Reference no: EM13491917
1. The focus of management accounting over time has changed. Which is the correct historical order for the following foci?
i. Cost
ii. Profitability
iii. Resource management
iv. Waste reduction
A. i, ii, iii and iv
B. ii, iii, i and iv
C. i, ii, iv and iii
D. i, iii, iv and ii
2. Which of the following are management accounting responses to the changing business environment?
A. Activity-based costing.
B. E-commerce.
C. Supplier cost analysis.
D. A and C.
3. Which of the following statements is correct?
A. The primary objective of a firm's management is to increase firm value.
B. The management accounting system needs to accumulate information from both internal and external sources.
C. Managers may be faced with a conflict between increasing customer value and increasing shareholder value.
D. All the given statements are correct.
4. Strategies are:
A. directions that a firm intend to take in the long term
B. describes the way the firm competes
C. the same as objectives and goals
D. independent of the firm's mission statement
5. Which of the following would not be likely as a consistent focus for a firm following a product differentiation strategy?
A. Quality
B. Delivery
C. Product innovation
D. Cost reduction
6. The 'vision' of an organisation:
A. refers to the desired future state of an organisation
B. refers to a statement that defines the purpose of the organisation
C. refers to specific statements of objective, upon which goals can be set
D. is only useful for non profit organizations
7. Animus Ltd is a mining company. Which of the following is an example of a decision relating to formulating Animus Ltd's corporate strategy?
A. Should Animus Ltd operate in the mining industry only, or to expand to heavy machinery manufacturing and distribution?
B. Should Animus Ltd compete based on price or product differentiation?
C. Should Animus Ltd hire a new financial controller?
D. Should Animus Ltd develop a new management accounting system?
8. People create budgetary slack because:
A. their performance will look better if they beat the budget.
B. it helps them cope with uncertainty.
C. they believe their budget requests will be cut.
D. All of the given answers
9. Which of the following items should be taken into account when setting budgets?
A. Positive behaviour of employees is more likely to result if the budgetary process is participative.
B. The budget goals should not be so tight that they are unachievable.
C. The goals of the individual sections' budget should be aligned with the firm's goals.
D. All of the given answers
10. Which of the following are contemporary approaches to managing costs?
A. Life cycle costing
B. Target costing
C. Both life cycle costing and target costing
D. Neither life cycle costing nor target costing
11. Which of the following activities are non-value-added activities?
i. Inspect work in process
ii. Process sales orders
iii. Repair drilling machine
iv. Move raw material to the work station
A. i, iii and iv
B. i, ii and iv
C. i, ii and iii
D. ii, iii and iv
12. When we consider the life cycle sequence of a product, the majority of costs for a typical product have been committed by the end of:
A. product planning
B. design and development
C. customer support
D. production
13. A systematic approach in analysing the product and process design, with the aim of eliminating any non-value-added elements, to achieve the target cost is known as:
A. component level target costs
B. value engineering
C. strategic cost reduction
D. cost reduction objective
- Explain why the management accounting information from the traditional responsibility accounting system fails to provide a greater strategic focus?
- Give one example of an appropriate performance measure for each of the responsibility and the process-orientated accounting systems.
- Explain four key features of a good process-oriented management accounting system.
-Wallace Communications Ltd produces paints and primers in its factory.In recent years, the company's market share has been eroded by stiff competition from overseas. Two years ago, the company's CEO decided to devote more resources to improving product quality. He set up a task force from various areas of the factory, including: production, customer services, sales, and accounting.
|
Cost Item
|
Year 1
|
Year 2
|
|
Machine maintenance..................
|
$ 215,000
|
$160,000
|
|
Final testing ..............................
|
160,000
|
94,000
|
|
Warranty repairs........................
|
69,000
|
23,000
|
|
Customer returns
|
262,000
|
80,000
|
|
Incoming inspection
|
45,000
|
22,000
|
|
Training suppliers
|
5,000
|
15,000
|
|
Scrap
|
68,000
|
40,000
|
|
Rework
|
120,000
|
62,000
|
|
Design reviews
|
20,000
|
95,000
|
|
Total Quality Cost
|
$964,000
|
$591,000
|
Total production costs for year 1 was $4,120,000 and for year 2 was $4,510,000.
Required:
(a) Prepare a Quality Cost Report for Wallace Communications Ltd.
(b) By analysing the quality cost report you prepared above, determine if the company's quality improvement programme has been successful.
(c) There are different views of how quality can be managed. While a certain level of quality may be accepted, there is an argument to aim for the highest level of quality. Discuss these two views of "quality as cost" and "quality as value".
-Mick and Donald run a fast food outlet on Queen Street. For most of the day, Mick and Donald are able to keep up with demand and serve customers quickly. However, from 10 am to 2 pm the shop becomes very busy with employees from close by businesses going out for their quick lunch. Most of the shop's customers want one of Mick's famous 'hamburgers with the lot'. Queues build, tummies rumble and customers grumble. Mick decided to solve this problem by setting up a burger production line from 10 am to 2 pm each day.
His wife, Minnie, would take over the sales counter. He would cut, toast and butter the bread rolls (he can complete 20 per hour). Donald would cook the meat patties, eggs, bacon and onions (he can complete 40 serves per hour). Donald's wife, Daisy, would chop the lettuce and tomato and place it in a toasted bread roll along with the meat patty, egg, bacon, onion, and of course sauce (she can complete 25 hamburgers per hour). The new system was put in place and the next day an average of 30 customers per hour ordered 'a hamburger with the lot' between 10 am and 2 pm.
Required:
a. Explain the theory of constraints and its implications for managing costs and improving customer value.
b. Draw a diagram to identify the number of customers per hour who received their orders.
c. How many customers were unfed by 2 pm?
d. Identify the bottlenecks in Mick's production process and suggest how they might be overcome to meet the customers' requirements.
-Classic Homes manufactures modular kitchens and bathrooms and the managing director, Amy Jones, is concerned that the total number of suppliers has increased from 20 to 60 over the past three years. He is sure that this is insufficient and has asked you as the new management accountant to investigate this. You have decided to undertake an activity-based analysis of supplier costs and supplier performance, and will focus initially on the four suppliers of wall and floor tiles.
|
Activity
|
Cost per unit of activity driver
|
|
Order material
|
$200 per order
|
|
Receive order
|
$1500 per delivery
|
|
Inspect order
|
$250 per delivery
|
|
Return material to supplier
|
$210 per return
|
|
Downtime due to late delivery
|
$260 per hour
|
|
Rework due to low quality tiles
|
$50 per hour
|
|
Pay supplier
|
$190 per invoice
|
|
Dispute invoiced amount
|
$480 per dispute
|
Over the past year, the four suppliers of tiles consumed the following number of activities:
|
Activity
|
Ardex
|
Slatecrete
|
Bath Depot
|
Bath & Tiles
|
|
Order material
|
20
|
50
|
30
|
10
|
|
Receive order
|
20
|
80
|
10
|
20
|
|
Inspect order
|
5
|
25
|
5
|
0
|
|
Return material to supplier
|
3
|
8
|
0
|
0
|
|
Downtime due to late delivery
|
20
|
60
|
10
|
10
|
|
Rework due to low quality tiles
|
11
|
10
|
0
|
0
|
|
Pay supplier
|
12
|
48
|
12
|
10
|
|
Dispute invoiced amount
|
2
|
0
|
13
|
2
|
|
Supplier manager time
|
10%
|
15%
|
10%
|
5%
|
|
Cost of material purchased
|
$60000
|
$120000
|
$70000
|
$30000
|
The Supplier Manager employed to manage suppliers is paid a salary of $90,000.
Required:
1. Calculate the total cost of ownership and the supplier performance index for each of the four suppliers.
2. Discuss the relative performance of each supplier.
3. Suggest four non-financial performance measure that could be used to assess the performance of the tile suppliers
4. Describe the benefits of supply chain management for an organisation and the ultimate customers.