NMIMS Strategic Cost Management Solve Assignment December 2023

Description

NMIMS Global Access
School for Continuing Education (NGA-SCE)
Course: Strategic Cost Management
Internal Assignment Applicable for December 2023 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. Shubham Limited is in the business of Fashion Designing. It has received an order to deliver 25,000 jackets custom made for ABC Ltd. The cost estimates for producing the jackets is as under:
a) Cloth 2500 reams of cloth @ Rs. 4000/- per ream
b) Threads and other decoration total Rs. 12,50,000/-
c) Labour rate Rs. 500 per hour. Total hours required is 5000 hours

d) Factory overheads Rs. 8,00,000/-
e) Selling expenses (including delivery charges) Rs. 75,000/-
Quote a price per jacket on the following basis:
1. Cost Plus 10% margin on cost
2. Variable cost + 20% margin
3. Target profit of Rs. 200 per jacket. Calculate the PV Ratio at that price.
4. Shubham Limited has a good brand following and people are willing to give up to Rs. 2500 per jacket. Shubham prices it at Rs. 2400 per jacket. What is this strategy called?
(10 Marks)
2. M/s Priya Industries is in the business of manufacturing and selling lubricants. There are 4 types of products. The information available about each:
P1
P2
P3
P4
Total
No. of units
produced
1300
2000
1500
1200
6000
Labour Hours
250
350
200
200
1000
No. of units in 1
packet
2
5
3
3
13
Machine Hours
260
450
360
180
1250
The total cost incurred is as under:
Fixed Costs
Rs.
Salaries and Wages
2500000
Supervisor Cost
75000
Factory Overheads
1000000
Packaging costs
600000
Total Costs
4175000

Q3.
a) With the following information, prepare the Budgeted Profit for the year for Company XYZ. (5 marks)
4 products (P, Q, R & S) are produced by XYZ Ltd. The labour costs are at Rs. 10 per hour of work. Raw Material used for all products is similar at Rs. 25 per kg.
Factory Rent is Rs. 1,00,000 and other Overheads are at Rs. 20,000/-. Prepare a Budgeted Profit and Loss Statement for XYZ Ltd.
Other information is as under:
UoM
P
Q
R
S
No. of Units
produced
Nos.
50
45
80
90
Sales Price
Rs. Per Unit
700
700
900
950
Labour Hours
Hrs. per unit
10
12
8
4
Raw Material
Kgs. per unit
6
5
10
12

Sales
25000 @ Rs. 50
p.u.
1250000
Variable Cost
Raw Material
250000
Labour
345000
Variable Overheads
150000
Fixed Costs
400000
Profit
105000
Calculate:
a) Contribution per unit
b) PV Ratio
c) No. of units to be sold for earning profit of Rs. 70,000/-
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