GUIDELINES FOR ASSIGNMENT
- If assignment is Question & Answer based then.
- Introduction is needed for each question.
- Question has to be answered based on the mark allotted for each question with references if any idea or information is taken from other source.
- If assignment is case based then,
- Executive summary
- Table of content
- Body of assignment (questions related to case need to be answered)
- Conclusion / Recommendation if any
- References (in-text + citation) to be used.
Total Marks _____________ 90
Plagiarism is a form of cheating, by representing someone else’s work as your own or using someone else’s work (another student or author) without acknowledging it with a reference. This is a serious breach of the Academic Regulations and will be dealt with accordingly. Students found to have plagiarised can be excluded from the program.
Plagiarism occurs whenever you do any of the following things without acknowledging the original source:
- Copy information from any source (including the study guide, books, newspapers, the internet)
- Use another person’s concepts or ideas
- Summarise or paraphrase another person’s work.
How do I avoid plagiarism?
To ensure you are not plagiarising, you must acknowledge with a reference whenever you:
- use another person’s ideas, opinions or theory
- include any statistics, graphs or images that have been compiled or created by another person or organization
- Paraphrase another’s written or spoken word.
What are the penalties?
The penalties for plagiarism are:
- Deduction of marks,
- A mark of zero for the assignment or the unit, or
- Exclusion from the program.
Plagiarism is dealt with on a case-by-case basis and the penalties will reflect the seriousness of the breach.
Please note: claiming that you were not aware of need to reference is no excuse.
Answer all the questions. Each question carries 15 marks
- a) “Accounting is the systematic an comprehensive recording of financial transactions pertaining to a business, and it also refers to the process of summarizing, analyzing and reporting these transactions to oversight agencies and tax collection entities”.
Discuss the Significance of Accounting and also explain the Scope of Accounting.
- b) Prepare an Income statement and Balance sheet of Indus Corp as on 31st Dec, 2018.
|Particulars||Amount ($ ‘000)|
|Cost of Goods Sold||26,980|
|Selling, General and Administrative Expense||3,624|
|Research and Development Expense||1,982|
|Plant and Equipment||7,154|
|Long term Liability||20,105|
|Income Tax expense||1,100|
- a) “Calculating the breakeven point is a key financial analysis tool used by business owners”
- Explicit the importance of breakeven analysis which is a critical step
- Advantages and limitations of breakeven analysis
- b) Robest Industries produces only one Product. The following revenues and cost have been estimated for the forthcoming month:
Selling price, $ 250 per unit (SP)
Variable cost, $ 100 per unit (VC)
Fixed Cost, $ 56,000
The Manager of the firm wishes to Know the following:
- Calculate contribution margin per unit
- Calculate contribution margin ratio.
- Calculate BEP in units
- Calculate BEP in sales.
- Calculate sales value in $ to earn profit of $50,000
- a) Choose an Organization of your choice and underline the components which are considered while preparing a budget in that company; What are the major considerations business owners should make as they budget and forecast?
- b) PQR industries is in the Business of manufacturing agro equipment. Prepare the Cash Budget for the Quarter April to June, based upon the following data and additional information.
|Wages $||Manufacturing Overheads $||Office Overheads $||Selling Overheads $|
- The Cash balance at 1 April is $ 800,000.
- Sales: 40% cash sales & 60% collected in the following sales.
- Purchases are all on credit and paid after 2 months.
- A plot of land was purchased in April $ 87,000.
- Wages are paid two month in arrear and all overheads settled after a month they are incurred.
- PQR Industries is due to repay a loan of $ 16,000 in May.
- A dividend of $ 80,000 is expected to be received in May.
- a) The Alpine Group, Inc. provides the following data for the June 2018, when 15,000 units are manufactured:
Standard Material Cost (Per Unit) 8.50 Kg @ $7.50 / Kg
Actual Material Cost (Per Unit) 6.75 Kg @ $13.5 / Kg
Standard Labour Cost (Per Unit) 5.5 hrs @ $15 / Hr
Actual Labour Cost (Per Unit) 6.5 hrs @ $12.2 / Hr
Direct Material Price Variance
Direct Material Quantity/Usage Variance
Total Material Cost Variance
Direct Labour Rate Variance
Direct labour Efficiency variance
Total Labour Cost Variance
- Calculate variable overhead spending variance if actual labor hours used are 260, standard variable overhead rate is $10.40 per direct labor hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favorable or unfavorable
- Calculate the variable overhead efficiency variance using the following figures:
|Number of Units Produced||620|
|Standard Direct Labor Hours Per Unit||0.2|
|Actual Direct Labor Hours Used||260|
|Standard Variable Overhead Rate||$10.40|
- b) Variance analysis is especially effective when you review the amount of a variance on a trend line, so that sudden changes in the variance level from month to month are more readily apparent. Variance analysis also involves the investigation of these differences, so that the outcome is a statement of the difference from expectations, and an interpretation of why the variance occurred.
Define the term “Variances Analysis” and also highlight the Advantages and Disadvantages of Variances.
Define the term Cost. Classification depends on the nature of the organization concerned. Discuss cost classification based on variability and controllability, highlight example for each.
- “Too much inventory is expensive and wasteful. Not enough inventories can result in lost sales”- Elucidate.
- Inventory can be anything from boxes of ice cream cones in the storeroom at a sweet shop to a million-square-foot warehouse full of goods for a big box chain. But in either case, accurate inventory management is a key to that company’s success.
Simply put, inventory is the goods that a business owns that it plans to sell. If your company is an apparel retailer, products become inventory when you take possession of shirts, dresses, suits and accessories from your suppliers. Those products leave the stock when they’re sold to customers. Inventory can be stored on premises or at warehouses, distribution centers and other facilities.
Why inventory management is so crucial to a company’s success and How to Manage Inventory?
- Contribution Margin per unit = Selling Price p.u – Variable Cost p.u
- Contribution Margin Ratio = Contribution p.u
Selling Price p.u
- BEP in Units = Fixed Cost___________
Contribution margin p.u
- BEP in sales = Fixed Cost__________
Contribution margin ratio
- Sales in $ = Fixed cost + Desired Profit
Contribution Margin Ratio
- Direct Material Price Variance = (SP – AP) x AQ
- Actual Quantity = Actual Quantity Produced x Actual Material p.u
- Direct Material Quantity / Usage Variance = (SQ – AQ) x SP
- Total Material Cost Variance = DMPV + DMQV
- Direct Labour Rate Variance = (SR – AR) x AH
- Actual Hours = Actual Quantity Produced x Actual Labour Hrs p.u
- Direct Labour Efficiency Variance = (SH – AH) x SR
- Total Labour Cost Variance = DLRV + DLEV
- Variable Overhead Spending Variance = Standard Variable Overhead Rate − Actual
Variable Overhead Rate = Difference Per
Hour × Actual Labor Hours
- Direct Labor Efficiency Variance = Actual Units Produced × Standard Direct Labor
Hours Per Unit = Standard Direct Labor Hours
Standard Hours Allowed − Actual Hours Used = Difference × Standard Variable Overhead Rate