distribution of products. Within each function, a number of activities may be distinguished and a principal driver
identified for each activity.
Each sales order will normally comprise a number of batches of any one of a range of products. The company is active
in promoting, where possible, a product focus for design, dedicated production lines and product marketing. It also
recognises that a considerable level of expenditure will relate to supporting the overall business operation.
It is known that many costs may initially be recognised at the unit, batch, product sustaining (order) or
business/facility sustaining (overall) levels. A list of expense items relating to Order Number 377 of product Zeta is
shown below. The methods of calculating the values for Order Number 377 shown below are given in brackets
alongside each expense item. These methods also indicate whether the expense items should be regarded as product
unit, batch, product sustaining (order) or business/facility sustaining (overall) level costs. The expense items are not
listed in any particular sequence. Each expense item should be adjusted to reflect its total cost for
Order Number 377.
Order Number 377 comprises 5,000 units of product Zeta. The order will be provided in batches of 1,000 product
units.
第1题
elated services to the
population of Blaintopia, a country in which the public health service is partially funded by the Government.
Additional information relating to the Dental Health Partnership for the year ended 31 May 2005 is as follows:
(1) The partnership was open for five days per week during 48 weeks of the year.
(2) Each dentist treated 20 patients per day. The maximum number of patients that could have been treated by a
dentist on any working day was 24 patients.
(3) (i) The partnership received a payment from the government each time any patient was consulted as shown in
the following table:
Required:
(a) Prepare a summary Profit and Loss Account of the Dental Health Partnership for the year ended
31 May 2005 and calculate the percentage of maximum capacity that was required to be utilised in order
to break even in the year ended 31 May 2005. (12 marks)
第2题
Bonlandia. SSH
develops bespoke software packages on behalf of clients. When requested to do so, SSH also provides training to
clients’ staff in the use of these software packages. On 1 December 2006, the directors of SSH established a similar
semi-autonomous operation in Karendia. All software packages are produced in Bonlandia and transferred to Karendia
at cost plus attributable overheads i.e. there is no mark-up on the software packages transferred from Bonlandia to
Karendia.
Karendia is a country in which the structure of industry has changed during recent years. There has been a major
shift from traditional manufacturing businesses to service orientated businesses which place a far greater emphasis
upon the use of business software.
The operational managers in both Bonlandia and Karendia have no control over company policies in respect of
acquisitions and financing.
The operational manager of Bonlandia receives a bonus of 40% of his basic salary for meeting all client delivery
deadlines in respect of Karendia. At a recent meeting he instructed his staff to ‘install client software by the due date
and we’ll worry about fixing any software problems after it’s been installed. After all, we always fix software problems
eventually’. He also stated that ‘it is of vital importance that we grow our revenues in Karendia as quickly as possible.
Our clients in Karendia might complain but they have spent a lot of money on our software products and will not be
able to go to any of our competitors once we have installed our software as all their businesses would suffer huge
disruption’.
Financial data (all stated on an actual basis) in respect of the two divisions for the two years ended 30 November
2007 and 2008 are shown on the next page:
Required:
(a) Assess the financial performance of SSH and its operations in Bonlandia and Karendia during the years
ended 30 November 2007 and 2008.
Note: you should highlight additional information that would be required in order to provide a more
comprehensive assessment of the financial performance of each operation. (14 marks)
第3题
les 1, 2 and 3 before
attempting this question.
Quicklink Ltd operates in the distribution and haulage industry and has achieved significant growth since its formation
in 1997. Its main activities comprise the door-to-door delivery of mail, parcels and industrial machinery.
The information contained in notes (i–vii) below relates to Quicklink Ltd in respect of the year ended 31 May
2005 and changes planned in the year ending 31 May 2006.
(i) Contracted clients were charged at the following rates during the year ended 31 May 2005: Mail £6 per delivery,
Parcels £10 per delivery and Machinery £200 per delivery.
(ii) Rates for non-contract clients during each of the years ended 31 May 2005 and year ending 31 May 2006,
were/are based upon the contracted client rates per delivery plus an additional percentage fee per delivery
charged to non-contract clients as follows:
Activity Additional Fee
Mail 40%
Parcel 20%
Machinery 50%
(iii) On 1 June 2003, Quicklink Ltd entered into a fixed price contract for the provision of fuel for its delivery vehicles
for the three-year period ending 31 May 2006. For the year ending 31 May 2006 fuel costs will be as follows:
(a) £0·10 per kilometre in respect of the delivery of mail and parcels
(b) £0·50 per kilometre in respect of the delivery of industrial machinery.
Each vehicle owned by Quicklink Ltd is in use for 340 days per annum.
(iv) Employee salaries were paid throughout the year ended 31 May 2005 at a rate of £26,400 per employee, per
annum.
(v) Sundry operating costs (excluding fuel and salaries) of Quicklink Ltd amounted to £3,000,000 during the year
ended 31 May 2005.
(vi) The board of directors expect that for the year ending 31 May 2006 the following will apply:
(a) contract rates of Quicklink Ltd business will increase by 5%
(b) sales volumes are expected to remain at the same level as in the year ended 31 May 2005
(c) salaries and other operating expenses will increase by 4%.
(vii) The board of directors agreed to purchase Celer Transport, an unincorporated business, which was founded in
December 2001. The purchase took effect on 1 June 2005. Celer Transport has main activities comprising the
delivery of mail, parcels and processed food. The managing director of Quicklink Ltd has expressed his view that
‘the acquisition of the Celer Transport business would constitute a good strategic move even though it is expected
to make a loss of £50,000 during the year ending 31 May 2006’.
The information contained in notes (viii–xii) below relates to the business of Celer Transport in respect of the year
ending 31 May 2006:
(viii) A distinctive competence of the Celer Transport business relates to its success in winning contracts with major
food producers. Each contract is for a fixed term of three years and all contracts were renewed on 1 June 2005.
Contract values per annum are as follows:
Number of contracts Value per contract (£)
4 225,000
6 150,000
9 100,000
(ix) (1) The sales volume of mail and parcel deliveries to Celer Transport clients is expected to increase by 10% per
annum with effect from 1 June 2005. It is intended to use the client billing rates of Quicklink Ltd that were
in application during the year ended 31 May 2005 as the basis of charging for mail and parcel deliveries to
Celer Transport clients during the year ending 31 May 2006. This is due to the fact that Quicklink Ltd had
higher client billing rates than Celer Transport and the board of directors recognised that it would have been
difficult to adopt company-wide billing rates with effect from 1 June 2005.
(2) During the year ended 31 May 2005 the billing rates of Celer Transport in respect of contract and noncontract
mail and parcel deliveries were 90% of the level of the rates charged by Quicklink Ltd.
(x) Fuel requirements for the Celer Transport business activities are forecast to cost £0·12 per kilometre for mail and
parcel deliveries and £0·60 per kilometre for deliveries of processed food. The fuel required for Celer Transport
business during the year ending 31 May 2006 cannot be provided under the current agreement entered into by
Quicklink Ltd as detailed in note (iii). Each Celer Transport vehicle is in use for 340 days per annum.
(xi) All Celer Transport employees will be paid on the same basis as Quicklink Ltd employees.
(xii) Sundry operating costs (excluding fuel and salaries) of the Celer Transport business will amount to £1,990,340.
Required:
(a) Prepare, in columnar format, the budgeted profit and loss accounts for the year ending 31 May 2006 of:
(i) Quicklink Ltd;
(ii) Celer Transport; and
(iii) The combined entity. (16 marks)
第4题
ountry of Strifeland. The
partnership commenced trading on 1 June 2001. Each of the advisors employed by HLP is a specialist in the
provision of legal services in respect of ONLY one of the following categories of work:
Property;
Commercial; or
Litigation.
Appendices 1.1 and 1.2 below show statistics (both budget and actual) for the twelve month period ended 31 May
2007 for HLP and also for a competitor, Merlin Advisory Services (MAS).
Additional information relating to HLP for the year ended 31 May 2007 is as follows:
(1) Fees charged per consultation (including subcontracted consultations)
Required:
(a) Using the information contained in Appendix 1.1, prepare budgeted and actual profit and loss statements for
HLP and also a profit and loss statement on an actual basis for MAS for the year ended 31 May 2007.
(14 marks)
第5题
ing. Its operations are
organised into five divisions which are as follows:
(i) Fashion
(ii) Industrial
(iii) Leisure
(iv) Children
(v) Footwear
The Fashion division manufactures a narrow range of high quality clothing which is sold to a leading retail store which
has branches in every major city in its country of operation. The products have very short life cycles.
The Industrial division manufactures a wide range of clothing which has been designed for use in industrial
environments. In an attempt to increase sales volumes, SCC Ltd introduced the sale of these products via mail order
with effect from 1 June 2005.
The Leisure division manufactures a narrow range of clothing designed for outdoor pursuits such as mountaineering
and sky diving, which it markets under its own, well-established ‘Elite’ brand label.
The Children division manufactures a range of school and casual wear which is sold to leading retail stores.
The Footwear division manufactures a narrow range of footwear.
The management accountant of SCC Ltd has gathered the following actual and forecast information relating to the five
divisions:
Required:
(a) Use the Boston Consulting Group matrix in order to assess the competitive position of SCC Ltd. (10 marks)
第6题
the country of Mayland.
Each centre offers dietary plans and fitness programmes to clients under the supervision of dieticians and fitness
trainers. Residential accommodation is also available at each centre. The centres are located in the towns of Ayetown,
Beetown and Ceetown.
The following information is available:
(1) Summary financial data for HFG in respect of the year ended 31 May 2008.
(2) HFG defines Residual Income (RI) for each centre as operating profit minus a required rate of return of 12% of
the total assets of each centre.
(3) At present HFG does not allocate the long-term borrowings of the group to the three separate centres.
(4) Each centre faces similar risks.
(5) Tax is payable at a rate of 30%.
(6) The market value of the equity capital of HFG is $9 million. The cost of equity of HFG is 15%.
2
(7) The market value of the long-term borrowings of HFG is equal to the book value.
(8) The directors are concerned about the return on investment (ROI) generated by the Beetown centre and they are
considering using sensitivity analysis in order to show how a target ROI of 20% might be achieved.
(9) The marketing director stated at a recent board meeting that ‘The Group’s success depends on the quality of
service provided to our clients. In my opinion, we need only to concern ourselves with the number of complaints
received from clients during each period as this is the most important performance measure for our business.
The number of complaints received from clients is a perfect performance measure. As long as the number of
complaints received from clients is not increasing from period to period, then we can be confident about our
future prospects’.
Required:
(a) The directors of HFG have asked you, as management accountant, to prepare a report providing them with
explanations as to the following:
(i) Which of the three centres is the most ‘successful’? Your report should include a commentary on return
on investment (ROI), residual income (RI), and economic value added (EVA) as measures of financial
performance. Detailed calculations regarding each of these three measures must be included as part of
your report;
Note: a maximum of seven marks is available for detailed calculations. (14 marks)
第7题
1 The Geeland Bus Company (GBC) is a partly government-funded organisation which provides transport services to
the population of Geeland, a country which is divided into four regions i.e. Northern, Eastern, Southern and Western.
The Western region differs from the Northern, Eastern and Southern regions in that it is a rural area with a low
population.
The Terrific Transport Company (TTC) is a privately owned organisation which also provides transport services to the
population of Geeland. All TTC buses are luxuriously fitted; each passenger has their own television and all buses
have on-board catering facilities which serve a variety of drinks and snacks. The costs of these luxuries are included
in fares charged by TTC.
Both GBC and TTC operate from premises in the Northern region. GBC operates a bus service to and from the Eastern,
Southern and Western regions as well as a ‘Hopper’ service which takes passengers around all regions, other than
the Western region, within Geeland. TTC also operates a bus service to and from the Eastern and Southern regions of
Geeland as well as a Hopper service. TTC does not operate a service to and from the Western region.
The following information is available:
(1) A summary of the financial performance of GBC and TTC for the years ended 30 November 2006 and 2007 is
as follows:
(12) At a meeting of the board of directors held during 2007, the managing director of GBC stated that: ‘on no account
shall we discontinue the operation of our Western route’.
Required:
(a) Prepare a report on the operating performance and financial performance of GBC and TTC for the years
ended 30 November 2006 and 2007. As part of your report, you should include an appendix showing
detailed workings of how each of the six figures marked with an asterisk (*) in note 1 has been calculated.
(23 marks)
Note: 6 marks are available in respect of the six figures marked with an asterisk (*). 17 marks are available
for other calculations and discussion, including 4 professional marks.
第8题
ctivities. All applications by
divisional management teams for funds with which to undertake capital projects require the authorisation of the board
of directors of NCL plc. Once authorisation has been granted to a capital application, divisional management teams
are allowed to choose the project for investment.
Under the terms of the management incentive plan, which is currently in operation, the managers of each division
are eligible to receive annual bonus payments which are calculated by reference to the return on investment (ROI)
earned during each of the first two years by new investments. ROI is calculated using the average capital employed
during the year. NCL plc depreciates its investments on a straight-line basis.
One of the most profitable divisions during recent years has been the IOA Division, which is engaged in the mining
of precious metals. The management of the IOA Division is currently evaluating three projects relating to the extraction
of substance ‘xxx’ from different areas in its country of operation. The management of the IOA Division has been given
approval by the board of directors of NCL plc to spend £24 million on one of the three proposals it is considering (i.e.
North, East and South projects).
The following net present value (NPV) calculations have been prepared by the management accountant of the IOA
Division.
第9题
Universities in Teeland have three stated objectives:
1. To improve the overall standard of education of citizens in Teeland.
2. To engage in high quality academic research.
3. To provide well-qualified university graduates to meet the needs of the graduate jobs market in Teeland.
Each university is funded by a fixed sum of money from the Teeland government according to the number of students studying there. In addition, universities receive extra funds from the government and also from other organisations, such as large businesses and charities. These funds are used to support academic research.
Following the onset of an economic recession, the Teeland government has stated its intention to reduce spending on publicly funded services such as the universities. One senior politician, following his recent visit to neighbouring Veeland, was controversially quoted as saying:
‘The universities in Veeland offer much better value for money for the citizens there compared to our universities here in Teeland. There are 25 students for each member of academic staff in Veeland, whereas in Teeland, the average number is 16, and yet, the standard of education of citizens is much higher in Veeland. The Veeland government sets targets for many aspects of the services delivered by all the universities in Veeland. Furthermore, league tables of the performance of individual universities are published on the internet, and university leaders are given bonuses if their university falls within the top quarter of the league table. In Veeland, the system of performance measurement of the universities is considered so important that there is a special government department of 150 staff just to measure it.’
He went on to add, ‘I want to see a similar system of league tables, targets and bonuses for university leaders being introduced here in Teeland. To appear near the top of the league tables, I think we should expect each university to increase the number of graduates entering graduate jobs by at least 5% each year. I would also like to see other steps taken to increase value for money, such as reducing the number of academic staff in each university and reducing the salary of newly recruited academic staff.’
You have been asked to advise the Teeland government on the measurement of value for money of the universities and the proposed introduction of league tables for comparing their performance. Appendix A contains details and existing performance data relating to four of the best known universities in Teeland.
Northcity University is famous for its high teaching standards and outstanding academic research in all subjects. As such, it attracts the most able students from all parts of the world to study there.
Southcity University is a large university in the capital city of Teeland and offers courses in a wide range of subjects, though most of the funding it receives for academic research is for science and technology in which it is particularly successful.
Eastcity University is a small university specialising in the teaching of arts and humanities subjects such as history and geography.
Westcity University currently offers less strict entry standards to students to attract students from more diverse backgrounds, who may not normally have the opportunity of a university education.
Appendix A
Existing university performance data
Key to performance data
1 – Entry requirements represent students’ average attainment in examinations prior to entering university. The entry requirement of the highest ranking university is scored as 100, with the score of all other universities being in proportion to that score.
2 – The number of graduates each year who go on to further study or who begin jobs normally undertaken by university graduates. In Teeland, students attend university for an average of 3·2 years.
3 – The TSOR (Teeland students overall satisfaction rating) survey is undertaken by the Teeland government to assess students’ overall satisfaction with the standard of teaching, the social and support aspects of university life and their optimism for their own future job prospects.
4 – The education department of the Teeland government has produced a provisional league table ranking the overall performance of each of the 45 universities in Teeland, with 1 being the highest ranking university. This has been compiled using a number of performance measures, weighted according to what the government believes are the most important of these measures.
Required:
(a) Advise the Teeland government how it could assess the value for money of the universities in Teeland, using the performance data in Appendix A. (12 marks)
(b) Assess the potential benefits of league tables for improving the performance of universities in Teeland and discuss the problems of implementing the proposal to introduce league tables. (13 marks)
第10题
s for use in the construction industry. Dibble has always absorbed production overheads to the cost of each product on the basis of machine hours.
Timber Division
Timber Division manufactures timber frames used to support the roofs of new houses. The timber, which is purchased pre-cut to the correct length, is assembled into the finished frame. by a factory worker who fastens the components together. Timber Division manufactures six standard sizes of frame. which is sufficient for use in most newly built houses.
Steel Division
Steel Division manufactures steel frames and roof supports for use in small commercial buildings such as shops and restaurants. There is a large range of products, and many customers also specify bespoke designs for short production runs or one-off building projects. Steel is cut and drilled using the division’s own programmable computer aided manufacturing machinery (CAM), and is bolted together or welded by hand.
Steel Division’s strategy is to produce novel bespoke products at a price comparable to the simpler and more conventional products offered by its competitors. For example, many of Steel Division’s customers choose to have steel covered in one of a wide variety of coloured paints and other protective coatings at the end of the production process. This is performed off-site by a subcontractor, after which the product is returned to Steel Division for despatch to the customer. Customers are charged the subcontractor’s cost plus a 10% mark up for choosing this option. The board of Steel Division has admitted that this pricing structure may be too simplistic, and that it is unsure of the overall profitability of sales of some groups of products or sectors of the market.
Recently, several customers have complained that incorrectly applied paint has flaked off the steel after only a few months’ use. More seriously, a fast food restaurant has commenced litigation with Dibble after it had to close for a week while steel roof frames supplied by Steel Division were repainted. Following this, the production manager has proposed increasing the number of staff inspecting the quality of coating on the frames, and purchasing expensive imaging machinery to make inspection more efficient.
The chief executive officer (CEO) at Dibble has approached you as a performance management expert for your advice. ‘At a conference recently’, he told you, ‘I watched a presentation by a CEO at a similar business to ours talking about the advantages and disadvantages of using activity based costing (ABC) and how over several years the adoption of activity based management (ABM) had helped them to improve both strategic and operational performance.’
‘I don’t want you to do any detailed calculations at this stage, but I’d like to know more about ABC and ABM, and know whether they would be useful for Dibble’, he said.
You are provided with extracts of the most recent management accounts for Timber and Steel Divisions:
Required:
(a) (i) Advise the CEO how activity based costing could be implemented. (4 marks)
(ii) Assess whether it may be more appropriate to use activity based costing in Timber and Steel Divisions than the costing basis currently used. (8 marks)
(b) Advise the CEO how activity based management could be used to improve business performance in Dibble. (13 marks)
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