Cost and Management Accounting June 2020

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Cost and Management Accounting June 2020

Q1. Given the slowdown in the auto sector, Fast Automobile company, a car manufacturing company wants to go in for an overhaul of its operations. The Management wants to review the cost of all its product lines i.e. types of cars it has in various segments and the way they value their closing stock given the inventory pile up, to take some strategic decisions. The Management accountant is asked to prepare a summary of costs to enable the top team to decide which product to manufacture, discontinue some segments etc. What are the various types of ways the Management accountant can classify the costs by Management decisions. Describe any 5. Also, discuss the different ways in which the company can value its closing stock?


Q2. Traditional Managerial accounting was all about managing costs whereas Management accounting has undergone a sea change, given the change in the overall Global environment. Discuss and describe in relation to the following

Growth of E-Commerce and e-business. Share atleast 2 practical examples.

Focus on cross-functional Groups

Total Quality management concept How these impacted global management accounting practices


Q3. Fancy Bag company purchases Ladies Bags from a wholesaler @ Rs 1100/- per piece. They add accessories and packaging and sell each bag for Rs 1800/- per piece. They incur certain fixed expenses. The company wants to understand how many pieces they must sell in order to be profitable. They seek the help of a Management accountant to:

  1. Ascertain Contribution per piece and as a % of Sales Price
  2. Prepare the Profit / Loss account for sale of 200 pieces 300 pieces

Details provided:

Purchase Cost   1100 per pc

Sale        1800 per pc



Per Month



Staff Salary


Commission per pc




Previous April 2020 NMIMS Assignment

Q1. Analyzing and making decisions in relation to cost requires in-depth study of various costs involved. The process of managerial decision making classify costs into certain specific head so as to be precise in evaluating various business proposals. Discuss any five such costs with relevant examples which are significant for managerial decision making.

Q2. Standard costing is the process where standard costs of various components and resources are predetermined.  Further, there are certain specific objectives for adopting the standard costing techniques in management accounting, Discuss in brief, the distinguished objectives of adopting standard costing in any organization.

Q3. Puppies and Rabbits, a soft toy manufacturing company requires 1250 units per month, of the soft toy named “COCO Rabbit”. The ordering cost is Rs 1000 per order. The cost of carrying inventory is 10% per annum. The cost of manufacturing one unit of COCO Rabbit is Rs 200

a. Determine the most economic lot size

b. The minimum total variable cost for the economic lot size.