4. Empire Ltd produces cookies and currently supplies three distinct types of customer: specialist candy stores,...
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4. Empire Ltd produces cookies and currently supplies three distinct types of customer: specialist candy stores, independent bakeries and supermarkets. From October 2016, the business is going to sell a new type of chocolate cookie. It is believed that the sales for October and growth in sales for subsequent months will be as follows: Customer type October sales '000 Expected monthly compound sales growth % Candy stores 5 2 Independent bakeries 7.5 4 Supermarkets 12.5 6 Based upon prior experience, the following credit periods have been agreed: a. Candy stores b. C. Independent bakeries Supermarkets 1 month 2 months 3 months REQUIRED: (a) Prepare an ageing schedule of receivables (debtors) for the first four months of selling this new product. Your schedule should analyse the expected receivables outstanding according to customer type and detail the amount (and percentage of total receivables outstanding) for each customer on a monthly basis. Show your workings in '000 and calculations to two decimal places. (b) In the context of management accounting, explain what "Just in Time" is. (13 marks) (12 marks) (c) Explain how the costs committed and costs incurred evolve during the product life cycle. (10 marks) (d) List the three generic strategic available to Empire. Explain the three strategies and provide an example how they can implement each strategy. (9 marks) (e) Provide an example of a leading and lagging measure Empire could use in the balanced scorecard. (6 marks) 4. Empire Ltd produces cookies and currently supplies three distinct types of customer: specialist candy stores, independent bakeries and supermarkets. From October 2016, the business is going to sell a new type of chocolate cookie. It is believed that the sales for October and growth in sales for subsequent months will be as follows: Customer type October sales '000 Expected monthly compound sales growth % Candy stores 5 2 Independent bakeries 7.5 4 Supermarkets 12.5 6 Based upon prior experience, the following credit periods have been agreed: a. Candy stores b. C. Independent bakeries Supermarkets 1 month 2 months 3 months REQUIRED: (a) Prepare an ageing schedule of receivables (debtors) for the first four months of selling this new product. Your schedule should analyse the expected receivables outstanding according to customer type and detail the amount (and percentage of total receivables outstanding) for each customer on a monthly basis. Show your workings in '000 and calculations to two decimal places. (b) In the context of management accounting, explain what "Just in Time" is. (13 marks) (12 marks) (c) Explain how the costs committed and costs incurred evolve during the product life cycle. (10 marks) (d) List the three generic strategic available to Empire. Explain the three strategies and provide an example how they can implement each strategy. (9 marks) (e) Provide an example of a leading and lagging measure Empire could use in the balanced scorecard. (6 marks)
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