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CASE STUDY : 1
J P
Ltd manufacturers of a special product, follows the policy of EOQ for one of
its components. The components’s details are as follows.
Purchase price per
component, Rs 200
Cost of an order Rs
100
Annual cost of
carrying one unit in inventory,
10 per cent of
purchase price
Annual usage of
components, 4000
The company has been offered a discount of 2 per cent on
the price of the component provided the lot size is 2000 components at a time.
Q1) You are required
to compute the EOQ?
Q2)
Advise whether the quantity discount offer can be accepted (assume that the
inventory carrying cost does not vary according to discount policy).
Q3) Would your advise
differ if the company is offered 5 per cent discount on a single order?
Q4) Explain the term
EOQ?
CASE STUDY : 2
In an engineering concern, the
employees are paid incentive bonus in addition to their normal wages at hourly
rates. Incentive bonus is calculated in proportion of time taken to time
allowed, of the time saved. The following details are made available in respect
of employees X, Y & Z for a particular week.
|
|
X
|
Y
|
Z
|
|
Normal
Wages (Per hour) (Rs)
|
4
|
5
|
6
|
|
Completed
units of Production
|
6000
|
3000
|
4800
|
|
0.8
|
1.5
|
1.0
|
|
|
(hour)
|
|
|
|
|
Actual time taken (hours)
|
42
|
40
|
48
|
Q1) You are required
to work out for each employee the amount of bonus earned?
Q2) Explain the term
incentive?
Q3) You are required
to work out for each employee the total amount of wages received?
Q4) You are required
to work out for each employee the total wages cost per 100 units of output?
CASE STUDY : 3
Following particulars
have been extracted from the books of Supreme Engineers Ltd.
|
Time allowed for the job (hours)
|
15
|
15
|
15
|
|
Time take (hours)
|
15
|
12
|
9
|
|
Bonus ratio for Halsey
(per cent)
|
|
50
|
|
|
Rate per Hour
|
|
Rs. 2
|
|
Q1) You are required
to compute the quantum of wages under Halsey Scheme and Rowon Scheme?
Q2)
Which of these schemes would you like to introduce in this company if the time
taken to complete the job is likely to reduce to 6 hours after three months.
Q3)
An alternative method of payment by results by a straight piece work rate for
completion of the job in 7 hours is feasible. Would you like to switch over to
this method of payment given further that hourly rate would be reckoned at Rs
1.50 for fixation of the price rate?
Q4) Give reasons for
your advice?
CASE STUDY : 4
The soft flow Ink Ltd’s income statement for the
preceding year is presented below. Expect as noted the cost / revenue
relationship for the coming year is expected to follow the same pattern as in
the preceding year. Income statement for the year ending March 31 is as
follows.
|
|
Rs.
|
Rs.
|
|
Sales
(2,00,000 bottles @ Rs 2.5
|
|
5,00,000
|
|
paise each)
|
|
|
|
Variable Costs
|
3,00,000
|
|
|
Fixed Costs
|
1,00,000
|
4,00,000
|
|
Pre-Tax Profit
|
|
1,00,000
|
|
Less : Taxes
|
|
35,000
|
|
Profit After Tax
|
|
65,000
|
Q2) Suppose that a plant expansion will add Rs 50,000 to
fixed costs and increase capacity by 60 per cent. How many bottles would have
to be sold after the addition to break even?
Q3)
At what level of sales will the company be able to maintain its present pre-tax
profit provision even after expansion?
Q4) Suppose the plant
operates at full capacity after the expansion, what profit will be earned?
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