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CA FINAL: SPOM SET - B

CA FINAL SCMPE (V1)

SPOM - CA FINAL SCMPE:

ALL ICAI MCQ Summary
Important Formulas

• ICAI MCQ Summary – One Liner

✓ Old Course - ICAI MCQ Booklet
✓ ICAI New SM MCQ’s
✓ ICAI BOS Portal MCQ’s

• Integrated MCQ’s Summary – One Liner

✓ Old Course - ICAI MCQ Booklet
✓ ICAI BOS Portal MCQ’s 37

• ACTUAL MCQ’s Asked in Exam (Memory Base)

• All Important FORMULAS

BY CA HEMANT SOMANI | AIR 46

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Contents
CHP 1 : INTRODUCTION TO STRATEGIC COST MANAGEMENT ..................................6
CHP 2: MODERN BUSINESS ENVIRONEMNT ...................................................... 20
CHP 3: LEAN SYSTEM & INNOVATION ............................................................ 25
CHP 4: SPECIALIST COST MANAGEMENT Techniques ............................................ 29
CHP 5: MANAGEMENT OF COST STRATEGICALLY FOR EMERGING BUSINESS MODELS .... 40
CHP 6: STRATEGIC REVENUE MANAGEMENT ..................................................... 50
CHP 7: STRATEGIC PROFIT MANAGEMENT ....................................................... 70
CHP 8: AN INTRODUCTION TO STRATEGIC PERFORMANCE MANAGEMENT .................. 71
CHP 9: STRATEGIC PERFORMANCE MEASURE IN PRIVATE SECTOR: .......................... 77
CHP 10: STRATEGIC PERFORMANCE MEASURE IN NPO: ........................................ 84
CHP 11: PREPARATION OF PERFORMANCE REPORT: ............................................. 86
CHP 12: DIVISIONAL TRANSFER PRICING: ....................................................... 87
CHP 13: STANDARD COSTING: ..................................................................... 96
ACTUAL MCQ’s ASKED & Students Feedback: ..................................................... 100
ALL IMPORTANT FORMULAS: ...................................................................... 103

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4. Who should participate in setting standards under the Kaizen Costing system? → “: Workers and
executives involved in the manufacturing process”

5. Which of the following key changes is vital for MIL's planning and control system to support the
adoption of Kaizen Costing Concepts?
a) Transition from a Cost Reduction System to a Standard Cost Control System
b) Increase the periodicity of setting standards from semiannually to annually
c) Include participation of workers and executives in setting standard (ANSWER)
d) Eliminate variance reports from the review process

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CHP 7: STRATEGIC PROFIT MANAGEMENT

1 Pareto analysis shall be performed → “PERIODICALLY” (Not Continuously)
2 Which one need to be responded first:
a) Trivial many
b) Vital few (ANSWER)
c) Trivial few
d) Vital many
3 Pareto principle based upon the law of → “Diminishing returns” (Not Variable Return)
4 Cost excluded / Included while analysing customer accountprofitability:
➔ Sales Revenue (INCLUDED)
➔ Direct product costs (INCLUDED)
➔ Delivery cost specific to the customer (INCLUDED)
➔ Fixed overhead allocation (EXCLUDED)
5 Which costing system is often used to calculate customer profitability → “Activity-based costing”
6 Pareto principle can be applied to ALL:
➔ Inventory control
➔ Customer profitability analysis
➔ Quality control
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7) Assume that the Indian division is charging the French division full manufacturing cost of ₹12,000 per unit. If the manager of
the Indian division wants to increase the transfer price to ₹12,001 per unit, that is transfer price is increased by ₹1, what will
be the impact on the income tax and import duty to be paid by the French division in France?

Answer: Decrease in income tax payable in France by ₹0.46 and increase in import duty payable in France by ₹0.15 per ₹1
increase in transfer price.

8) Assume that the Indian division is charging the French division full manufacturing cost of ₹12,000 per unit. If the manager of
the Indian division wants to increase the transfer price to ₹12,001 per unit, that is transfer price is proposed to be increased
by ₹1. What will be the impact on the overall profits of Quicklink per ₹1 increase in transfer price?
Answer: Decrease in overall profits by ₹0.04 per ₹1 increase in transfer price.

9) Assume that the Indian division is charging the French division full manufacturing cost of ₹12,000 per unit. The manager of
the Indian division wants to increase the transfer price to ₹13,000 per unit, that is transfer price is proposed to be increased
by ₹1,000 per unit. What will be the impact on the overall profits of Quicklink for the 50,000 mobile phones transferred
from India to France?
Answer: Decrease in overall profits by ₹20,00,000

10) Based on your analysis, should the Indian division increase the transfer price to ₹13,000 per unit that is ₹1,000 per unit
above the full manufacturing cost of ₹12,000 per unit?
ANSWER: “No”

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Answer: → “OUTSIDE, PLANNING ” (Not: Outside, Marketing )

5) Traditional Variances for 'Ice' are as under:

Answer→

Traditional Variances

Usage Variance = (27,500 Kgs. - 27,225 Kgs.) x Rs.10 = Rs.2,750 (F)

Price Variance = (₹10 - ₹9.50) x 27,225 Kgs. = Rs.13,612.50 (F)

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