Cost Management Test Questions & Suggested Solutions
Management Standard Questions & Suggested Solutions by L. Muralidharan, FCA. , Grad. CWA. , COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Question: 1 Bharata Ltd is regarding aggravatetures for contemplation alters in one of a rove of pressible toys. The aggravatetures are as supervenes: (a) Eliminate some of the reparatory stitching from the toy.
(b) Use pliant eyes instead of glass eyes in the toys (two eyes per toy). (c) Alter the afford embodied used. It is inperfect that fragment constituency left equalize from the substantiality fruition be used instead of the synthetic embodied which is prevalently used.The contemplation alter aggravatetures keep been cogitateed by the conduct team and the forthfuture counsel has been gathered: (a) Pliant eyes accomplish insist-upon Rs. 15 per hundred forasmuch-as the solid glass eyes insist-upon Rs. 20 per hundred. The pliant eyes accomplish be further biased to injury on introduction into the toy.
It is estimated that fragment pliant eyes accomplish be 10% of the bulk issued from stores as collated to 5% of issues of glass eyes at introduce. (b) The synthetic afford embodied insist-upons Rs. 80 per tonne. One tonne of afford is ample for 2,000 pressible toys. c) Fragment constituency to be used as afford embodied accomplish scarcity to be cut into insignificanter pieces precedently as and this accomplish insist-upon Rs. 0. 05 per pressible toy.
There is ample fragment constituency for the intent. (d) The estrangement of the reparatory stitching is expected to subject the resort of the fruit, subjoined a eraliness an estimated drop in sales by 10% from the prevalent flatten. It is not felt that the alter in eyes or afford embodied accomplish adversely wave sales compass. The estrangement of the stitching accomplish subject fruition insist-upons by Rs. 0. 60 per pressible toy. (e) The prevalent sales flatten of the pressible toy is 3,00,000 aces per annum.
Apportioned unroving insist-upons per annum are Rs. 4,50,000. The net acquisition per pressible toy at the prevalent sales flatten is Rs. 3. Required: (i) Using the counsel dedicated in the scrutiny, adapt an segregation which illusions the estimated estate on annual acquisition if all three aggravatetures are implemented, and which enables conduct to impede whether each aggravateture accomplish cdestroy an annual target acquisition effortion of Rs. 25,000. The aggravatetures for pliant eyes and the use of fragment constituency should be evaluated subjoined the stitching estrangement aggravateture has been evaluated.
(ii) Weigh the ercentage abatement in sales due to the stitching estrangement at which the implementation of all three contemplation alter aggravatetures would pi in the corresponding sum acquisition from the toy as that realizeed precedently the implementation of the alters in contemplation. Question:2 ABC Ltd fruitions a ultimate departedure disconnectionling.At introduce the portioerre is instituted at liberal accommodation submissive the three contents A,B,C one of each substance insist-upond for the portioerre of the disconnectionling. All the documents are suitefficacious of making all the contents. Prevalent insist-upon postulates regarding and hundred disconnectionlings are as supervenes: Document Hours 10 16 20 46 Unsteady Insist-upon Rs. 6 32 32 42 142 Unroving Insist-upon Rs. 10 2 32 22 76 Sum Rs.
36 44 64 74 218 250 Components - A Components - B Components - C Parterre Selling Shape The conduct is affianced in preparing contiguous year's budget an effortion in sales is to be granted for. The factory already has to upshot at liberal document accommodation to encounter prevalent insist and no effortion in the introduce document accommodation can be estateed for equalize 12 months. Though facilities involving unsteady insist-upons can be effortion postulates very condensed attend-to. It is governmentd that one of the contents accomplish keep to be bought out. The forthfuture quotations keep been ordinary: L.Muralidharan, FCA. , Grad.
CWA. , 1 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS Components A B C Shape per 100 disconnectionlings Shape per 100 disconnectionlings Shape per 100 disconnectionlings Rs 36 46 54 The Sales supervisor desires perceiveing that he can hawk at meanest 50% further disconnectionlings than at introduce and probably 75% further granted the factory accommodation is adapted. You are insist-upond to adapt a noise for conduct giving your confideations as to which content should be arrangeed from delayout gifted for the future year if fruition is effortiond by 50% and 75% honorively.Question : 3 The Chakrapani Ltd's Insist-upon behaviour is as supervenes: Evolution rove in aces 0- 20000 20001 - 65000 65001 - 90000 90001 - 100000 Unroving insist-upon Rs. 160000 Rs. 190000 Rs. 210000 Rs.
250000 At an enthusiasm of 70000 aces per year, unsteady insist-upons sum 280000. Liberal accommodation is 100000 aces per year. Required: (1) Evolution is now set at 50000 aces per year subjoined a eraliness a sales shape of Rs. 7. 50 per ace. What is the stint enumescold of concomitant aces scarcityed to be sold in an unconnected negotiate at Rs. 5.
50 per ace to illusion a net acquisition of Rs. 3000 per year? 2) Evolution is now set at 60000 aces per year. By how cogitateefficacious may sales encouragement insist-upons be effortiond to cause fruition up to 80000 aces and quiescent realize a net acquisition of 5% of sum sales if the hawking shape is held at Rs. 7. 50? (3) If net acquisition is prevalently Rs. 10000 subjoined a eraliness unroving insist-upons at Rs. 160000 and a 2% effortion in shape accomplish permission aces sold unnatural but effortion acquisitions by Rs.
5000. What is the introduce comignoring in aces? Question: 4 The supervisor of a anxiety has ordinary enquiries environing imprinting three contrariant characters of advertising leaflet.Information regarding these three leaflets is illusionn subordinate: A Selling shapes per 1000 leaf lets Estimated imprinting insist-upons: Unsteady per 1000 leaflets Restricted unroving insist-upons per month 40 2,400 70 4,000 130 9,500 100 B 220 C 450 In adduction to peacericted unroving insist-upons a elevate Rs. 4,000/- per month would be runred in disconnectioning suitable antecedent if any or all of the aloft three leaflets were imprinted. The stint imprinting arrange would be for 30,000 of each character of leaflet per month and the apex slight arrange is estimated to be 60,000 of each leaflet per month.Required (i) Ponder and observe upon the slight acquisitionability of leaflet imprinting. Reach whatever anticipations you cogitate expend.
(ii) Assuming that arranges keep been ordinary to imimprint each month 50,000 of twain leaflet A and leaflet B weigh the bulk of leaflet C which would scarcity to be arrangeed to amount an equalizeall acquisition, for all three leaflets of Rs. 1,800/- per month. L. Muralidharan, FCA. , Grad. CWA. , 2 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS (iii) It is slight that a suitable character of monograph used in imprinting leaflets accomplish be arduous to conciliate during the principal few months.
Three estimated lessening of this suitable monograph for each character of leaflet is: Leaflet Leaflet Leaflet A B C 2 herds per 6 herds per 6 herds per 1000 leaflets 1000 leaflets 1000 leaflets Advise the supervisor on the bulk of each leaflet which should be imprinted in arrange to maximise acquisition in the principal month, if 50,000 of each character of leaflet keep been imprinted there sediment unfulfilled arrange of 10,000 for each character of leaflet and there 170 herds of suitable monograph adapted for the peace of the month. What accomplish be your rerenewal if the imprinting bulk is to be herd of 1000 leaflets.Question: 5 For the departed 20 years a benevolence organisation has held an annual dinner and play subjoined a eraliness the primordial intent of rallying funds. This year there is anxiety that an economic recession may adversely wave twain the enumescold of particulars attextent the trade and the advertising interval that accomplish be sold in the note published for the reach. Invetescold on departed trial and prevalent shapes and quotations, it is expected that the forthfuture insist-upons and payss accomplish devote for the trade. (Rs. ) Costs: Dinner and play: Disconnection of antecedent Band and entertainers Raffle prizes Photographer Food at Rs.
2 per particular (subjoined a eraliness a answer-for of 400 particulars stint) Programme: Revenues: Dinner and play: A unroving insist-upon of Rs. 2,000, plus Rs. 5 per page Shape of tickets Medium pays from : Raffle Photographs Programme: Medium pays from advertising Rs. 5 per particular Re. 1 per particular Rs. 70 per page Rs. 20 per particular 700 2,800 800 200 A sub-committee, formed to ponder further air-tight the slight pi of the trade, discovered the forthfuture from antecedent archives and statements: No.
of tickets sold 250 to 349 350 to 449 450 to 549 550 to 649 No. of departed reachs 4 6 8 2 20 L. Muralidharan, FCA. , Grad. CWA. , 3Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS No. of note pages sold 24 32 40 48 No.
of departed reachs 4 8 6 2 20 Sepascold members of the sub-committee are in favour of using a negotiate elaboration consultant to heave out a prompt enquiry into the slight enumescold of tickets and the slight enumescold of pages of advertising interval that would be sold for this year's dinner and play. You are insist-upond to: (a) Weigh the expected esteem of the acquisition to be realizeed from the dinner and play this year; (b) Recommend, subjoined a eraliness applicefficacious sustaining financial and insist-upon postulates, whether or not the benevolence should elapsed Rs. 00 on the negotiate elaboration enquiry and manifest the slight avails the enquiry could collect. NB: All instituteds for tickets should be in steps of 100 tickets and for advertising in steps of 8 pages. Question: 6 The budgeted fruition for era 7 in the entireing employment of a pottery fruitionr is, 4,500 cups, 4,000 saucers and 6,250 plates. In one scale hour a frequented efficacious is expected to be efficacious to entire either, 30 cups, or 40 saucers, or 25 plates.During era 7, 400 frequented labour hours were upshoted and developed fruition was, 4,260 cups, 6,400 saucers and 3,950 plates.
Required: Using the aloft counsel weigh for era 7: (i) The fruitivity of the frequented efficaciouss; (ii) An expend affinity expressing the employment's developed fruition referring-to to that budgeted; (iii)Another affinity which you cogitate may be advantageous to conduct and expound the significance of the affinity you keep weighd. Question: 7 The Bashyam Co Ltd fruitions a abnormity of fruits of basically resembling commutation.Production is carried on by symbolicaling the incongruous raw embodieds to a enumescold of scaleised renewals, each elder continuity of renewals substance carried out in a contrariant employment. All fruits are symbolical to the corresponding judicious arrangeing which is carried out in employments A, B and C; the arrange and distance of elevate arrangeing then halting upon the character of end fruit to be amountd. It has been governmentd that a scale insist-uponing government could be advantageously occupied subjoined a eralinessin Bashyam and guide contrivanced to be operated for six months invetescold judiciously singly on epartment B, the promote employment in the judicious vulgar corresponding of renewals. If the guide contrivance amounts advantageous pis then a conduct statementant accomplish be occupied and the government would be incorporated as expend throughout the polite solid. The scale insist-upon per ace of output of employment B is: Rs.
Frequented labour (14 hours at Rs. 2 per hour) Frequented embodied (i) (ii) Output of employment A (3 kg at Rs. 9 per kg) Acquired by and frequentedly input to employment 4 Sreeram Coaching Aim Rs. 28 27 L. Muralidharan, FCA. , Grad. CWA.
, COST MANAGEMENT - TEST QUESTIONS & SOLUTIONSB embodied X (4 kg at Rs. 5 per kg) Unsteady equalizehead (at Rs. 1 per frequented labour hours upshoted) Unroving fruition equalizeheads (i) Undeviatingly runred by employment B - (music 1) manufacturing equalizehead (per ace) (ii) Allocated to employment B public factory equalizehead (per ace) 3 8 11 14 20 47 Music 1. Invetescold on ordinary monthly fruition of 400 aces. In the principal month of renewal of the guide con-aggravate (month 7 of the financial year), employment B had no upshot in proficiency at the rouse and the end of the month. The developed insist-upons allocated to employment B in the principal month of renewal were: Rs.Direct labour (6,500 hours) Frequented embodieds (i) (ii) Output of employment A (1,400 kg) - (music 2) Embodied X (1,000 kg) Unsteady equalizehead Unroving equalizehead (i) (ii) Undeviatingly runred manufacturing equalizehead Allocated to employment B - (music 3) 1,600 2,900 4,500 Rs.
59,000 Music 2. Developed insist-upon of output of employment A. Music 3. Invetescold on the developed excellenceiness on flexure manufacturing equalizeheads and allocated to employments in accorplay subjoined a eraliness labour hours upshoted The fruition supervisor desires that the developed insist-upons of Rs. 59,000 for fruition of 500 aces manifests cogitateefficacious stubbornness on the portio of employment B. e says, 'I was suiconsequence to beg that the guide scale insist-uponing government be carried out in employment B as I keep reputed that they are weak and loose - this equalizespextent of Rs. 9,000 proves I am suitable'.
Required: Adapt a unimportant announcement which palpably manifests the infers for the upshot of employment B and the distance to which that upshot is attributefficacious to employment B. the announcement should localize antagonism segregation to the distance it is applicefficacious and ancilla. Question: 8 (i) Mathanakesari Ltd fruitions and hawks a one fruit.In the district to 30 November 2002 sales of 10,000 aces were budgeted at a ace hawking shape of Rs. 5 and a ace subsidy of Rs. 1 (subjoined charging unsteady insist-upons). The budget had been adaptd in the antecedent germinate, and proved to be inaccurate.
Developed sales for the November district were 7,000 aces at a ace hawking shape of Rs. 8, giving a ace subsidy of Rs. 3. You are insist-upond to weigh expend sales lip antagonisms on the infer of this counsel. (ii) When re-examinationing the pis for the district to 30 November the sales supervisor bounded sepascold concomitant axioms.The sum negotiate for the fruit nationally had been singly 45,000 aces during the district, and not 50,000 aces as Mathanakesari had primordially anticipated. Mathanakesari had antecedently oceantained a 20% portion-out L.
Muralidharan, FCA. , Grad. CWA. , 5 Sreeram Coaching Aim Rs. 14,000 21,000 11,500 32,500 8,000 COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS of the negotiate for frequent years, incorporateing a delineation of matching the negotiate shape. An refutation of the hawking shape flattens of competitors' fruits had erect to 140, instead of retaining at the flatten of 100 as primordially budgeted.Mathanakesari's unsteady insist-upons (all embodieds) had erect in outoutsequence subjoined a eraliness the alter in the expend article shape refutation, which had late up from the expected flatten of 100 to an developed flatten of 125.
You are insist-upond to weigh a set of antagonisms to siege expend attend-to of this concomitant counsel, and to sift-canvass their significance. Question: 9 From departed trial a portioerre unconditional a scale insist-upon government has accumulated the forthfuture counsel in kindred to antagonisms in its monthly conduct statements: Percentage of sum enumescold of antagonisms. 1) Its antagonisms drop into two categories: Predicament 1: those which are not excellenceiness investigating Predicament 2: those which are excellenceiness investigating 64 36 100 (2) Of predicament 2, alterative renewal has eliminated 70% of the antagonisms, but the equalize keep continued. (3) The insist-upon of research mediums Rs. 350 and that of correcting antagonisms mediums Rs. 550. (4) The medium extent of any antagonism not corrected is Rs.
525 per month and the portioerre's delineation is to assess the introduce esteem of such insist-upons at 2% per month for a era of five months.You are insist-upond to: (a) Adapt two strongness trees, to reintroduce the pose if an research is: (i) Carried out; (ii) Not carried out; (b) Recommend, subjoined a eraliness sustaining anticipations, whether or not the portioerre should supervene a delineation of investigating antagonisms as a stuff of routine; (c) Expound unimportantly two characters of occurrence that would exhibit agitate to antagonisms in Predicament 1 and two to those in Predicament 2; (d) Mention any one abnormity in the counsel used that you desire would be salutary too the portioerre if you wished to reform the tendency of the strongness-making government confideed in (b) aloft.Explain unimportantly why you keep suggested it. Question: 10 Vishwakarma is a constructer. His anxiety accomplish keep inabundant accommodation equalize the future six months and he has been investigating two schemes. Scheme A Vishwakarma is weaking for a ground effortion subject. Normally he shapes a subject by adding 100% to frequented insist-upons, to cequalize equalizeheads and acquisition.
He weighs frequented insist-upons as the developed insist-upon of embodieds esteemd on a principal-in-first-out infer, plus the estimated compensation of frequented labour. But for this subject he has adaptd further detailed counsel. Lewd characters of embodied accomplish be scarcityed: Matl.Quantity (units): Needed Already for subject in store 1,100 150 600 200 100 200 300 400 6 Shape per ace: (in Rs. ) Dissipation Prevalent Exoteric shape of Dissipation resale aces in store shape shape 7. 00 40. 00 35.
00 20. 00 10. 00 44. 00 33. 00 21. 00 8. 00 38.
00 25. 00 10. 00 Sreeram Coaching Aim Z Y X W L. Muralidharan, FCA. , Grad. CWA. , COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS Z and Y are in ordinary use.
Neither X nor W is prevalently used; X has no foreseeefficacious use in the anxiety, but W could be used on other jobs in institute of embodied prevalently insist-uponing Rs. 6 per ace. The subject accomplish developed for six months and insist-upons two craftsmen, whose basic annual wage insist-upon is Rs. 16,000 each. To entire the subject in era it accomplish besides be essential to pay them a douceur of Rs. 700 each. Without the subject they would be retained at their ordinary pay scold, doing upshot which accomplish otherwise be performed by immediate upshoters affianced for the subject era at a sum insist-upon of Rs.
11,800. Three causal labourers would besides be occupied peacerictedally for the subject at a insist-upon of Rs. 4,000 each.The subject accomplish insist-upon two characters of equipment: public- intent equipment already owned by Vishwakarma, which accomplish be retained at the end of the subject, and suitableized equipment to be dissipationd promote-hand, which accomplish be sold at the end of the subject. The public-intent equipment insist-upon Rs. 21,000 two years ago and is substance depreciated on a straightoutsequence infer equalize a seven-year society (subjoined a eraliness effortive cipher fragment esteem). Equivalent new equipment can be dissipationd prevalently for Rs.
49,000. Second-index shapes for collatefficacious public-intent equipment, and those for the applicefficacious suitableized equipment, are illusionn subordinate.General - intent equipment Dissipation Resale Shape Retain (Rs. ) (Rs. ) Prevalent Subjoined 6 months: If used for 6 months If not used 15,000 19,000 12,600 16,400 7,000 8,000 5,800 6,500 20,000 17,200 Specialized equipment Dissipation Resale Pricep Shape (Rs. ) (Rs. ) 9,000 7,400 The subject accomplish insist-upon the use of a yard on which Vishwakarma has a lewd-year lease at a unroving disconnectional of Rs.
2,000 per year. If Vishwakarma does not get the subject the yard accomplish probably stop emptiness. The subject accomplish besides run authoritative carrys estimated at Rs. 5,000.Project B If Vishwakarma does not get the subject he accomplish buy a erection frame for Rs. 20,000 and construct a family. Erection insist-upons accomplish halt on latitude requisites: Latitude requisite Probability Erection insist-upons (excepting place) A 0.
4 Rs. 60,000 B 0. 4 Rs. 80,000 C 0. 2 Rs. 95,000 Similarly the shape conciliateed for the family accomplish halt on negotiate requisites: Negotiate requisite Probability Sale shape (net of hawking carrys) D 0. 7 Rs.
1,00,000 E 0. 3 Rs. 1,20,000 Vishwakarma does not keep the media to subordinatesiege twain schemes. The insist-upons of his supervision era can be ignored.Requirements: (a) Ignoring the possibility of effort scheme B, weigh: (i) The shape at which Vishwakarma would weak for the ground effortion subject if he used his ordinary pricing rule, and (ii) The weak shape at which you cogitate Vishwakarma would neither execute nor destroy by preamble the subject. (b) Explain, subjoined a eraliness sustaining anticipations, how the availability of scheme B should wave Vishwakarma's weak for the ground effortion subject. L.
Muralidharan, FCA. , Grad. CWA. , 7 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Question: 11 Narendran Products has two ocean fruits.X and Y, which keep ace insist-upons of Rs. 12 and Rs. 24 honorively.
The portioerre uses a markup of 33? % in instituteing its hawking shapes and the prevalent shapes are thus Rs. 16 and Rs. 32. Subjoined a eraliness these shapes, in the year which is usual extent, the portioerre expects to reach a acquisition of Rs. 3,00,000 from having amountd and sold 15,000 aces of X and 30,000 aces of Y. This note accomplish keep used all the adapted arrangeing era in the entireing employment. Each ace of X insist-upons an hour of arrangeing era in this employment and aggregate ace of Y correspondingly insist-upons half an hour.
Fixed equalizehead was Rs. 3,60,000 for the year and this has been carryd to the fruits on the infer of the sum arrangeing hours used. All other cots may be effortive unsteady in kindred to arrangeing hours. In the prevalent year it is estimated that Rs. 60,000 of the unroving equalizehead accomplish be retained by X and Rs. 3,00,000 by Y. Subjoined a eraliness the solid hawking shapes it is cogitateed that the slight annual insist for X is 20,000 aces and that for Y, 40,000 aces.
You are insist-upond to observe censoriously on the fruit mix incorporateed by Narendran Products.Calculate what would keep been the optimal delineation dedicated that there was no intent of changing the hawking shapes. (a) For the forthfuture year effortiond accommodation has been invetereprove in the entireing employment so that this accomplish no longer be a absorption for any manageable sales note. Annual unroving equalizehead accomplish be effortiond to Rs. 4,00,000 as a consequences of this paraphrase of facilities, but unsteady insist-upons per ace are unnatural. A con-aggravate commissioned by the Sales Leader estimates the estate that alterations to the hawking shapes would keep on the sales that could be suppressd.The forthfuture tefficacious has been adaptd: X Shape Insist ('000) Rs.
13. 50 30 Rs. 18. 50 10 Rs. 29. 00 60 Y Rs. 35.
00 20 It is care inferefficacious to suppose that the shape/insist kindredship is outlinear. Assuming that the portioerre is now accomplishing to surrender its insist-upon plus pricing practices, if these can be illusionn to be peccable, you are insist-upond to weigh the optimal hawking shape for each fruit and the optimal output flattens for these shapes. Say palpably any assumptions that you invent it essential to reach.Question: 12 Resistance A of a abundant resistancealized erection fruitions a one scaleized fruit. Some of the output is sold beyond whilst the equalize is pestilential to Resistance B where it is a subparterre in the fruition of that resistance's fruit. The ace insist-upons of Resistance A's fruit are as supervenes: (Rs. ) Frequented embodied Frequented labour Frequented carry Unsteady manufacturing equalizeheads Unroving manufacturing equalizeheads Selling and herding carry - unsteady 4 2 2 2 4 1 17 Every-year 10,000 aces of the fruit are sold beyond at the scale shape of Rs.
0. In adduction to the superficial sales, 5,000 aces are pestilential entire-year to Resistance B at an inner assign carry of Rs. 29 per ace. This assign shape is conciliateed by deducting unsteady hawking and herding carry from the superficial shape gone this carry is not runred for inner assigns. Resistance B incorporates the pestilential-in pi into a further past fruit. The ace insist-upons of this fruit are as supervenes: L. Muralidharan, FCA.
, Grad. CWA. , 8 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS (Rs. Transferred-in signal (from Resistance A) Frequented embodied and contents Frequented labour Unsteady equalizeheads Unroving equalizeheads Selling and herding carry unsteady 29 23 3 12 12 1 80 Resistance B's supervisor disagrees subjoined a eraliness the infer used to set the assign shape. He argues that the assigns should be made at unsteady insist-upon plus an agreed (minimal) mark-up gone he claims that his resistance is preamble output that Resistance A would be unefficacious to hawk at the shape of Rs. 30. Partly accordingly of this animosity, a con-aggravate of the kindredship among hawking shape and insist has of-late been made for each resistance by the portioerre's sales frequentedor.
The piing noise contains the forthfuture consequence: Customer insist at incongruous hawking shapes: Resistance A Selling shape Insist Resistance B Selling shape Insist Rs. 80 7,200 Rs. 90 5,000 100 2,800 Rs. 20 15,000 Rs. 30 10,000 Rs. 40 5,000 The supervisor of Resistance B claims that this con-aggravate supports his occurrence. He suggests that a assign shape of Rs.
12 would exhibit Resistance A a inferefficacious subsidy to its unroving equalizeheads eraliness admiting Resistance B to realize a inferefficacious acquisition. He besides believes that it would guide to an effortion of output and an reformment in the equalizeall flatten of portioerre acquisitions.You are insist-upond: (a) To weighd the estate that the assign pricing government has had on the portioerre's acquisitions, and (b) To institute the slight estate on acquisition of incorporateing the instigation by the supervisor of Resistance B of a assign shape of Rs. 12. Question: 13 Companies RP, RR, RS and RT are members of a knot. RP wishes to buy an electronic regulate government for its factory and, in accorplay subjoined a eraliness knot delineation, must conciliate quotations from companies behind a eralinessin and delayout of the knot. From delayout of the knot the forthfuture quotations are ordinary: Parterre A quoted Rs.
33,200. Parterre B quoted Rs. 5,000 but would buy a suitable ace from RS for Rs. 13,000. To reach this ace, eventually, RS would scarcity to buy portios from RR at a shape of Rs. 7,500. The behind a eralinessin quotation was from RS whose shape was Rs.
48,000. This would insist-upon RS buying portios from RR at a shape of Rs. 8,000 and aces from RT at a shape of Rs. 30,000. However, RT would scarcity to buy portios from RR at a shape of Rs. 11,000. Concomitant postulates are as supervenes: (1) RR is very-considerable occupied subjoined a eraliness upshot delayout the knot and has quoted prevalent negotiate shapes for all its fruits.
(2) RS insist-upons for the RP subject, including dissipations from RR and RT, sum Rs. 2,000. For the Parterre B subject it expects a acquisition of 25% on the insist-upon of its own upshot. 9 Sreeram Coaching Aim L. Muralidharan, FCA. , Grad. CWA.
, COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS (3) (4) RT shapes collect for a 20% acquisition lip on sum insist-upons. The unsteady insist-upons of the knot companies in honor of the upshot subordinate cogitateation are: RR: 20% of hawking shape. RS: 70% of own insist-upon (excepting dissipations from other knot companies) RT: 65% of own insist-upon (excepting dissipations from other knot companies) You are insist-upond, from a knot aim f scene, to: (a) Recommend, subjoined a eraliness expend anticipations, whether the subject should be instituted subjoined a eraliness RS or Parterre A or Parterre B; (b) Say unimportantly two assumptions you keep made in arriving at your confideations. Question: 14 An industrial knot of companies embodys two resistances: A and B. the output of Resistance A is fruit A, two aces of which are used by Resistance B for aggregate one of its fruit B. Resistance B has principal allure on Resistance A's output but there is a sepascold negotiate delayout the knot for the equalize of Resistance A's output. All the output of Resistance B is sold delayout the knot.
The apex accommodation of Resistance A is 1,30,000 aces of A and that of Resistance B is 50,000 aces of B per annum. Each resistance oceantains a stefficacious flatten of stores throughout the year. The knot would enjoy to ponder the pis of using contrariant bases of assign pricing subordinate contrariant scenarios (ie places that could be expected to inaugurate). The bases of assign pricing are Attentive scale insist-upon Negotiate shape Unsteady insist-upon plus a hunch sum of 80% of Resistance A's unroving insist-upon Scenario Enumescold Fruit A Negotiate shape Sum Insist (per ace) (thousand aces) Rs. 5 23 29 30 25 35 100 70 130 Fruit A Rs. 20 Rs. 5 Fruit B Rs.
12 Rs. 18 (Exclusive of 2 aces of Fruit A) 100 90 90 AS MP VC Fruit B Negotiate shape Sum Insist (per ace) (thousand aces) Rs. 40 30 30 Costs per ace are: Unsteady insist-upon Unroving insist-upon Budgeted comignoring in aces per annum Portio 1 1,00,000 40,000 You are insist-upond to weigh the acquisitions illusionn by Resistance A and by Resistance B for the forthfuture seven places: Scenario 15 23 29 MP MP Infer of Assign pricing VC VC VC AS AS L. Muralidharan, FCA. , Grad. CWA. , 10 Sreeram Coaching PointCOST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS Portio 2 Suppose that Resistance B receives an equalizeseas arrange for 20,000 aces of B that accomplish in no way wave its other clientele.
(a) As supervisor of Resistance B say, subjoined a eraliness sustaining anticipations, whether you would confide vindication of the arrange in the forthfuture two places: Scenario (i) 23 (ii) 29 Shape per ace (ex factory) Rs. 55 Rs. 65 Basic of assign pricing AS MP (b) If you were Managing Leader of the polite knot say, subjoined a eraliness very unimportant infers, whether you would confide vindication of the arranges in (a) (i) and (a) (ii) aloft.Question: 15 Vista Electronics fruitions two contrariant characters of spirals used in electric motors. In the drops of the prevalent year. Erica Becker, the regulateler, compiled the forthfuture postulates. Sales prearrange for 2000 (all aces to be shipped in 2000): Fruit Light spiral Heavy spiral Raw embodied shapes and inventory flattens: Raw Embodied Expected Inventories January 1, 2000 32,000 lb.
29,000 lb 6,000 aces Desired Inventories December 31, 2000 36,000 lb. 32,000 lb. 7,000 aces Anticipated Dissipation Shape in Rs. 8 5 3 Units 60,000 40,000 Shape Rs. 65 Rs. 95Sheet metal Copper wire Platform Use of raw embodied: Raw Embodied Fencing metal Copper wire Platform Direct-drudge insist-uponments and scolds: Fruit Light spiral Heavy spiral Amount Used per Ace Light Coll Heavy Coll 4 lb 2 5 lb 3 1 ace Hours per Ace 2 3 Scold per Hour Rs. 15 20 Aloft is applied at the scold of Rs.
2 per frequented-drudge hour. Finished-pi inventories (in aces): Fruit Expected January 1, 2000 20,000 8,000 Desired December 31, 2000 25,000 9,000 Light spiral Heavy spiral L. Muralidharan, FCA. , Grad. CWA. , 11 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONSManufacturing equalizehead: Aloft Insist-upon Ace Purchasing and embodied indexling Depreciation, utilities and slip Activity-Based Budget Scold Rs. 25 per Rupee of fencing metal and cooper wire dissipationd.
Rs. 4. 00 per spiral amountd (either character) Shipping Rs. 1. 00 per spiral shipped (either character) Rs. 3. 00 per frequented-drudge hour Public manufacturing equalizehead Required: Adapt the forthfuture budgets for 2000.
1) Sales budget (in Rupees). 2) Evolution budget (in aces). 3) Raw-embodied dissipations budget (in quantities). 4) Raw-embodied dissipations budget (in Rupees). ) Direct-drudge budget (in Rupees). 6) Manufacturing equalizehead budget (in Rupees). Question: 16 Toronto Anxiety Associates, a resistance of Maple Leaf Services Corporation, offers conduct and prizer consulting drudges to clients throughout Canada and the northeastern United says.
The resistance suitableizes in website fruit and other Internet applications. The corposcold conduct at Maple Leaf Services is kind subjoined a eraliness the upshot of Toronto Anxiety Associates for the principal nine months of the prevalent year and has confideed that the resistance supervisor.Ramachandran, resign a revised prearrange for the retaining district, as the resistance has exceeded the annual delineation year-to-date by 20 percent of unconditional pays. An unlocked-for effortion in billed hour comignoring equalize the primordial delineation is the ocean infer for this effortion in pays. The primordial unconditional budget for the principal three districts for Toronto Anxiety Associates supervenes. TORONTO BUSINESS ASSOCIATES 20x1 Unconditional Budget 1st District 2nd District 3rd District Sum for principal three QuartersRevenue: Consulting fees: Computer government consulting Conduct consulting Sum consulting fees Other pays Sum pays Expenses: Consultant disconnection carrys Wandering and kindred carry Public and authoritative carrys Slander carry Corposcold carry allocation Sum carrys Unconditional pays 3,86,750 45,625 1,00,000 40,000 50,000 6,22,375 1,24,500 3,86,750 45,625 1,00,000 40,000 50,000 6,22,375 1,24,500 3,86,750 45,625 1,00,000 40,000 50,000 6,22,375 1,24,500 11,60,250 1,36,875 3,00,000 1,20,000 1,50,000 18,67,125 3,73,500 4,21,875 3,15,000 7,36,875 10,000 7,46,875 4,21,875 3,15,000 7,36,875 10,000 7,46,875 4,21,875 3,15,000 7,36,875 10,000 7,46,875 12,65,625 9,45,000 22,10,625 30,000 22,40,625 L. Muralidharan, FCA.
, Grad. CWA. , 12 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS Hopolite accomplish cogitate the forthfuture counsel in his revised prearrange for the lewdth district. Toronto Anxiety Associates prevalently has 25 consultants on staff, 10 for conduct consulting and 15 for prizer governments consulting. Three concomitant conduct consultant keep been disconnectiond to rouse upshot at the rouse of the lewdth district in arrange to encounter the effortiond client insist. • The hourly billing scold for consulting pays accomplish stop at 90 per hour for each conduct consultant and 75 per hour for each prizer consultant. However, due to the favorefficacious effortion in billing hour comignoring when collated to the delineation, the hours for each consultant accomplish be effortiond by 50 hours per district.
• The budgeted annual salaries and developed annual salaries, disconnectiond monthly, are the corresponding: 50,000 for a conduct consultant and 46,000 for a prizer consultant.Corposcold conduct has beloved a excellenceiness effortion of 10 percent at the rouse of the lewdth district for all 25 solid consultants, eraliness the new consultants accomplish be enriched at the delineationned scold. • The delineationned disconnection carry embodys a afford for employee fringe avails amounting to 30 percent of the annual salaries. However, the reformment of some corposcold extensive employee programs accomplish effortion the fringe avails to 40 percent. • The primordial delineation supposes a unroving hourly scold for wandering and other kindred carrys for each billing hour of consulting. These are carry that are not reimbursed by the client, and the antecedently solid hourly scold has proven to be ample to cequalize these insist-upons. • Other pays is acquired from immediate disconnectionals and intepeace pays and sediment unnatural for the lewdth district.
Public and authoritative carry keep been favourefficacious at 7 percent subordinate the delineation; this 7 percent savings on lewdth district carrys accomplish be cogitateed in the revised delineation. • Slander of employment equipment and particularal prizers accomplish arrive continuous at the schemeed straight-outsequence scold. • Due to the favourefficacious trial for the principal three districts and the resistance's effortiond ability to retain insist-upons, the corposcold conduct at Maple Leaf Services has effortiond the corposcold carrys allocation by 50 percent. Required: 1) Adapt a revised unconditional budget for the lewdth district for Toronto Anxiety Associates that Ramachandran accomplish introduce to corposcold conduct. 2) Sift-canvass the infers why an erection would adapt a revised unconditional budget. Question: 17 Ford ltd. anufactures and hawks 15,000 aces of a raft, RF17, in 2001.
The liberal insist-upon per ace is Rs. 200. Ford realizes a 20% restore on an siege of Rs. 18,00,000 in 2001. Required: (1) Weigh the hawking shape of RF17 in 2001. Weigh the markup percentage on the liberal insist-upon per ace of RF17 in 2001. (2) If the hawking shape in insist-uponment 1 indicates a markup percentage of 40% on unsteady insist-upons per ace, weigh the unsteady insist-upon per ace of RF17 in 2001 (3) Weigh ford's unconditional pays if it had effortiond the hawking shape to Rs.
230. at this shape ford would keep sold 13,500 aces of RF17. Suppose no alter in sum unroving insist-upons. Should ford keep effortiond the hawking shape of RF17 to Rs. 230? 4) In rejoinder to competitive urgency, ford must subject the shape of RF17 to Rs. 210 in 2002, in arrange to cdestroy sales of 15,000 aces. Ford delineations to subject its siege to Rs.
16,50,000. If ford wants to oceantain a 20% restore on siege, what is the target insist-upon per ace in 2002? L. Muralidharan, FCA. , Grad. CWA. , 13 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS ; SOLUTIONS Question: 18 Amrutha, chairman of PAL Electronics (PE), is anxietyed environing the prospects of one of its elder fruits. The chairman has been re-examinationing a negotiateing noise subjoined a eraliness Krishna, negotiateing fruit supervisor, for their 10-disk car amalgamate disk (CD) alterr.
The noise manifests another shape abatement is scarcityed to encounter anticipated competitors' abatements in sales shapes. The prevalent hawking shape for their 10-disk car CD alterrs is Rs. 350 per ace. It is expected that subjoined a eralinessin three months PE's two elder competitors accomplish be hawking their 10-disk car CD alterrs for Rs. 300 per ace. This anxietys Amrutha accordingly their prevalent insist-upon of submissive the CD alterrs is Rs. 315, which yields a Rs.
35 acquisition on each ace sold. The place is chiefly exciting accordingly PE had implemented an enthusiasm-invetescold insist-uponing (ABC) government environing two years ago. The ABC government aided them rectify warrant insist-upons, insist-upon pools, insist-upon drivers, and insist-upon abatement opportunities.Changes made when incorporateing ABC subjectd insist-upons on this fruit by approximately 15 percent during the developed two years. Now it appears that insist-upons accomplish scarcity to be subjectd cogitateably further to stop competitive and to realize a acquisition on the 10-disk car CD alterrs. Sum insist-upons to amount, hawk, and drudge the CD alterr aces are as supervenes: 10-Disk Car CD Changer Per Ace Embodied Purchased contents All other embodied Drudge Manufacturing, frequented Setups Materials indexling Slip Machining Cutting, shaping, and training Bextent and entireing Other Finished-pi warehousing Carelessness Sum ace insist-upon Rs. 110 40 65 9 18 23 21 14 5 10 Rs.
315 Amrutha has governmentd to disconnection Damodar, a consultant, to aid career how to pay.After two weeks of re-examination, sift-canvassion, and esteem engineering segregation, Chandran suggested that PE incorporeprimand a usual-inera (JIT) cell manufacturing arrange to aid subject insist-upons. He besides suggested that using target insist-uponing would aid in encountering the new target shape. By changing to a JIT cell manufacturing government, PE expects that manufacturing frequented drudge accomplish effortion by Rs. 15 per entireed ace. However, setup, embodied indexling, slip, and entireed pi warehousing accomplish all be eliminated. Document insist-upons accomplish be subjectd from Rs.
35 to Rs. 30 per ace, and carelessness insist-upons are expected to be subjectd by 40 percent. Required: (1) Determine PAL Electronics' ace target insist-upon the Rs. 300 competitive sales shape eraliness oceantaining the corresponding percentage of acquisition on sales as is realizeed on the prevalent Rs. 350 sales shape. 2) If the usual-in-era cell manufacturing arrange is implemented subjoined a eraliness the alters musicd, accomplish PAL Electronics encounter the ace target insist-upon you solid in insist-uponment (3)? Adapt a register detailing insist-upon abatements and the ace insist-upon subordinate the inperfect JIT cell manufacturing arrange. Question: 19 The conduct of Alliance Enterprises of-late governmentd to incorporeprimand a usual-in-era inventory delineation to mitigate steadily elevation insist-upons and loose up money for intents of siege.
The portioerre anticipates that inventory accomplish subside from Rs. 36,00,000 to Rs. 6,00,000, subjoined a eraliness the unoccupiedd funds to be invested at a 12 percent restore for the solid. Concomitant postulates supervene: L. Muralidharan, FCA. Grad. CWA.
, 14 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS • Mean inventories should amount savings in security and estate taxes of Rs. 27,000. • Alliance accomplish lease 75 % of an solid warefamily to another solid for Rs. 2 per balance base. The warefamily has 30,000 balance feet. • Accordingly of the scarcity to wield an effortiond enumescold of insignificant shipments from suppliers, Alliance accomplish reform fruition and receiving-dock facilities at a insist-upon of Rs. 6,00,000.
The erection insist-upons accomplish be depreciated equalize a 10-year society. • A repropel in suppliers is expected to pi in the dissipation and use of further rich raw embodieds.However, these embodieds should exhibit agitate to fewer carelessness and relit bearings subjoined Alliance's entireed fruit is sold, piing in a net savings for the solid of Rs. 25,000. • Three employees who prevalently realize Rs. 30,000 each accomplish be frequentedly waveed by the usual-in-era incorporateion strongness. Two employees accomplish be pestilential to other poses subjoined a eraliness Alliance; one accomplish be signalinated.
• Mean raw embodied inventory flattens and appertaining storeouts accomplish insist-upon Alliance Rs. 70,000. Required: (1) Prize the annual financial contact of Alliance's strongness to incorporeprimand a usual-in-era inventory government. (2) If the usual-in-era government is implemented in suitable form, what is the enjoylihood of superfluous raw embodied storeouts?Briefly expound. (3) Preference of a usual-in-era purchasing government accomplish repeatedly pi in less scarcity for the slip of infuture embodieds and portios. Why? (4) In similitude subjoined a eraliness a transmitted purchasing government, why does a usual-in-era government exhibit agitate to an effortiond enumescold of insignificant shipments to the buying solid? Question: 20 The fruit constituency and the guide eras for a entireed fruit 'X' are dedicated in shape subordinate If 100 aces of X are insist-upond in week 12 and if none of the contents, sub-assemblies and the end fruit are either on index or on arrange, prize the amounts and dates of the delineationned arrange unoccupieds for all the contents and sub-assemblies.Assume that there is no portioicular arrange extent and accordingly all the arrange quantities are lot for lot.
X, LT = 2 P (1), LT = 3 Q (2), LT = 1 R (3), LT = 3 S (2), LT = 3 P (2), LT = 3 R (3), LT = 3 Question: 21 S (2), LT = 3 The guide era to bring-encircling Paracetamol from a supplier is lewd weeks. At introduce, 54 kg of the offal is adapted subjoined a eraliness us. There is besides a registerd acknowledgment of 45 kg of it in lewd weeks. The fruition insist-uponments of paracetamol equalize the contiguous nine weeks are as: Week Amount in kg 1 24 2 3 29 4 11 15 5 - 6 5 7 19 8 27 9 18 L. Muralidharan, FCA. , Grad. CWA.
, Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS If we use an arrange bulk of 45 kg, when shall we unoccupied the arranges for Paracetamol?Question: 22 Having gay a CIMA continuity on enthusiasm-invetescold insist-uponing (ABC) you career to trial by devoteing the principles of ABC to the lewd fruits prevalently made and sold by your portioerre. Details of the lewd fruits and applicefficacious counsel are dedicated subordinate for one era: Fruit Output in aces Costs per ace: Frequented embodied Frequented labour Document hours (per ace) A 120 (Rs. ) 40 28 4 B 100 (Rs. ) 50 21 3 C 80 (Rs. ) 30 14 2 D 120 (Rs. ) 60 21 3 The lewd fruits are resembling and are usually amountd in fruition runs of 20 aces and sold in devisees of 10 aces. The fruition equalizehead is prevalently retained by using a document hour scold, and the sum of the fruition equalizehead for the era has been analysed as supervenes: (Rs.
Document employment insist-upons (rent, anxiety scolds, slander and supervision) Set-up insist-upons Stores receiving Slip / Tendency regulate Materials indexling and importune 10,430 5,250 3,600 2,100 4,620 You keep bounded that the 'insist-upon drivers' to be used are as inventoryed subordinate for the equalizehead insist-upon illusionn: Insist-upon Set up insist-upons Stores receiving Slip / Tendency regulate Materials indexling and importune Insist-upon Driver Enumescold of fruition runs Requisition excited Enumescold of fruition runs Subserviency effected The enumescold of requisition excited on the stores was 20 for each fruit and the enumescold of arranges effected was 42, each arranges substance for a devise of 10 of a fruit. You are insist-upond. a) To weigh the sum insist-upons for each fruit if all equalizehead insist-upons are retained on a document hour infer; (b) To weigh the sum insist-upons for each fruit, using enthusiasm-invetescold insist-uponing; (c) To weigh and inventory the ace fruit insist-upon from your shapes in (a) and (b) aloft, to illusion the differences and to observe unimportantly on any conclusions which may be drawn which could keep pricing and acquisition implications. Question: 23 Sumantra Technology Ltd. ,. fruitions sepascold contrariant characters of imprinted tour tables; eventually, two of the tables statement for the elderity of the portioerre's sales. The principal of these tables, a television tour table, has been a scale in the assiduity for sepascold years.
The negotiate for this character of table is competitive and shape-sensitive. Sumantra delineations to hawk 65,000 of the TV tables in 2001 at a shape of Rs. 50 per ace. The promote high-comignoring fruit, a particularal prizer tour table, is a fresh adduction to Sumantra's fruit outline. Accordingly the PC table incorporates the extreme technology it can be sold at a encouragement shape. The 2001 delineations embody the sale of 40,000 PC tables at Rs. 300 per ace.
L. Muralidharan, FCA. , Grad. CWA. , 16 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Sumantra's conduct knot is encountering to sift-canvass how to expend the sales and encouragement Rupees for 2001. The sales supervisor believes that the negotiate portion-out for the TV table could be ample by concentrating Sumantra's encouragemental efforts in this area.In rejoinder to this instigation, the fruition supervisor said, "Why don't you go subjoined a bigger negotiate for the PC table? The insist-upon fencings that I get illusion that the subsidy from the PC table is further than double the subsidy from the TV table.
I perceive we get a encouragement shape for the PC table. Selling it should aid equalizeall acquisitionability. " The insist-upon-accounting government illusions that the forthfuture insist-upons devote to the PC and TV tables. PC Table Frequented embodied Frequented labour Document era Rs. 140 4 hr. 1. 5 hr.
TV Table Rs. 80 1. 5 hr. .5 hr. Unsteady manufacturing equalizehead is applied on the infer of frequented-drudge hours. For 2001, unsteady equalizehead is budgeted at Rs.
1,20,000, and frequented-drudge hours are estimated at 2,80,000. The hourly scolds for document era and frequented drudge are Rs. 10 and Rs. 14, honorively. The portioerre applies a embodied-handling carry at 10 percent of embodied insist-upon. This embodied-handling carry is not embodyd in unsteady manufacturing equalizehead. Sum 2001 excellenceinesss for frequented embodied are budgeted at Rs.
1,06,00,000. Andrew Fulton, Sumantra's regulateler, believes that precedently the conduct knot pays subjoined a eraliness the sift-canvassion environing allocating sales and encouragemental Rupees to particular fruits, it force be excellenceiness eraliness to appear at these fruits on the infer of the activities complicated in their fruition.Fulton has adaptd the forthfuture register to aid the conduct knot subordinatestand this concept. "Using this counsel," Fulton expounded, "we can weigh an enthusiasm-invetescold insist-upon for each TV table and each PC table and then collate it to the scale insist-upon we keep been using. The singly insist-upon that sediment the corresponding for twain insist-upon rules is the insist-upon of frequented embodied. The insist-upon drivers accomplish reinstitute the frequented drudge, document era, and equalizehead insist-upons in the old scale insist-upon shapes. " Budgeted Insist-upon Procurement Evolution scheduling Packaging and shipping Sum Document setup Hazardous destroy arrangement Tendency regulate Public eatables Sum Document introduction Manual introduction Wave-soldering Sum In Rs.
,00,000 2,20,000 4,40,000 10,60,000 4,46,000 48,000 5,60,000 66,000 11,20,000 12,00,000 40,00,000 1,32,000 53,32,000 Required per Ace Parts: Document introductions Manual introductions Document setups Hazardous destroy arrangement Inspections L. Muralidharan, FCA. , Grad. CWA. , 17 Insist-upon Driver Enumescold of portios Enumescold of tables Enumescold of tables Enumescold of setups Rupees of destroy Enumescold of slips Enumescold of tables Enumescold of introductions Numbers of introductions Enumescold of tables Budgeted Annual Enthusiasm for Insist-upon Driver 40,00,000 portios 1,10,000 tables 1,10,000 tables 2,78,750 setups 16,000 Rupees 1,60,000 slips 1,10,000 tables 30,00,000 introductions 10,00,000 introductions 1,10,000 tables PC Table 55 35 20 3 . 35 lb. 2 TV Table 25 24 1 2 .
02 lb. 1 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONSRequired: (1) Warrant at meanest lewd public advantages associated subjoined a eraliness enthusiasm-invetescold insist-uponing. (2) On the infer of Sumantra's ace insist-upon postulates dedicated in the bearing, weigh the sum subsidy lip expected in 2001 for the PC table and the TV table. (3) On the infer of an enthusiasm-invetescold insist-uponing government, weigh the sum subsidy lip expected in 2001 for the PC table and the TV table. (4) Expound how a similitude of the pis of the two insist-uponing rules may contact the strongnesss made by Sumantra's conduct knot. Question: 24 Calton Ltd. reach and hawk a one fruit.
The solid fruit ace peacerictedations are as supervenes: Frequented embodied X: Document era: Document insist-upon per bloated hour: Selling shape: 8 sq. etres at Rs. 4 per sq. metre 0. 6 prevalent hours Rs. 40 Rs. 100 Calton Ltd.
, insist-upon to verify arranges for 5,000 fruit aces per era. There are no stores of fruit aces at the rouse or end of the era subordinate re-examination. The store flatten of embodied X sediment unnatural throughout the era. The forthfuture concomitant counsel waves the insist-upons and payss: (1) (2) (3) (4) (5) 5% of infuture embodied from suppliers is fragmentped due to faulty acknowledgment and storage organisation. 4% of embodied X input to the document arrange is destroyd due to arrangeing bearings. Slip and storage of embodied X insist-upons Rs. 0.
10 pence per sq. metre dissipationd.Inspection during the fruition cycle, calibration impedes on slip equipment, vendor rating and other impedes insist-upons Rs. 25,000 per era Evolution bulk is effortiond to admit for the downgrading of 12. 5% of fruit aces at the terminal slip limit. Downgraded aces are sold as 'promote tendency' aces at a authorizeance of 30% on the scale hawking shape. Evolution bulk is effortiond to admit for restores from customers which are rearranged loose of carry.
Receipts are due to peacerictedation deficiency and statement for 5% of aces judiciously delivered to customers. Replacement aces run a offer insist-upon of Rs. 8 per ace. 80% of the restores from customers are rectified using 0. hours of document prevalent era per ace and are re-sold as 'third tendency' fruits at a authorizeance of 50% on the scale hawking shape. The retaining restoreed aces are sold as fragment for Rs. 5 per ace.
Fruit impost and other claims by customers is estimated at 3% of sales pays from scale fruit sales. Document void era is 20% of bloated document hours used (i. e. prevalent hours = 80% of bloated hours). Frequent insist-upons of administration, hawking and arrangement sum Rs. 60,000 per era. Calton Ltd is apprised of the bearing of surplus insist-upons and prevalently expends Rs.
20,000 per era in efforts to checkmate a enumescold of such bearings from occurring. (6) 7) (8) (9) (10) Calton Ltd. is delineationning a tendency conduct note which accomplish effortion its surplus insist-upon checkmateion excellenceiness from Rs. 20,000 to Rs. 60,000 per era. It is estimated that this accomplish keep the forthfuture contact. (1) A abatement in stores droppinges of embodied X to 3% of infuture embodied.
(2) A abatement in the downgrading of fruit aces at slip to 7. 5% of aces inspected. (3) A abatement in embodied X droppinges in arrange to 2. 5% of input to the document arrange. L. Muralidharan, FCA. , Grad.
CWA. , 18 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS (4) A abatement in restores of fruits from customers to 2. % of aces delivered. (5) A abatement in document void era to 12. 5% of bloated hours used. (6) A abatement in fruit impost and other claims to 1% of sales pays from scale fruit sales. (7) A abatement in slip, calibration, vendor rating and other impedes by 40% of the solid shape.
(8) A abatement in frequent administration, hawking and arrangement insist-upons by 10% of the solid shape. (9) A abatement in document prevalent era insist-upond per fruit ace to 0. 5 hours. Required: (a) Adapt summaries illusioning the anticipation of (I) sum fruition aces (pre-inspection), (ii) dissipations of embodied X (sq. metres), (iii) bloated document hours.In each occurrence the shapes are insist-upond for the place twain precedently and subjoined the implementation of the concomitant tendency conduct note, in arrange that the arranges for 5,000 fruit aces may be verifyled. (b) Adapt acquisition and dropping statement for Calton Ltd for the era illusioning the acquisition realizeed twain precedently and subjoined the implementation of the concomitant tendency conduct note.
(c) Observe on the junction of a tendency conduct note and expound the significance of the signals inner deficiency insist-upons, superficial deficiency insist-upons, appraisal insist-upons and checkmateation insist-upons giving examples for each, siegen where slight from the counsel in the scrutiny. Question: 25 Destiny Products reachs digital observees. Destiny is preparing a fruit society-cycle budget for a new observe, MX3. Fruit on the new observe is to rouse condensedly.Estimates environing MX3 are as supervenes: Life-cycle aces fruitiond and sold Selling shape per observe Life-cycle insist-upons R & D and contemplation insist-upons Manufacturing Unsteady insist-upons per observe Unsteady insist-upons per devise Watches per devise Unroving insist-upons Marketing Unsteady insist-upons per observe Unroving insist-upons Arrangement Unsteady insist-upons per devise Watches per devise Unroving insist-upons Customer-drudge insist-upons per observe Ignore the era esteem of money. Required: (1) Weigh the budgeted society-cycle unconditional pays for the new observe. (2) What percentage of the budgeted sum fruit society-cycle insist-upons accomplish be runred by the end of the R & D and contemplation limits? Rs.
280 160 Rs. 7,20,000 Rs. 1. 50 Rs. 3. 20 Rs. 10,00,000 Rs.
15 Rs. 600 500 Rs. 18,00,000 Rs. 10,00,000 4,00,000 Rs. 40 L. Muralidharan, FCA. , Grad.
CWA. , 19 Sreeram Coaching PointCOST MANAGEMENT - TEST QUESTIONS & SOLUTIONS (3) An segregation reveals that 80% of the budgeted sum fruit society-cycle insist-upons of the new observe accomplish be locked in at the end of the R & D and contemplation limits. What implications does this inventing keep for managing MX3's insist-upons? (4) Destiny's Negotiate Elaboration Employment estimates that reducing MX3's shape by Rs. 3 accomplish effortion society-cycle ace sales by 10 percent. If ace sales effortion by 10%, Destiny delineations to effortion manufacturing and arrangement devise extents by 10% as polite. Suppose that all unsteady insist-upons per observe, unsteady insist-upons per devise, and unroving insist-upons accomplish stop the corresponding. Should Destiny subject MX3's shape by Rs.
3?Show your anticipations. Question: 26 A principal devise of 25 transistor radios took a sum of 250 frequented labour hours. It is inperfect to congregate another 40 aces. What accomplish be the medium labour per ace in this lot? Suppose that there is 85% erudition scold. Question: 27 Bhakatavatsala & Co, a vitality arms fruitionr, has contemplationed a new character of gun and a principal lot of 25 guns congregated for standard intents had the forthfuture insist-upons: Frequented embodieds Frequented labour Unsteady equalizeheads Unroving equalizeheads Sum insist-upons 24,500 22,500 16,875 11,250 75,125 Proportional to frequented labour BSF substance pleasant subjoined a eraliness this gun keep asked the lowest bid for afford of 1,000 guns.The portioerre accomplish ignoring on the avails of erudition of 85% to the client in elucidation the bid. The portioerre accomplish set a hawking shape to realize 40% bloated acquisition lip.
Determine the ace shape that should be bid. Question: 28 One ace of fruit A contributes Rs. 7 and insist-upons 3 aces of raw embodied and 2 hours of labour. One ace of fruit B contributes Rs. 5 and insist-upons one ace of raw embodied and one hour of labour. Availability of the raw embodied at introduce is 48 aces and there are 40 hours of labour. (a) Formulate it as a outstraight programming bearing.
(b) Write its dual. (c) Solve the dual subjoined a eraliness Simplex rule and invent the optimal fruit mix and reflection shapes of the raw embodied and labour.Question: 29 The ultimatex consequenceau for a maximization bearing of outstraight programming is dedicated here: Fruit Mix Cj 5 0 xj x2 S2 cj zj cj - zj Xl 1 1 4 5 -1 x2 1 0 5 5 0 S1 1 -1 0 5 -5 S2 0 1 0 0 0 Bulk (bi) 10 3 Answer the forthfuture scrutinys, giving infers in unimportant: (a) Is this disconnection optimal? (b) Are there further than one optimal disconnection? (c) Is this disconnection grow-worse? L. Muralidharan, FCA. , Grad. CWA. , 20 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS (d) Is this disconnection manageable? (e) If S1 is remiss in document A (in hours / week and S2 is remiss in document B (in hours / week), which of these documents is substance used to the liberal accommodation when submissive according to this disconnection? f) A customer would enjoy to keep one ace of fruit x1 and is accomplishing to pay in surplus of the ordinary shape in arrange to get it.
How cogitateefficacious should the shape be effortiond in arrange to enknowing no abatement of acquisitions? Question: 30 Conduct of Ranga Ltd are very cogitateefficacious worried environing the continuing recession in the kingdom. The portioerre has 7 resistances (A to G). they keep governmentd to cdestroy lewd resistances namely A,B,C and D and assign some of the employees to the retaining resistances. Personnel at the aces to be suppressd keep signified a accomplishingness to propel to any of the three retaining aces and the portioerre is accomplishing to collect them subjoined a eraliness disunion insist-upons.The technology of fruition is contrariant to some rank at each ace and retraining carrys accomplish be runred on assign. Not all solid particularnel can be retained by assign and a enumescold of redundancies accomplish inaugurate. Insist-upon of accumulation is dedicated as a public shape at each ace is to be suppressd.
Enumescold occupied A-200 B-400 C-300 D-200 Rs. thousands per particular Retraining insist-upons Assign to : Ace E Ace F Ace G Disunion insist-upons: Assign to : Ace E Ace F Ace G Accumulation payments 2. 5 2. 4 2. 5 6. 0 3. 6 4.
6 2. 7 5. 0 3. 4 3. 4 3. 3 6. 0 3.
7 1. 7 2. 7 7. 0 0. 5 0. 6 0. 5 0.
4 0. 4 0. 3 0. 6 0. 6 0. 7 1. 3 0.
3 0. 3 A B C D Concomitant particularnel insist-upond at aces retaining open: E-350 F-450 G-200.To use the manner rule to conciliate an optimal disconnection to the bearing of the cheapest instrument to assign particularnel from the aces to be suppressd to those which accomplish be ample. Question: 31 A conduct consulting solid has a backlog of 4 subjects. Upshot on these subjects must be rouseed forthwith. 3 scheme guideers are adapted for assignment to the subjects. Accordingly of the deviateing upshot trial of the guideers, the acquisition to consulting solid accomplish deviate invetescold on the assignment as illusionn subordinate.
The unassigned subject can be entired by subcontracting the upshot to an delayout consultant. The acquisition on the subsubject is cipher. Finds the optimal assignment.Contract Scheme Leader A B C L. Muralidharan, FCA. , Grad. CWA.
, 1 13 15 6 21 2 10 17 8 3 9 13 11 4 11 20 7 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Question: 32 The tit-fit Scientific Laboratories is affianced in submissive contrariant characters of High-class equipments for use in Science labs. The portioerre has two contrariant portioerre outlines to amount its approved fruit "P". Processing era (minutes) Parterre A1 Parterre A2 10 0. 10 0. 20 11 0. 15 0. 40 12 0.
40 0. 20 13 0. 25 0. 15 14 0. 10 0. 05 Use the forthfuture Random(Rn. ) no's, genescold postulates on the arrange eras for 15units of the ace and entire the expected arrange era for the fruit.
134 7476 4943 Question: 33 A scheme insists of 7 activities. The era for upshot of each of the enthusiasm is as supervenes:Activity A Immediate Era 3 4 5 B 4 4 4 4 4 C A 1 1 1 D B,C 4 5 E D 3 4 5 6 F D 5 7 G E,F 2 3 Probability 0. 2 0. 6 0. 2 0. 1 0. 3 0.
3 0. 2 0. 1 0. 15 0. 75 0. 10 0. 8 0.
2 0. 1 0. 3 0. 3 0. 3 0. 20 0. 80 0.
5 0. 5 8343 1183 1915 3602 9445 5415 7505 0089 0880 7428 3424 9309 L. Muralidharan, FCA. , Grad. CWA. , 22 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS a) Draw a netupshot and warrant censorious route using expected era. b) Simulate the scheme for 5 eras using Rn.
no's and invent censorious routes? 8 99 57 57 77 Question: 34 A insignificant oceantenance scheme insist of jobs in the tefficacious subordinate. Subjoined a eraliness each job is inventoryed its ordinary era and a stint or clang era in days. The insist-upon in Rs. Per day of each job is besides dedicated: Job(i-j) 1-2 1-3 1-4 2-4 3-4 4-5 Ordinary days 9 8 15 5 10 2 Clang days 6 5 10 3 6 1 Cost/Day 40 50 60 20 30 80 13 93 33 12 37 09 18 49 31 34 20 24 65 96 11 73 22 92 85 27 07 07 98 92 10 72 29 00 91 59 a) What is the ordinary scheme protraction and stint scheme protraction? b) Determine the stint clanging insist-upon of registers ranging from ordinary protraction down to, and including, the stint protraction register. c) Aloft insist-upons sum Rs. 115/day. What is the optimum protraction register in signals of twain clanging and equalizehead insist-upon?Question: 35 Allocate the men efficiently to the jobs dedicated subordinate and Invent out the era insist-upond to entire the scheme.
No. of particulars: 4 Job (I-j) 1-2 1-3 1-5 2-3 2-6 3-4 4-7 5-6 6-7 tn 10 6 5 0 8 10 10 7 5 Men 1 2 3 0 1 2 3 1 2 L. Muralidharan, FCA. , Grad. CWA. , 23 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Suggested Solutions L. Muralidharan, FCA.
, Grad. CWA. , 24 Sreeram Coaching Aim COST MANAGEMENT - TEST QUESTIONS & SOLUTIONS Answer to Scrutiny No. 1: Estrangement of reparatory stitching insist-upon. Insist-upon Dropping of subsidy due to drop in sales (WN-1) 1,35,000 Net avail = 27,000/(a) Substituting glass eyes by pliant eyes.