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Prakash Singh (MBA Assignment Solutions)
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MBA Assignment Solutions
MBA Assignment Solutions

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Need Answer Sheet of this Question paper
WWW.MBAASSIGNMENTSOLUTIONS.COM
Email ID: smu.assignment@gmail.com
PRAKASH - 09741410271/ 08722788493
STRATEGIC COST MANAGEMENT
1. X Ltd has to replace its machine and the production manager has to decide between Machine A and Machine B. Machine A is having installation cost of ₹ 160 and annual electric bill ₹ 200. Machine B has installation cost of ₹ 760 and annual electric bill of ₹ 80. If both have life of 8 years which machine will you recommend if interest rate is 9 % for five years. P/V factor @ 9 % for 8 years is 5.5348
2. A company manufacturing two products furnishes the following data for a year.
Product Annual Output Units Total machine hours Total No. of purchase orders Total No. of setups
A 5,000 20,000 160 20
B 60,000 120,000 384 44

The annual Overheads are as under:
Volume related activity cost ( Activity driver-Machine hours ) ₹ 5,50,000
Setup related cost ₹ 8,20,000
Purchase related cost ₹ 6,18,000

You are required to calculate cost per unit of each product A & B based on
i. Traditional method of charging overhead and
ii. Activity based costing method
3. Project X Involves an initial outlay of Rs 32,400.Its working life is 3 years. The cash streams are as follows
Year Inflows ₹ P .V Factor @ 14% P .V Factor @ 16%
1 16,000 0.877 0.862
2 14,000 0.769 0.743
3 12,000 0.675 0.641

Calculate:
a. NPV at 14 % & 16%
b. IRR

Need Answer Sheet of this Question paper
WWW.MBAASSIGNMENTSOLUTIONS.COM
Email ID: smu.assignment@gmail.com
PRAKASH - 09741410271/ 08722788493
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