FNSACC507 Provide management accounting information this course answer
Name: Hiu Tung Leung, Kitty
Subject: Provide management accounting information
1. What are the differences between manual and computerised systems when entering final transactions?
2. Describe some of the problems that might arise from a failure to maintain and update an existing Chart of Account.
3. Management accounting information is used to inform decision- making but it has limitations. What can the accountant do to minimise the limitations of management accounting?
1. What do these terms mean?
2. You have been asked to carry out research about how Australians use their credit cards. How would you store or classify the information you gather? You can choose more than one option. Why would you organise information in this way?
3. What do information systems capture and why are they important?
4. Create a coding system that could be used to input data using these variables:
• Case Number:
• Month of birth
• Marital Status
• Annual income
• Highest academic qualification
1. You have been asked to provide an accurate and up-to-date profit and loss report on work in process for a particular job. What data might you draw on, what reports might you need to access and how would you ensure that the information you provide is error free and comprehensive?
2. Why do organisations need accurate and timely reports and what financial information is required to manage the organisation’s finances? Who is usually responsible for an organisation’s financial management?
1. What is the revenue cycle?
The revenue cycle includes all the administrative and clinical functions that contribute to the capture, management and collection of patient service revenue, according to the Healthcare Financial Management Association (HFMA).
Here is whats involved in the revenue cycle:
• Charge capture: Rendering medical services into billable charges.
• Claim submission: Submitting claims of billable fees to insurance companies.
• Coding: Properly coding diagnoses and procedures.
• Patient collections: Determining patient balances and collecting payments.
• Preregistration: Collecting preregistration information, such as insurance coverage, before a patient arrives for inpatient or outpatient procedures.
• Registration: Collecting subsequent patient information during registration to establish a medical record number and meet various regulatory, financial and clinical requirements.
• Remittance processing: Applying or rejecting payments through remittance processing.
• Third-party follow up: Collecting payments from third-party insurers.
• Utilization review: Examining the necessity of medical services.
2. What is the expense cycle and why is it more complex than the revenue cycle?
3. Why is it important to state the assets and liabilities at their correct accrual basis amounts at the start of the accounting cycle?
4. If inventory levels are rising but sales are not, what might this indicate and why might this be a concern?
5. What might rising trade debtors indicate and what action might you take?
6. How could comparisons between your organisation and your competitors be useful?
1. Explain the procedures you might need to follow to access the financial data and plans necessary for efficient operation of a team/section/division.
2. Operational staff are the people actually doing the job in each of the cost centres. These people are in the best position to identify problems, constraints or issues relating to current job costing budgets and to advise financial personnel of requirements for future budgets- to help prioritise resource needs for the next job costing exercise. They should be included in consultative processes for advising on cost information when formulating budgets.
Comment on this statement and the implications for expense in the organisation.
3. What are the likely cost implications for a business which expands rapidly?
4. To what extent are the employees in a team/ section/ division responsible for?
a. Data collection to support the budget?
b. Developing realistic and attainable budgets for the section/ division?
c. Monitoring expenditure?
d. Using the budget to measure actual work against projected work achievements?
1. What is the purpose and value of the job cost report?
2. Why is it important for budgets and reports to be presented in a clear manner, that they conform to management information requirements and how would a budget timetable or planner assist in satisfying this need?
1. You have been asked by management to prepare a report on why the personnel budget has a large negative variance. What information would you include in your repost?
2. When reporting, why is it necessary to provide evidence to support your statements or conclusions?
3. How might the materiality threshold level set for negative deviations differ between a small and large business?
4. Why are the variances from budgets and forecasts important to know?
At the commencement of the financial year a business estimated that their overhead would be $720000 and their direct labour costs would be $1.44 million.
At the end of the financial year the actual data reveals that the overhead was $770000. Direct labour cost was calculated to be $1.54 million.
The business uses normal costing and applies overhead on the basis of direct labour cost. The cost of goods sold before making adjustments for any overhead variance is $856000.
Calculate the overhead variance for the year and dispose of the overhead variance by adjusting the costs of goods sold.
1. A furniture manufacturer predicts that they will sell 12000 of product A and 8000 of product B in the next financial period. They prepare their budget accordingly.
At the end of the financial period the actual figures are 15000 for product A and 7000 for product B. costs are assigned and the wholesale margin on product A is calculated to be $450 and on product B it is $350.
Calculate the predicted and the actual sales mix, the variances that need to be examined and their impact.
2. Part way through the production process it is discovered that the cost assignment was inaccurate for product A and that there has been an underestimation of $150 per unit. They are unable to change the pricing because of contractual obligations.
What is the impact of this error in cost assignment if sales were as predicted?
3. What is the impact on income when the actual sales figures are used?
4. Consider an example of a new car sale yard and the managers predicted that they would sell 1400 of model A and 1800 of model B in the fiscal year. They would prepare their budget accordingly. Sales of model A did not meet expectations and sold 1200 units. Model B had sales rise to 2400 vehicles for the year. The expected margin on each vehicle is $2000 for model A and $3000 for model B.
Calculate the predicted and actual sales mix and the impact of the variations on income.