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(i) The budgeted overheads for a company are ₹10,000, consisting of ₹6,000 as fixed and ₹4,000 as variable. Actual overheads incurred were ₹10,400, with ₹6,100 as fixed and ₹4,300 as variable. The actual hours worked were 2,100. What are the variable overhead cost variance and fixed overhead cost variance?

₹100 (Adverse) and ₹200 (Adverse) ₹100 (Favorable) and ₹200 (Favorable) ₹100 (Adverse) and ₹200 (Favorable) ₹200 (Adverse) and ₹100 (Favorable)

(ii) A company sells a product at ₹80, with a variable cost of ₹32 per unit. The fixed cost is ₹11,52,000 per year. The company operates with a margin of safety of 40%. What is the total sales of the company?

4,000 units 40,000 units 30,000 units 20,000 units

(iii) A firm dealing in electrical equipment has a P/V ratio of 50% and a margin of safety of 40%. What will be the Break-Even Point (BEP) if the sales volume is ₹50,00,000?

₹25,00,000 ₹35,00,000 ₹30,00,000 ₹36,00,000

(iv) ABC Limited currently has a PBIT of ₹19.20 lakhs on total assets of ₹96 lakhs. The company plans to increase assets by ₹24 lakhs, expecting an increase in operating profit before depreciation of ₹8.40 lakhs. The net increase in depreciation is ₹4.80 lakhs. What will be the change in ROI?

ROI will increase by 1% ROI will decrease by 1% ROI will decrease by 1.5% ROI will remain the same

(v) For a Learning Curve percentage of 72%, the time to complete the 4th unit of a 12-unit job is 80 hours for the first unit. What will be the time taken to complete the 4th unit?

43.50 hours 41.47 hours 46.71 hours 40.95 hours

(vi) A company expects to sell 40,000 new mixers annually at a price of ₹60 each. To design, develop, and produce these mixers, an investment of ₹40,00,000 is required. The company desires a 15% ROI. What will be the target cost to manufacture, sell, distribute, and service one mixer?

₹37.50 ₹40.00 ₹45.00 ₹48.60

(vii) When inventory is issued from stock after the product's manufacture is complete, this process is referred to as:

Forensic Accounting Back-flush Accounting Tax Accounting Lean Accounting

(viii) Match the following terms with their corresponding definitions:

Source	Cure
A) Dr. Deming believes	(1) Common causes
B) Ishikawa development	(2) To prevent defect
C) Type of variation is due to	(3) Cause & effect diagram
D) Crosby’s objective of quality	(4) Histogram

A-3, B-2, C-1, D-4 A-2, B-3, C-4, D-1 A-2, B-3, C-1, D-4 A-4, B-3, C-1, D-2

(ix) Sab Ltd. fixes the inter-divisional transfer prices based on cost plus a return on investment in the division. The division’s budget for 2016-17 includes fixed assets of ₹5,00,000, current assets of ₹3,00,000, debtors of ₹2,00,000, an annual fixed cost of ₹8,00,000, and a variable cost per unit of ₹10. The budgeted volume is 400,000 units per year, and the desired ROI is 28%. What is the transfer price for division X?

₹12.70 ₹10.70 ₹8.70 ₹14.70

(x) A company uses traditional standard costing. The actual inspection and setup costs are ₹1,760 against a budget of ₹2,000. The budgeted production is 10,000 units in batches of 1,000 units, while the actual production was 9,000 units in 11 batches. Under an Activity-Based Costing (ABC) system, what will be the cost per batch?

₹160 ₹200 ₹180 ₹220

Dec 2017 SCM Paper