INDIAN INSTITUTE OF MATERIALS MANAGEMENT
Post Graduate Diploma in Materials Management
PAPER No. 15
COST AND FINANCIAL MANAGEMENT
Date :14.06.2017 Max. Marks :100
Time 2.00 p.m to 5.00 pm Duration 3 Hrs.
Instructions:
1. The question paper is in three parts
2. Part A is compulsory. Each sub question carries one mark. Total marks-32
3. In Part B answer any 3 questions out of 5. Each question carries 16 marks Total marks-48
4. Part C is a case study with sub questions and it is compulsory. Total marks-20
PART A (32 marks) compulsory. Each sub question carry one mark)
Q1. Give the full form of 8 marks
CCC
ADCP
PBP
MSUV
SWIFT
STCI
DFHI
CHIPS
Q2. Write True or False 8 marks
Margin of safety indicates the excess of actual sale over break even sales.
DFHI was set up by Finance Ministry.
Retail banking is a high volume business.
June 2017
In the primary market, shares of existing companies are bought and sold.
At breakeven point, the profit is zero.
Office Rent is a product cost.
Treasury Bill is a short term security.
Working capital is a long term fund.
Q3. Fill in the blanks 8 marks
Gross working capital refers to .
Public deposits are loan.
PM DL MOH is .
Contribution Sales minus .
indicates profit making capacity beyond the breakeven point.
Preference dividend cover Net Profit After Tax
A bank selling its services to other financial institutes is called .
NSE was established in the year .
Q4. Match the following 8 marks
Column A Column B
Break Even Analysis
Advance from customers
William Sharpe
IRR
Variance
ZBB
Summarized budget
Marginal Costing
Decision Making
Working Capital
CAPM
Budgetary Control
Master Budget
Cost Reduction
Standard Actual
NPV is zero
PART B
Answer Any Three Questions each question carry 16 marks) 48 marks
Q5. Explain the factors affecting the need for working capital.
Q6. What are the key elements of cost?
Q7. Explain the steps in capital budgeting.
Q8. a From the following details find out: P/V Ratio, Break-even point, and Margin of safety.
Sales Rs. 1,00,000 Total Cost Rs. 75,000 Fixed Cost Rs. 20,000 Net Profit Rs. 25,000
b. What are the assumptions of Break-even Chart?
Q9 a. Product X requires 20 kg of material at Rs. 4 per kg. The actual consumption of material for the manufacturing of product X came to 24 kg of material at Rs. 4.50 per kg. Calculate: Material Cost Variance Material Price Variance, and Material Usage Variance.
b. What are the uses of Ratio Analysis?
PART- C (Compulsory) 20 Marks
Q10. a. A choice is to be made between the two competing proposals which require an equal investment
of Rs. 50,000 and are expected to generate net cash flows as under:
Years
Project A Rs.
Project B
Rs.
1
25,000
10,000
2
15,000
12,000
3
10,000
18,000
4
Nil
25,000
5
12,000
8,000
6
6,000
4,000
Cost of capital of the company is 10%. The following are the present value factor at 10% p.a.
Year
1
2
3
4
5
6
P.V. Factor at 10%
0.909
0.826
0.751
0.683
0.621
0.564
Which proposal should be selected using NPV method? Suggest the best project.
A firm has the following capital structure as the latest statement shows:
Sources of funds
Rs.
After tax cost
Debt
Preference shares
Equity share
Retained earnings
30,00,000
10,00,000
20,00,000
40,00,000
4
8.5
11.5
10
Total
1,00,00,000
Based on the book values, compute the cost of capital.