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MS-04 Solved Assignment Accounting and Finance for Managers

Rs. 200.00

  • Version: 2015 July - Dec


Soft Copy: Yes

1. Discuss the activities performed by accounting personnel and the role and responsibilities that they undertake in an organisation.

Answer. Accounting personnel operate at many levels and in different roles within all.....

2. You are required to prepare Funds Flow Statement and Cash Flow Statement for the year ending 31st March 2015, based on the information given below.
Balance Sheet
(As on 31st March)

Liabilities

2014

2015

Assets

2014

2015

Trade Creditors

100

40

Cash at Bank

100

65

Bills Payable

50

60

Accounts Receivable

105

120

Outstanding Expenses

25

20

Bills Receivable

130

140

Bonds Payable

220

140

Inventory

110

40

Accumulated depreciation

   

Machinery

120

160

-on Machinery

30

35

Building

300

310

-on Building

75

85

Land

60

130

Reserves

100

115

Patents

55

60

Retained Earnings

130

170

     

Share Capital

250

360

     
 

980

1025

 

980

1025

Profit from operations after providing Rs. 10,000 as depreciation on building and Rs. 10,000 on machinery and Rs. 5,000 as amortization on Patents for the year ‘April 14 – March 15’ was Rs. 35,000. Other revenues for the year were Rs. 40,000. An old machine with original cost of Rs. 15,000 was sold at a loss of Rs. 5,000.

3. Explain briefly the technique of Marginal Costing. In what ways you consider this technique useful in Management Accounting.

Answer. Marginal Costing is the technique of costing fully oriented towards managerial decision.....

4. A company manufactures a single product in its factory utilizing 60% of its capacity. The selling price and cost details are given below:

 

Rs.

Sales (6,000 units)

5,40,000

Direct materials

96,000

Direct labour

1,20,000

Direct expenses

18,000

Fixed overheads:

 

Factory

2,00,000

Administration

21,000

Selling and Distribution

25,000

12.5% of factory overheads and 20% of selling and distribution overheads are variable with production and sales. Administrative overheads are wholly fixed. Since the existing product could not achieve budgeted level for two consecutive years, he Company decides to introduce a new product with marginal investment but largely using the existing plant and machinery.

The cost estimates of the new product are as follows:

Cost elements

Rs. per unit

Direct materials

16.00

Direct labour

15.00

Direct expenses

1.50

Variable factory overheads

2.00

Variable selling and distribution overheads

1.50



It is expected that 2,000 units of the new product can be sold at a price of Rs. 60 per unit. The fixed factory overheads are expected to increase by 10%, while fixed selling and distribution expenses will go up by Rs. 12,500 annually. Administrative overheads remain unchanged. However, there will be an increase of working capital to the extent of Rs. 75,000, which would take the total cost of the project to Rs. 8.75 lakh. The company considers that 20% pre-tax and interest return on investment is the minimum acceptable to justify any new investment.

You are required to
(a) Decide whether the new product be introduced.
(b) Make any further observations/recommendations about profitability of the Company on the basis of the above data, after making assumption that the present investment is Rs. 8 lakh.

5. How do you envisage your role as a Finance Manager in matters related to dividend policy? What are the alternatives and factors that you may consider before finalizing your views on dividend policy?

Answer. The size and frequency of dividend payments are critical issues in company policy. Dividend policy.

MS-04 Solved Assignment - IGNOU MBA

This page is dedicated to IGNOU Master of Business Administration (MBA) MS-04 Accounting and Finance for Managers Solved Assignment. You can download IGNOU MBA MS 4 Solved Assignments of 2015 July - Dec here.

Old Sample Answer

Q. What do you understand by Revenue Expenditure?
Answer. Revenue expenditure is the day-to-day expenditure that the organisation incurs as it goes about its business of producing and selling goods and services. Revenue expenses include materials, heating, lighting, admin and management salaries, stationery, photocopying, etc. They are the daily costs of doing business and are charged.......... Revenue expenditure usually has the following characteristics: It is the consequence of earlier capital acquisitions, It is short term, It is usually funded out of day-to-day revenue. As revenue costs do not form part of the fixed asset cost, they are expensed in the income statement in the period in which they are incurred........

Q. What do you understand by Capital Expenditure?
Answer. Capital expenditure is about spending money on long-term assets. Long-term assets could be things like plant, machinery and equipment. Capital expenditure could also be about developing products and brands that deliver a long-term return...... The main form of capital expenditure is on items used in the business over a long period of time – for example, buildings, furniture, and equipment. These are usually referred to as long-term assets. Long-term assets may be tangible assets, such as those named above, or intangible assets such as investments in patents, copyrights...... Plans for capital expenditure must take into account how limited cash is today as well as 'the time value of money'. Constructing a capital expenditure plan requires us to produce a model of the cash flows associated with........


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