Management Control Systems Question Papers Pune University

    MAY 2009

    Instructions to the candidates:

    1) Attempt any three questions/rom Q. 1 to Q. 5.

    2) Q. NO.6 is compulsory.

    3) Figures to the right indicate full marks.

    Ql) Distinguish clearly between strategic planning, management control and task

        control with examples.                                                                             [18]

    Q2) "A Sound Audit system strengthens management Control" critically examine

           this statement in respect of the financial audit, Cost Audit and Management

           Audit.                                                                                                   [18]

    Q3) "Balance score card started as a performance measurement system but has

           ended up as a full fledged management control system". Explain with

           suitable examples.                                                                                [18]

    Q4) Explain the various types of responsibility centre in detail.                     [18]

    Q5) Write a short note on (any three) :                                                                   [18]

    a) Goal congruence.

    b) Just in time.

    c) Budgeting for R & D ..

    d) Control systems in service organisation.

    e) Bench marking and total cost management.

    Q6) a) A company fixes the inter divisional transfer prices for its product on the

              basis of cost plus estimated return on investment in its divisions. The

              relevent portion of the budget for division'  A' for year 2007-08 is given

              below:

             

              Fixed Assets                                      Rs.5, 00,000

              Current Assets (other than debtors)    Rs.3, 00,000

              Debtors                                    Rs.2, 00,000

              Annual fixed cost of division                Rs.8, 00,000

              Variable cost per unit of product         Rs.10

     

    Budgeted volume of production per year (units) 4,00,000 desire return on investment 28%.

    Youare require to determine transfer price for division 'A'.                            [10]

    Division 'A' and 'B' are both considering an outlay on new investment projects.

    Division 'A'

    Division 'B'

    Investment outlay

    Rs.1,00,000

    Rs.1,00,000

    Net return on new}

    Rs.16,000

    Rs.11,000

    Investment

    Current ROI

    18%

    11%

    The companies cost of capital is 13%. Should the project be accepted or rejected?                                                                                                   [6]