| 1. | (a) | Match each expression under Column I with Column II: | (I) | (II) | (i)
(ii)
(iii)
(iv)
(v) | Residual Income
Balanced Score Card
Fayol
Unity of Command
TQM | (a)
(b)
(c)
(d)
(e) | Scalar chain
Each man should report only to one manager or superior
Measures the divisional performance
Process of continuous quality improvement
Customer perspective |
| 1x5 | (0) |
| | (b) | Fill in the blanks: | 1x5 | |
| | | (i) | A company being an _______ _______ can function only through human beings. | | (0) |
| | | (ii) | Algorithm is a _______ _______ _______ for solving problems. | | (0) |
| | | (iii) | Degeneracy in a simplex problem is a situation where a _______ takes on value zero. | | (0) |
| | | (iv) | At BE point, _______ is equal to fixed cost. | | (0) |
| | | (v) | Any transfer pricing system has to ensure the resource allocation in a way that promotes _______ _______ . | | (0) |
| | (c) | Which of the following statements are TRUE or FALSE: | 1x5 | |
| | | (i) | The variable cost ratio is equal to (1–P/V ratio.) | | (0) |
| | | (ii) | A budget manual is the summary of all budgets. | | (0) |
| | | (iii) | Zero Base Budgeting is alternatively termed as Budgetary Control. | | (0) |
| | | (iv) | A 'bill of materials' is the bill that a supplier submits for payment to a purchaser of materials and components. | | (0) |
| | | (v) | Under two–part tariff the selling division transfers goods at marginal cost including any opportunity cost. | | (0) |
| | (d) | Define the following terms in not more than two sentences: | 1x5 | |
| | | (i) | Backflush Costing. | | (0) |
| | | (ii) | Value Added Activities. | | (0) |
| | | (iii) | Value Engineering. | | (0) |
| | | (iv) | Cost Driver. | | (0) |
| | | (v) | Balanced Score Card. | | (0) |
| 2. | (a) | "Change has become inevitable in the dynamic business world of today. Employees in the organization often tend to vehemently resist the change for various reasons." | (i) | List some of the most important reasons for resistance to change. |
| (ii) | Suggest measures which could be used to overcome such a resistance |
| 4+4 | (0) |
| | (b) | What is ERP and what are benefits occurring to organization on account of implementation of ERP system? | 2+6 | (0) |
| 3. | (a) | Four products A, B, C and D have Rs. 5, Rs. 7, Rs. 3 and Rs. 9 profitability respectively. First type of material (limited supply of 800 kg) is required by A, B, C and D at 4kg, 3kg, 8kg and 2kg, respectively per unit. Second type of material has a limited supply of 300 kg, and is for A, B, C and D at 1kg, 2kg, 0kg and 1 kg per unit. Supply of other types of material consumed is unlimited. Machine hours available are 500 hours and requirements are 8, 5, 0 and 4 hours for A, B, C and D each per unit. Labour hours are limited to 900 hours and requirements are 3, 2, 1 and 5 hours for A, B, C and D respectively. How should a firm approach so as to maximize it profitability? Formulate this as Linear Programming Problem. You are not required to solve the LPP. | 8 | (0) |
| | (b) | The Indian Airlines operates daily flights from Mumbai to Kolkata. The scheduled take–off time is 10.00 hours. The normal duration of the flight is 2 hours. On occasions, because of administrative and technical problems, the take–off gets delayed and the pattern of delays from past data is as shown below: Hours
0
0.5
1.0
1.5
2.0 | Probabilities
0.30
0.25
0.20
0.15
0.10 |
Further, depending on weather conditions, the actual air–borne time may fluctuate marginally and its pattern from past data is as shown below: Minutes
–10
–5
0
+5
+10 | Probabilities
0.10
0.15
0.50
0.15
0.10 |
Simulate the flight operations for a period of 10 days and assess: | (i) | Probability that the flight will arrive late in Kolkata, and | | (ii) | The average delay on arrival. |
Use the Random numbers given below in a table: | (1) For take–off delays | (2) For air–borne delays | 17
46
96 | 43
51
9 | 74
68
65 | 31
93
43 | 72
54
90 | 78
92
54 | 16
56
77 | 35
8
31 | 23
58
87 | 44
78
75 |
Select the Random numbers horizontally from the top left corner. | 8 | (0) |
| 4. | (a) | MODERN MANUFACTURERS LTD. manufactured and sold two products during the year 2006–07 as per particulars given below: | Quantity | Product A
6,00,000
Rs./Unit | Product B
3,00,000
Rs./Unit | Selling Price
Direct Materials
Direct Wages
Other Overheads (50% variable) | 6.00
1.00
1.20
1.00 | 10.00
2.00
2.60
0.60 |
Variable factory overheads are absorbed as 50% of Direct Wages.
The summarized statement of profitability for the year ending March 31, 2007 is as under: | Rs. in Lakhs | | Sales
Direct Materials
Direct Wages
Factory Overheads
Other Overheads (50% fixed) | 66.00
12.00
15.00
13.50
7.80 |
(of this Rs. 6 lakhs is fixed) |
For the year 2007–08 due to fall in demand, the production and sales of Product A will be reduced by 20% and of Product B by 40%. It is therefore decided to introduce a new Product M, the cost particulars for the same are as under: Production and Sales
Selling Price
Direct Materials
Direct Wages
Other Variable Overheads | 2,00,000 Units
Rs. 7.00 per Unit
Rs. 1.40 per Unit
Rs. 2.40 per Unit
Same as in Product A |
The fixed overheads will remain the same and the variable overheads will continue to be incurred at the same rate as in 2006–07. Requirements: | (i) | Prepare a product wise and overall budget for the year 2007–08. |
| (ii) | State what conclusions can be drawn from the budget for 2007–08 by using marginal costing technique. |
| 8+2 | (0) |
| | (b) | GADGETS LTD. which makes and sells only one product, sold 1,20,000 units incurring a loss of Rs. 1,20,000. The variable cost per unit of the product is Rs. 8 and the fixed costs are Rs. 3,60,000.
The company has estimated its sales demands as under: Sales Units
1,20,000
1,44,000
1,68,000
1,92,000
2,16,000 | Probability
0.10
0.15
0.20
0.30
0.25 |
Requirements: | (i) | What is the probability that the company will continue to make losses? |
| (ii) | What is the probability that the company will make a profit of at least Rs. 72,000? |
| 2+2+2 | (0) |
|
| 5. | (a) | In transfer pricing, what is the common conflict between a division and the company as a whole. | 6 | (0) |
| | (b) | Division Z is a profit centre, which produces four products A, B, C and D. Each product is sold in the external market also. Data for the period are as follows: | A | B | C | D | Market price per unit (Rs.)
Variable cost of production per unit (Rs.)
Labour hours required per unit
Maximum external sales units | 150
130
3
2,800 | 146
100
4
2,500 | 140
90
2
2,300 | 130
85
3
1,600 |
Product D can be transferred to Division Y, but the maximum quantity that might be required for transfer is 2,500 units of D. Division Y can purchase the same product at a slightly cheaper rate (price) of Rs. 125 per unit instead of receiving transfers of Product D from Division Z. What should be the transfer price for each unit for 2,500 units of D, if the total labour hours available in Division Z are: (i) 20,000 hours? (ii) 30,000 hours? | 10 | (0) |
| 6. | (a) | The following information has been obtained from the records of ZENITH LTD., a manufacturing organization using Standard Costing System: | Budget: | | No. of working days
Working hours per day
No. of direct workers | 25
8
16 | | Efficiency: One standard hour per clock hour | Down time
Overheads:
Fixed
Variable | 20%
Rs. 30,720
Rs. 40,960 | | The actual data for the month of December 2007 are as under: | Fixed overhead costs
Net operating hours worked
Standard hours produced | Rs. 33,000
1,920
2,112 |
There was a special holiday in December, 2007
Required: Work out the Fixed Overhead Variances. | 2+(1x6)+1 | (0) |
| | (b) | "All variances should not be investigated." Do you agree with this statement? What are the reasons for the occurrences of variances and which variances should be investigated? | 4+3 | (0) |
| 7. | (a) | | (i) | What do you understand by the terms: Queue, Queue Length, and Traffic Intensity? |
| (ii) | "Using the assumptions of Poisson arrivals and Exponential service times, operational Research specialist have developed certain formulae, which define the operating characteristics of a single channel waiting time."
In this context, establish the formulae for: | (1) | Mean (expected or average) number of units in the queue waiting for service; | | (2) | Mean (expected) waiting time in the system; and | | (3) | Mean average time a unit spends waiting in queue. |
|
| 3+5 | (0) |
| | (b) | In ICICI Bank, every 12 minutes one customer arrives to encash the cheque. The staff in the only one payment counter takes 8 minutes for serving a customer on an average.
Required: Determine the— | (i) | Average quiue length; and | | (ii) | Increase in arrival rate in order to justify a second counter (when the waiting time of a customer is at least 10 minutes the management will increase one more counter).
[Assume that the arrival pattern follows poisson distribution and service time follows Exponential distribution.] |
| 8 | (0) |
| 8. | Write short notes on any four of the following: | 4x4 | |
| | (a) | Pricing by Service Sector; | | (0) |
| | (b) | Zero Base Budgeting as an approach towards productivity improvement; | | (0) |
| | (c) | Total Quality Management (TQM); | | (0) |
| | (d) | Objectives of Balanced Score Card; | | (0) |
| | (e) | Residual Income (RI); | | (0) |
| | (f) | Responsibility Accounting (RA). | | (0) |
