|Time Allowed : 3 Hours||Full Marks : 100|
|The figures in the margin on the right side indicate full marks.|
|Answer Question No. 1 which is compulsory and any five from the rest.|
|1.||(a)||Fill in the blanks with appropriate options given:||1x5|
|(i)||Decision Model is a method of making a choice, sometimes requiring elaborate _____________ procedure. (Options: quantitative/qualitative)||(0)|
|(ii)||CVP Analysis is the study of the effects of _____________ volume on revenue, expenses and net income. (Options: input/output)||(0)|
|(iii)||Discriminating Pricing is charging different pricing to different customers for the _____________ product(s) or service(S). (Options: same/different).||(0)|
|(iv)||Flexible Budget adjusts for changes in ______________ and other cost driver activities. (Options: price/sales volume)||(0)|
|(v)||Cost–Benefit Balance is weighing estimated costs against probable benefits, the primary condition in choosing among ______________ systems and methods. (Options: engineering/accounting)||(0)|
|(b)|| Match each expression under Column I with Column II:|
|(c)||Which of the following statements are TRUE or FALSE:||1x5|
|(i)||Sunk costs are future costs where total will be affected by the choice between alternative.||(0)|
|(ii)||Only unavoidable costs are relevant for decision making purposes;||(0)|
|(iii)||Future costs, rather than past costs, are required for decision making;||(0)|
|(iv)||Standard costs are predetermined costs; they are target costs that should be incurred under efficient operating conditions;||(0)|
|(v)||Responsibility centre is a unit of organization for whose performance a manager is held responsible.||(0)|
|(d)||Define the following terms in not more than two sentences:||1x5|
|(ii)||Break Even Point;||(0)|
|(iv)||Activity Based Accounting;||(0)|
|2.||(a)||Discuss the process of managing organizational change effectively.||8||(0)|
|(b)||How does the management help the organization in achieving its objectives?||8||(0)|
|3.||(a)||The XYZ Ltd. produces a variety of products, each having a number of component parts. Product B takes 5 hours to produce on M/c. No.99, working to full capacity. Product B’s selling price and marginal cost are Rs.50 and Rs.30 respectively. A–10 is a component part that could be made on the same M/c. in 2 hours for a marginal cost of Rs.5 per unit. The supplier’s price is Rs.12.50 per unit. |
Should the Company make or buy the component A–10? Assume that the machine hours is the limiting factor.
|(b)|| A Marketing Manager suggests to his Managing Director that if only he is permitted to reduce the selling price of a product by 20%, he would be able to achieve 30% increase in sales volume. The Managing Director, in good faith, gives the clearance. |
You are given the following information:
Assume that there are no changes in the cost pattern in the coming period.
|4.||(a)|| The Pupils’s Book Co. has two book selling outlets: Kalidas Book House and Tulsidas Book House. Each store has a manager, who has a great deal of decision authority over the individuals stores. A central office however, handles advertising, marketing research, acquisition of books, legal services and other staff functions. The Pupils’ Book Co.’s current accounting system allocates all costs to the stores. |
Results for 2009–10 were:
Each book store manager makes decisions that affect salaries and wages, supplies and depreciation. In contrast, rent and utilities are beyond the manager’s control because the managers did not choose the location or the size of the store.
Supplies are variable costs. Variable salaries and wages are equal to 8% of the cost of merchandise sold, the remainder of salaries and wages is a fixed cost. Rent, utilities and depreciation are also fixed costs. Allocated staff costs are unaffected by any events at the book stores but they are allocated as a proportion of sales revenue.
|(b)||Viswakarma Enterprises conducted a study for its maintenance shop and found that the inter arrival times at tool–crib are exponential with an average time of 10mins. The length of the service time (amount of time taken by the tool–crib operator to meet the needs of the maintenance man) is assumed to be exponentially distributed, with mean 6 mins. |
Required to find:
(ii) Average length of the queue that forms and the average time that an operator spends in the queue system.
|5.||(a)||What are the benefits accruing to an organization on account of implementation or ERP system?||4||(0)|
|(b)|| Division A is a profit centre that produces three products X, Y and Z and each product has an external market. |
The relevant data is as:
Up to 300 units of Y can be transferred to an internal division B.
Division B has also the option of purchasing externally at a price of Rs.45 per unit.
Determine the transfer price for Y if the total labour hours available in division A is:
|6.|| A book store wishes to carry Ramayana in stock. Demand is probabilistic and replenishment of stock takes 2 days. |
The probabilities of demand are given below:
Each time the order is placed, the store incurs ordering cost of Rs.10 per order. The store also incurs a carrying cost of Re.0.50 per book per day. The inventory carrying cost is calculated on the basis of stock at the time of each day.
The manager of the book store wished to compare two options for his inventory decision.
Option A: Order 5 books when the inventory at the beginning of the day plus orders outstanding is less than 8 books.
Option B: Order 8 books when the inventory at the beginning of the day plus orders outstanding is less than 8.
Currently beginning of 1st day, the store has stock of 8 books plus 6 books ordered two days ago and expected to arrive next day. Using Monte Carlo simulation for 10 cycles, recommend which option the manager should choose.
Two digit random Nos. are given below:
89, 34, 78, 63, 61, 81, 39, 16, 13, 73
|7.||(a)|| The cost of an article at a capacity level of 5,000 units is given in the table, under column A below. For a variation of 25% in capacity above or below this level, the individual expenses vary as indicated in column B. |
Prepare the production cost budget (flexible)at4,000 units and 6,000 units.
|(b)||A diet of a sick person must contain at least 4,000 units of vitamins, 50 units of minerals and 1,400 units of calories. Two foods A and B are available at a cost of Rs.4 and Rs.3 per unit respectively. If one unit of A contains 200 units of vitamins, 1 unit of mineral and 40 units of calories and one unit of food B contains 100 units of vitamins, 2 units of minerals and 40 units of calories. Formulate LPP model. You need not solve the problem.||6||(0)|
|8.||Write short notes on:||4x4|