DCM3101 MANAGEMENT ACCOUNTING

Description

SESSION	JAN-FEB 2026
PROGRAM	BACHELOR OF COMMERCE (B.COM)
SEMESTER	V
COURSE CODE & NAME	DCM3101 MANAGEMENT ACCOUNTING

 

Set – 1

 

 

Q.1. Describe the concept of marginal costing. Enlist the advantages and limitations of marginal costing. (2+4+4 = 10 Marks)

Ans 1.

Concept of Marginal Costing

Marginal costing, also referred as direct or variable costing is a costing method in which only variable costs are charged to the cost unit or product to be the production cost and fixed expenses are regarded as cost of production and are wiped out completely against any contribution made during the time period when they are incurred. The fundamental principle of marginal costing rests on the concept of marginal cost. It can be defined as an additional costs incurred to produce one additional unit of output. Since fixed costs remain constant regardless of the amount of production, the marginal cost of the extra unit comprises solely variable costs, such as direct material, direct labour,

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Q.2. The competing companies, S Ltd. and R Ltd., produce and sell the same type of product in the same market. For the year ended March 2023, their forecasted profit and loss accounts are as follows: [S Ltd.: Sales Rs.6,00,000; Variable Cost Rs.4,00,000; Fixed Cost Rs.1,00,000; Total Cost Rs.5,00,000; Profit Rs.1,00,000]. [R Ltd.: Sales Rs.6,00,000; Variable Cost Rs.4,50,000; Fixed Cost Rs.50,000; Total Cost Rs.5,00,000; Profit Rs.1,00,000]. You are required to calculate: 1. P/V ratio and Break-even in sales (Rs.) of both the firms. 2. State volume at which each business will earn a profit of Rs.60,000. (4+6 = 10 Marks)

Ans 2.

P/V Ratio and Break-Even Analysis

The P/V Ratio shows the relation between sales and contribution. It shows the percentage of every sales rupee is available to cover fixed expenses, and also generate profits. An increase in the P/V ratio is a sign of better earning capacity and greater effectiveness in managing costs, due to the fact that a greater

 

Q.3. Explain the points of differentiation of management accounting with cost accounting and financial accounting. (10 Marks)

Ans 3.

Management Accounting vs Cost Accounting

Management accounting is a larger field that includes cost accounting as well as covers a wide range of making, planning and management activities like budgeting, evaluation of financial performance as well as strategic planning. Cost accounting, by contrast, focuses specifically on the precise record, classification, distribution and evaluation of the cost related to the manufacturing of services and goods. Cost accounting provides the cost data that management accounting makes use

 

Set – 2

 

Q.4. Analyse the objectives of a funds flow statement and evaluate how a funds flow statement differs from a cash flow statement. (5+5 = 10 Marks)

Ans 4.

Objectives of a Funds Flow Statement

A funds flow statement or statement of sources and the application of funds or statement on adjustments in working capital is a financial tool that records the movement of cash (changes of working capital)

 

 

Q.5. The comparative statements of Income and Financial position are given below. You are required to calculate the following ratios for both years: 1) Current ratio, 2) Acid test ratio, 3) Debtors’ Turnover Ratio, 4) Average collection period, 5) Stock turnover ratio. (Assume 360 days in a year.) (10 Marks)

Ans 5.

Ratio Analysis – Concept and Significance

Ratio analysis can be a significant technique of analysis of financial statements which is utilized to determine the general performance and financial health of any business. It’s about examining the relation to various numbers in financial statements like the income statement as well as the balance sheet. In converting huge amounts of financial information into clear and meaningful connections,

 

Q.6. Describe the components of responsibility accounting. Also, explain the advantages and limitations of responsibility accounting. (2+4+4 = 10 Marks)

Ans 6.

Components of Responsibility Accounting

Responsible accounting is a control system that focuses on the management of individual managers who are accountable for certain segments of the organization, and ensuring that every manager accountable for profits, revenues, and costs profit generated within their region of control. It is founded on the notion that managers are evaluated only on factors within their