Ask Question, Ask an Expert


Ask Financial Management Expert

Attempt all the problems.


problem1) Discuss the various GAAPs that are mandatory to be followed briefly.
problem2) What are the different components of total cost.
problem3) What are the statements of financial information? Discuss two items from each.
problem4) describe statement of changes in financial positions, with the ex.

Case Study

M/s XYZ Ltd manufactures a product “PLVS” at its plant at Meerut, the maximum capacity of which is 200 units per month. Details of raw materials that go into making of 1 units of “PLVS” are provided to you below:-
Sl.No    Raw material description    Standard Qty per finished unit (No)    Standard purchase price per unit (Rs. 00)
1                     A                                                  1                                                             6
2.                    B                                                  2                                                             5
3.                    C                                                  3                                                             4
4.                    D                                                  4                                                             3
5.                    E                                                  5                                                             2
6.                    F                                                   6                                                            1
Standard fixed overheads are Rs. 20,00,000/- per month while the standard variable overhead rate has been estimated as equal to Rs.1,400/- per unit of finished goods.

You are required to compute the:

a) Standard cost of the product.
b) Compute the production volume variance in case the company produces and sells only 100 units of finished goods in the concerned month.
c) Compute the usage and material price variances considering the following actual data (actual production and sale: 100 units)

Raw material description    Actual quantity consumed (Nos)    Actual price (Rs.’00)
A                                                         102                                              7
B                                                         201                                              6
C                                                         310                                              5
D                                                         415                                              4
E                                                         540                                              3
F                                                         610                                              2

d) Assuming no deviation in actual selling price (Rs. 30,000/-) and the actual overheads from what was projected in Standards, you are required to compute actual profits.

Attempt all the problems.



prepare short notes on:

• P V Ratio
• Margin of Safety
• Material Variances
• Absorption Costing


describe the meaning of the term `variance analysis’.  What is its significance in controlling and monitoring costs?


a.) What are the pre-requisites of installation of responsibility accounting system?
b.) Distinguish between ‘cost centre’ and ‘profit centre’.


a) Distinguish between standard costing and budgetary control.
b) “Calculation of variances in standard costing is not an end in itself, but a means to an end” Discuss.


Case Study

Ramesh developed original specification of the product and founded Ramesh Manufacturing Ltd. In 2007 the firm manufactured 980 nos at the average price of Rs.900/- each. In 2008 due to continuous price rise of inputs, he raised his prices at the average of 12%, as he knew he could sell plant’s full capacity of 980 nos per year. In spite of price rise for the product, which sold for over Rs.1000/- for the first time. Ramesh was surprised to learn in late 2008 (as may be seen from the financial statements) that Ramesh Manufacturing Ltd show the decline in earnings and still worse, decline in cash flow.

His accountant has bought the following:

i) We are following FIFO system for purpose of issues.
ii) Costs are going up faster than 12% and they will go up further in 2009.
iii) We are not setting aside enough to replace the machinery; we need to set aside Rs.1,65,000/- not Rs.1,50,000/- so as to be able to buy new machinery.
iv) It is still not late to switch to the LIFO for 2008. This will reduce closing inventory to Rs.3,30,000/- and raise cost of goods sold

1893_manufacturing table.jpg


a) What is the weighted average inflation factor for the firm using LIFO?
b) If the firm desires a 15 percent profit margin on sales, how much should the firm charge for the product per unit?

Financial Management, Finance

  • Category:- Financial Management
  • Reference No.:- M9444

Have any Question? 

Related Questions in Financial Management

Richard rambo presently owns the marine tower office

Richard Rambo presently owns the Marine Tower office building, which is 20 years old, and is considering renovating it. He purchased the property two years ago for $800,000 and financed it with a 20-year, 75 percent loan ...

Given the following information could you find any

Given the following information, could you find any arbitrage opportunities in ABC stock? If so, what is your arbitrage procedure and profits? (Assume all the interest rates are periodically compounded.)                 ...

At a firms quarterly dividend meeting held april 9 the

At a firm's quarterly dividend meeting held April 9, the directors declared a $0.50 per share dividend for the holders of record on Monday, May 1. The firm's stock will sell "ex-dividend" on: (a) April 9th, (b) May 5th, ...

Nonconstant growth computech corporation is expanding

NONCONSTANT GROWTH Computech Corporation is expanding rapidly and currently needs to retain all of its earnings; hence, it does not pay dividends. However, investors expect Computech to begin paying dividends, beginning ...

At the beginning of the year a firm has current assets of

At the beginning of the year, a firm has current assets of 397 and current liabilities of 215. At the end of the year, the current assets were 429 and the current liabilities were 255. What is the change in net working c ...

For the second discussion consider the following good

For the second discussion, consider the following good research questions: What are the perceived strengths and weaknesses of our retail operations? What is the demographic profile of visitors to our website? To what ext ...

Aswer parts a-c for each of the following casescaseamount

Answer parts (a)-(c) for each of the following cases. Case Amount of Initial Deposit ($) Stated Annual Rate, r(%) Compounding Frequency, m (times/year) Deposit Period (years) A 2,500 6 2 5 B 50,000 12 6 3 C 1,000 5 1 10 ...

The spot price of an investment asset is 43 per unit and

The spot price of an investment asset is $43 per unit and the annual risk-free rate for all maturities (with continuous compounding) is 3%. The asset provides an income of $1.26 per unit at the end of the first and secon ...

Sustainable competitive advantage is influenced by check

Sustainable competitive advantage is influenced by: (Check all that apply) a lower price for the customer based on the value created for them (due to your operations or other cost control strategies) a rareness factor, m ...

Suppose paccarrsquos current stock price is 10245 and it is

Suppose Paccar’s current stock price is $102.45 and it is likely to pay a $2.16 dividend next year. Since analysts estimate Paccar will have a 13.5 percent growth rate, what is its required return? (Round your answer to ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro

Describe what you learned about the impact of economic

Describe what you learned about the impact of economic, social, and demographic trends affecting the US labor environmen