Category: Strategic Cost Management

Strategic Cost Management – Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

30 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management

Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

Strategic Cost Management

1. A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

2. The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

3. You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

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Strategic Cost Management – Based on the information provided calculate ROI and Residual income of ABC Limited

30 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management

Based on the information provided calculate ROI and Residual income of ABC Limited.

Strategic Cost Management

1. A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

2. The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

3. You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

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You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order

30 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management

You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

Strategic Cost Management

1. A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

2. The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

3. You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

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Strategic Cost Management – The following information is available from the records of Alpha Ltd. For the year 2019

30 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management

The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

Strategic Cost Management

1. A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

2. The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

3. You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

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Contact: Prakash

Call us +919741410271/ 08722788493 or

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Strategic Cost Management – A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate

30 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management

A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

Strategic Cost Management

1. A company has a contribution/sales ratio of 50%. It maintains a MOS of 25%. If its annual fixed cost is Rs. 50 lakhs, calculate:

BE sales, MOS, Total Sales, Total Variable Cost and Profit.

2. The following information is available from the records of Alpha Ltd. For the year 2019:

 Rs.
Sales of product A25.0     Lakhs
Sales of product B75.0     Lakhs
Material cost  55% of sales
Direct wages50,000 per month per worker
Factory Overheads:
Indirect Labor: 
Works Manager10,000.0   per month
Foreman5,000.0     per month
         Stores and spares       5.0% of sales
Depreciation of machinery150,000.00
Light and power100,000.00
Repairs and maintenance150,000.00
Other expenses       15% of direct wages
Administration expenses200,000.0 per annum

You are required to prepare a master budget.

3. You are a consultant hired to advise ABC Limited on ROI and help with decision making for additional order. The company has provided you following information:

ParticularsAmount (Rs.)
Sales (2,00,000 units at Rs. 20)4,000,000
Less: Variable costs @ Rs. 15 per unit3,000,000
Contribution Margin1,000,000
Less: Fixed costs750,000
Division Profit250,000

The amount of division investment is Rs. 15,00,000 and the target rate of return on investment is 20%

a. Based on the information provided calculate ROI and Residual income of ABC Limited.

b. Assume that division has offer to sell 50,000 units at Rs. 25 per unit. If additional order is accepted, the variable cost per unit will remain the same. However, fixed costs would increase by Rs. 250,000. A further additional investment of Rs. 10,00,000 would also be required. Analyze the impact on residual income.

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Contact: Prakash

Call us +919741410271/ 08722788493 or

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Strategic Cost Management June 2018 Assignment

03 Apr
MBA Assignment Admin 0 Comment Strategic Cost Management ,

Strategic Cost Management

1. X Ltd has to replace its machine and the production manager has to decide between Machine A and Machine B. Machine A is having installation cost of ₹ 160 and annual electric bill ₹ 200. Machine B has installation cost of ₹ 760 and annual electric bill of ₹ 80. If both have life of 8 years which machine will you recommend if interest rate is 9 % for five years. P/V factor @ 9 % for 8 years is 5.5348

2. A company manufacturing two products furnishes the following data for a year.

Product Annual Output Units Total machine hours Total No. of purchase orders Total No. of setups
A 5,000 20,000 160 20
B 60,000 120,000 384 44

The annual Overheads are as under:

Volume related activity cost ( Activity driver-Machine hours ) ₹ 5,50,000
Setup related cost ₹ 8,20,000
Purchase related cost ₹ 6,18,000

You are required to calculate cost per unit of each product A & B based on

i. Traditional method of charging overhead and

ii. Activity based costing method

3. Project X Involves an initial outlay of Rs 32,400.Its working life is 3 years. The cash streams are as follows

Year Inflows ₹ P .V Factor @ 14% P .V Factor @ 16%
1 16,000 0.877 0.862
2 14,000 0.769 0.743
3 12,000 0.675 0.641

Calculate:

a. NPV at 14 % & 16%

b. IRR

Calculate Labour Yield Variance from the following data:

16 Sep
MBA Assignment Admin 0 Comment Strategic Cost Management ,

Strategic Cost Management

1. XYZ is considering a Project with an initial investment of Rs.100,000. Three probable cash flow scenarios with their probabilities of occurrence are as under:
Annual Cash Flow (Rs.)
20,000
30,000
40,000
Probability
0.1
0.7
0.2
Project life is 5 years with expected return of 20%. The expected terminal values associated with each of above probabilities are Rs.0, Rs.20,000 & Rs.30,000. Find the probable NPV.
2. An M&A expert has been hired to explain to the management of a sick company the symptoms that are normally seen before a company qualifies for being referred to as a BFIR candidate. You being a freshly appointed Management Trainee are required to present a small write up, briefly explaining those early symptoms.
3. a) From the following particulars, calculate: Material Cost Variance & Material Price Variance
Quantity of materials purchased
3000 units
Value of materials purchased
Rs.9000
Standard quantity of materials required per tonne of output
30 units
Standard rate of material
Rs.2.5 per unit
Opening stock of materials
nil
Closing stock of materials
500 units
Output during the period
80 tonnes
3. b) Calculate Labour Yield Variance from the following data:
Standard Output
500 units
Actual Output
450 units
Standard Time
1000 hrs
Standard Rate
Rs.20 per hour

From the following particulars, calculate: Material Cost Variance & Material Price Variance

16 Sep
MBA Assignment Admin 0 Comment Strategic Cost Management ,

Strategic Cost Management

1. XYZ is considering a Project with an initial investment of Rs.100,000. Three probable cash flow scenarios with their probabilities of occurrence are as under:
Annual Cash Flow (Rs.)
20,000
30,000
40,000
Probability
0.1
0.7
0.2
Project life is 5 years with expected return of 20%. The expected terminal values associated with each of above probabilities are Rs.0, Rs.20,000 & Rs.30,000. Find the probable NPV.
2. An M&A expert has been hired to explain to the management of a sick company the symptoms that are normally seen before a company qualifies for being referred to as a BFIR candidate. You being a freshly appointed Management Trainee are required to present a small write up, briefly explaining those early symptoms.
3. a) From the following particulars, calculate: Material Cost Variance & Material Price Variance
Quantity of materials purchased
3000 units
Value of materials purchased
Rs.9000
Standard quantity of materials required per tonne of output
30 units
Standard rate of material
Rs.2.5 per unit
Opening stock of materials
nil
Closing stock of materials
500 units
Output during the period
80 tonnes
3. b) Calculate Labour Yield Variance from the following data:
Standard Output
500 units
Actual Output
450 units
Standard Time
1000 hrs
Standard Rate
Rs.20 per hour

An M&A expert has been hired to explain to the management of a sick company

16 Sep
MBA Assignment Admin 0 Comment Strategic Cost Management ,

Strategic Cost Management

1. XYZ is considering a Project with an initial investment of Rs.100,000. Three probable cash flow scenarios with their probabilities of occurrence are as under:
Annual Cash Flow (Rs.)
20,000
30,000
40,000
Probability
0.1
0.7
0.2
Project life is 5 years with expected return of 20%. The expected terminal values associated with each of above probabilities are Rs.0, Rs.20,000 & Rs.30,000. Find the probable NPV.
2. An M&A expert has been hired to explain to the management of a sick company the symptoms that are normally seen before a company qualifies for being referred to as a BFIR candidate. You being a freshly appointed Management Trainee are required to present a small write up, briefly explaining those early symptoms.
3. a) From the following particulars, calculate: Material Cost Variance & Material Price Variance
Quantity of materials purchased
3000 units
Value of materials purchased
Rs.9000
Standard quantity of materials required per tonne of output
30 units
Standard rate of material
Rs.2.5 per unit
Opening stock of materials
nil
Closing stock of materials
500 units
Output during the period
80 tonnes
3. b) Calculate Labour Yield Variance from the following data:
Standard Output
500 units
Actual Output
450 units
Standard Time
1000 hrs
Standard Rate
Rs.20 per hour

Project life is 5 years with expected return of 20%. The expected terminal values

16 Sep
MBA Assignment Admin 0 Comment Strategic Cost Management ,

Strategic Cost Management

1. XYZ is considering a Project with an initial investment of Rs.100,000. Three probable cash flow scenarios with their probabilities of occurrence are as under:
Annual Cash Flow (Rs.)
20,000
30,000
40,000
Probability
0.1
0.7
0.2
Project life is 5 years with expected return of 20%. The expected terminal values associated with each of above probabilities are Rs.0, Rs.20,000 & Rs.30,000. Find the probable NPV.
2. An M&A expert has been hired to explain to the management of a sick company the symptoms that are normally seen before a company qualifies for being referred to as a BFIR candidate. You being a freshly appointed Management Trainee are required to present a small write up, briefly explaining those early symptoms.
3. a) From the following particulars, calculate: Material Cost Variance & Material Price Variance
Quantity of materials purchased
3000 units
Value of materials purchased
Rs.9000
Standard quantity of materials required per tonne of output
30 units
Standard rate of material
Rs.2.5 per unit
Opening stock of materials
nil
Closing stock of materials
500 units
Output during the period
80 tonnes
3. b) Calculate Labour Yield Variance from the following data:
Standard Output
500 units
Actual Output
450 units
Standard Time
1000 hrs
Standard Rate
Rs.20 per hour