Strategic Cost Management


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NMIMS Global Access

School for Continuing Education (NGA-SCE)

Course: Strategic Cost Management

Internal Assignment Applicable for April 2023 Examination

Assignment Marks: 30


All Questions carry equal marks. All Questions are compulsory

All answers to be explained in not more than 1000 words for question 1 and 2 and for question 3 in not more than 500 words for each subsection. Use relevant examples, illustrations as far as possible.

All answers to be written individually. Discussion and group work is not advisable.

Students are free to refer to any books/reference material/website/internet for attempting their assignments, but are not allowed to copy the matter as it is from the source of reference.

Students should write the assignment in their own words. Copying of assignments from other students is not allowed.

Students should follow the following parameter for answering the assignment questions.


For Theoretical Answer

Assessment Parameter Weightage
Introduction 20%
Concepts and Application related to the question 60%
Conclusion 20%

For Numerical Answer

Assessment Parameter Weightage
Understanding and usage of the formula 20%
Procedure / Steps 60%
Correct Answer & Interpretation 20%
  1. A Factory produces 3 types of moulds. While producing, for switching over from one mould to another, there is a shift-over process involved. Costs incurred are as follows: Shift-over costs Rs. 50,000 Factory Overheads Rs. 1,00,000/-Packing costs Rs. 20,000/-

Engineering Costs Rs. 30,000/-

Supervisor Costs Rs. 10,000/-

Quantity produced A- 1000, B – 2000, C- 4000

Allocate the costs to the 3 moulds (A,B and C) using Traditional Costing method and Activity Based Costing. Make assumptions as may be needed for cost drivers.

Compare the results and discuss. (10 Marks)

  1. What is Life Cycle Costing? Explain in brief. What are its Stages? Briefly explain each stage. What are the 4 stages of a Product Life Cycle?

For each of the following, mention the nature of cost incurred (Low, Medium, High) over each phase.

Research and Development Sales Discounts

Maintenance and After Sales service Advertisements

(10 Marks)

  1. a. Following are the Budgeted figures of PQR Ltd.
Particulars UoM
Raw Material 50
Wages Rs. Per Unit 10
Direct Expenses 20
Fixed Overheads Rs. 100000
Variable Overheads Rs. Per Unit 10
Selling & Distribution Expenses 3 20 % is Fixed
Administrative Expenses Rs. 50000
Sales Price Rs. Per unit 130


Capacity of the Factory is 10000 units. However due to Covid, the production capacity for the year was reduced to 80%.

Prepare a Budget for the factory in Normal and Covid situation.

(5 Marks)

  1. b. With the following information, prepare the Budgeted Profit for the year for Company XYZ.
No. of Units Nos. 20 30 40
Sales Price Rs./Unit 100 50 25
Variable Costs Rs./Unit 40 20 5
Fixed Costs Rs. 1,80,000

Assuming that the mentioned production numbers are at 100% capacity, under what situation would XYZ ltd. create a flexible budget (suggest any one). What benefit would it provide to the management of the company?

(5 Marks)




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