Course: Cost and Management Accounting

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Course: Cost and Management Accounting

Internal Assignment Applicable for June 2017 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.

Question. 1. Massachusetts Mutual Life Insurance Company has high Labour Turnover ratio. Labour Turnover is costly, lowers productivity, morale of employee and tends to get worse if not dealt with. Discuss any five factors that can be controlled by the management so as to have the least of Labour Turnover. (10 Marks)

Answer: In this case, Massachusetts Mutual Life Insurance Company is facing high Labour Turnover ratio. Due to the reason that Labour Turnover is really very costly and it also lowers the productivity of the company, therefore morale of employee and tends to get worse if not dealt with.

Here are the important five factors that can be controlled by the management so as to have the least of Labour Turnover.

High employee turnover harms an organization's primary

Question. 2. Thhakar Supplies Ltd is the manufacturer and supplier of protein powder. The company wants to start up with the manufacturing of the tin cans needed to supply the powder instead of buying it from outside. Discuss the probable reasons, why the company wants to manufacture the tin cans on its own? (10 Marks)

Answer: In this case, we are talking about Thhakar Supplies Ltd which is the manufacturer and supplier of protein powder. Company has its plans to start up with the manufacturing of the tin cans that are needed to supply the powder instead of actually buying it from outside market. There are many probable reasons behind their decision. Therefore, here I am sharing some of the decision that led them to make their decision and influenced their choice regarding why the company wants to manufacture the tin cans on its own.

Question. 3. a) Dettol being identified as the leading brand of antiseptics. For promoting its various products like hand sanitizer, shaving creams, soap etc. the company spends a lot in the form of selling and distribution expenses. At times, company finds it difficult to control these costs. Discuss the problems associated with controlling these selling and distribution overheads.

Answer: Administrative overhead:

·       Costs identifying with defining arrangement, coordinating and controlling operation of an undertaking.

·       Not related straightforwardly to creation movement or capacity.

·       On a standard, organization overhead are all costs brought about on approach detailing, course, control, office administration, etc.

b) From the data given below, calculate (5 Marks)                                                                                                    

The Material Price Variance,

The Materials Usage Variance And

Material Cost Variance

Answer:

The Material Price Variance: $1,000 (Favourable)

The Materials Usage Variance: MUV = SP (SQ — AQ)

Direct materials quantity variance = ( 250unit  ×   $50

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