaning and scope of financial accounting. How does accounting function as an information system? (c) What are accounting standards? Briefly explain the meaning of IFRS and IND-AS. (d) What is meant by cost reduction and cost control.? (e) Define cost allocation and cost apportionment. (9 Marks) (a) What is cash flow statement? Discuss briefly the major classification of cash flow as per AS-3 (Revised). (9 Marks) (b) Discuss liquidity ratios with examples. Explain its significance. (c) From the following information, calculate Debt-equity ratio and interpret the result: Particulars Rs. Particulars Rs. Equity share capital 1,00,000 Securities Preference share capital General Reserves 40,000 Trade creditors 40,000 Capital Reserves 10,000 Outstanding expenses Profit & Loss account (Credit) 25,000 Provision for tax 10,000 (d) Discuss the importance of financial ratios in interpreting financial statements. (a) Discuss briefly the objectives and limitations of budgetary control. (9 Marks) (b) Distinguish between fixed budget and flexible budget. Briefly state the circumstances in which flexible budgets are used. (c) Prepare a flexible budget for production at 80 per cent and 100 per cent activity on the basis of following information: Production at 50% capacity 5000 units Raw Material Rs. 80 per unit Direct Labour Rs. 50 per unit Direct Expenses Rs. 15 per unit Factory Expenses Rs. 50,000 (50% fixed) Administrative expenses Rs. 60,000 (60% variable) (a) The following data is given: Selling Price Rs. 20 per unit Variable manufacturing costs Rs. 11 per unit Variable selling costs Rs. 3 per unit Fixed Factory overheads Rs. 5,40,000 per Year Fixed selling costs Rs. 2,52,000 per Year You are required to compute: i. ii. Break-even point in amount of sales in rupees. Number of units that must be sold to earn a profit of Rs. 60,000 per year. (b) What is P/V ratio? Explain the ways by which P/V ratio can be improved. (c) What is meant by angle on incidence and margin of safety? Explain with the help of break-even chart. (d) The following information is given: Year Sales (Rs.) Profit (Rs.) You are required to compute: i. P/V Ratio, ii. Margin of safety in year 2025-26. (9 Marks) (a) What is differential costing? Explain its importance in Decision making. (b) Explain any three of the following terms: i. Sunk Cost ii. Marginal cost iii. Opportunity cost iv. Relevant cost (c) AB Ltd manufactures Auto parts. The following costs are incurred for processing 1,00,000 units of a component: Direct material cost Rs. 5 lakh, direct labour cost Rs. 8 lakha, variable factory overheads Rs.6 lakhs and fixed factory overheads Rs. 5 lakhs. The purchase price of the component is Rs. 22. The fixed overhead would continue to be incurred even when the component is bought from outside Although there would be reduction to the extent of Should the part be made or bought, considering that the present facility when released following a buying decision would remain idle?