Questions and Answers of Advanced Accounting

Select an organisation with which you are familiar, and outline some of the main changes that gave taken place in its business environment in recent years.
Select an organisation with which you are familiar, and outline some of the main changes that gave taken place in its business environment in recent years. Discuss.
Explain how specific aspects of management accounting systems may be used to motivate employees and managers.
Identify the factors that may influence management accounting system design according to contingency theory.
Briefly describe changes in the focus of management accounting that have occurred since the beginning of the twenty-first century.
Briefly summarize the professional qualifications required to become a member of one of the three major Australian professional accounting bodies.
Complete each of the following statements by selecting the best answer. In each case, explain your selection. 1. Management accounting: (a) Often involves predicting future outcomes (b) Is based on
Classify each of the following statements as true or false. In each case, provide reasons to explain your answer. 1. Management accounting systems provide managers with all the information they need
For the 10 activities listed below indicate whether each is likely to form part of the duties of the following roles: (a) Management accountant (b) Financial accountant (c) Cost accountant (d) None
Use the internet to find a job advertisement for a management accountant. Identify the key roles and the applicant's qualifications required for this position.
Give an example of management accounting information that could be used by a manager to make each of the following decisions. Remember to consider non-financial information where relevant. 1. The
Classify each of the following statements as true or false. In each case, provide reasons to explain your answer. 1. The growth of the manufacturing sector in Australia has led to the widespread
Outline the major processes that management accounting systems use to create value and manage resources.
Identify management accounting information that could assist managers in making each of the follow, decisions. Remember to consider non-financial information where relevant. 1. A marketing manager is
Give two examples of management accounting information that would be prepared on a regular basis, and two examples of management accounting information that might be prepared on an ad hoc basis.
According to institutional theory, a number of factors may influence the design of management accounting systems. 1. Explain the implications of institutional theory for management accounting system
You are the financial controller of a large manufacturing organisation and intend to approach the human resources (HP) manager seeking to create two new positions: a financial accountant and a
You have just been appointed as the new management accountant to manage the transition of the existing Royal Adelaide Hospital to the proposed new site. The hospital has a number of separate
You and your best friend intend to go into business together as owners of a sports equipment store. Required: Identify specific types of financial and non-financial information that would help you to
You are recently appointed as the senior management accountant for a large organisation. In your first meeting with the CEO you suggest that you should be included in the strategic leadership team
Information for management Joe Murphy retired a few years ago at the age of 48, having built up a substantial retirement portfolio through a range of entrepreneurial activities. He moved to the Snowy
1. Use the internet to find a vision and mission statement for an organisation. 2. Identify objectives and strategies for this organisation. (If this information is not included in the website,
You have just been appointed as the management accountant for Close Up and Personal (CUP) , a company that sells pottery items, jewellery and cool clothing, featuring personal digital photos, this
Explain the concept of competitive advantage and provide examples of the different types of business strategies that can be used to achieve it.
Janet Kaniva is the head of the sales department for a large book distributor. She manages a team of five salespeople, including her close friend, Ima Lyer. Each salesperson is responsible for
Examine the definition of management accounting, and explain what is meant by customer value and shareholder value.
Cakes P Us operates a series of bakeries in Canberra that specialise in supplying a range of cakes to restaurants and coffee shops. Major products include lamingtons, scones, éclairs and
Enron was a large US energy company which failed spectacularly in late 2001 after being involved in extensive accounting fraud. Requirement: 1. Search the internet using the term Enron and identify
Briefly describe the key differences between financial accounting and management accounting.
Explain the key differences between cost accounting and management accounting.
The 'Peal life' scenario highlights the turbulent competitive environment faced by many airlines. Explain how such events might impact the type of information provided by management accountants in
All accountants should be located in the head office of a company so that they can be closer to the senior management. Do you agree with this statement? Provide reasons for your answer.
Based on the 'Real life, describe some of the qualities that a successful chief financial officer (CFO) should possess.
Give examples of how management accounting information could assist in managing resources the Australian Football League.
What types of management accounting information might assist management in a business that followed a strategy based on cost leadership?
What types of information might a management accountant provide to assist management in a business that considered product quality to be of key strategic importance?
Explain how a budget can be used to assist managers in planning and controlling.
'Planning systems and control systems are unrelated parts of a management accounting system.' Do you agree? Explain your answer.
The cost of inventory is the only cost that managers need to consider when making product-related decisions. Discuss.
Describe the key components of traditional management accounting systems. How do these differ from modern management accounting systems?
Identify three costs that could be classified as direct costs of chemical production plant indirect costs of the chemical produced.
List three costs that are likely to be controllable by the chief executive officer (CEO) of the Australian Football League. List three costs that are likely to be uncontrollable by the CEO.
Describe each segment of the value chain and explain why information about costs in the variance segments of the value chain can be useful to managers.
Refer to the value chain in Exhibit 2.4. Consider a manufacturer of computers and give two examples of costs for each segment of the company's value chain. Which of these costs would be included in
Describe the three main components of product cost. Focusing on a pair of Calvin Klein jeans, provide examples of costs that would be classified under each of these three cost components.
Distinguish between product and period costs and give three examples of each.
Outline the four major steps in the flow of costs through a manufacturing company.
In a manufacturing context, explain how product costs can be classified as an asset, and then as an expense. What are the underlying principles behind this accounting treatment?
Using examples from the 'Peal life stories, explain why management accounting systems pay so much attention to costs.
In your own words, explain the difference between cost of goods manufactured and cost of goods sold.
For each of the costs listed below, indicate whether it is: (a) A direct or indirect cost of the equipment maintenance department. (b) At least partially controllable by the department
For each of the costs listed below, indicate whether it is: (a) A product or period cost (b) A variable or fixed cost (c) A manufacturing or non-manufacturing cost. 1. Advertising costs of Nike. 2.
For each of the costs listed below, indicate whether it is: (a) A product or period cost (b) A variable or fixed cost (c) A manufacturing or non manufacturing cost. 1. Handbrake pads manufactured by
Classifying costs: value chain manufacturer Igloo Icicle Company produces and sells ice-cream. Classify the costs listed below, using these value chain classifications: (a) Research and
A foundry employee worked a normal 38 hour week, but six hours were idle due to a small fire in the plant. The employee earns $29 per hour.Required:1. Calculate the employee's total wages for the
A loom operator in a textile factory earns $30 per hour, and $35 for each overtime hour, The operate worked 48 hours during the first week of May, instead of the normal working time of 38
1. Determine the missing amount in each of the independent cases above.2. Explain the components of cost of goods manufactured.
1. Determine the missing amount in each of the independent cases above.2. Explain the relationship between the schedule of cost of goods manufactured and the schedule of cost of goods sold and an
Matilda Surf Gear, a manufacturer of sports and beach wear, had the following inventory balances at the beginning and end of the year.During the year, the company purchased $240,000 of raw material
Give three examples of non-financial information that could be useful for the managers of Tennis Australia in running the Australian Open tennis tournament each year.
Australian Aluminum Company. a manufacturer of recyclable soft-drink cans, had the following inventory balances at the beginning and end of the current year:During the year, the company purchased
Wholly Donuts Ltd is a medium-sized doughnut manufacturer. 1. Apply value chain and other classifications to the costs listed below. (More than one classification may be appropriate for each cost
The following cost data for the current year relate to Heartstrings Pty Ltd, a greetings card manufacturersRequired: Calculate each of the following costs for the year: 1. Total prime costs. 2. Total
Indicate, for each of the costs listed below, whether it is: (a) Product cost (b) Period cost (c) Conversion cost (d) Prime cost (e) Direct material cost (f) Direct labour cost (g) Manufacturing
Direct and indirect labour: manufacturer Sharpedge Cutlery manufactures kitchen knives. One of the employees. whose job is to cut out wooden knife handles, worked 49 hours during a week in January.
Madigan Company commenced operations at the beginning of the current year. One of the company's products, a refrigeration element, sells for $185 per unit, Information related to the current year's
Inventory estimates, partial data: manufacturer On April 12, after the close of business. Goldstein & Sons had a devastating fire that destroyed the firm's work in process and finished goods
The following data refer to Flintoff Fashions for the current year:Required: 1. Required the schedule of cost of goods manufactured for Flintoff Fashions. 2. Prepare the schedule of cost goods sold
The following data refer to Maximus Manufacturing Ltd for the current years:Required: Prepare Maximus manufacturings: 1. Schedule of cost of goods manufactured. 2. Schedule of cost of goods sold. 3.
Give four examples to illustrate how the managers in the head office of Qantas could use cost information for planning and controlling costs.
Refer to the schedule of cost of goods manufactured prepared in problem 2.39.Problem 2.39 dataRequired: 1. How much of the manufacturing costs incurred during the current year remain in work in
Colonial Tap Company (CTC) is a manufacturer of taps and fittings for the plumbing trade, located in Brisbane. The company was established by Ken Hall in 1951, with a workforce of 10, to meet the
On 1 January, Bob Earl set up Earl's Gyms Ltd to manufacture and sell children's outdoor play gyms. He was an engineer by profession but he understood the importance of accounting information and
Traditional management accounting systems classify costs as fixed and variable. Define these terms and provide three examples of each for a bank.
When analysing cost behaviour, what do we mean by 'level of activity'?
What are cost objects? Give four examples of cost objects from the various 'Peal life' situations described in this chapter to explain why managers might be interested in knowing their cost.
What is a direct cost? What is an indirect cost? List three direct costs of the IT department in firm. List three indirect costs of the department.
Speedy Copy Centre operates a chain of photocopy centres near several major universities. The firm's accountant is accumulating data to be used in preparing its annual budget for the coming year. The
Motomation Pty Ltd plans to acquire several retail automotive parts stores as part of its expansion program. Motomation carries out en extensive review of possible acquisitions prior to making any
Why did Holden Engine Company adopt five different levels of cost drivers, as described in the 'Peal life' on p. 77? Why might these differ from the hierarchy of cost drivers for activity-based
Austral Fine Furniture manufactures high-quality furniture. During the past year, the company's design department developed new product, a marble-topped dining table. This would be the first time
'I don't understand this cost report at all', exclaimed Jeff Mahoney, the newly appointed administrator of Bunyip General Hospital. 'Our administrative costs in the new pediatrics clinic are
Greenscape Pty Ltd provides commercial landscaping services. Linda Drake, the firms owner, wants to develop cost estimates that sh. can use to prepare bids on jobs. After analysing the firm's costs.
After a more sophisticated analysis of Greenscape's costs, Drake has access to the following additional data.Required:Refer to the data in the previous case, as well as the additional data above.1.
The 'Peal life describes some of the steps that BP took to reduce costs. Describe four root-cause cost drivers that a petroleum company like BP might identify to help them reduce costs.
Explain the impact of a decrease in the level of activity on: (a) Total fixed cost. (b) Fixed cost per unit of activity.
Explain why managers need to take care when making decisions using product costs that include unitised fixed costs.
You are the management accountant for Brideshead Tyres and have identified a linear relationship between the total direct material cost and the quantity of rubber used in production. Provide answers
Outside of the relevant range, cost behaviour patterns may not hold.' Explain this statement.
A cost analyst showed the general manager a graph that portrayed the firm's electricity cost as semivariable. The general manager looked at the graph and said: 'This fixed-cost component doesn't look
Is direct labour likely to be a fixed cost or a variable cost in the current business environment? Explain your answer by referring to the examples discussed in the 'Peal life' on p. 87 which
Describe how the 'account classification method' may be used to estimate costs.
Some businesses use only approximations when estimating cost functions. What are some possible reasons for this?
Explain how multiple regressions can be used to estimate a cost function. Select an example of a cost and two cost drivers that could form a multiple regression equation.
Explain the relevance of the R2 statistic to the evaluation of a multiple regression equation.
Describe some of the problems that are often encountered when collecting data for cost estimation.
In explaining cost behaviour we refer to the 'level of activity' as a cost driver. What do we mean by 'level of activity' and why is it a cost driver? What role do cost drivers play in identifying
Friendly Skies Travel is a travel agency that has branches in many major shopping centres. A typical branch employs five full-time staff: a manager and four customer service staff. Casual customer
On the Ball Pty Ltd manufactures footballs. Its fixed costs per month are $75,000, and its raw materials costs are $60 per finished ball. Required: 1. Draw a graph of the firms raw material cost,
The behaviour of the annual repair and maintenance cost for the Blue 1-lills Bus Company is shown by the solid line in the following graph. The dashed line depicts a semivariable cost approximation

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