Dear students, get
fully solved assignments of NMIMS University for December 2020 batch.
Do send your query
at:
Call us at:
08263069601
NMIMS Global
Access
School for Continuing
Education (NGA-SCE)
Course:
Strategic cost management
Internal
Assignment Applicable for September 2020 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 aspossible.
·
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 theirassignments, 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
otherstudents is not allowed.
·
Students
should follow the following parameter for answering the assignment questions.
|
For Theoretical Answer |
|
For Numerical Answer |
||
|
Assessment
Parameter |
Weightage |
Assessment
Parameter |
Weightage |
|
|
Introduction |
20% |
Understanding and usage of the formula |
20% |
|
|
Concepts and Application related to the question |
60% |
Procedure / Steps |
50% |
|
|
Conclusion |
20% |
|
Correct Answer & Interpretation |
30% |
Ques.
1. “Beautiful Masks” is a start-up manufacturing designer masks for men and
women set up in April’ 20 post COVID. It is managed by Ms Meher. She is facing
a huge demand for her designer masks from Retail outlets and on their Online
store as well. She wants to understand the correct approach for pricing the
masks. She has appointed you as the management accountant. Please advise her
regarding the key factors affecting pricing decisions, both internal and
external. Also, suggest any 3 types of pricing methods she can choose from
highlighting 2 salient features of each method.
Answer: Pricing
The
pricing decision is one of the most crucial decisions which the managementhas
to take. The term pricing refers to the assignment of a selling price to
aproduct produced or a service provided by a firm. Of course, sometimes theterm
price is used for the purchase price of some resource acquired by a
firm.However, in such a case, it should more precisely be termed as cost to
thepurchasing firm.Pricing is not a onetime affair. It may have to be revised
from time to time.It, thus, requires dynamic decision-making, keeping in mind
the market behaviour,management needs, legal restrictions and social
environment. The price of aproduct may thus vary over time, classes of
customers and places. However,while pricing, the basic premise of maximizing
contribution towards meeting thefixed costs, does not change.
Ques.
2. Mr Chopra is the CEO of Tasty packaged Foods. They manufacture various
products like potato fries, samosas etc. Post covid, the company is under
revenue pressure due to the reduced demand for packaged food. Like every other
business, the short term decision making process in this business is also a
process of selecting the best amongst various alternatives considering the cost
benefit factors and impact on overall profitability of the firm. These could
involve accepting or rejecting a special order, making or buying decisions,
product mix decisions etc. These decisions require different analysis like
Contribution margin analysis, relevant and irrelevant cost analysis. Please
describe any 3 of these short term decision strategies with salient features.
Answer: Short
term decision strategies
Accepting
or rejecting order
Both
manufacturing and service companies often receive requests to fill special
orders. These special orders are typically for goods or services at a reduced
price and are usually a one-time order that, in the short-run, does not affect
normal sales. When deciding whether to accept a special order, management must
consider several factors:
·
The capacity required to fulfill the special
order
·
Whether the price offered by the buyer will
cover the cost of producing the products
·
The role of fixed costs in the analysis
·
Qualitative factors
Ques.
3. Make vs Buy Harish Aggarwal, A management accountant with Car Udyog is
evaluating whether a component MTR2000 should continue to be manufactured by
Car or purchased from Outside Vendor company. Outside Vendor has submitted a
bid to manufacture and supply the 32000 units of MTR 2000 that Car udyog will
need for 2021 at a selling price of Rs 173 Harish has gathered the following
information regarding Car Udyog's costs to manufacture 30000 units of MTR-2000
IN 2020
|
Direct Materials |
19,50,000 |
|
Direct Manufacturing Labour |
12,00,000 |
|
Plant space rental |
8,40,000 |
|
Equipment leasing |
3,60,000 |
|
Other manufacturing overhead |
22,50,000 |
|
Total Manufacturing costs |
66,00,000 |
Harish
has also collected the following information related to manufacturing MTR 2000:
a. Prices of direct materials used in the production of MTR 2000 are expected
to increase by 8% in 2021
b.
Car Udyog's direct manufacturing labour contract calls for a 5% increase in
2021
c.
Car Udyog can withdraw from the plant space rental agreement without any
penalty. Car Udyog will have no need for this space if MTR 2000 is not
manufactured
d.
The equipment lease can be terminated by paying Rs 60,000/-
e.
40% of the other manufacturing overhead is considered variable. Variable
overhead changes proportionately with the number of units produced. The fixed
component of other manufacturing overheads is expected to remain the same
whether or not MTR 2000 is manufactured
Required:
a.
On the basis of the financial information Harish has obtained, calculate the
cost of making MTR 2000 inhouse in 2021? Please share calculations
b.
Please compare with the cost of outsourcing the product and whether it is
profitable to buy or manufacture MT 2000?
Answer: a) Cost
of making MTR 2000 inhouse in 2021
Total Costs for 32,000 Units
Direct
materials (Rs.19,50,000x1.08)x32,000/30,000 22,46,400
Direct
manufacturing labor (Rs.12,00,000x1.05)x32,000/30,000 13,44,000
Factory
space rental 8,40,000
Equipment
leasing costs 3,60,000
Dear students, get
fully solved assignments of NMIMS University for December 2020 batch.
Do send your query
at:
Call us at:
08263069601
No comments:
Post a Comment
Note: only a member of this blog may post a comment.