Strategic Cost Management NMIMS Assignment December 2024

NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Strategic Cost Management
Internal Assignment Applicable for December 2024 Examination
Assignment Marks: 30
Instructions:
 All Questions carry equal marks.
 All Questions are compulsory
 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.
 All answers to be written individually. Discussion and group work is not advisable.
 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.
 Students should write the assignment in their own words. Copying of assignments from other students is not allowed.
 Students should follow the following parameter for answering the assignment questions.
1) With the following information, calculate: (10marks) a) Contribution b) PV Ratio c) BE Ratio (in no. of units and value) d) MOS at actual sales of Rs. 9,00,000/-
e) Number of watches to be sold to get a profit of Rs. 18,000/- Amt. in Rs.
Sale Price
Per unit
10,000
Raw Material
Per unit
5,000
Power
Per unit
500
Factory Wages (variable)
Per unit
1,000
Rent
Per month
80,000
Salaries
Per Month
1,00,000
Telecom and Printing
Per month
45,000
Travel
Per Month
25,000
2) Pritam owns a glass factory and is in the business of making cups and glasses. He gets an order to supply 20,000 nos. of a specific type of glass. The variable cost to make the glass totals to about Rs. 45 per glass and the total fixed cost is Rs. 3,00,000.
How should Pritam price his glasses under:
a. Cost Plus Pricing to earn a profit of 10%
b. Variable Cost Plus contribution to earn a contribution margin of 20%.
Compare the results and discuss under what situation each type will be beneficial.
Which of the two methods will Pritam choose if he has surplus capacity to manufacture the glasses without incurring any additional fixed cost. (10 marks)
3)
a) Divya went to Dhanalaxmi Bank to get a loan for her Business Needs. As the Loan approving officer of the Bank, which ratios shall you look at to establish that it is safe to give Divya a loan, considering her capacity to repay the loan back along with the interest? Explain any two ratios along with their formula.
(5 Marks)
b) With the following information, prepare the Budgeted Profit for the year for Company PQR Ltd. (5 marks)
UoM
P
Q
R
S
No. of Units
Nos. in ‘000s
20
30
40
100
Sales Price
Rs./Unit
100
50
25
45
Variable Costs
Rs./Unit
40
20
5
25
Fixed Costs
Rs.
200,000
In addition to the above, each unit has semi-variable expenses of power, which are Rs. 150,000 for all products put together and @ Rs. 10 per unit of production beyond it.
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