Posted: February 1st, 2025

The focus of management accounting over time has changed.

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 reductionA. i, ii, iii and iv
B. ii,
iii, i and iv
C. i, ii, iv and iii
D. i, iii, iv and ii2.
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 statement5.
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
reduction6.
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 organizations7.
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 answers9.
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 answers10.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 costing11.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
stationA. i,
iii and iv
B. i,
ii and iv
C. i,
ii and iii
D. ii,
iii and iv12.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. production13.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 objectiveExplain 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 ItemYear 1Year 2Machine
maintenance..................$ 215,000$160,000Final testing ..............................160,00094,000Warranty repairs........................69,00023,000Customer returns262,00080,000Incoming inspection45,00022,000Training suppliers5,00015,000Scrap68,00040,000Rework120,00062,000Design reviews20,00095,000Total Quality
Cost$964,000$591,000Total 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 aredifferent 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.ActivityCost per unit of activity driverOrder material$200 per orderReceive order$1500 per deliveryInspect order$250 per deliveryReturn material to supplier$210 per returnDowntime due to late delivery$260 per hourRework due to low quality tiles$50 per hourPay supplier$190 per invoiceDispute invoiced amount$480 per disputeOver the past year, the four suppliers
of tiles consumed the following number of activities:ActivityArdexSlatecreteBath DepotBath & TilesOrder material20503010Receive order20801020Inspect order52550Return material to supplier3800Downtime due to late delivery20601010Rework due to low quality tiles111000Pay supplier12481210Dispute invoiced amount20132Supplier manager time10%15%10%5%Cost of material purchased$60000$120000$70000$30000The 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 suppliers4.
Describe
the benefits of supply chain management for an organisation and the ultimate
customers.

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