Management Accounting 7th Edition Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton - Solutions

lnkco manufactures printing inks. The company employs 150 people, of whom 120 are productt0 The ink market is extremely competitive and, with a 20 per cent market share, lnkco has the third largest share of the Australian market. The two market leaders manufacture high-volume black ink, while lnkco
Windsor General Hospital is a major hospital treating both private and public patients. It is a not for profit organization and its main sources of revenue are patient billing, state government grants and private donations. The organizational chart is as followsThe following information relates to
Pegasus Technology Ltd (PTL) has two divisions: Adelaide and Sydney. Sydney currently sells a diode reducer to manufacturers of aircraft navigation systems for $2325 per unit. Variable costs amount to $1500, and demand for this product currently exceeds the division's ability to supply the
Sandstone Industrial Resources Company (SIPC) has several divisions. However, only two are involved in the internal transfer of products. The Mining Division refines a material called toldine, which is then transferred to the Metals Division. The toldine is processed into an alloy by the Metals
Discuss the benefits and costs of decentralization?
Dragoon has two manufacturing divisions:• Costa Division• Margarita Division.The Costa Division produces electric motors, 20 per cent of which are sold to the Margarita of Dragoon. The remainder are sold to outside customers. Dragoon regards both divisions as centres and allows division
Rabbid Industries Ltd consists of three decentralized divisions: Brentwood Division, Crater Division and Dollar Division. The managing director of Rabbid Industries has given the managers of the three divisions the authority to decide whether to sell their products outside the company or between
Easy Living Industries manufactures carpets, furniture and cushions in three separate divisions, the company's profit statement is presented below:Additional information regarding Easy Living Industries operations is as follows:• Included in the Cushion Division's sales revenue is $500 000 that
How might a move to a shared services operation for payroll and accounts payable change the responsibilities of the manager who formerly managed those operations within a division?
Explain how the formation of self-managed work teams might impact on responsibility accounting?
When developing financial performance reports in a decentralized organization, a contribution margin format may be used. Explain the advantages of using this format for performance evaluation of units and managers?
Explain why it is useful to focus on the two component ratios of the ROI calculation. rather than on the ROI ratio itself.
What is meant by value under VBM? Describe the four drivers of VBM.
In your own words, outline strategies that managers might use to maximise economic value added that are not in the best interests of an organisation.
Explain the difference between the imputed interest charge used in the calculation of residual income and the WACC used to calculate EVA®.
Explain why many companies link achievement of performance targets to employee remuneration.
Outline the differences between extrinsic and intrinsic motivation, and explain how organisations can encourage intrinsic motivation.
The 'Peal life' suggests that senior executive salaries have risen considerably over time. What do Herzberg's theory of motivation and expectancy theory suggest about using large salary packages to motivate managers?
What is a share option? Is the inclusion of share options in remuneration packages likely to lead to intrinsic or extrinsic motivation? Explain your answer.
Describe the difference between a gain sharing scheme and a team-based incentive scheme.
In the 'Peal life', the use of profit sharing and employee share ownership in incentive schemes is explained. Use expectancy theory to explain how such schemes can be motivational.
What are the advantages and disadvantages of basing individual incentives on company-wide performance?
Explain how return on investment and residual income can be used as part of a responsibility accounting system.
Explain the advantages of providing more frequent and more timely incentives as part of an employee reward system.
Zap is a retailer that specialises in electrical goods. It is a division of a large retail company, data relate to the most recent year of operations:Profit.................................................$6,000,000Saks revenue........................................75,000,000Average invested
The following data relate to Metalla Manufacturing Company for the past year:Sales revenue...............................................$9,000,000Cost of goods sold..........................................4,950,000Operating expenses.........................................3,600,000Average
Assume that you have just been employed at Southern Coast Wealth Foods as an assistant and you are concerned with the high level of reliance on PCI to evaluate and compare the performance of the three divisions of the company. You are aware that one division has assets that it purchased 10 years
Oatley Fabrics Company has two retail divisions, which reported the following results for last year:Furnishing DivisionDressmaking DivisionProfit.........................................$1,350,000............................$300,000Average invested
The onstt.t0 Construction Company is a real estate developer and building contractor. The company has two sources of long-term capital: debt and equity. The cost of issuing debt is the after-tax cost of the interest that relates to the debt. (Interest paid on debt is tax deductible.) The cost of
Describe the actions that could be taken by the managers in the Business Studies Textbook division of a publishing company to improve the division's ROI. (Assume the division is responsible for acquiring new book titles. preparing books for production. and printing. marketing and selling the bon',
Grant Lawson has just been appointed as the new financial controller of Safety Chemicals Ltd, which has three separate divisions Industrial Chemicals, Paints, and Household Chemicals. During his first week on the job, Lawson receives a visit from the managing director, who says I'm so glad you have
Fletcher Industries manufactures a range of household products. Roger Wilkie is head of the Hardware Division and he has just experienced a terrible nine months. 'If it could go wrong it did. Sales are down profits are down, inventories are out of control and I am starting to get worried about my
Lamington Industries has manufactured prefabricated houses for aver 20 years. The houses are constructed in sections to be assembled on customers' lots. Lamington expanded into the pre-cut housing market five years ago when it acquired Pam Company, one of its suppliers. In this market, various
Electromart is a retailer of electrical products and has four divisions. At the end of each year the four divisional managers are evaluated and bonuses are awarded based on PCI. Last year, the company as a whole produced an ROI of 13 per cent.During the past week management of the company's Little
Honiara Ltd made a capital investment of $100,000 in new equipment for its Sandman Division two years ago. The analysis at that time indicated that the equipment would save $35,000 in operating expenses per year over a five-year period. Discounted cash flow methods were used to evaluate the
Fun Time Company (FTC), a subsidiary of New Age Industries, manufactures go-carts, water skis and motorised scooters. With the increasing popularity of electronic arcade games, New Age has been encouraging FTC to diversify into some of these other recreational areas. Arcade Unlimited LTD (AUL) is a
Angler Fisheries operates a chain of budget seafood restaurants, as well as its own fishing fleet, which operates off the south coast of Australia. Angler is structured into three divisions: the Northern Australian Division and the Southern Australian Division, which manage the restaurants, and the
Outline some of the steps that can be taken to minimise the negative behavioural effects of ROI.
Salt Water Ltd is a large and successful manufacturer of engines. The company consists of two divisions the Automotive Engine Division and the Outboard Motor Division. Salt Water has recently acquired a company which will become a third division. The new Couch Division is a small manufacturer of
Provide two examples of situations where the use of ROI can lead to decisions which may harm the future competitiveness of a company.
Can the residual income measure eliminate all of the disadvantages associated with ROI? Explain your answer.
Does it matter how invested capital and profit are defined for the purpose of the ROI calculation? Explain your answer.
Explain why it is considered important to distinguish between performance of a business unit manager and performance of a business unit. Provide two examples to illustrate your answer.
Explain why traditional financial performance measures may not be sufficient to manage an organizational?
Contrast the likely differences between the balanced scorecards of a profit seeking company and a non for profit organization?
Explain the purpose of a strategy map and how it relates to a balanced scorecard?
Distinguish between lag and lead indicators. Provide two examples of each to illustrate your answer?
Outline some of the reasons why the implementation of a balanced scorecard may not be a success?
Explain why the effective management of non-financial performance may not always flow through to improved financial performance?
Explain why improved product quality and improved time-to-market may not necessarily flow through to higher profits?
What is a Du Pont chart? How can it help in managing performance?
Describe the ways in which continuous improvement can be built into a performance measurement system? Illustrate your answer with an example.
What role can management accountants play in bench marking?
Explain the advantages non-financial performance measures offer for managing resources end creating value, compared with financial measures?
Describe the advantages and limitations of the four types of benchmarking?
The Corporate Caterers Ltd specializes in catering for office parties. Over the past six months, business has started to pick up, particularly as the number of 'employee farewell' parties has increased in the larger corporation. A performance report, which contains comparisons between actual and
For each of the following businesses select two performance measures that could be used to support the competitive strategy of superior product/service quality. Make sure that your measures are specific to each type of business. 1. Accounting firm. 2. Company that manufactures electric garden
Luigi's Pizzas is a chain of pizza stores. Pizzas are made fresh in-store, and then delivered to customers by a fleet of drivers. The senior management team has identified the strategic priorities for the business as on-time delivery and product quality. Required: 1. For each of the strategic
Identify specific lag and lead indicators that may be used in each of the following three businesses to measure: (1) Quality. (2) Innovation. a. A sporting goods manufacturer b. An airline c. A law firm?
The 'Real life on page 623 explains how IAG develops its balanced scorecard. A table is provided that includes the five perspectives, the objectives and some performance measures.Required:1. Use each of the objectives to develop a strategy map.2. Draw a diagram similar to the one in Exhibit 14.4 to
St Andrews Bank is currently redesigning its performance measurement system. Up until now it has relied heavily on monthly cost variance reports to control the costs in each bank branch but would now like to have a more comprehensive performance measurement system that can help the bank to detect
Provide four examples of non-financial performance measures that could be used to measure performance of an international aid organization like World Vision or Oxfam?
Zippy Cola is a multinational soft drink manufacturer. The Australian plant, located at Deveton in Victoria is currently attempting to improve its performance through benchmarking activities. The best-performing plant in the Zippy Cola group is located in Seattle in the USA. The general manager of
Joe Evans is a line supervisor in the Paint Shop of the Auckland Car Company (ACC). The ACC manufactures cars for the domestic and export markets. Jim Kent is the manager of the Finishing Department, which includes the Paint Shop. It is the end of the first week in August when Kent approaches Evans
Revor Mowers Ltd manufactures lawnmowers and grass-slashers. The manufacturing plant has three production departments: Metalwork, Mechanical Work and Assembly. The company uses monthly standard costing reports to evaluate performance and control costs in the manufacturing areas. Typically, these
Your best friend, Jason Bell, has just graduated from university and started his first job as a trainee accountant in a medium-sized manufacturing company. One of the first things that he notices is that the monthly manufacturing performance reports focus only on costs and profits. One of his major
Visit the website of a major airline to find information about the airline's mission, objectives, strategic priorities, organizational structure and operations.Required:1. Outline the airline's mission, objectives and strategic priorities.2. Select perspectives that are appropriate to supporting
Search the internet to find the website of a not-for-profit organization.Required:1. Outline the long-term goals of the organization and define the groups of stakeholders or clients for the organizations.2. Choose suitable perspectives that could be used as part of a balanced scorecard and more
The Department of Social Welfare (DSW) is a state government department that provides support and counselling services to several groups in the community: the elderly, the unemployed children at risk. DSW is accountable to a range of stakeholders, some of whom dictate specific deliverable or
Fancy Flowers is an online florist that delivers flowers and related goods to offices and homes. It has been operating successfully for the past two years. However, competition is becoming more intense, particularly in the trendier suburbs of the city. Mark Fisher, the managing director, no longer
Monoclean Ltd is a multinational company that manufactures and markets household cleaners in a batch process-manufacturing environment, and ABC is used to allocate overhead to production. Recently Monoclean has undergone a major structural reorganization to assist it to compete more effectively in
Refer to Case 14.43.Janice examined the performance-related pay system used to reward the managing directors, and has prepared a report that recommends three changes• Add a more long-run emphasis to the bonus system.• Base rewards on achieving company-wide as well as divisional performance
Describe the meanings of cycle time, setup time and machine downtime. Which competitive strategies might these measures support?
Explain why an over-reliance on non-financial measures can be problematic?
Wow does a balanced scorecard relate to an SPMS? Explain your answer
Describe the Kaplan and Norton balanced scorecard approach to performance measurement?
Describe how responsibility accounting principles apply to a balanced scorecard system?
Explain why simplified production processes and effective preventative maintenance are important features of a JIT production management system.
Briefly explain the reasons why a manufacturer may adopt JIT purchasing and JIT production management.
The Real life highlights the risks to manufacturers of requiring suppliers to provide inventory on a just-in-time basis. In your own words, explain the advantages and disadvantages ix suppliers if they agree to deliver to their customers under a MT system.
What are the advantages for an organisation of creating an effective CPM system?
Explain how customer groups may be determined. In your answer, select a company with which you are familiar and identify the type of customer groups that might be relevant to its needs
Outline the three levels of customer-driven activities and provide two examples for each level.
Review the list of activities associated with low-cost and high-cost customers in Exhibit 15.10. Select a company with which you are familiar and explain which activities would most likely apply to its customer base.
Explain why some organisations consider it important to measure customer retention and customer acquisition.
Choose a particular industry and explain why time is important as a source of customer value within that industry.
Explain the meaning of customer response time and its four components. Are these measures relevant to a service firm? Illustrate your answer with an example.
Explain the meaning of supply chain and provide an example to illustrate your answer. Your example should focus on a particular industry and involve at least one answer customer.
Explain the major differences between backflush costing and traditional costing.
Motor vehicle manufacturers are renowned for creating close relationships with their suppliers, and have committed significant resources to developing their supplier programs. These supplier programs have resulted in advantages, not only for the motor vehicle manufacturer but also to the component
Classify the following supplier-related activities as either unit level, order level, or supplier level: 1. Extra machine set-ups due to late receipt of material from supplier. 2. Additional production salaries caused by late delivery of components from a supplier. 3. Damage to production
Cascade of Poses (COP) is a business that specialises in the delivery of arrangements of roses. Cascade of Poses uses six main suppliers of roses, and has worked hard over the past two years to establish close cooperative relationships with them. Cascade of Poses is now keen to put in place
Monitor Ltd uses 1680 tonnes of a chemical each year in its manufacturing processes. Monthly demand for the chemical fluctuates between 110 and 160 tonnes. The lead time for each order is one month, and the economic order quantity is 260 tonnes. Required: 1. Determine the safety stock required
Jackson Sausages Pty Ltd is a medium-sized company that produces gourmet beef and, chicken sausage for a highly competitive market. Jackson's sausages are sold to major supermarket chains, as well as to retail butchers and speciality delicatessens. The company holds only about 15 percent of the
Customer profitability analysis Using activity-based analysis, you have just prepared a customer profitability report for the sales manager that shows some customer groups are profitable but other customer groups are unprofitable. The sales manager is delighted with your report. We states: This is
Swish Designs specialises in designing commercial office space in Auckland. The CEO, Ralph Polo has reviewed the financial results and has noticed that operating profits were below budget. He also has access to a customer profitability graph that shows the operating profit for each of the six main
The 'Real life' on page 655 explains the changes in the Tasmanian wool supply chain outline the likely benefits to individual members of the improvements in that supply chain as well as benefits for the ultimate customers.
Sweety Tea (ST) manufactures a range of designer T-shirts, which it produces to order for major department stores. On to March the sales department at ST received an order from retail company, Legend Outwear, for 5000 glitter Ts. The sales department at ST forwarded the order to its manufacturing
Jacaranda Builders is undertaking an analysis of supplier costs in order to evaluate the relative costs and performance of each supplier. They have isolated a range of activities that are consumed by suppliers, identified activity drivers, and estimated the cost per unit of activity driver for last
Fabulous Enterprises manufactures modular kitchens and bathrooms and the Managing Director. Alfred 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 inefficient and has asked you as the new management accountant to

Showing 400 - 500 of 1117

Management Accounting 7th Edition Kim Langfield Smith, Helen Thorne, David Alan Smith, Ronald W. Hilton - Solutions

Step by Step Answers