PGDM End Term Examination – January 2024

Term 2 – PGDM 2023 – 25

Course Title: Costing for Decision Making
Faculty: Kannadas S
Duration: 70 Minutes Max. Marks: 30
Mode of Exam: Moodle + paper based
Instructions to Candidates:
1. This is not an open book exam.
2. Theory must be handwritten and submitted in a hardcopy answer script issued by the exam
invigilator.
3. Numerical portions must be typed in an excel file. Only one file is permitted for submission.
4. Each numerical must be answered in a separate sheet of the same excel file and the final answers (not
the entire numerical, only the final answer number) for those numerical must be written in the hard
copy scripts too. If not, those excel answers will not be considered for evaluation.
5. Moodle submissions beyond the exam time limit will not be considered for evaluation. Any other
mode of submission (via mail, pen drive, etc.) will not be accepted. Any unprofessional request in this
regard to the PGDM office staff and the course faculty will lead to stern disciplinary action.
6. SEP students should submit online as per the guidelines given by the PGDM office.
CLO’s
ICLO 1 – To have a clear understanding about the preparation of cost sheet and the application of such
statement by various internal stakeholders in decision making.
ICLO 2 - To have familiarity with cost concepts, records and principles underlying them and to develop
their skills in analyzing and executing the cost aspects in various departments of the organization.
ICLO 3 - To acquaint with cost and management accounting mechanics and emphasize on sound
concepts and their managerial implication on various cost aspects in terms of implementing and
reviewing periodically.
ICLO 4 - To evolve as a Strategic thinker of Cost Management

Answer the following questions.

1. What do you mean by relevant cost? By taking an example of electronic devices 4 marks
selling agency business, explain relevant cost in brief.
ICLO 3

2. ABC Ltd. manufactured and markets a product whose cost data is as follows:
Material Costs = Rs. 16 per unit 13 marks

PGDM Question Paper

 Conversion (Variable Cost) = Rs. 12 per unit
Dealer’s Margin = Rs. 4 per unit (10% of selling price)
ICLO 3 & 4
Selling Price = Rs. 40 per unit Fixed Cost = Rs. 5,00,000
Present Sales = 90,000 units
Capacity Utilization = 60%
1. Find out the BEP in volume and sales.
2. Management has the following two suggestions, which alternative is better so as
to maintain the present profit level?
a) Reduction in Selling Price by 5%
b) Increasing the dealer’s margin by 25% over the existing rates.
Suggest the best alternative based on your calculations.

1. 3. A batch of workers consists of 30 men, 15 women and 10 boys. They are paid at 13 marks
as per the industry standard hourly rates for a work as under: Skilled Men Rs.800;
Skilled Women Rs.600 ; Semiskilled workers Rs.400. In a normal working week of
40 hours, the batch is expected to produce 2,000 units of output as per the industry
standard. During the week ended 21 st December 2023 the group consisted of 40 ICLO 2,3 & 4

skilled men, 10 skilled women and 5 semiskilled workers were involved for a similar
work. The actual wages paid were @ Rs.70, Rs.65 and Rs.30 respectively. 4 hours
per worker were lost due to the abnormal idle time of each labourer and 1,600 units
were produced. Calculate all the labor variances including the idle time variance.

PGDM Question Paper