IIBM Exam papers: Examination Paper MM.100 Hospitality and Tourism Marketing: contact us for answers at assignmentssolution@gmail.com

Examination Paper: Hospitality Management

4

IIBM Institute of Business Management

IIBM Institute of Business Management

Examination Paper MM.100

Hospitality and Tourism Marketing

Section A: Objective Type (30 marks)

· This section consists of Multiple choices/Fill in the blanks/True-False and short notes type

questions.

· Answer all the questions.

· Part One questions carry 1 mark each and Part two questions carry 5 marks each.

Part One:

Multiple Choices:

1. In SMERF, ‘S’ stands for:

a. Social

b. Service

c. Sale

d. None of the above

2. If the Question Mark businesses are successful then they become Stars.(T/F)

3. Customers can be considered under:

a. Micro environment forces

b. Macro environment forces

c. None of the above

d. depending on the area of consideration any of the above

4. Demography is the study of………………………………………………………………………

AIMA Sem 2 assignments:FM12 FINANCIAL MANAGEMENT :contact us for answers at assignmentssolution@gmail.com

FM12

FINANCIAL MANAGEMENT

Assignment I
Assignment Code: 2012 FM12 B1                    Last Date of Submission: 15th October 2012
                                                                                                                                                  Maximum Marks: 100
Attempt all the questions. All questions carry equal marks.

Section A

1.     Explain the concept of risk analysis with reference to capital budgeting. Briefly describe the methods as measures of dealing with risks of capital budgeting

2.    Explain the following methods of working out the cost of equity shares:
    (i)  Dividend Price Approach
(ii) Earning Price Ratio
(iii) Dividend Plus Growth Approach
(iv) Realised Yield Approach
(v) Capital Asset Pricing Model (CAPM)


3.        ABC Ltd. Produces electronic components with a selling price per of Rs.100. Fixed cost amount to     
              Rs.2,00,000/-
5000 units are produced and sold each year. Annual profits amount to Rs.50,000/-. The company’s all equity financed assets are Rs.5,00,000/-. The company proposes to change its production process, adding Rs.4,00,000/- to investment and Rs. 50,000/- to fixed operational costs.
The consequences of such a proposal are:
     (i)  Reduction in variable cost per unit by Rs.10/-
(ii) Increase in output by 2000 units.
(iii) Reduction in selling price per unit to Rs.95/-
(a)     Assume an average cost of capital 10%. Examine the above proposal and advise whether or not the company should make the change.
(b)     Also work out the degree of operating leverage.

4.    You are required to determine the weighted average cost of capital of a firm using (i) book–value  weights and (ii) market value weights. The following information is available for your perusal:
       Present book value of the firm's capital structure is:.
                                        Rs   
             Debentures of Rs. 100 each            8,00,000
             Preference shares of Rs. 100 each        2,00,000
             Equity shares of Rs. 10 each                 10,00,000
                                                             20,00,000             
All these securities are traded in the capital markets. Recent prices are: Debentures @ Rs. 110, Preference shares @ Rs. 120 and Equity shares @ Rs. 22.
     Anticipated external financing opportunities are as follows:
(i)    Rs.100 per debenture redeemable at par : 20 years maturity 8% coupon rate, 4% floatation costs,
        sale price Rs. 100.
(ii)    Rs.100 preference share redeemable at par : 15 years maturity, 10% dividend rate, 5% floatation
        costs, sale price Rs. 100.
(iii)    Equity shares : Rs. 2 per share floatation costs, sale price Rs. 22.
 In addition, the dividend expected on the equity share at the end of the year is Rs. 2 per share; the anticipated growth rate in dividends is 5% and the firm has the practice of paying all its earnings in the form of dividend. The corporate tax rate is 50%.

Section B
5.    Case Study

Hardware Ltd. manufactures computer hardware products in different divisions which operate as profit centers. Printer Division makes and sells printers. The Printer Division's budgeted income statement, based on a sales volume of 15,000 units is given below. The Printer Division's Manager believes that sales can be increased by 2,400 units. If the selling price is reduced by Rs. 20 per unit from the present price of Rs. 400 per unit, and that, for this additional volume, no additional fixed costs will be incurred.
Printer Division presently uses a component purchased from an outside supplier at Rs. 70 per unit. A similar component is being produced by the Components Division of Hardware Ltd. and sold outside at a price of Rs. 100 per unit. Components Division can make this component for the Printer Division with a small modification in the specification, which would mean a reduction in the Direct Material cost for the Components Division by Rs. 1.5 per unit. Further, the Component Division will not incur variable selling cost on units transferred to the Printer Division. The Printer Division's Manager has offered the Component Division's Manager a price of Rs. 50 per unit of the component.
Component Division has the capacity to produce 75,000 units, of which only 64,000 can be absorbed by the outside market.
The current budgeted income statement for Components Division is based on a volume of 64,000 units considering all of it as sold outside.


    Printer Division    Component Division
    Rs. '000    Rs. '000
Sales revenue
Manufacturing cost:
Component
Other direct materials, direct
labour and variable OH
Fixed OH
Total manufacturing cost
Gross margin
Variable marketing costs
Fixed marketing and Admn. OH
Non–manufacturing cost
Operating profit    6,000

1,050

1,680
480
3,210
2,790
270
855
1,125
1,665    6,400

—

1,920
704
2,624
3,776
384
704
1,088
2,688
(i)    Should the Printer Division reduce the price by Rs. 20 per unit even if it is not able to procure the components from the Component Division at Rs. 50 per unit.
(ii)    Without prejudice to your answer to part (i) above, assume that Printer Division needs 17,400 units and that, either it takes all its requirements from Component Division or all of it from outside source. Should the Component Division be willing to supply the Printer Division at Rs. 50 per unit?
(iii)    Without prejudice to your answer to part (i) above, assume that Printer Division needs 17,400 units. Would it be in the best interest of Hardware Ltd. for the Components Division to supply the components to the Printer Division at Rs. 50?
Support each of your conclusions with appropriate calculations.












FM12

FINANCIAL MANAGEMENT

Assignment II
Assignment Code: 2012 FM12 B2              Last Date of Submission: 15th November 2012
    Maximum Marks: 100
Attempt all the questions. All questions carry equal marks.
   
Section A

1.    Explain how the working capital management policies affect the profitability and liquidity of the firm?

2.    What is the Modigliani-Miller’s irrelevance hypothesis in dividend decision making? Critically evaluate its assumption.

3.    From the following balance sheets of Winners Ltd. for years ended 31st March, 2003 and 2004, prepare a cash flow statement:
            Liabilities                31.03.2003                    31.03.2004
                                       (Rs.)                  (Rs. )
            Equity shares of Rs.100 each        9,00,000                12,00,000
            Securities premium                  -                     90,000
            Profit and loss appropriation account     3,00,000                  3,00,000
            Profit for the year                   50,000                  6,00,000
            9% Debentures                 4,00,000                  3,00,000
            Sundry creditors                 4,05,000                     2,30,000
            Provision for taxation            1,50,000                  3,00,000
            Proposed dividend                   45,000                  1,00,000
                                              22,50,000                                            31,20,000
            Assets                    31.03.2003                    31.03.2004
                                       (Rs.)                  (Rs. )
            Land                    6,00,000                          7,50,000
            Plant and machinery     12,00,000            13,50,000
            Less: depreciation          4,20,000    7,80,000            4,50,000      9,00,000
            Loan to subsidiary company               50,000
            Share in subsidiary company           60,000                60,000
            Stock in trade                 3,70,000                      4,50,000
            Debtors                     3,00,000                       4,00,000
            Bank                                                                    90,000                       60,000           
                                                22,50,000                                          31,20,000
           The following additional information are available:
(i)    A plant costing Rs.1,50,000 was sold during the year for Rs.60,000. Accumulated depreciation on this plant was Rs.1,00,000 and profit/loss, if any, arising out of this sale was transferred to profit and loss account.
(ii)    During the year, the company paid income-tax amounting to Rs.1,80,000.

4.     From the following information provided by Big Brothers Ltd., draw up its balance sheet:
Current ratio
Liquid ratio
Net working capital
Stock turnover ratio (cost of sales/closing stock)
Gross profit ratio
Fixed assets turnover ratio (on cost of sales)
Average collection period
Fixed assets to shareholders net worth
Reserve and surplus to capital
Long term loans    2.5
1.5
Rs.60,000
6 times
20
2 times
2 months
0.8
0.5
Rs.30,000
   
Section B
5.    Case Study


    A multi product company has been producing an electronic components in its department P. the budget of department P for the next year is as under:
Budgeted Production and Sales 72,000 units.
            Rs. Per unit
Selling price
Direct materials    200
X 1kg per unit
Y I kg per unit    40
30
Direct wages
Variable overheads
Fixed overheads
Total
Profit    40
20
60
190
10_


    Subsequent to the preparation of the budget, the company offered that the setting up of an electronic park in the region where the company is situated has resulted in migration of the majority of the departments workforce and consequently the company is forced to take a decision on the closer of the department and abandonment of the budget. The company was however, advised to produce either 24000 or 48,000 components in the next year by employing contract labour. A few remaining workers will be absorbed by the company with in the organization against vacancies. The relevant data are as under:
(a)    The cost of contract labour is Rs.6 per hour and the standard contract labour time per unit s 10 hours. The contract labour, however, will have to be trained at a fixed cost of Rs.40,000.
(b)    The stock of material X is 72000kg. There is no other use for this material. The quantity not used in department P will have to be disposed of. The cost of disposal is Rs.4000 plus Re.1 per kg disposed off.
(c)    The stock of material Y is 36000kg. if this material is not used in department P, a quantity up to 24000kg can be used in another department a substitute for an equivalent weight of a material which currently costs Rs.36 per kg. Material Y originally cost Rs.30 per kg and its current market price is Rs.40 per kg. if any surplus material Y is sold, it will fetch a realization of Rs.20 pre kg sold.
(d)    The variance overheads will be 30% higher per unit produced than originally budgeted.
(e)    If department P is to closed down immediately, the foreman who will otherwise retire at the end of next year, will be asked to retire earlier and he will be paid Rs.80,000 as compensation. His salary is Rs.6,000 per month.
(f)    The only machine used in department P originally cost Rs. 1,40,000 and it can be currently sold for Rs.86,000. This sales values will go down to RS.80,000 at the end of the next year and if the machine is used during the next year for any production activity in the year, the sale value will further decrease by Rs.1000 per every 1000 units produced.
(g)    The fixed overheads are apportionment of general overheads and will not be altered by any decision concerning department P.
(h)    The sales manager states that a sales volume of 24000 units can be achieved if the selling price is set at Rs.180 per unit. He further stated that a sales volume of 48000 units will be achieved if the selling price per unit is reduced to Rs.150 and an advertisement expenditure of RS.30,000 is spent.

Required:
(i)    Prepare a statement indicating the financial implications of the choice to be made between the following alternatives:
(A) Close down department P immediately.
(B) Operate department P for a further year to produce 24000 units of he component.
(C) Operate department P for a further year to produce 48000 units of the component.
(ii)    Advise the management on the course of action to be taken.

AIMA Sem 1 assignments:GM12 Business Communication:contact us for answers at assignmentssolution@gmail.com

GM12
                                         Business Communication

                                                          Assignment I

Assignment Code: 2012 GM12 B1                                                      Last Date of Submission: 15th October 2012
                                                                                                                Maximum Marks: 100     

Attempt all the questions. All questions carry equal marks.

                                                                Section A
1.    “If all my possessions were taken from me with one exception, I would hope to keep my power of communication …. For by it I would regain all the rest.”  Comment on the statement  by Daniel Webster with reference to the components of business Communication?
2.    “Writing is an Art.” In light of the above statement, write a detailed note on   ‘Writing with style.’
3.    Persuasive messages are different as compared to routine messages. Compare the two? Write a persuasive message to your Manager convincing him to relocate you to a new city?
4.    On the one hand, it is said that oral communication saves time and on the other it is said that it wastes time. How and why does it happen?                                                                   
Section B
  Case Study
From  : Belinda Gibson, Training Coordinator                              To: Freda Smith, General Manager
Subject: Portable Computers                                                               Date: January 29 2008
To make the most of the technologies we discussed the other day to provide a quality service to our customers, it is essential that our training staff be equipped with portable computers which can be used at client sites.
Over the next couple of weeks, please investigate the portable computers which would be most appropriate for our staff, and present your findings in the form of a formal management report. The selected machine needs to be compatible with the Windows software we are currently using. Other factors which should be considered when comparing the brands and models include:
•    Initial cost;
•    Weight and size;
•    Screen size;
•    Clarity of the screen image;
•    RAM and hard disk size;
•    Speed of the CPU;
•    Battery capability; and
•    The availability of on-going service agreements and warranties.
With our training staff so often out at client sites, it would be useful if the machines also had modern facilities to enable staff to access their email. Please pass the report to me by the end of the month so I can read it over before discussing your recommendations with the training staff. Let me know if you have any questions.

A Business report was submitted based on the requirement.
Business Report on Comparison of two Computers
1.0 Executive Summary
The purpose of this report was to analyze  two portable computers and recommend a suitable machine for the training staff to use at client sites. The analysis has led to a choice of computer. This report has considered two machines suitable for corporate use that can accommodate modern facilities such as e-mail, video conferencing and assist staff with training courses.
A summary of the findings is presented in the next two paragraphs.
The Hewlett Packard Omnibook 3000CTX model 5/233 is a well made portable computer with a good size screen and keyboard. For the price of this model you would expect to see more memory, a CD drive and a Windows based power management set up. (Australian PC Authority, April 1998, 'PCs and Notebooks - Reviews', p.82)
Like the Hewlett Packard model the Micro-pro 8500 Series has a good size screen and keyboard but also comes with a numeric pad. This machine is ideal for the business user who wants usability, comfort and performance. (Australian PC Authority, April 1998, 'PCs and Notebooks - Reviews' , p.81)
After taking both machines into consideration, it is recommended that the Micro-pro 8500 Series would be the most suitable computer due to its value for money, durability and standard features.
1.1 Purpose : The purpose of this report was to analyse two portable computers and recommend a suitable machine for our training staff to use at client locations.
1.2 Scope:  While investigating these two computers it was important to consider their suitability for corporate use, standard features, optional benefits and warranties.
1.3 Method: The information used in this report was collected by consulting an independent review by the Australian PC Authority magazine and contacting the individual companies for additional information on the technical specifications and warranties on the machines.
1.4 Limitations
•    Local computer stores did not stock either machine.
•    Additional information difficult to locate.
•    Software packages included with the machine not specified.
1.5 Assumptions
It has been assumed that the Microsoft Office software package will be installed on the computers to ensure our training staff  have access to PowerPoint. This program will enable them to present effective teaching media. As our staff  regularly use computer applications it has been assumed that the implementation of portable computers will cause little delays for the company. As most computer companies offer clients an extended warranty, it is assumed that All Purpose Training Company will have the option to purchase an extended warranty for a period of one year.
1.6 Background
The All Purpose Training Company is a well respected supplier of quality executive training courses for the business community. The All Purpose Training Company has statewide representation with plans to expand interstate within the next 12 months. All Purpose Training Company has a demand to supply new clients with numerous training courses. With such demands it is crucial that training staff can have computer access for training presentations and be able to complete day to day operations while mobile.
2. Findings
2.1 Micro-pro 8500 Series                           (Australian PC Authority, 1998, p 81).
•    Cost: $7895 RRP
•    Weight: 4.5 Kg
•    Size: (W x D x H) 357 x 275 x 50mm
•    Screen size: 15.1"
•    Clarity of screen image: Resolution could be higher, set at 1,024 x 768 you can see the pixels, but very easy on your eyes. (Australian PC Authority, April 1998, 'PCs and Notebooks - Reviews, p. 81)
•    RAM: 64 Mb, RAM can be raised to a maximum 128Mb for $1140
•    Disk Drive: CD-ROM and 3.5" FDD
•    Speed of the CPU: Pentium processor
•    Battery capabilities: Lithium-ion battery, smart battery option available. Lithium-ion battery lasts 2.5 hours without smart battery upgrade. (Australian PC Authority, April 1998, 'PCs and Notebooks - Reviews, p. 81)
•    Service agreements and warranties: Two year parts and labour warranty
2.2  Hewlett Packard 3000CTX 5/233               (Australian PC Authority, 1998, p 81).
•    Cost: $8245 RRP
•    Weight: 3.1 Kg
•    Size: (W x D x H) 304 x 238 x 47mm
•    Screen size: 13.3"
•    Clarity of screen image: Resolution is set at 1,024 x 768. Reasonably easy to read... with normal working conditions. (Australian PC Authority, April 1998, 'PCs and Notebooks - Reviews, p. 81)
•    RAM: 16Mb, upgrade available, $242 for 16Mb.
•    Disk drives: 3.5" FDD, CD-ROM available for $570
•    Speed of the CPU: Pentium processor
•    Battery capabilities: - 2.5 hours from a lithium-ion battery
•    Service agreements and warranties: All Hewlett Packard Omnibooks come with a 3 year parts and labour warranty. (Stephen, 7/5/1998, Telephone Interview, Customer Service Officer, Hewlett Packard Information Centre, Hewlett Packard)
3 Discussion                                       3.1 Comparison of computers
The following table summarises the important points of comparison between the two portable computers - Hewlett Packard Omnibook and Micropro 8500 Series.
Table 1: Comparison of two portable computers
    Hewlett Packard Omnibook    Micropro 8500 Series
Initial cost    $8245    $7895
Weight    3.1 Kg    4.5 Kg
Size (Dimensions WxDxH)    304 x 238 x 47mm    357 x 275 x 50mm
Screen Size    13.3"    15.1"
RAM    16 Mb    64 Mb
Battery Time    2.5 Hours    2.5 Hours
Warranty Period    3 Years    2 Years
3.2 Initial cost: There is a RRP difference between the two computers of $350. In order to have the computers ready for staff use, upgraded memory size would be required on the Hewlett Packard model.
3.3 Weight and size: The Micro-pro computer weighs an extra 1.4 Kg. This is substantially heavier, but the Micro-pro is a larger machine with each dimension larger than the Hewlett Packard computer. Micro-pro measures 53W x 37D x 3H mm larger.
3.4 Screen size : There is a notable gap between screen sizes. Micro-pro has a 14.1 inch screen compared with Hewlett Packards 13.3 inch screen. When using over long periods a larger screen is preferred to avoid eye strain.
3.5 Clarity of screen image                     (Australian PC Authority, 1998,  p. 81-82).
The resolution on both machines is set a 1,024 x 768. Pixels can be seen on the Micro-pro model, while the Omnibook is reasonably easy to read. (Australian PC Authority, April 1998, PCs and Notebooks - Reviews, p. 81 - 82)
3.6 RAM and hard disk Size             (Australian PC Authority, 1998, pp. 81-82).
RAM between the two machines varies greatly. The Australian PC Authority states that the Micro-pro comes with 64 Mb of RAM standard, with an option of buying the maximum 128 Mb for $1140. They also state Hewlett Packards Omnibook comes with 16 Mb RAM, but as most computer applications require 32 Mb, this extra memory will cost you $242. Both machines come with a standard 3.5" FDD. Only the Micro-pro machine comes with a CD-ROM drive, you must buy this as an extra for the Omnibook for a cost of $570. (Australian PC Authority, April 1998, PCs and Notebooks - Reviews, p. 81- 82)
3.7 Speed of the CPU : With 32 Mb of RAM fitted the Omnibook is one of the fastest portable computers the Australian PC Authority magazine has ever seen, They also found that with 64 Mb RAM the Micro-pro was not exceptionally quick but for word processing and other office tasks it was quite acceptable.
3.8 Battery Capability                 (Australian PC Authority, 1998, p 81).
Both machines come with a standard lithium-ion battery which can support the computers for up to 2.5 hours. The computers come with power management tools that will save battery power. A smart battery option is available on the Micro-pro for $60. (Australian PC Authority, April 1998, PCs and Notebooks - Reviews, p. 81)
3.9 Service agreements and Warranties:  Micro-pro supplies their clients with a two year part and labour warranty, while Hewlett Packard supplies a three year parts and labour warranty. It is assumed that when the machines are purchased a service agreement will be negotiated with the option to extend the warranty.
4. Conclusion
After investigating the Hewlett Packard Omnibook 3000CTX 5/233 and the Micro-pro 8500 Series portable computers, it was found that both models are suitable for corporate use and would meet All Purpose Training Company requirements.
It is important to consider the long term benefits to the company when considering which computer was best suited. Apart from initial purchasing expenses, warranty, speed, size and memory were some factors which have been taken into account. Software suitability was also considered.
The computers had to be easily adaptable for new technology such as e-mail, video conferencing and presentation aids, for future company requirements. Both computers are distinct from each other and, although both companies have the corporate user in mind, Micro-pro appears to be offering an exceptional package.
5. Recommendations and implementation
The findings and conclusion in this report support the following recommendations:
1.    The Micro-pro 8500 Series portable computer is purchased at a rate of one computer per training staff member.
2.    The smart battery option is purchased with each computer; this will assist with heavy workloads and long training programs.
3.    Staff must have e-mail access on their computers to enable them to be in contact with the company.
4.    All Purpose Training Company should negotiate price, warranty and on going service agreements with Micro-pro direct.
5.    To reduce company long term expenses:
a.    The company could investigate the viability of staff leasing the computers
b.    A staff option of buying the computers for personal use after the warranty period expires.
6.    Computers should be available to staff after a maximum of 6 weeks.
   
Question
1. Critically evaluate and justify the format of the business report? What are the commonly occurring  mistakes  in a business report?










                                                                                                                
                                   












GM12
Business Communication

                                                          Assignment II

Assignment Code: 2012 GM12 B2                                                             Last Date of Submission: 15th Nov 2012
                                                                                                                Maximum Marks: 100     

Attempt all the questions. All questions carry equal marks.

                                                                Section A
1.    “Everything is Negotiable all the time.”  Explain in context of elements of a successful Negotiation?
2.    You are applying for the post of an Executive in the I.T. department of a hospital.  The hospital is one of the leading hospitals of the country. Write   a resume and make a list of the preparations you will do before  the Interview?
3.    Paralanguage tells us a lot about the speaker’s background. Explain with an example.
4.    Planning, Preparing and Presenting are the 3 P’s to make an effective Presentation. Comment?
                                                              Section B
Case Study
MEMO
 Date:     July 1, 1995

    To:         Harold Johnston

    From:     Isabel Higginbotham

    Subject:  Procedure for Handling Payroll Advances

           There is a new procedure (to reflect updated policies) for obtaining payroll advances.  I believe that our employees will find it an improvement over the old, confusing procedure. The new procedure is as follows:

    Procedure

    1.  Obtain Form PR-7, Request for Payroll Advance, from your supervisor.
    2.  Complete the form by filling in all the blanks in the Employee Section of  the form.
    3.  Have your immediate supervisor approve your request by signing on the Supervisor Approval line.
    4.  Take the approved Form PR-7 to the receptionist in the Payroll and Benefits Office, Building Z, Room 1620.
    5.  Pick up your check from the cashier's office, Main Building, Room 201 three working days after turning in Form PR-7. You must have your employee identification card with you to receive your check.
    6.  Sign the receipt form in the presence of the cashier's office clerk.
      Policies :     The following policies govern the issue of payroll advances:
 
    1.  Payroll advances may not total more than 80% of an employees normal net pay for a payroll period.
     2.  Except in the case of a documented emergency, payroll advances are limited to one every two months.


   Questions
1 Critically evaluate and analyze the above memo and create a format for writing a Memo?
2. Draft a memo informing the recipient (employee) about his suspension.

AIMA Sem 1 assignments 2012:GM11 Management Functions & Organizational Behaviour:contact us for answers at assignmentssolution@gmail.com

GM11
Management Functions & Organizational Behaviour

Assignment I


Assignment Code: 2012 GM11 B1                 Last Date of Submission: 15th October 2012
Maximum Marks: 100

Attempt all Questions.  All questions carry equal marks.

Section A

1.    (a)    Define management and contrast the nature of management in (i) service and production
industries; (ii) private and public sector organization.

(b)    As a manager do you think it is important to go through the various management theories
and make use of the learnings from them.                          (10+10=20)

2.    (a)    If you were the Chief Executive of a   large   corporation   such  as   Sony or Infosys, how
would you “institutionalize” ethics in the organization?

(b)    “Decentralization is the tendency to  disperse  decision-making  authority.”  Comment on the statement.                                        (10+10=20)

3.    (a)    “Planning  is  looking  ahead,  and   control  is looking back”.  Comment with appropriate
example.

    (b)    Future of Indian Industrial Relation Scenario.                      (10+10=20)

4.    What do you understand by authority and power?  How are they different from each other?      (20)

Section B
Case Study

Case Study: XYZ Company

John Tan, the service manager, had Ram Lim as a supervisor in the equipment service section to oversee the work of the servicemen.  The supervisor was a nice person, but a bit soft in dealing with people.  After working for four years, Ram Lim left the company for a new job elsewhere.  A new supervisor was recruited from outside.

Roy Lee, a senior technician who had 10 years of service with the company, was disappointed because he was not considered for the supervisor’s post.  Robert had maintained a good record all along, and in fact, came up through the ranks from trainee to senior technician.

The new supervisor, Mehra, was generally a more aggressive person.  Shortly after taking over the job, he started asking his subordinates to record the actual hours spent on various activities and idle time, if any.  (Prior to this, the hours spent on each job were based on some kind of estimate.)  The technicians were not happy with this, but unwillingly complied with the demand.

The relationship between the supervisor and his workers deteriorated when Mehra started to change certain routine matters which were supposed to improve the flow of work and reduce overtime.

A few months later, two servicemen resigned.  Then the senior technician also tendered his resignation and complained to the service manager accusing Mehra of trying to create more work for them unnecessarily.  However, these complaints were found to be not fully justifiable, but to a great extent were the result of misunderstandings between Mehra and his men.

The service manager did not want to lose the senior technician, and managed to persuade him to stay on and reconcile with the supervisor.  Shortly after, the supervisor left the company.

Questions:

1.    Do you consider the actions taken by the new supervisor not tactful enough?  What would have been the tactful approach?

2.    There is a general tendency for employees to resist changes in routine, particularly when such changes may encounter initial teething problems and affect the morale of the employees.  In view of this, what should be the right approach in implementing changes?
                                                  (10+10=20)
GM11
Management Functions & Organizational Behaviour

Assignment II


Assignment Code: 2012 GM11 B2                       Last Date of Submission: 15th Nov 2012
                                               Maximum Marks: 100

Attempt all Questions.  All questions carry equal marks.

Section A

1.    What are the control systems used in organizations?  What features of these systems contribute towards its effectiveness?  What contingency factors do you think influence these control systems?
(20)

2.    (a)    Type and trait theories of personality.

(b)    Which  behavioural theory explains it’s attitude towards employees?  How does it differ from other related theories?                              (10+10=20)

3.    “Co-ordination is imperative for the success of any organization”.  Explain the underlying concept, suggest ways to achieve effective co-ordination in a decentralized organization.            (20)

4.    Write short notes:

(a)    Locus of Control
(b)    Conflict Management
(c)    Group Vs. Team
(d)    Distribution of Authority                                        (4x5=20)

Section B
Case Study: Palmer Machinery Company
Palmer Machinery Company has encountered hard times, not only because of an economic recession but also because of competition from products imported from Japan.  In the past, labor relations have been rather poor.  The unions usually asked for big pay increases for the workers and got them.  But things have changed during the last few months, and labor and management have realized that they are in for some bad times ahead.

The company, maintaining it is in a precarious condition, has asked labor for concessions and givebacks.  The union has called a membership meeting to discuss the situation.  While Ann Stewart, an assembler, thinks that she is overpaid and argues for a wage reduction, the majority of those present disagrees and do not want to make any concessions.  In fact, there is a great mistrust of management’s intentions and the workers feel that giving concessions will encourage the company to ask for additional ones.  After a long discussion some workers are more agreeable to concessions if management makes similar sacrifices.  But management does not make any commitments.  During the next few weeks the situation gets worse; faced with a layoff, the union agrees to some cutbacks with the understanding that employees will share in some way in the profits of the company when things get better.

One month later, a national-magazine survey of executives’ salaries at major companies shows that the executives at Palmer received a substantial increase in compensation.  One worker remarks; “You just can’t trust top management.  I wish our situation was like the one in Japan, where in hard times the dividends are cut first, then the salary of top management is reduced and later middle-level managers get a pay cut; the workers’ pay is affected last.”

Questions:

1.    Do you think the workers should have made concessions and agreed to givebacks?

2.    If you were the president of the company, how would you have handled the situation?
         (10+10=20)

AIMA Sem 1 assignments 2012:GM04 Managerial Economics:contact us for answers at assignmentssolution@gmail.com

GM04
Managerial Economics

Assignment I


Assignment Code: 2012 GM04 B1                Last Date of Submission: 15th October 2012
                                                            Maximum Marks: 100

Attempt all Questions.  All questions carry equal marks.

Section A

1.    “Managerial Economics is integration of economic theory and business practice for the purpose of facilitating decision-making and forward planning by management.”  Elucidate the statement. (20)    

2.    Write short note on the following concepts:
a.    Isoquants
b.    Break-even Analysis
c.    Incremental Reasoning
d.    Difference between economies and diseconomies of scale.                            (4x5=20)

3.    Why is Long Run Average Cost Curve known as the Planning Curve?                        (20)

4.    Explain the Percentage Method and Total Outlay Method for measurement of Elasticity of Demand with the help of suitable illustration.                                 (20)

Section B
Case Study: The Production Process in Vandana Enterprise

Vandana Enterprise Pvt. Ltd is owned by the Kumar family.  Mr Ramesh Kumar, the Managing Director and his daughter Vandana, jointly look after the company affairs.  Mr Gopal Kumar is the Chairman, but the day-to-day operations are handled by the father and daughter team.  There are about 300 employees and the sole aim of the company is to expand the market share in the textile market at home, as well as abroad.  Twenty-five years ago, when the company was started in a small town in Punjab, there were around 350 workers.  The company used indigenous and old technology to produce clothes.  Labour was mainly used while machines were used minimally.  The plants were modernized and mechanized over the years by acquiring the latest technology from  Japan and Europe, the result being that the number of machines were doubled and production quadrupled from 15,000 metres of cloth to about 62,000 metres of cloth everyday.  Vandana Enterprise had specialized till now only in the spinning and weaving of white linen and had no plans of changing the patterns of production.  However, after acquiring a modern machine from Japan, the company started planning the printing of bed sheets, pillow covers, etc., as a market for it existed all over India.  The company had, moreover, already established distribution channels and had significant presence.  Moreover, the South Asian, South-East Asian and Asia Pacific region proved to be a great export market.

Mr Kumar and Miss Kumar assumed that in order to increase their sales and make a bigger impact in the international market, the company had to improve on market information, regarding the specific needs and demands of customers in different markets.  The father and daughter team felt that the company had achieved maximum technical efficiency and the maximum production efficiency as the man-machine ratio was optimal.

Mr Gopal Kumar, Mr Ramesh Kumar’s older brother felt that mechanizing the plants further could increase the production capacity to a great extent (more than improving on market information).  Gopal Kumar didn’t mind retrenching some of the labour, but Ramesh Kumar and Vandana, thought the present man-machine ratio of 1;7:1 as maximum for the company, and the further import of the machine could not increase the production unless more people were hired – that too in exact accordance with the machines being bought/hired.  Hence, the best way to improve production and sales is by improving on market information, as there is unanimous decision of the management that at no cost will more workers will be hired.

Questions:

I    Can you comment on the returns to scale and factors (of production) of Vandana Enterprise, which the company experienced with mechanization of its plants?

II    When Mr. Gopal Kumar insists that production can be increased by further mechanization of the plants, what is the assumption regarding the production function that has to be valid?   (10+10=20)        




GM04
Managerial Economics

Assignment II


Assignment Code: 2012 GM04 B2                      Last Date of Submission: 15th Nov 2012
                                                                    Maximum Marks: 100

Attempt all Questions.  All questions carry equal marks.

Section A

1.    What do you mean by Monopolistic Competition?  Derive firm’s equilibrium in monopolistic competition.                                                 (20)

2.    Write short note on:
a.    Baumol’s Sales Revenue Maximization Model
b.    Difference between Risk and Uncertainty                                    (10+10=20)

3.    How does a seller practice price discrimination?  What are the necessary conditions for price discrimination to be possible?                                    (20)

4.    Explain the MR and MC approach for equilibrium determination of firm in short run.            (20)                                            

Section B

Case Study: Cartel Formation by the Organization of
                         Petroleum Exporting Countries (OPEC)

OPEC is possibly the most renowned of all cartels.  It was established in 1960 by 5 major oil-exporting countries namely, Saudi Arabia, Iran, Iraq, Kuwait and Venezuela.  OPEC based itself on the principles of coordination and unification of the petroleum policies of member countries and the organization of means to ensure stabilization of prices, removing disadvantageous fluctuations.

Before 1960, countries producing oil had seen mounting/escalating clashes with international oil companies, which extracted oil under a concessionary agreement, whereby these companies could extract oil in return for royalties.  In effect, the oil producing countries had little say over the price, output and hence the revenue.  Till 1973, despite the existence of the cartel, OPEC member countries had virtually no control over oil production.

By 1973 with 13 members, i.e. Algeria, Gabon, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates, Venezuela and Ecuador, the OPEC pricing policy through the 1970s comprised of setting a market price for Saudi Arabia (the market leader in terms of highest volume in production) and leaving other OPEC members to set their prices thereafter.

The cartel operated smoothly when demand conditions were buoyant.  The reasons for this being, that oil has an inelastic demand in the international market.  Consequently, the members earned huge revenues with a rise in price.  In 1973-74, after the Arab-Israeli War, OPEC increased the price from $ 3 per barrel to over $ 12 per barrel.  This was maintained till 1979-80.  Sales hardly showed a decline on account of the four-fold rise.  After the 1980 post - Iranian revolution, when the price was increased from $ 15 per barrel from $ 40 per barrel, the world demand dropped. This decline in demand was as a result to:

1.    Recession in the world economy (later, economists realized that recession was due to the soil shock itself).
2.    Steep rise in oil price resulting in conservation policies.  (For instance, lowering thermostats, switching to small fuel and efficient automobiles, etc).
3.    Expanded exploration and production by UK and Norway in the North Sea by USA in Alaska and by Mexico in newly discovered fields.  Switching to other sources of energy.

The result was a drastic fall in OPEC’s share of world oil production (from 55 to 60 percent in 1974 to less than 40 percent in 1994-95).

In order to restore its old glory, OPEC met frequently to settle aspects like oil prices and production quotas.  Hit by the harsh reality of declining demand, OPEC members settled down on a production ceiling of 16 million barrels per day to keep the price up.  This was the start of the break-up of the cartel.

Two trends were visible. On one hand, countries, which were densely populated and had low petroleum reserves like Nigeria, Indonesia and Iran wanted to charge high prices to maximize their short-run profit, while on the other hand, thinly populated and large reserve countries like Saudi Arabia and Kuwait preferred low prices to dissuade conservation and exploration of oil by bob-OPEC countries. They targeted long-term profits.  Prices declines in the world market and ranged between $ 15 and $ 20.  This prompted member countries like Venezuela and Nigeria to cheat by producing more than their quota.

With the glut in the oil market, OPEC could not regain its former glory, as it could not increase the price as desired.  There was a temporary surge in price after the Gulf War between Kuwait and Iraq, as the supply of oil was cut off from these two oil-rich countries.  No sooner had the war ended, the oil prices fell. Today the price of crude oil, in real terms stands at roughly $ 16 per barrel, while it was @ 2.50 per barrel in 1973.

OPEC clearly is trying to dominate the scene and new strategies are continuously devised to revive oil prices by strengthening oil quotas.  The reason for low oil prices have been already outlined.  On the demand side, the development of energy saving technology, plus a rise in fuel taxes have created a relatively slow growth in consumption.  On the supply side, there is a growing supply of crude oil by non OPEC countries and the adoption of a relatively high OPEC production ceiling of 24.5 million barrels per day from 1994-95.  All these factors have upset the demand-supply harmony.

The primary concern of OPEC members was how to make non-OPEC members control their production and how to stop some of them (OPEC members) from resorting to unethical production of more than the allotted quota.  A typical production by OPEC has been an over-production of 1 million barrels per day.

Questions:

I    What are the pre-requisites for cartel formation?  Is it possible to have cartels under all kinds of market structures?

II    Assuming that analysts predict a low future price of oil in the international market to continue for sometime, what should the likely impact on the OPEC be?                      (10+10=20)

AIMA Assignments 2012:GM 03 Business Statistics:contact us for answers at assignmentssolution@gmail.com

GM 03
Business Statistics

Assignment I

Assignment Code: 2012 GM03 B1                         Last Date of Submission: 15th October, 2012
                                            Maximum Marks: 100

Attempt all the questions. All questions are compulsory and carry equal marks

SECTION – A
1.    a) Distinguish between discrete and continuous probability distribution.
b) A dart player throws is given ten attempts to hit the bulls eye. He is had good practice and believes that he will be able to hit the bulls eye 90% of the time. What is the probability that he will have hit the bulls eye at least 6 times. State the assumptions you make while answering this question.  

2.    a) A batch of products is produced using two machines namely M1 and M2. It is believed that 30% of the products are produced using machine 1. Each machine is unable to produce all items which can be accepted. Hence Machine 1 produces only 94% of the products that can be accepted and machine 2 produces 98% of the products which can be accepted. One piece of the product is taken at random from the whole lot of production and is found to be defective. Find the probability that the defective piece found was produced by Machine 1.

b)It is found that a story book containing 200 pages contained on an average 2 spelling mistakes in every 10 pages. What is the probability that in the next 25 pages of the book that you read there will be more than 8 spelling mistakes. What is the expected number of spelling mistakes per 25pages and the variance in the spelling mistakes per 25 pages.    

3.    A company has given a contract to a bottling plant to fill its products with the product. The company has specified to the bottling plant that not more than 1% of the bottles should contain less than 980 ml of the product.
a.    Find the mean fill rate that the bottling plant must set so as to maintain the guideline stated by the company. The standard deviation is believed to be 40 ml per bottle.    
b.    The bottling plant has also found that it can install a machine which will reduce the standard deviation from 40ml to 10ml, but this needs to be replaced after filling 50000 bottles and it costs the company Rs. 30000. Each bottle of 1000 ml is sold to the company for Rs. 10. Should the bottling plant install this new machine ?



4.  The GMAT scores of students who are potential applicants to a university are normally distributed with a mean of 487 and a standard deviation of 98.
i.    What percentage of students will have scores exceeding 500?
ii.    What percentage of students will have scores between 600 and 700?
iii.    If the university wants only the top 75% of the students to be eligible to apply, what should be the minimum GMAT score specified for eligibility?
iv.    Find the narrowest interval that will contain 75% of the students’ scores.
Find x such that the interval [x,2x] will contain 75% of the students’ scores. (There are two answers. See if you can find them both.)   



SECTION- B 

A Company supplies pins in bulk to a customer. The company uses an automatic lathe to produce the pins. Factors such as vibration, temperature, and wear and tear affect the pins, so that the lengths of the pins made by the machine are normally distributed with a mean of 1.008 inches and a standard deviation of 0.045 inches. The company supplies the pins in large batches to a customer. The customer will take a random sample of 50 pins from the batch and compute the sample mean. If the sample mean is within the interval 1.000 ± 0.010 inch, then the customer will buy the whole batch.
1.    Find the probability that a batch will be acceptable to the consumer?
2.    If you were the manager of the company would be satisfied with the above level of probability and if not what would you think should be reasonable level of probability.
3.    If the lathe can be adjusted to have the mean length at any desired value, what should it be adjusted to achieve the probability you desire in part (2) above.


GM 03
Business Statistics

Assignment II

Assignment Code: 2012 GM03 B2                Last Date of Submission: 15th November 2012
                                                   Maximum Marks: 100

Attempt all the questions. All questions are compulsory and carry equal marks.

SECTION – A

1.    a)       Explain the need for different  forecasting techniques. How can we evaluate as to how good is  
       our   forecast.  
b)    Collect data on the amount of expenditure you do each day for the next 25 days and based on the same forecast using 7day moving average the forecast for the 26th day. Evaluate the accuracy of your forecast.
c)     Explain one application where you can apply Queuing Theory in daily life.

2. Customers from the Higher Income Group were sampled to test the quality of foods at one of the four major restaurant run by the Taj Group of Hotels. The four types of foods for which the quality were to be checked were Chicken Platter, Honey Chicken, Chicken Spinach, and Tandoori Chicken. Each of the respondent were asked to rate in a scale of 1- 10. The following were the data.
Chicken Platter    Honey Chicken    Chicken Spinach    Tandoori Chicken
6    8    7    6
7    8    6    6
8    9    6    7
5    8    6    6
9    7    5    8
8    9    7    7
7    8    7    6
Is there sufficient evidence to indicate that the quality of food being served is different. Use 5% level of significance.

3. Maxwell’s Hot Chocolate is concerned about the effect of the recent year long coffee advertising  campaign on hot chocolate sales. The average weekly hot chocolate sales two years ago was 984.7 pounds and the standard deviation was 72.6 pounds. Maxwell’s has randomly selected 30 weeks from the past year and found average sales of 912.1 pounds.                   
1.    State appropriate hypotheses for testing weather hot chocolate sales have decreased.
2.    At the 2 percent significance level, test the hypotheses.

4. A manufacturer was making sport shirts for men. The manufacturer was mainly catering to the needs of Baseball, Basketball, and Football players. Their salesman had given a feedback to the company that the games for which the firm wanted to cater was equally applicable for both men and women and hence recommended that the firm should start making sport shirts for women as well. The firm collected data which are as follows:
      Gender    Baseball    Basketball    Football
Men    19    15    24
Women    16    18    16
 Does the data suggest whether the requirement is  gender specific at 5% level of significance



SECTION-B

The debt-to-capital ratio of a company signifies the amount of financial risk a company is taking. If the ratio is high, the risk is high. This is because when the profit margin falls, debt will worsen the situation by making the return on capital fall even more adversely. The data on debt-to-capital ratio and return on capital for 12 different health care companies were collected and given in table below. Assume that this is a random sample of health care companies. Carry out a Regression analysis on the data for return on capital against debt-to-capital ratio and then answer the following questions.

1.  What is the regression equation.                             (3)

2.  Construct the ANOVA table and check the significance level of the regression model.    

3. Calculate the coefficient of correlation and test its significance at 5% level of significance.

Company    Debt/Capital ( %)    Return on Capital ( %)
Abbott Laboratories    11    31
Allergan    24    25
Cardinal Health    30    14
Johnson & Johnson    11    25
Eli Lilly    31    40
Merck    15    33
Pfizer    7    23
SmithKline Beecham    10    22
Bristol-Myers Squibb    12    45
Stryker    55    14
United Health    10    17
Universal Health    38.6    9.8

AIMA FM11 Assignment:contact us for answers at assignmentssolution@gmail.com

FM11

FINANCIAL AND MANAGEMENT ACCOUNTING

Assignment I
Assignment Code: 2012 FM11 B1                    Last Date of Submission: 15th October 2012
                                                                                                                                              Maximum Marks: 100
Attempt all the questions. All questions carry equal marks.

Section A

1.    (I) What is the purpose of the statement of changes in financial position?
(II) What is the relationship of the assets turnover rate to the rate of return on total assets?

2.    (I) What portion of profit on uncompleted contracts is transferred to the profit and loss account. Explain for different situations.
    (II) Why is reconciliation of cost and financial accounts necessary? State the possible reasons for difference in profits shown by both accounts.
3.     A chemical process yields the following products out of materials introduced in the process:
                % of Material
        Main Product—A    60
        By-product—B    15
        By-product—C    20
        Wastage    5
Following additional information has been given to you:
    (i)    Total cost incurred:
        Input 1,000 units    Rs. 4,600
        Direct labour    Rs. 4,100
        Overheads    Rs. 6,000
    (ii)    One unit of Product-C requires half the raw material required for one unit of Product-B; one unit of Product-A requires one and half times the raw material required for Product-B.
    (iii)    Product-A requires double the time needed for the production of one unit of Product-B and one unit of Product-C.
    (iv)    Product-C requires half the time required for production of one unit of Product-B.
    (v)    Overheads are to be absorbed in the ratio of 6:1:1.
You are required to calculate the total and per unit cost of each of the products.

4.    You are given the following figures worked out from the profit and loss account and balance sheet of
    Steadfast Ltd. relating to the year 2007-08. Prepare a balance sheet:
    Fixed assets (net, after writing off 30%)                        Rs. 10,50,000/-
    Fixed assets turnover ratio (cost of sales basis)                2
    Finished goods turnover ratio                                6
    Rate of gross profit to sales                                25%
    Net profit (before interest) to sales                            16%
    Fixed charges cover (debenture interest 14%)                8
    Debt collection period                                        1-1/2 months
    Materials consumed to sales                                30%
    Stock of raw materials (in terms of number of months'
    Consumption)                                            3
    Current ratio                                                2.4
    Quick ratio                                                1.0
    Reserves to capital                                        0.21

Section B
5    Case Study

X Ltd has been offered a contract to manufacture six special machines for the Government. Manufacture would take a total of three years at the rate of two machines per year. Payment would be in two installments, Rs.3,50,000 at the start f manufacture and another Rs.3,50,000 upon completion.
 The company is now evaluating the contract to see if it is worthwhile undertaking and its management accounting department has produced the following estimates about the resources required to produce the special machines: 
(a)    Materials:
Type of material   Quantity per   Amount in        Original cost of.    Current purchase   Current realizable
  M/c   ton        stock now          stock per ton           price per ton           value per ton
                                               Rs.                            Rs.                          Rs.
Copper            20        60           700              1000                800
Radium           10         20              500                 750         See below
 
 Copper is used regularly by the company on many contracts. Radium is used rarely and if the existing stock is not applied to this contract it will have to be disposed immediately at a net cost of Rs.100 per ton. Materials required for the contract must be purchased and paid for annually in advance. Replacement cost of copper and radium and the realizable value of copper are expected to increase at an annual compound rate of 20%. 
(b) Labour:
Each of the six machines will require 3,000 hours of skilled electronic engineering and 5,000 hours of unskilled labour. Current wage rate are Rs.4 per hour for skilled electronic staff and Rs.3 per hour for unskilled labour. 
X Ltd expects to suffer a shortage of skilled staff during the firs year so that acceptance of the contract would make it necessary for the firm to give up ‘other work’ on which a contribution of Rs. 7 per hour would be earned (the other work would require no unskilled labour.)
In the contract’s first year only, the company expects to have 20,000 surplus unskilled labour hours. the company has an agreement with the in-house trade union whereby it lays off employees for whom there is work and pays them two-thirds of their normal wages during the lay-off period. All wage rates are expected to increase at an annual compound rate of 15%. 
(c) Overheads:
Overhead costs are currently allocated to contracts at a rate of Rs.14 per skilled labour hour calculated as follows:
Fixed overhead (including equipment depreciation of Rs.5)     11
Variable overhead                      3
Special equipment will be required to undertake this contract and will be purchases at Rs.2,00,000/-  payable immediately. It will be sold once the contract is completed for Rs.50,000/- both fixed and variable overheads are expected to increase in line with the Retail Price Index. 
The special equipment will be financed with the first contract installment paid by Government.
The company believes that a return of 20% would be acceptable for the project. The Retail Price Index is expected to increase by 15% per year over the life of the contract.  
All current prices will hold for the next 1 month, before increasing in line with inflation.
Therefore material cost for the second year’s production will be 20% higher than the current market prices.
Analyze and comment whether the project can be acceptable. Ignore Tax.











FM11

FINANCIAL AND MANAGEMENT ACCOUNTING

Assignment II
Assignment Code: 2012 FM11 B2                    Last Date of Submission: 15th November 2012
    Maximum Marks: 100

Attempt all the questions. All questions carry equal marks.

Section A

1.    What is capital budgeting? Explain IRR and Discounted NPV methods for appraisal if investments.
                       
2   (I) Explain the factors to be considered in pricing-decision and describe the stages involved in decision   
         Process.
    (II) Explain relevance of time value of money in investment decision. What are the disadvantages of the   same?
3.   ABC earns an average net profit of Rs.3 per unit at a selling price of Rs. 15 by producing and selling 60,000 units at 60% potential capacity.

  The composition of cost of sales is as follows:
      Direct materials            Rs.4.00
      Direct labour                Rs.1.00
      Production overhead            Rs.6.00 (50 fixed)
      Sales overhead            Re.1.00 (75% fixed)
During the current year the firm intends to produce the same number but   anticipates that:
(i)    its fixed expenses will increase by 10%;
(ii)    rates of direct material will increase by 5%;
(iii)    rates of direct labour will increase by 20%; and
(iv)    Selling price can not be increased.
Under these circumstances, the firm obtains an order for an additional 20% of its capacity.
What minimum price, would you recommend for accepting the order to ensure ABC an overall         profit of Rs.1,80,500 ?

4.        The following information is available from the records of Always First Ltd. for a particular week with regard to the composition and rates of a gang of workmen:
            Standard    Standard
            Composition    Hourly Rate
                (Rs.)
            20 Skilled workmen    12.00
            15 Semi-skilled workmen    10.00
            5 Unskilled workmen    8.00
        The standard output for a week is 3,600 units and a week consists of 48 hours.
        During a particular week, a gang consisted of 25 skilled workmen, 12 semi-skilled workmen and 3 unskilled workmen and the actual wages paid were as follows:
        Skilled workmen @ Rs. 11.60 per hour; semi-skilled workmen @ Rs. 10.20 per hour; and unskilled workmen @ Rs. 8.00 per hour.
        Actual output during the week was 3,750 units despite the fact that 6 hours were lost in that week due to abnormal idle time.
        Based on the above information, you are required to work out —
    (i)    Labour rate variance;
    (ii)    Labour mix variance;
    (iii)    Labour idle time variance;
    (iv)    Labour yield variance;
         (v)     Labour efficiency variance; and
    (vi)   Labour cost variance.

Section B
5.    Case Study

A multi product company has been producing an electronic component in its department P. The budget of department P for the next year is as under:
 Budgeted Production and Sales 72,000 units.
                                Rs. Per unit
            Selling price                 200
            Direct materials
               X 1kg per unit                  40
                  Y I kg per unit                  30
            Direct wages                   40
            Variable overheads                       20
            Fixed overheads                                       60    
            Total                     190
Subsequent to the preparation of the budget, the company offered that the setting up of an electronic park in the region where the company is situated has resulted in migration of the majority of the departments workforce and consequently the company is forced to take a decision on the closer of the department and abandonment of the budget. The company was however, advised to produce either 24000 or 48,000 components in the next year by employing contract labour. A few remaining workers will be absorbed by the company with in the organization against vacancies. The relevant data are as under:
(a)  The cost of contract labour is Rs.6  per hour and  the  standard  contract labour time per units 10  hours.
       The contract labour, however, will have to be trained at a fixed cost of Rs.40,000. 
(b)  The stock of material X is 72000kg. There is no  other  use for t his  material. The  quantity not used in  
      department P will have to be disposed of. The cost of disposal is Rs.4000 plus Re.1 per kg disposed off.
 (c)  The stock of material Y is  36000 kg.  if  this material  is not  used  in  department P, a quantity  up to    
       24000 kg can be used in another department a  substitute for an equivalent weight of a material which          
       currently costs Rs.36 per kg. Material Y  originally  cost  Rs.30 per kg  and its  current market price is 
       Rs.40 per kg. if any surplus  material Y is sold, it will fetch a realization of Rs.20 pre kg sold.
(d)  The variance overheads will be 30% higher per unit produced than originally budgeted.
(e)  If department P is to closed down immediately, the foreman who will otherwise retire at the end of next  
      year, will  be   asked  to retire  earlier  and  he will   be  paid  Rs.80,000  s  compensation. His  salary  is        
      Rs.6,000 per month.
(f) The only machine used in  department P originally   cost Rs.1,40,000  and it  can  be  currently  sold  for    
      Rs.86,000. This sales values will go down to RS.80,000 at the end of the next year and if the machine is  
      used during the next year for any production activity in the year, the sale value will further  decrease by   
      Rs.1000 per every 1000 units produced.
(g) The fixed overheads are  apportionment  of general  overheads and  will  not be  altered by any decision    
     concerning department P.
(h) The sales manager states that a sales volume of 24000 units can be achieved if the selling price is set at 
      Rs.180 per unit. He further stated that a sales volume of 48000 units will be achieved if the selling price   
      per unit is reduced to Rs.150 and an advertisement expenditure of RS.30,000 is spent.

Required:
( i )    Prepare a statement indicating the financial implications of the choice to be made between the following alternatives:
             (A) Close down department P immediately.
             (B) Operate department P for a further year to produce 24000 units of he component.
             (C) Operate department P for a further year to produce 48000 units of the component.
   (ii)    Advise the management on the course of action to be taken.