Strategic Cost Management | NMIMS Assignment Help June 2023 Questions
1) The following information is available for a watch showroom. Calculate the following:
b) PV Ratio
c) BE Ratio (in no. of units and value)
d) MOS at actual sales of Rs. 6,00,000/-
e) Number of watches to be sold to get a profit of Rs. 20,000/-
|Sale Price||Per unit (Rs.)||9800|
|Variable Costs||Per unit (Rs.)||4905|
|Commission (variable)||Per unit (Rs.)||500|
|Rent||Per month (Rs.)||100000|
|Salaries||Per Month (Rs.)||120000|
2) A Factory produces 3 types of shoes. While producing, for switching over from one type to another, there is a shift-over process involved. Costs incurred are as follows:
Shift-over costs Rs. 50,000
Factory Overheads Rs. 1,00,000/-
Packing costs Rs. 20,000/-
Engineering Costs Rs. 30,000/-
Supervisor Costs Rs. 10,000/-
Quantity produced A- 1000, B – 2000, C- 4000
Allocate the costs to the 3 shoes (A, B and C) using Traditional Costing method and Activity Based Costing. Some other information of the 3 products is as under:
|No. of Switches||3||4||2|
|No. of Receipts / packs||4||5||8|
|Supervisor Hours spent||10||12||10|
Compare the results and discuss.
3) a) Prepare a Cash Budget with following information.
|Selling Price (per Unit)||80||64||100|
|Variable Cost ( per Unit)||20||23||35|
|Allocation of General Overhead||280000||320000||200000|
b) A firm faces a decision about replacement of a machine.
Following is the information available:
1. Depreciation of existing machine is Rs. 25000/- p.a.
2. A new machine is available at Rs. 45000/- that is much more efficient in production.
3. Increase in power cost due to the new machine is Rs. 5000/- p.a.
4. Rent of the factory building is Rs. 60000/- p.a.
5. Scrap Value of the old machine is Rs. 4000/- Identify which of the above information is relevant and which is not relevant for taking the decision whether to continue with the existing machine or use new one.