ACC00146 – Management Accounting
S3, 2016
Assignment 2 (20 marks)
Question 1 (5 marks)
What function does feedback play in the work of the manager and who provides it? Discuss. Your discussion must be supported by the relevant readings and real world examples. You must disclose the source of your information by referencing.
Question 2 (5 marks)
What is the difference between the contribution approach to the profit and loss statement and the traditional approach to the profit and loss statement? And why the contribution approach is preferred by the managers. Discuss. Your discussion must be supported by the relevant readings and real world examples. You must disclose the source of your information by referencing.
Question 3 (5 marks)
Valcor company produces a product which has peak sales in March of each year. The company’s budgeted sales for the first quarter of 2013 are given below:
January February March Total
Budgeted sales $50,000 $65,000 $75,000 $190,000
In order to have data available for preparing a cash budget, the company is keen to determine the budgeted cash collections from sales. To this end, the following information has been assembled:
Collections on sales:
60% in month of sale
30% in month following sale
8% in second month following sale
2% uncollectable
The company gives a 2 percent cash discount for payments made by customers during the month of sale. The account receivable balance to start the year is $22,000, of which $4,000 represents uncollected November sales and $18,000 represents uncollected December sales.
Required:
a. What were the total sales for November? For December? (1 mark)
b. Prepare a schedule showing the budgeted cash collections from sales, by month and in total, for the three-month period. (2 marks)
c. In structuring a cash budget, what important factors must be considered in planning cash collection from sales? In planning cash disbursement from suppliers? Discuss. Your discussion must be supported by the relevant readings and real world examples. You must disclose the source of your information (2 marks)
Question 4 (5 marks)
The following data are available on the single product produced by the Bart Company:
Direct Materials Direct Labour
Budgeted quantity per unit 3kg hours?
Budgeted price/rate $5 per kg per hour?
Budgeted cost per unit $15 ?
During the most recent period, the company paid $55,650 for direct materials, all of which were used in the production of 3,200 units of the product, and worked 4,900 direct labour hours at a cost of $36,750. The following variance data are available:
Direct Material Efficiency variance $4,500 U
Total Direct Labour variance $1,650 F
Labour Efficiency variance $800 U
Required: (1.25 mark each)
a. Calculate the actual cost paid per kg for direct materials.
b. Calculate the materials price variance.
c. Calculate the budgeted direct labour rate per direct labour-hour.
d. Calculate the budgeted hours allowed for the production of the period and the budgeted hours allowed per unit.
THE END