MOUNT CARMEL COLLEGE, AUTONOMOUS,

BANGALORE
ASSIGNMENT – SEPTEMBER, 2022
I Sem B.COM - FPP
SUBJECT TITLE – FINANCIAL PLANNING AND PERFORMANCE

TIME: 1.5 Hours Max Marks: 30

Section – A

Answer any five questions out of seven 5X2=10

1. A company implements a new process to manufacture its product and spends $500 on
labor to produce 50 units. It expects that the new process will be subject to an 80%
learning curve. If the company assumes the learning curve will follow the cumulative
average-time learning model, what will be the total labor cost to produce 200 units?
2. Explain the limitations of regression analysis and learning curve analysis.
3. Explain the difference between Incremental Unit Time Learning Model and
Cumulative Average Time Learning Model.
4. Describe Micheal Porter's 5 Forces Model and give an example of each force.
5. Based on focus, development and control, explain strategic plan and operational plan.
6. Manager Jeff has a habit of adding something extra every year the budget is being
prepared. What is this practice called as? How does a company overcome this issue?
7. Differentiate between Top-Down and Bottom-Up Budgeting.

Section – B

Answer any two questions out of three 2X5=10

1. What is a Master Budget? What is the process to prepare it?

2. Ben's Toy Shop performed a regression analysis on its shipping costs for the previous
12 months. The number of units shipped during those 12 months ranged from 1,500
units to 2,150 units. The regression analysis yielded an intercept of $10,000, a
coefficient on units shipped of $25, and an R-squared of 94.2%. If Ben expects to ship
1,800 units in the next month, what would Ben estimate total shipping costs to be?
3. What is a financial Budget? Explain in detail.

Section – C

Answer any one question out of two 1X10=10

1. After leading the market for the past decade, the growth of product ABC is slowing
down. In this stage of its life cycle, the product is still generating significant amounts
 of cash flows that cover the company’s investment into new product innovations.
According to the BCG Growth-Share Matrix, what is product ABC most likely
positioned as? Further, from the current state, if they want to become a Star, what
efforts would/ strategic changes would be needed by the organization?

2. The Lions Club is planning to sell pretzels at a local football game and has estimated
sales demand as follows:
Sales demand 8,000 10,000 12,000 15,000
Probability 10% 40% 30% 20%

The cost of the pretzels varies with the quantity purchased as follows:
Purchase quantity 8,000 10,000 12,000 15,000
Cost per unit $1.25 $1.20 $1.15 $1.10
Any unsold pretzels would be donated to the local food bank. The calculated profits at the
various sales demand levels and purchase quantities are as follows.

            Expected Profits at Various Purchase Quantity  

Levels
Sales Demand 8,000 10,000 12,000 15,000
8,000 $6,000 $4,000 $ 2,200 $(500)
10,000 6,000 8,000 6,200 3,500
12,000 6,000 8,000 10,200 7,500
15,000 6,000 8,000 10,200 13,500

Which one of the following purchase quantities would you recommend to the Lions
Club?