NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Strategic Cost Management
Internal Assignment Applicable for December 2024 Examination
Assignment Marks: 30
Instructions:
ï‚· All Questions carry equal marks.
ï‚· All Questions are compulsory
ï‚· All answers to be explained in not more than 1000 words for question 1 and 2 and for
question 3 in not more than 500 words for each subsection. Use relevant examples,
illustrations as far as possible.
ï‚· All answers to be written individually. Discussion and group work is not advisable.
ï‚· Students are free to refer to any books/reference material/website/internet for attempting
their assignments, but are not allowed to copy the matter as it is from the source of
reference.
ï‚· Students should write the assignment in their own words. Copying of assignments from
other students is not allowed.
ï‚· Students should follow the following parameter for answering the assignment questions.
1) The following information is available for a watch showroom.
Calculate the following: (10marks)
a) Contribution
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:
A B C
No. of Switches 3 4 2
Machine Hours 20 18 15
No. of Receipts / packs 4 5 8
Engineering Hours 30 40 50
Supervisor Hours spent 10 12 10
Compare the results and discuss. (10 marks)
3)
a) Prepare a Cash Budget with following information. (5 marks)
Diary Notebook
Spiral
Bound
Sales Units 8750 12500 5000
Selling Price (per Unit) 80 64 100
Variable Cost ( per Unit) 20 23 35
Fixed Cost 65000 140000 95000
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. (5 marks).
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