IGNOU MCO-05 June 2018 Previous Year Question Paper

Q1."Management accounting is nothing more than the use of financial information for management purposes." Explain this statement, and clearly distinguish between 'financial accounting' and 'management accounting'.

Q2.Identify the various bases of classification of costs 20 and explain the various types of costs involved under each base.

Q3.Explain the meaning and importance of fund flow statements, and state the usual sources and uses of funds. 4+6+10

Q4.What do you understand by 'Zero Based Budgeting' ? State the benefits that accrue from it and also its disadvantages. 4+8+8

Q5."The effect of a price reduction is always to 20 reduce the P/V ratio, to raise break even point and to shorten the margin of safety". Explain and illustrate with examples.

Q6.Given : Current Ratio = 2.8 Acid-test Ratio =1.5 Working Capital = 1,62,000 Find out :

(a) Current Assets

(b) Current Liabilities, and

(c) Liquid Assets

Q7.A company is making a loss of Z 40,000 and relevant information is as follows : 5+8+7 Sales 1,20,000 ; Variable costs 60,000 ; Fixed costs 1,00,000. Loss can be made good either by increasing the sales price or by increasing sales volume. What are Break even sales if :

(a) present volume of sales is maintained and selling price is increased.

(b) if present selling price is maintained and the sales volume is increased. What would be the volume of sales if a profit of

Q9.Prepare a Production Budget for each month and a summarised Production Cost Budget for the six months period ending 31st December 2015 from the following data of product 'X'. 12+8

(a) The units to be sold for different months are as follows : July 2015 1,100 August 2015 1,100 September 2015 1,700 October 2015 1,900 November 2015 2,500 December 2015 2,300 January 2016 2,000

(b) There will be no work in progress at the end of any month.

(c) Finished units equal to half the sales for the next month will be in stock at the end of each month (including June 2015).

(d) Budgeted production and production cost for the year ending 31st December 2015 are as follows : Production (units) 22,000 Direct materials (per unit) 10 Direct wages (per unit) Z 4 Total Factory overheads apportioned to products

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