Section-A
Question1) What do you understand by Reporting? How is it useful as a control system?
Question2)(a) What is a 'Balanced Score Card’? Briefly discuss how the Balanced Score Card would help to overcome some of the limitations identified above.
(b) Suggest a framework for implementing a Performance Measurement System at a large manufacturing organization.
Question3) What do you mean by budgetary control system? Describe the process of budgetary control in the organization.
Question4)(a) Describe the implications of Corporate Strategies for the design of Management Control systems.
(b) "Design and operation of control systems are significantly influenced by top management style". Comment.
Section-B
Case Study
The profit budget for the Sinduri company for January 2006 was as follows:
Standard cost per unit
(Rs.000)
Sales Rs.2500
Standard cost of sales 1620
Gross profit 880
Selling expenses Rs.250
Research and Development expenses 300
Administrative expenses 120
Total expenses 670
Net profit before taxes Rs.210
The product information used in developing the budget was as follows:
P Q R S
Sales units (000) 1000 2000 3000 4000
Price per unit Rs.0.15 Rs.0.20 Rs.0.25 Rs.0.30
Standard cost per unit
Material 0.04 0.05 0.06 0.08
Direct labour 0.02 0.02 0.03 0.04
Variable overhead 0.02 0.03 0.03 0.05
Total Variable cost 0.08 0.10 0.12 0.17
Fixed overhead (Rs.000) 20 60 60 160
Total Standard cost per unit 0.10 0.13 0.14 0.21
The actual revenues and costs for January’2006 were as flows:
(Rs.000)
Sales Rs.2160
Standard cost of sales 1420
Net standard cost of variances 160
Actual cost of sales 1580
Gross profit 580
Selling expenses Rs.290
Research and Development expenses 250
Administrative expenses 110
Total expenses 650
Net loss (-) Rs.70
P Q R S
Sales (units) 1000 1000 4000 3000
Sales Price Rs.0.13 Rs.0.22 Rs.0.22 Rs.0.31
Production 1000 1000 2000 2000
Actual manufacturing cost (000) :
Material Rs.360
Labour 200
Overhead 530
Prepare an analysis of variance between actual profits and budgeted profits for January 2006.