Reference no: EM132309976
Assignment
a) Explain fundamental management accounting concepts and terms. Apply management accounting techniques that underpin cost management strategies in organisational contexts
b) Evaluate financial performance measurement processes, pricing and product mix decisions
c) Evaluate contemporary approaches to measuring and rewarding performance using financial and non-financial indicators and systems such as the balanced scorecard and benchmarking
d) Evaluate ethical issues in a management accounting context.
Required:
1. Robert Cleveland believes that the transfers from the Cushion Division to the Furniture Division should be at market price rather than at cost, for performance measurement.
a) Is Cleveland correct? Explain your answer.
b) Describe another approach that the company could use to set transfer prices, other than manufacturing cost and market price.
2. Using transfer prices based on market prices, prepare a revised profit statement, by division, for Raven Industries that will facilitate the evaluation of divisional performance. Use the contribution margin approach.
3. Based on the above analysis and your own research prepare a report to the CEO outlining your recommendations in relation to the transfer pricing and performance measurement approach which would help optimise the performance and efficiency of the company. Clearly outline the benefits and challenges of your suggested approach.
Task Details: Groups are to analyse the information provided, make appropriate calculations, develop recommendations and draw conclusions from their analysis. Submissions are to be in the form of a professional business report and include a title page, executive summary, table of contents, introduction, body, conclusion and reference list.
Style and Format:
1. Report should be typed on single sided pages, using Arial 11 font, double line spaced with 2.5 cm margins all around.
2. Reference and reference list – in text referencing should be in accordance with the Harvard Anglia method. The reference list should be prepared in accordance with the Harvard Anglia method and list only those references cited in the body of the report.