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INDIAN
SCHOOL OF BUSINESS MANAGEMENT AND
ADMINISTRATION
AN ISO 9001:2015 CERTIFIED INTERNATIONAL
B-SCHOOL
Name:
Marks:
80
Course: Masters in Business
Administration (MBA 4 Sem)
Subject: Management Control Systems
Answer the following question.
Q1.
Write a short note on Mix and Volume Variance (10marks)
Answer: Mix and Volume variances are two
important types of variances in cost accounting that are used to measure the
differences between the actual and expected costs of producing a product.
Mix variance refers to the difference
between the actual proportion of materials used in production and the expected
proportion of materials used, based on the standard mix. This variance is
calculated by multiplying the standard quantity of each material by the
difference between the actual mix ratio and the standard mix ratio. A positive
mix variance indicates that more of a high-cost material was used than
expected, while a negative mix variance indicates that less of a low-cost
material was used than expected.
Q3.
What are the characteristics of a project organization? Explain how do these
characteristics affect the control system design of a project.(10marks)
Answer: A project organization is a
temporary organization that is created for the purpose of completing a specific
project. Unlike traditional organizations, which have a more permanent
structure, project organizations are designed to be flexible and adaptable to
changing requirements. Here are some characteristics of a project organization:
- Temporary: A
project organization is created for a specific project and is disbanded
once the project is completed.
- Unique: Each
project is unique, with its own set of requirements, constraints, and
objectives.
- Cross-functional:
Project teams typically include members from different functional areas of
the organization, such as engineering, finance, marketing, and operations.
- Project manager: A
project
Q4.
Explain the following models and highlight their usefulness in formulating
business unit strategies : The BCG Model.(10marks)
Answer: The BCG (Boston Consulting Group)
model, also known as the Growth-Share matrix, is a strategic management tool
that helps organizations analyze their product portfolio and make strategic
decisions about their business units. The model is based on two dimensions:
market growth rate and relative market share. Business units are classified
into four categories: Stars, Cash Cows, Question Marks, and Dogs. Here is a
brief explanation of each category:
- Stars: Business
units with a high relative market share and high market growth rate. These
units have a strong market position and are expected to generate high
profits in the future.
- Cash Cows:
Business units with a high relative market share and low market growth
rate. These units generate high profits,
Q5.
Define Transfer pricing. Describe the various transfer pricing methods in
detail What do you understand by the term responsibility center?(10marks)
Answer: Transfer pricing refers to the
price at which goods or services are transferred between different departments,
divisions, or subsidiaries of a company. The goal of transfer pricing is to
ensure that each department or subsidiary is fairly compensated for the goods
or services it provides, while also optimizing the overall performance of the
company. Transfer pricing is important for both tax and managerial purposes.
There are several transfer pricing methods
that
Q6.
Explain, in detail, the various corporate level strategies and business unit,
'strategies with detail (10marks)
Answer: Corporate-level strategy is
concerned with the overall scope and direction of an organization. It involves
decisions about the company's portfolio of businesses, the industries in which
it operates, and how to allocate resources among its various business units.
There are three primary corporate-level strategies:
- Diversification
strategy: This involves expanding the company's portfolio of
businesses to reduce risk and increase growth opportunities. Diversification
can be achieved through either related or unrelated
Q7.
Consider a Retail Outlet. What should be the objectives of Management Control
system for the retail outlet? Examples would strengthen your views.
(10marks)
Answer: The objectives of a Management
Control System (MCS) for a retail outlet can be broadly categorized into three
areas: financial performance, operational efficiency, and customer
satisfaction. Examples of each are:
- Financial Performance:
- Increasing revenue and profit margins: This can be achieved
by monitoring sales, inventory levels, and profit margins, and adjusting
pricing and promotions as needed.
- Controlling expenses: This can be achieved by monitoring and
controlling labor costs, inventory shrinkage, and other operating expenses.
- Maximizing return on investment: This can be achieved by
measuring and tracking key financial metrics such as return on assets and
return on investment, and making strategic investments to improve
performance
Q8.
Difference between Responsibility Centers: Revenue and Expense Centers. (10marks)
Answer: Responsibility centers are
organizational units that are responsible for specific functions and are
accountable for their performance. Two common types of responsibility centers
are revenue centers and expense centers. The main difference between the two is
the primary focus of their performance measurements.
Revenue centers are
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students get fully solved assignments
Send
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