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GUJARAT TECHNOLOGICAL UNIVERSITY
MBA - SEMESTER- IV EXAMINATION — WINTER 2019
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Subject Code: 2840007 Date: 29-11-2019Subject Name: Management Control System
Time: 2.30 PM to 5.30 PM Total Marks: 70
Instructions:
- Attempt all questions.
- Make suitable assumptions wherever necessary.
- Figures to the right indicate full marks.
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| No. | Question | |
| Q.1 | Objective Questions | |
| 1. | Which of the following activities represents a top-down function of management control? | |
| A. Resource allocation, B Report on goal achievement; develop personal skills of lower-level managers and their subordinates. | ||
| C. Enable lower-level D Enable the coordination and cooperation with other decentralized units. managers to acquire the support and resources to execute their responsibilities. | ||
| 2. | Which of the following statements is true? | |
| A. Strategic variance B Strategic variance analysis means that traditional variance analysis is (more firmly connected the company’s and the respective business unit’s strategy. analysis is the same as traditional ~ variance analysis. | ||
| C. Strategic variance! D Strategic variance analysis means that focus lies on analyzing expense variances in relation to the company’s strategy. analysis means that focus lies on analyzing revenue variances -in relation to the company’s strategy. | ||
| 3. | A balanced scorecard proposes measures in the following four perspectives: | |
| A. Financial, customer, B Financial, customer, employee, innovation and learning. internal business, employee. | ||
| C. Financial, internal D Financial, customer, internal business, innovation and learning. business, employee, innovation and learning. | ||
| 4. | If a company uses cost-based transfer prices, the usual cost basis is: | |
| A. Actual costs. B Standard costs. | ||
| C. Negotiated costs. D Actual costs less standard costs. | ||
| 5. | Which of the following items is never budgeted? | |
| A. Budget deviations B Investments | ||
| C. Taxes D Cash flow | ||
| 6. | Which of the following is not a common way of evaluating the performance of the profit center manager? | |
| A. Contribution margin. B Net income. | ||
| C. Residual income. D Direct profit. |
Q.1 (b) 1. Strategy Formulation 04
2. Operational Control
3.EVA
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4.BSCQ.1 (c) Difference Between Strategy Formulation & Management 04
Control System
Q.2 (a) “The scope of MCS is not limited to the top-level management 07
but it affects the whole organization” Are you agree with the statement? Why?
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(b) Distinguish between corporate level strategy & business level 07
strategy.
OR
(b) Discuss in detail of various/incentive plans. 07
Q.3 (a) Explain in detail about responsibility center & types of 07
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responsibility center.(b) Explain advantage of profit center 07
OR
Q.3 (a) What do you mean by transfer pricing? Discuss various 07
methods of transfer pricing?
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(b) Write a brief note on agency theory in compensation 07
management.
Q.4 (a) Explain behavioral aspect of budgeting in detail. 07
(b) Difference between EVA & ROI 07
OR
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Q.4 (a) Explain in detail of objective & methods of performance 07
evaluation of business managers. Discuss merits & demerits of each of methods of evaluation.
(b) Distinguish between strategic planning & strategic 07
formulation. Explain advantages & pitfalls of strategic planning from view point of management control.
Q.5
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Following information
Standard (Budgeted)
Material for 70 kg finished products 100 kg
Price of material 1 Re per kg
Actual output 210 MT
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Materials used 280MT
Cost of material 2,52,000 Rs.
Calculate Material variances 14
OR
The Swara Ltd. manufactures and sells music system. The Assembly Division assembles the music system sets. It buys the accessories for sets from the Accessory Division. The Accessory Division is operating at full capacity. The incremental cost of manufacturing the accessories is Rs. 70 per unit. The Accessory division can sell as many accessories as it wants in the outside market at price Rs. 110 per unit. If it sells in the outside market, the Accessory division will incur variable marketing and distributing cost of Rs. 4 per unit. Similarly, if the assembly division purchases accessories from outside market, it will incur variable purchasing cost Rs. 2 per unit. Suppose division managers’ act autonomously to maximize their own division’s operating income, and they were to negotiate a transfer price, what is the range of acceptable transfer price? 14
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