IGNOU MCO-05 June 2022 Previous Year Question Paper

Q1.Discuss the accounting conventions with examples.

Q2.Describe briefly the different methods of costing and state the particular industries to which they can be applied. 10+10 [ 2 ]

Q3.Victor Ltd. disclosed the following particulars : 9%, 80000 preference shares of ` 10 each fully paid ` 8,00,000 50000 equity shares ` 10 each fully paid ` 5,00,000 30000 equity shares of ` 10 each ` 8 paid up ` 2,40,000 20000 equity shares ` 10 each ` 6 paid up ` 1,20,000 The directors proposed a dividend of 15% on equity shares and resolved to ma ke the following appropriations :

(i) Transfer to General Reserve as per the provisions of the Section 205

(ii) Transfer to dividend Equalisation Fund ` 1,75,000

(iii) Transfer to debenture Redemption Fund ` 1,00,000

(iv) Transfer to Investment Allowance Reserve ` 1,25,000 The net profit (before tax) for the year amounted to ` 12,50,000. You are required to prepare Profit and Loss Appropriation Account. Provide for income tax @ 50% and corporate dividend tax @ 12.5%. [ 3 ]

Q4.From the following particulars, compute various leverage ratios : 20 Balance Sheet of Raja Ltd. as on March 31, 2021 Liabilities ` Equity Share Capital 40,000 8% Preference Share Capital 20,000 Reserve 10,000 Profit and Loss Account 5,000 10% Debentures 45,000 Trade Creditors 9,000 Outstanding Expenses 2,000 Provision for Taxation 3,000 Proposed Dividend 6,000 Total 1,40,000 Assets ` Land 22,000 Building 24,000 Plant and Machinery 38,000 Furniture 5,000 Sundry Debtors 22,000 Stock 13,000 Cash 14,000 Prepaid Expenses 2,000 Total 1,40,000

Q5.What is Standard Costing ? Write a detailed note explaining the advantages and limitations of standard costing.

Q6.XY Company Ltd. , a manufacturer of Product P, uses standard cost system gives you the following details for 1000 kgs of Product P : Ingredients Quantity (kg) Price per Cost A 800 2.50 2,000 B 200 4.00 800 C 200 1.00 200 Input 1200 Output 1000 Actual record indicate : Consumption in January A 157000 kgs @ ` 2.40 B 38000 kgs @ 4.20 C 36000 kgs @ 1.10 Actual finished production for the month of January is 200000 kgs. 4+4+4+4+4 Calculate :

(i) Material Cost Variance

(ii) Material Price Variance

(iii) Material Mix Variance

(iv) Material Yield Variance

(v) Material Usage Variance

Q7.(i) Explain the application of marginal costing in managerial decision-making. 10

(ii) What are the limitations of marginal costing technique ? Explain. 10 [ 6 ]

Q8.The cost data of XYZ Ltd. is as follows : 10+10 Product Product Product Total Sales (40:50:10) (`) 80,000 1,00,000 20,000 2,00,000 Variable Costs (`) 50,000 60,000 10,000 1,20,000 Contribution (`) 30,000 40,000 10,000 80,000 Fixed Cost (`) — — — 50,000 Profit (`) — — — 30,000 Calculate :

(i) Break-even point

(ii) Break-even point if sales mix ratio is changed to 30 : 50 : 20.