No. of Printed Pages: 4 IBFW-023I
B.Sc. FASmON MERCHANDISING AND
RETAIL MANAGEMENT (BSCFMRM)
Term-End Examination
December, 2015

BFW-023 FINANCIAL MANAGEMENT
Time: 3 hours Maximum Marks: 70

Note: Attempt any five questions. All questions carry equal marks.

1. ABC Ltd. have prepared the budget for the production of 1,00,000 units of a commodity. Detail is given below

Raw material Rs 2.52 per unit
Direct wages Rs 0.75 per unit
Direct expenses Rs 0.10 per unit
Worked overheads fixed) Rs 2.50 per unit
Office overheads fixed) Rs 0.40 per unit
Selling overheads fixed) Rs 0.20 per unit

The actual production during the period was only 60,000 units. Calculate the Revised Budgeted Cost per unit.

2. What is financial management Explain the objectives of financial management.

What is meant by cash budget? What are the objectives to prepare cash budget Explain the motives for holding cash.

3. Following data are related to the company producing the product during the month of January

Raw material:

Opening stock Rs 20,000
Closing stock Rs 11,500
Purchase Rs 1,50,000
Direct labour Rs 60,000
Factory overhead of Direct labour)
Office overhead Rs 27,500
Finished stock:
Opening stock 500 units Rs 11.20 per unit
Closing stock 1500 units current cost price
Profit on sales 20%
Selling expenses Rs 20,000
Units producted 25,000 units

Prepare Cost Sheet.

4. A product passes through three processes namely B and C. From the following information prepare the Process Accounts:

Particulars Process Process Process

Raw material used Rs 1,000 per tonne 1000 tonnes - -

Wages and Expenses Rs 87,500 Rs 39,500 10,710

Weight loss 10% 20%

Scrap (sale Rs 50 per tonne 50 tonnes 30 tonnes 51 tonnes

Sale price per tonne Rs 350 Rs 500 Rs 800

Management expenses were Rs 17,500 and Selling expenses Rs 10,000. Two-third of the output of Process A and one-half of Process B output passes to the next process and the balance of A and B and the entire output of Process C is sold. Prepare all Process Accounts and Statement of Profit.

5. Two businesses, AB Ltd. and CD Ltd., sell the same type of product in the same type of market. Their budgeted P&L A/c for the year ending 31st March, 2007 are as follows

Particulars AB Ltd. CD Ltd.
Sales 1,50,000 1,20,000
Variable cost 15,000 1,50,000
Fixed cost 1,00,000 35,000
Net budgeted profit 15,000 15,000

You are required to calculate

Break-even-point of each business.

State which business is likely to earn greater profits in the following conditions:

Heavy demand for the product

Low demand for the product

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