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THE OPEN UNIVERSITY OF SRI LANKA

BACHELOR OF TECHNOLOGY - LEVEL 5

MEM 5336 – MANAGEMENT FOR ENGINEERS

ACADEMIC YEAR 2013/14

ASSIGNMENT 02

INSTRUCTIONS:

1. This assignment is based on course materials in Book 02.

2. Answer all questions.

3. Write your registration number clearly on your answer script. Write your address at

the back of your answer script.

4. Send your answer script under registered cover to the address given below or put it into the

Assignment box available at the Research Lab of the Department of Mechanical Engineering

(S & T Building) Nawala, Nugegoda.

THE COURSE COORDINATOR IN MEM 5336,

DEPARTMENT OF MECHANICAL ENGINEERING,

THE OPEN UNIVERSITY OF SRI LANKA,

P.O.BOX 21, NAWALA,

NUGEGODA.

5. Last date of submission is 04.04.2014.

6. No late submissions will be accepted.

1. (a) List the types of prime entry books that are in common use.

(b) Record the following transactions in a set of prime entry books.

Date Activity Value in Rs.

2012 January 1 Purchase from Robert 20,000

2012 January 2 Purchase from Jinadasa 10,000

2012 January 3 Sales to Dias 40,000

2012 January 4 Sales to Gunasena 30,000

2012 January 5 Sales to Romanis 4,000

2012 January 8 Sales to Nimal 10,000

2012 January 10 Purchase from Albert 6,000

2012 January 12 Purchase from Gamini 2,500

2012 January 14 Goods returned to Robert 2,100

2012 January 15 Goods returned to Jinadas

Goods returned by Gunasena

1,300

2,000

2012 January 16 Goods returned by Romanis 300

2012 January 18 Goods returned to Albert 1,000

2012 January 20 Goods returned by Nimal 2,100

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(c) Record the following transactions in the ledger and balance the accounts as at 31st January

2012.

Purchased goods worth Rs. 10,000 from Siripala (on credit)

Purchased goods worth Rs. 2,450 from Susiripala (on credit)

Sold goods worth Rs. 8250 to Jayapala (on credit)

Returned goods with Rs. 200 to Siripala (on credit)

Sold goods worth Rs. 3,200 to Sumanapala (on credit)

Sumanapala returned goods worth Rs. 320

Sold goods worth Rs. 12,450 to Rusiripala (on credit)

Purchased furniture worth Rs 18,000 (on credit) from Lakmini & Co

Purchased Motor vehicle for Rs. 40,000 from Lanka Motor Co. Ltd. (on credit)

Purchased goods worth Rs. 12,250 from Simon (on credit)

2. Trial balance of XYZ Trading Company Ltd. as at 31st March 2012 is given below.

Debit

(Rs’00)

Credit

(Rs’00)

Bank 1,200

Capital 33,000

Cash 300

Drawings 6,000

Insurance 2,000

Office expenses 15,000

Office furniture at cost 5,000

Office furniture; accumulated depreciation at 1st April 2011 2,000

Provision for bad and doubtful debts at 1st April 2011 500

Purchases 55,000

Salaries 25,000

Sales 100,000

Stocks at 1st April 2011 10,000

Trade creditors 4,000

Trade debtors 20,000

139,500 139,500

Notes: The following additional information is to be taken into account.

1. Stock at 31st March 2012 was valued at Rs. 1,500,000.

2. The insurance included Rs. 50,000 worth of cover which related to the year 31

st March

2012.

3. Depreciation is charged on office furniture at 10% per annum of its original cost (it is

assumed not to have any residual value).

4. A bad debt of Rs. 100,000 included in the trade debtor’s balance of Rs. 2,000,000 is to be

written off.

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5. The provision for bad and doubtful debts is to be maintained at a level of 5% of outstanding

trade debtors as at 31st March 2012. ie. After excluding the bad debt referred in note 4 above.

6. At 31st March 2012 there was an amount owing for salaries of Rs. 100,000.

Prepare the following.

(i) XYZ company Trading and Profit and Loss account for the year ended 31st March 2012.

(ii) Balance sheet as at 31st March 2012.

3. (a) Explain the methods used for evaluating a capital project.

(b) A machine used for making steel nails cost Rs 100,000/- (inclusive of installation). Cash

flow during lifetime of the machine is as follows.

Year Net cash flow

(Rs.)

1 5,000

2 10,000

3 30,000

4 40,000

5 40,000

6 25,000

7 20,000

8 15,000

Scrap value of the machine is Rs. 10,000/-. Capital required for the project was raised at

discount factor of 15%. Evaluate the feasibility of the project.

(c) Apart from evaluating techniques, what are the other factors that one should consider in

deciding the location of a project, prior to its implementation?

4. (a) Explain the following.

Variable cost

Contribution

Break-even point

Margin of safety

(b) Selling price of a product is marked as Rs. 10.00 per unit. Variable cost is Rs. 6.00 per unit.

Monthly fixed cost is Rs. 20,000/-. Monthly production capacity is 15,000.

Draw graphs of total variable cost, total cost and total sales revenue for various volumes of

output of the product.

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Answer the following using the above graphs.

(i) Mark the break-even point and find out its value.

(ii) Mark the regions of profit and contribution.

(iii) If the number of products sold is 8,000, find out the margin of safety in terms of

volume and sales (in rupees).

5. (a) Briefly describe the functions of a human resource manager in an organization.

(b) Discuss the different methods of recruitment and their merits and demerits.

(c) State what is meant by Job analysis and indicate information derived from job analysis.

(d) Briefly discuss the two approaches of job analysis, Functional Job Analysis and the

Position Analysis Questionnaire.