Cost & Management Accounting - NMIMS

 

 

Hello MBA aspirants,

Get MBA assignments of NMIMS University solved by educational professionals at a nominal charge.

Mail us at: help.mbaassignments@gmail.com

Call us at: 08263069601

 

Cost & Management Accounting

Dec 2020

 

 

1. Excellent Clothing Company is run by MsDilnaz and her son, Burzin. They manufacture dresses for women and have diversified into the production of masks since April’20 to take advantage of the huge demand for masks due to the recent COVID-19 impact. Till now the decisions were taken on an adhoc basis by the promoters. However, given the phenomenal growth in business, they understand the importance of having formal processes in place.

 

You were hired as the Management accountant to enable them to formalize the decision-making process in the company.

 

Please advise them regarding the significance and components of the following 3 key steps involved in Decision making process of a company:

a) Planning

b) Directing

c) Controlling (10 Marks)

 

SOLUTION:

Introduction:

The decision-making process is an essential part of the business organization. The owners and management of the organization must make accurate and correct decisions. It will ensure that the business is run effectively and efficiently, thereby generating profits. If the decision is not appropriate

 

2. Marginal Costing is a key tool used by Managements for Cost-Volume- Profit analysis enabling comparative assessment of 2 or more products / divisions. However, Absorption costing is the preferred method of accountants as it is a recognized and accepted practice for external reporting.

 

Please describe the differences between Marginal Costing and Absorption costing (Any 5). (10 Marks)   

 

SOLUTION:

Introduction:

Marginal Costing is a technique to analyze the relationship between volume, cost, and profit. It increases with the increase in the quantity of production. It advocates the theory of incremental cost of production. That means with every rise in the amount of production, the cost of production will increase

3. WRITERS' Company

 

Writers' Company produces 2 products presently The information related to manufacturing is given below.

 

 

 

3,00,000,00   WRITERS’ Company                                          Yr 2018-19                                                                              Fountain                                                                                Pen                 ball point Unit                                                                        10000                     20000 Area occupied (sq feet)                                        7000                      8000 Variable cost - direct                                                 32                             25 Fixed cost - direct (per unit)                                    10                               8   Rent – fixed cost per Month(indirect – common for all products)

 

 

The Fixed indirect cost of Rent of Rs 3,00,000/- is to be allocated to both the products

The company was doing this on the "number of units" basis till now.

 

a. Please compute cost per unit of each product basis the above method.

 

You have researched and advised Writers' Company to have Activity Based Costing and have gathered data to support the allocation of the Fixed indirect cost as follows :

 

Break-up of Indirect Fixed Costs                        Allocation basis

 

Rent

3,00,000

Area of operations

 

(5 Marks)

Introduction

The traditional method of costing is also known as the conventional method of costing, in other words. In this method, the fixed costs are assigned or allocated to the product based on the volume. For example,

              Hello MBA aspirants,

Get MBA assignments of NMIMS University solved by educational professionals at a nominal charge.

Mail us at: help.mbaassignments@gmail.com

Call us at: 08263069601