MS-4: ACCOUNTING AND FINANCE FOR MANAGERS SOLVED ASSIGNMENT (2020) OCTOBER

ASSIGNMENT
Course Code : MS-4
Course Title : Accounting and Finance for Managers
Assignment No. : MS-4/TMA/Sem-II/2020
Coverage : All Blocks
Note: Attempt all the questions and submit this assignment to the Coordinator of your Study
Centre on or before 31st October, 2020.
1. Explain the meaning of Generally Accepted Accounting Principles? Discuss in brief
about the Accounting Concepts that are being followed in your Organisation. Give
your suggestions if any.
2. Discuss the methods of depreciation and how these methods differ from each other.
3. You are required to Compute all variances for a product X, the standard cost data per
unit of output for which are as follows:
Direct material 20kg @ Rs.10per kg
Direct labour 12 hours at Rs. 5.50 per hour
Variable overheads 12 hours at Rs. 10 per hour
Fixed overheads Rs.9,00,000 per month based on a normal
volume of 60,000 direct labour hours
Selling price Rs. 600 per unit
The costs incurred and other relevant information for the month of June2020 are as
under
Direct material used 1,00,000 kg at a cost of Rs. 10,50,000
Direct wages paid Rs. 3,10,000 for 62,000 hours worked
Overheads Rs.15,26,000 out of which a sum of Rs.9,40,000
is Fixed
Actual output 4,800 units sold for Rs. 28,32,000
Assume no stocks of work-in-progress or finished goods at the beginning or at the end
of the month.
4. Alpha Ltd is considering the purchase a new machine, the details of the machines
from which it is to select one are as follows:
Machine I Machine II
Estimated Life 3 years 3 years
Capital Cost Rs. 90,000 Rs. 90,000
Earnings (after tax) Year 1 40,000 20,000
Year 2 50,000 70,000
Year 3 40,000 50,000
The company follows the straightline method of depreciation, the estimated salvage
value of both the types of machines is zero. You are to advise which is the most
profitable investment based on (i) Pay back period (ii) Accounting Rate of Return
and (iii) Net Present Value assuming a 10% cost of capital.
5. Explain the Concepts of Working Capital. Why is management of working capital
important for any business? Discuss the various factors that are taken into
consideration while deciding the working capital requirements of the business.