|Total No. of Questions — 6]||[Total No. of Printed Pages — 3|
|Time Allowed : 3 Hours||Maximum Marks : 100|
|Answers to questions are to be given only in English except in the cases of candidates who have opted for Hindi medium. If a candidate who has not opted for Hindi medium, answers in Hindi, his answers in Hindi will not be valued.|
|Question No. 1 is compulsory. |
Answer any four Questions from the rest. Working notes should form part of the answer.
Make assumptions wherever necessary.
|1.||(a)|| The following table gives the activities in a construction project and the time duration of each activity: |
|(b)|| A manufacturer produces three products whose cost data are as follows: |
Fixed overheads (Rs.) 4,00,000 per annum.
Later, the market improved and the sales quantities could be increased by 20 per cent for product X and 25 per cent each for product Y and Z. The sales manager confirmed that the increased sales could be achieved at the prices originally budgeted. The production manager stated that the output could not be increased beyond the budgeted level due to the limitation of Direct labour hours in department 2.
|(c)|| S Limited is engaged in manufacturing activities. It has received a request from one of its important customers to supply a product which will require conversion of material ‘M’, which is a non–moving item. |
The following details are available:
It is estimated that conversion of one unit of ‘M’ into one unit of the finished product will require one labour hour. At present, labour is paid at the rate of Rs. 20 per hour. Other costs are as follows:
The labour will be re–deployed from other activities. It is estimated that the temporary redeployment will not result in loss of contribution. The employees to be re–deployed are permanent employees of the company.
|2.||(a)|| A company manufactures a single product, which requires two components. The company purchases one of the components from two suppliers: X Limited and Y Limited. The price quoted by X Limited is Rs. 180 per hundred units of the component and it is found that on an average 3 per cent of the total receipt from this supplier is defective. The corresponding quotation from Y Limited is Rs. 174 per hundred units, but the defective would go up to 5 per cent. If the defectives are not detected, they are utilised in production causing a damagee of Rs. 180 per 100 units of the component. |
The company intends to introduce a system of inspection for the components on receipt. The inspection cost is estimated at Rs. 24 per 100 units of the component. Such an inspection will be able to detect only 90 per cent of the defective components received. No payment will be made for components found to be defective in inspection.
(Assume total requirement is 10,000 units of the component).
|(b)||What are the distinctive features of learning curve theory in manufacturing environment? Explain the learning curve ratio.||9||(0)|
|3.|| The working results of a Software Company for two corresponding years are shown below: |
In year 2006, there has been an increase in the selling price by 10 per cent. Following are the details of material consumption and utilization off direct labour hours during the two years:
|4.||(a)|| A company has four zones open and four marketing managers available for assignment. The zones are not equal in sales potentials. It is estimated that a typical marketing manager operating in each zone would bring in the following Annual sales: |
The four marketing manages are also different in ability. It is estimated that working under the same conditions, their yearly sales would be proportionately as under:
|(b)||“In many organisations, initiatives to introduce balanced score card failed because efforts were made to negotiate targets rather than to build consensus.” |
Elucidate the above statement.
|5.||(a)||"Cost can be managed only at the point of commitment and not at the point of incidence. Therefore, it is necessary to manage cost drivers to manage cost." Explain the statement with reference to structural and executional cost drivers.||5||(0)|
|(b)||Explain the main features on ‘Enterprise Resource Planning.’||4||(0)|
|(c)|| X Limited having an installed capacity of one lakh units of a product is currently operating at 70 per cent utilization. At current level of input prices, the F.O.B. costs per unit, taking credit for applicable export incentive workout as follows: |
The company has received three Foreign offers as under:
|6.||(a)||What is the fundamental difference between Activity Based Costing System (ABC) and Traditional Costing System? Why more and more organizations in both the manufacturing and non–manufacturing industries are adopting ABC?||10||(0)|
|(b)||What is Target Costing? It is said that implementation of the target costing technique requires intensive marketing research. Explain why intensive marketing research is required to implement target costing technique.||9||(0)|