Questions and Answers of Financial And Management Accounting

You are now going to do a simple breakeven point for number of passengers on a flight for the years 20x4 to 20x6. Go to the worksheet that says “Template for DB 3.2.” Complete the breakeven
Judy Holmes, owner and primary manager of Holmes Industry, has recently completed a course in management accounting. She has decided to try to take a look at her company, which makes a variety of
Pete’s Lawn Care is a medium- sized company with customers in three counties in northwestern Connecticut. Pete cuts grass and provides basic cleanup services for his customers, with each job taking
You are now going to do a bit of analysis of Easy Air’s profitability performance, specifically complete a CV P analysis. Go to the worksheet that says “Template for DB 3.3.” Using the
Smith and Company manufactures pens in a variety of ink colors. Each pen sells for $0.75. While the colors vary, the costs of making a pen are pretty constant, as suggested by the table
What are the primary differences between management accounting and financial accounting?
Using the following list of tasks, identify the type of manager who would have responsibility for the task’s planning and completion. Use “T ” for top management, “P” for process managers,
Bill Larkin, president of LM Landscaping, has recently completed a course in management accounting, giving him new skills with which to analyze his company. He pulls together the following
How does the BPA perspective influence the practice of management accounting?
Using the following list of tasks, identify the type of manager who would have responsibility for the task’s planning and completion. Use “T ” for top management, “P” for process managers,
Tim Carswell has recently graduated from his state university, majoring in accounting. He has taken a job with a medium-sized firm that offers financial accounting, audit, and consulting services to
What is the key attribute that changes data into information?
For the following list of decisions and activities, please identify which domain is a effected. Specifically, use “P” for process, “R” for product, “C” for customer/markets, “S” for
Where do costs occur in organizations?
For the following list of decisions and activities, please identify which domain is a effected. Specifically, use “P” for process, “R” for product, “C” for customer/markets, “S” for
What is the management process?
What are the five decision domains? What are the responsibilities of each?
What are the primary types of managers in an organization? How do their tasks differ?
You have taken a job for the summer. One day you come across some data that just does not seem to make sense. You go to your supervisor, who tells you that the data is fine and to return to work. You
What are the four components of the IMA Statement of Ethical Professional Practice? Why do we need an ethical code in this area of management?
What are the primary differences between financial accounting measures and the managerial accounting measures? What is a CSF?
What is a KPI? How does it differ from a CSF ?
What are the eight basic characteristics of an effective measurement?
How are measurements used in the management process?
What is a vision statement? How does it differ from a mission statement?
What are the three levels of objectives used by a firm and how do they differ?
What are the various types of action controls an organization can use? Please be as specific as you can.
What are the primary differences between gap analysis, trend analysis, and variance analysis?
A dam Smith, owner of PB Manufacturing, uses one performance measure—units sold—to evaluate his sales staff. Recently he has noted that while units sold are increasing, he is actually making far
What does it mean to have goal congruence in a firm?
Tom Perdy works at the local insurance company, South County Insurers. The company only uses results controls. Increasingly, Sam has noticed other salespeople making special deals with customers or
What are the three different types of controls we use in business planning and analysis (BPA)?
What does “dysfunctional consequences” mean in BPA ?
Please list the key dysfunctional consequences of control and provide an example of each that reflects what might happen during the course of a semester.
What is the relationship between a cost and a price, if any? When do we need to know these relationships?
What is the difference between a direct and an indirect cost? When does knowing these differences lead to changes in decision making?
For the following list of resources, note whether they would be direct (D) or indirect (I) to making a cake:a. Ovenb. Flourc. Eggsd. Cake pane. Sugarf. Butterg. Cooling rackh. Vanillai. Plate
What is the basic cost estimate? How is it used in making decisions?
For the following list of resources, note whether they would be direct (D) or indirect (I) to making a canoe:a. Plasticb. Machinesc. Peopled. Nylon corde. Paddlesf. Buildingg. Laborh. Managementi.
Rogers Manufacturing makes ball bearings that are used in several industries. The ball bearings are sold with lubricant so they are ready to install. Each set sells for $50. The following is
What are the different definitions of cost that are used in management accounting? Please briefly describe them.
Using the information in the following table, please develop an activity-based variable cost estimate for each of the activities described. Cost per Unit of Work Done Activity Cost Work Done (Driver)
What does “unavoidable” mean when we talk about a cost? Why is it important?
Angie’s Cleaning Service does routine cleaning of houses. She charges $100 for a house taking four hours of cleaning, her standard product offering. Each time she cleans, she uses $5 in variable
What is cost variability? How do we use this concept in analyzing a product’s profitability?
Johnson Hardware offers a range of merchandise for the maintenance of the home and cars. It is a small and simple business, with Pete Johnson doing most of the managerial and office work himself. He
What are the four basic types of cost variability? Please define each term. How does each type of variability impact our ability to develop accurate product costs?
Ruby ’s Bu et offers customers a choice of various dishes for a flat price of $10 per person. While people choose different items, it is remarkable that they all eat roughly the same amount (except
Nancy’s Beauty Salon does mainly haircuts for men and small children. Each haircut is a unique job, but takes about the same amount of time to complete. Nancy charges $25 per haircut regardless of
James Manufacturing wants to estimate its breakeven revenue and level of profitability at different ranges of sales revenue. It provides you with the following table:REQUIRED:a. Calculate the
Provide an example of each type of cost variability using your college as the baseline for your analysis.
What does the term “cost structure” mean? How does it affect the operations of the firm?
Hot Juices, Inc., makes hot sauce for use by various Mexican restaurants in the Northeast. It has asked you to help it do some analysis of its business using the following data:REQUIRED:a. Calculate
Tandry Associates offers a variety of tax and accounting services for local small businesses. It is a simple operation, with high variable costs per job completed but low fixed costs. In fact, it
What is CVP analysis? Why do we use it?
Angus Manufacturing makes basic tools for sale in hardware stores across the country. It is a successful business, with the following unit sales in a month. It faces fixed costs of $225,000 per
What is the basic profit equation? Please state it in terms of fixed and variable costs. How can we use this equation to understand a business?
Peters Pots makes a large ceramic pot that it sells through a nationwide distribution channel. The following table details the sales and costs for the first seven months of this year.REQUIRED:a.
What does the term “breakeven” mean? What is the breakeven formula? When do we use these concepts?
Andrews Manufacturing makes folding chairs that are sold by various retailers across the country. The following table details the company ’s sales and costs for the first six months of this
The board of directors of Kirkside Glassware Ltd is considering the following proposed investment projects:It is estimated that each product will provide benefits in terms of reduced cash outflows,
Today’s task is to review the first stage of budget preparation in a major hospital dealing with a wide range of medical conditions, including accident and emergency services. (There are
Holyrood Products Ltd makes cassette recorders. The management accountant has produced the following summary of the company’s trading in the year ended 30 June Year 3:The following additional
Projects Ltd intends to acquire a new machine costing £50,000 which is expected to have a life of five years, with a scrap value of £10,000 at the end of that time.Cash flows arising from operation
Offshore Services Ltd is an oil-related company providing specialist firefighting and rescue services to oil rigs. The board of directors is considering a number of investment projects to improve the
(a). Imagine you are the finance director of a company which is planning to open a new supermarket chain. Prepare a chart similar to that shown in Figure 16.2 which sets out key aspects of the
The Garden Ornament Company manufactures two types of garden ornament: a duck and a heron. The information presented in Tables T 1 to T 5 has been prepared, as a result of discussions by line
Chris and Alison Weston have been manufacturing and selling children's toys from a workshop attached to their house. Alison has carried out the manufacturing activity and Chris has provided the
The following budgeted accounting statements were submitted to the board of directors of Alpha Ltd on 1 October Year 4:At 31 March Year 5 the following information was available in respect of the
The directors of Craigielaw plc have decided that specialist paints for use on buses and lorries should become the focus of a new digital business strategy. ‘All we have at present is a call centre
Using a suitable computer spreadsheet package, set up a spreadsheet which will calculate net present values and internal rates of return for projects having cash flows for a ten-year period. Test the
Tools Ltd is a new business which has been formed to buy standard machine tool units and adapt them to the specific needs of customers.The business will acquire fixed assets costing £100,000 and a
In a calculation of the internal rate of return of a project it is found that the net present value is +£122m at 22% discount rate and −£58m at 24% discount rate. What is the internal rate of
The directors of Advanced plc are currently considering an investment in new production machinery to replace existing machinery. The new machinery would produce goods more efficiently, leading to
XYZ Ltd is considering purchasing a new machine, and the relevant facts concerning two possible choices are as follows:The company’s cost of capital is 10%.RequiredCalculate, for each machine, the
Now write an evaluation of the spreadsheet you have received from another group.Consider the following:(a) Does it deal with all possible types of cash flows (e.g. a negative flow at some point)?(b)
Marsh Limited has investigated the possibility of investing in a new machine. The following data have been extracted from the report relating to the project:• Cost of machine on 1 January Year 6:
In a calculation of the internal rate of return of a project it is found that the net present value is +£60m at 24% discount rate and −£20m at 26% discount rate. What is the Internal Rate of
A company is reviewing its total quality management programme, which does not appear to be making the progress expected. Problems have been identified in:• Fear of exposing weaknesses in the
A company selling life insurance policies is planning to implement the Balanced Scorecard approach. The board of directors is aware that it should consider four aspects of vision and goals:•
How could planning of business strategy be useful to a public sector organisation such as a public library service? Does the idea of competition have any meaning? How can the management accountant
A manufacturer of toothpaste has estimated the price at which the product will sell, making use of market surveys and consumer analysis. A profit margin has been set. Finally a target cost has been
A company manufacturing specialised medical equipment and supplies is currently having a debate internally about developing an e-business strategy. The sales manager wants to develop an e-commerce
Explain how a low-cost airline can use strategic management accounting in developing a business strategy for competing with the traditional airlines (300 words).
Search the management feature pages of a business newspaper such as the Financial Times for a period of one month. Find articles about management which have a management accounting angle. Select one
As a group you are planning to launch a monthly student newsletter on the university’s website. The roles to be allocated are: editor, reporters, webmaster, university accountant, student
Bright Papers Ltd has established a new subsidiary company to produce extra-large rolls of wall covering. Management forecasts for the first four years of trading are as follows:Further
The monthly budget of Plastics Ltd, manufacturers of specialist containers, was prepared on the following specification:Production and sales ........................................ 30,000
The following report has been prepared for the production department of Cabinets Ltd in respect of the month of May Year 4:The department manufactures storage cabinets. When the budget was prepared,
You are the Student Union management committee representative in charge of student transport affairs. Members have proposed that the Union should operate a campus bus service to operate between the
The upholstery department of a furniture manufacturing business prepared the following statement of standard costs at the start of the calendar year:Standard cost per unit
Fixit Ltd is a manufacturing company which produces a fixed budget for planning purposes. Set out below is the fixed monthly budget of production costs, together with the actual results observed for
You are the Student Union management committee representative in charge of academic affairs. Members have proposed that the Union should publish a study guide for sale to incoming students. It is
Carrypack Ltd manufactures and sells plastic cases for portable computers. Production each month equals sales orders received. The following monthly budget was prepared at the start of Year 6, to
Concrete Products Ltd manufactures heavy paving slabs for sale to local authorities and garden paving slabs for domestic use.The board of directors meets early in each month to review the company’s
DEF Products Ltd manufactures and assembles one type of furniture unit. The following information is available for the year ended 31 August Year 7. The budgeted costs and the actual costs incurred
Nu-Line Ltd purchases manufactured machine tools for conversion to specialist use. The converted tools are sold to the textile industry. The following information relates to the month of July Year
Suggest six non-financial performance measures for a company which offers contract gardening services to companies which have landscaped sites surrounding their offices. Give reasons for your choice.
Standard pine benches are assembled and packed in the bench assembly department of Furniture Manufacture Ltd. The department is treated as a cost centre. Control reports prepared every month consist
Lightwave Radio Ltd produces a range of products at its assembly plant. Due to recent rapid expansion the company’s system of management control is now inadequate. The board has established a

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