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IBFW-02S1
B.Sc. FASmON MERCHANDISING AND
RETAIL MANAGEMENT (BSCFMRM)
Term-End Examination
June, 2016

C?31b
BFW-023 FINANCIAL MANAGEMENT
Time: 3 hours Maximum Marks: 70
Note: Attempt any Seven questions. All questions carry equal marks.

1. Explain the concepts in break-even-analysis with examples. What are the advantages and limitations of break-even-analysis 10

2. A manufacturing firm has three proposals for a product. Either it can be purchased from an outside vendor at Rs. 40.00 per unit or it can be manufactured in-plant. There are two alternatives for in-plant manufacturing. Either, a fully automatic unit is procured, involving fixed cost of Rs. 3,00,000 and variable cost of Rs. 27.50 per unit. Alternatively, a semi-automatic unit would cost Rs. 2,00,000 as fixed cost and Rs. 30.00 per unit as variable cost.Draw a break-even-chart for these alternatives. Suggest the range of production-volume suited for these alternatives. 10

3. Define cost. What are the elements of cost Explain the method of computation of cost sheet. 10

4. What is process costing? How is process costing different from job costing Explain the procedure to calculate the abnormal loss in process costing. 10

5. What is working capital management Explain briefly the factor determining the working capital of an organisation. 10

6. What is Financial Management Explain the objectives of financial management. 10

7. What are the main sources of funds Explain any three with their merits and demerits. 10

8. You are given the following data:

Fixed expenses Rs. 4,000

Break-even-point: Rs. 10,000

Calculate:
P/V ratio Profit when sales are Rs. 20,000 New break-even-point, if selling price is reduced by 20% 10

9. HMT sold in two successive years 7,000 and 9,000 units and incurred a loss of Rs. 10,000 and earned Rs. 10,000 as profit respectively. The selling price per unit is Rs. 100.
Calculate: The amount of fixed cost The number of units to break-even The number of units to earn a profit of Rs. 50,000 10

10. The following information is obtained from the books of a manufacturing concern for the month of September, 2015

Direct Material Rs. 8,20,000
Direct Wages: Rs. 2,40,000
Direct Expenses: Rs. 20,000
Factory Overheads: 50% of prime cost
Office Overheads Rs. 1·50 per unit

Selling and Distribution
Overheads: 10% of sales

Opening stock of finished
goods: (15000 units) Rs. 2,13,000

Closing stock of finished
goods: 10,000 units

Sales: (1,25,000 units)
Rs. 20 per unit

Prepare a cost sheet. 10