Can I get the answers to the question 2 in the assignment? Please

AF102: INTRODUCTION TO ACCOUNTING AND FINANCIAL MANAGEMENT: PART II Introduction and Assignments Semester 2, 2016 School of Accounting and Finance Faculty of Business and Economics The University of the South Pacific Produced by The University of the South Pacific, Suva, Fiji, 2016 First produced 1978 This revision February 2016 This revision July 2016 Introduction & Assignments team for Semester 2, 2016 Course coordinator Charlotte Taylor Electronic publisher Pranita Singh Cover design Marketing, Development and Communications Office This material has been prepared by The University of the South Pacific for use by students enrolled in the course for which it was developed. It may contain copyright material copied under the provisions of the Fiji Copyright Act 1999 or under license from rightsholders or their agents. Copyright in material prepared by USP is owned by USP. This material cannot be sold or copied for further distribution without the University's permission. Where provided in electronic format, it can only be printed by or for the use of the student enrolled in the course. AF102 (IA) 22016 ii C o n t en t s Calendar for semester 2, 2016 ...................................................................... iv Your course coordinator ............................................................................... 1 Your learning materials ................................................................................ 2 Your learning support ................................................................................... 4 How to login to Moodle ............................................................................... 6 Additional tutorial questions ........................................................................ 7 Study schedule .............................................................................................. 9 Assessment overview ................................................................................... 11 Grading System ............................................................................................ 12 Submission of assignments .......................................................................... 14 Plagiarism ..................................................................................................... 16 Major assignment ......................................................................................... 18 Past mid-semester test .................................................................................. 24 Past examination paper................................................................................. 34 iii Calendar for semester 2, 2016 iv Your course coordinator Welcome to AF102! I am Masilina Rotuivaqali, the course coordinator for AF102 DFL/Print mode course for this Semester 2, 2016. For AF102 DFL I will be updating students regularly through the use of the newly introduced MOODLE (http://elearn.usp.ac.fj/). Please check this MOODLE website as well as your student email regularly, for course updates and other pointers to help you in your study of AF102 on the distance and flexible mode. AF102 DFL MOODLE Website \"Forum Discussions\": This is a tool students can use in the AF102 DFL MOODLE site, to interact with other students as well as raise questions regarding a particular topic. I will be checking the student forum discussions and replying to student questions three (3) times a week i.e. Monday, Wednesday and Friday. I am based on the main Laucala Campus, Suva, Fiji Islands. For any queries regarding this course, you need to contact your DFL Centre and if there are any urgent matters, then you can contact me, your course coordinator, on the following address: Room: S234 School of Accounting and Finance, Faculty of Business and Economics, The University of the South Pacific, Laucala Campus, Suva, Fiji. Email: tuiloa_m@usp.ac.fj Telephone: (+679) 32 32517 Address: School of Accounting and Finance, Faculty of Business and Economics, The University of the South Pacific, Laucala Campus, Suva, Fiji. All the best in your studies! 1 Your learning materials You should have already received the following materials for AF102: 1. The Introduction and Assignments book, which you are reading now. 2. A Study Guide containing 12 units - AF102 (Available in Moodle). The Study Guide has been written to guide you through the course and the prescribed textbook. It is neither a textbook nor a substitute for the prescribed text. It will be vital that you regard the Study Guide as your personal guide to this course and follow instructions precisely. It will guide you through the text that will be your main source of study. The text will be supplemented by some comments and notes in the Study Guide. Contact your USP Campus or Centre IMMEDIATELY if you are missing any of the material mentioned in 1 above. 3. The recommended textbook for this course is a 7th edition of \"Managerial Accounting: Tools for Business Decision Making\" by Weygandt, J.J., Kiesso, D.E. and Kimmel, P.D. (2015) Published by John Wiley. You will need to purchase this separately in addition to those mentioned above. 4. A course Moodle page. 5. Other suggested materials not included in the package: a) Dictionary Like most fields of study, accounting has developed some special words and abbreviations that are not used in everyday speech. This means that you may need to consult a dictionary, because you will constantly be meeting new words in the Study guides, readings and in the textbook. If you have not acquired a good dictionary during your studies, I strongly advise you to buy the Concise Oxford Dictionary. There is also a glossary of terms included in your textbook, should you need to clarify special accounting words or abbreviations. If you get in the habit of consulting a dictionary or glossary of terms frequently, you will quickly become familiar with the new terminology. b) Additional References (Optional) Your local USP Centre Library may hold copies of the following titles for you to consult in addition to the prescribed text book and study guide, if you wish. You may also want to refer to these references when doing assignments or preparing for the final examination. 1. Atkinson, A., Kaplan, R., Matsumura, E. & Young, S. 2007, Management Accounting, 5th ed, Upper Saddle River, N.J: Pearson/Prentice Hall. 2. Birt, J., Chalmers, K., Beal, D., Brooks, A., Bryne, S., & Oliver, J., 2008. Accounting: Business Reporting for Decision Making. John Wiley & Sons Australia, Ltd. 3. Boer, G., 2001, Cost Accounting: A Decision Emphasis, 4th ed, Dame. 2 4. Carter, W. & Usry, M., 2002, Cost Accounting, 13 ed., Cincinnati, Dame Thomson Learning. 5. Chadwick, L. 1997, The Essence of Management Accounting, 2nd ed, New York: Prentice-Hall 6. Collier, M. 2006, Accounting for Managers: Interpreting Accounting Information for Decision-making, 2nd ed, Hoboken, NJ: Wiley 7. Drury,C., 1997, Management Accounting for Business Decisions, Melbourne, International Thomson. 8. Fargher, N., Wise, V., Kieso, D.E., Weygandt, J.J., & Warfield, D.T., 2008. Fundamentals of Intermediate Accounting. John Wiley & Sons Australia, Ltd. 9. Hansen, D. & Mowen, M., 2003, Cost Management: accounting and control, 4th ed, Thomson/South-western. 10. Hart, J. & Wilson, C., 1996, Management Accounting: principles and applications, 2nd ed, Prentice Hall. 11. Hoggett, J., Edwards, L., Medlin, J., and Tilling, M. 2009. Accounting. 7th edition. John Wiley & Sons Australia, Ltd. 12. Jackson, S., Sawyers, R., & Jenkins, G. 2006, Managerial Accounting: A Focus on Decision Making, 3rd ed, Thomson South-Western. 13. Horngren, C. T., Datar, S. M. & Foster, G., 2003, Cost Accounting: A Managerial Emphasis, 8th ed ( or other), Prentice Hall. 14. Horngren, C., Sundem, G. & Stratton, W., 1996, An Introduction to Management Accounting, 10 ed, New Jersey, Prentice Hall. 15. Langfield-Smith, K., Thorne, H., and Hilton, R.W., 2006, Management Accounting: Information for managing and creating value, 4th ed, McGraw Hill Inc. 16. Weygandt, J. J., Kieso, D. E., and Kimmel, P. D., 2008, Managerial Accounting: Tools for Business Decision Making, Fourth Edition, John Wiley & Sons, Inc. 3 Your learning support L o cal t u t o ri al s To assist you with your studies, regular face-to-face sessions may be held with a tutor. You should check with your Campus or Centre at the start of semester to see if face-to-face tutorials will be held for your course. S t u d y g ro u p s Most people find it easier to study in a group or with a friend, at least for part of the time. Working with others helps to motivate us. It provides a shared goal and reduces feelings of isolation or boredom. Your local Campus or Centre will be able to put you in touch with students doing this course and may help you get organised. L i b ra r y se r vi ce s Making good use of the library and its resources is vital for you to be a successful student. Learn about library support and services and the importance of information literacy at your Campus or Centre library. S t u d en t L e a rn i n g S u p p o rt ( S L S ) SLS supports you through e-mentoring which is giving you learning tips and advice through email. You can email us at the following addresses: Faculty of Business and Economics: fbe_sls@usp.ac.fj 4 Y o u r RE A CT se s si o n Apart from local tutorials, USP uses a system known as REACT which allows you to hear and see your course coordinator or tutor as well as your fellow students who are located in the various campuses in the USP region. You may get presentations and notes in addition to your scheduled session. These are commonly known as satellite tutorials. You are encouraged to attend the scheduled sessions in the weeks shown in your study schedule. Here are some suggestions for getting the most out of these REACT sessions: 1. Note that before your REACT tutorial session begins your tutorial group will be advised as to who all the participants are (regional and oncampus). Try to note down names of your colleagues and which Campuses or Centres they are listening from. 2. Speak slowly and pronounce your words clearly so that your colleagues can understand what you are saying. 3. Be courteous and try to maintain a polite tone of voice. 4. When you want to address your tutorial group, press the "speak button", and aim to maintain a 6-inch distance between your mouth and the microphone whilst speaking. Please note that you may be using two different types of microphones as shown below. 5. If you have questions or comments to communicate during your tutorial session you can do so by speaking to a microphone or through the chat tool in REACT. 6. Try not to "steal the show". Remember that each of you will have important points to add to discussions. Contact your local USP Campus or Centre for further information on using the REACT facilities. O n l i n e l ea rn i n g Moodle is USP's learning management system and will be used to support learning in some of your courses. 5 How to login to Moodle AF102 has a Moodle component, the instructions below will help you access the system. You will need a computer connected to the Internet. The computer must have a Web browser such as Firefox or Google Chrome. Such a computer should be available at your USP Campus (if you don't already have one at home or work). You will also be given a username and password by your local USP Campus. Step 1: Accessing Moodle Open your browser: Firefox or Google Chrome. Type in the following at the address bar: http://elearn.usp.ac.fj/ Press Enter. Alternatively, you can go to the USP website: http://www.usp.ac.fj/ and use the Quick Links drop down menu to the left of the page and select Moodle. Step 2: Username and password You will come to a Login screen. Type your student number in the Username box. Type your student email password in the box. Click Login. (webmail) Password Step 3: Accessing your course You should now see a list of your courses. Click the Course Code and Title of the course that you are enrolled in to enter. For example: L o st o r f o rg o t t en p as sw o rd Contact your local ITS student Helpdesk or email: moodlehelp@usp.ac.fj 6 Additional tutorial questions (For Local Tutors and Students at all Campuses) Week 2 3 4 5 6 7 Textbook Chapter Reference 1 2 3 4 5 Questions Questions 1, 6, 11, & 13 Problems E1-4, E1-8, & E1-16. Exercises P1-4A, & P1-3B BYP BYP1-2 Questions 8, 13 & 18 Exercises E2-4, E2-11, & E2-13 Problems P2-1A, & P2-4B BYP BYP2-7 Questions 8, 10, 14 & 18 Exercises E3-4, E3-12 & E3-20 Problems BYP P3-3A & P3-7B BYP3-5 Questions 1, 3, 5, 7, 10 & 18 Exercises E4-4, E4-11 & E4-16 Problems P4-1A, & P4-4B BYP BYP4-8 Questions 1, 7, 12, 14 & 16 Exercises E5-5, & E5-17 Problems P5-2A, & P5-5B BYP BYP5-3 Questions 1, 2, 7, 12, & 14 Exercises E6-4, E6-9, E6-10, & E6-12 Problems P6-6A, P6-3B BYP BYP6-8 6 7 Mid-Semester Break 8 11 12 13 14 3, 5,7 8 & 10 Exercises E7-3, E7-8, E7-10, & E7-14 Problems P7-3A, & P7-2B BYP BYP7-7 Questions 1, 2 & 9 Exercises E8-3, E8-7, & E8-10 Problems P8-2A Questions 1, 6, & 16 Exercises E9-9, E9-12 & E9-16 Problems P9-2A, & P9-4B BYP BYP 9-7 Questions 1, 6, 13, & 24 Exercises E10-1, E10-8, & E10-14 Problems P10-4A, P10-3B & P10-5B Questions 1, 2,5, & 18 Exercises E11-8, & E11-14 Problems P11-3A, P11-5A & P11-4B BYP BYP11-8 Questions 1, 2, & 3 Exercises E12-1, E12-2 & *E12-6 Problems **P12-2A Questions 6, 8 & 10 Exercises E12-3 and E12-11 Problems P12-4A, P12-2B BYP BYP12-1 7 8 10 Questions 9 10 11 12 12 *only answer cash payback requirement of this question. **only answer annual rate of return and cash payback requirements of these questions. After covering a Unit, students can attempt the above additional questions for that Unit. Selected questions only from above list will be discussed at your local tutorials. 8 Study schedule P l an n i n g yo u r w or k To help you keep pace with the course, we suggest that you try to allocate at least two hours a day to your studies. You should divide your time based on the following study schedule. Within the one or two weeks allocated to each unit, you should read through the unit, and do the thinking and activities associated with it, as well as work on any assignment that is required. The key to success in this course is to maintain a constant study programme throughout the semester. An early start and regular assignments will help you complete the work and will let you know what standard of performance you are attaining. On the following pages is a suggested Study Schedule for you. This should enable you to check your progress from week to week. If you follow the programme you should be well prepared for the final examination. The Study Schedule has four columns: Column 1: Weeks and dates Column 2: Study topics and units for each week Column 3: Textbook references Column 4: Assignment due dates and satellite tutorials dates Now look at the Study Schedule. Note: Check with your local Centre for your Tutorial Timetable. Tutorial questions to be covered are on Page 7. You should study all the topics covered by an assignment before you attempt your assignment questions. 9 WEEKS AND DATES TOPICS AND UNITS TEXTBOOK Week 1 11-15 July Unit 1: Managerial accounting and financial management environment Weygandt, Kieso and Kimmel Chapter 1 Week 2 18-22 July Unit 2: Managerial cost concepts and practices Chapter 1 Week 3 25-29 July Unit 3: Job order costing Chapter 2 Week 4 1-5 August Unit 4: Process costing Chapter 3 Week 5 8-12 August Unit 5:Activity-based costing Chapter 4 Week 6 15-19 August Unit 6: Cost volume profit analysis Chapter 5 Week 7 22-26 August Unit 7:Incremental analysis Chapter 7 27 August-4 September Week 8 5-9 September Week 9 12-16 September Week 10 19-23 September Week 11 26-30 September Week 12 3-7 October Week 13 10-14 October Week 14 17-21 October MID SEMESTER BREAK Unit 8:Pricing (External sales) Unit 9: Budgetary planning Unit 10:Budgetary control and responsibility accounting Unit 11: Standard Costing The need for standards Setting standards Unit 11: Standard Costing Variances from standards o Analysing o Reporting Unit 12: Planning for Capital Investments Unit 12: Discounting methods ASSIGNMENT AND SATELLITE TUTORIALS Satellite Tutorial 1: Friday 22 July 2016 (2.00-3.00 pm Fiji time) Satellite Tutorial 2: Friday 5 August 2016 (2.00-3.00 pm Fiji time) Satellite Tutorial 3: Tuesday 16 August 2016 (2.00-3.00 pm Fiji time) Assignment due: Friday 2 September, 2016 Satellite Tutorial 4: Friday 9 September 2016 (2.00-3.00 pm Fiji time) Chapter 8 Mid-semester test. (Exact date and time to be confirmed later) Chapter 9 Chapter 10 Satellite Tutorial 5: Tuesday 20 September 2016 (2.00-3.00 pm Fiji time) Chapter 11 Chapter 11 Satellite Tutorial 6: Tuesday 4 October 2016 (2.00-3.00 pm Fiji time) Chapter 12 Chapter 12 Satellite Tutorial 7: Wednesday 19 October 2016 (3.00-4.00 pm Fiji time) Week 15 22-30 October STUDY BREAK Week 16 & 17 31 October-11 November FINAL EXAMINATION Check with your USP Campus or Centre for the exact time and date of your examination. 10 Assessment overview This course is assessed in two ways: Continuous assessment Final examination Total value 50% 50% 100% C o n t i n u o u s a s ses s m en t Continuous assessment makes up 45% of the final score and includes 1 assignment and a mid-semester test. It is weighted in the following way: Assignment Mid-semester test 20% 30% Total value 50% Check your study schedule for the date of the test; confirm other details with your USP Campus or Centre. A sample mid-semester test is included in this book for practise; your test may differ in content and structure from the sample. F i n al ex a mi n a t i o n Your final examination is 3 hours long. It will make up the other 50 % of your final score. We have included a sample examination paper later in this Introduction and Assignments book, to give you an opportunity to practise for the final examination. Remember that your final examination may differ in content and structure from the sample paper. 11 Grading system a) The following grading system will be used by all faculties in awarding final grades for academic performance in a course: Pass Grades Grades Percentage (%) Description A+ 85+ Pass with Distinction A 78 - 84 Pass with Distinction B+ 71 - 77 Pass with Credit B 64 - 70 Pass with Credit C+ 57 - 63 Pass C 50 - 56 Pass Other Pass Grades R Restricted Pass Aeg Aegrotat Pass Comp Compassionate Pas Pass or Competent S Satisfactory Note: Pas and S are used in circumstances where graded passes are inappropriate such as in postgraduate thesis and Professional Diploma in Legal Practice. Fail Grades Grade D Percentage (%) 40 - 49 E 40 (Less than) Description Work below the standard required for a pass. This grade will also be awarded for failure to meet course minimum requirement Very weak performance or failure to complete to the satisfaction of the examiner such practical, field or other work as may be prescribed Not completed Null and Void: This is awarded for plagiarism or dishonest practice Unsatisfactory Not Competent NC NV U Fail Note: Fail and U correspond with Pass and S above respectively. 12 Provisional Results: I IP SE Incomplete In progress Special Exam Granted b) Students shall be awarded an Aegrotat or Compassionate Pass if they satisfy the conditions prescribed in Clauses 6.3 or 6.4 of these Regulations respectively. c) Students may be awarded a Restricted Pass if they satisfy the conditions prescribed in Clause 8. d) Students who have been granted an extension of time past the last day of lectures to complete work required for the final assessment of their course shall be awarded the provisional grade of I (Incomplete) for an undergraduate or postgraduate course assessed by coursework, or IP (In progress) for a Supervised Research Project or thesis for a Master's degree or a thesis for a PhD degree. At the end of the period of extension the Faculty Assessment Board shall determine a final grade. e) Students who have not submitted their master's or PhD thesis or Supervised Research Project by the end of the maximum period of candidature prescribed in the regulations shall be awarded the grade of NC (Not completed). [Extracted from 2015 Handbook & Calendar, pp.454-455 (hard copy), pp. 453-454 (e-copy)] 13 Submission of assignments Moodle You are advised to submit all your assignments before the dates given in your study schedule or on your course Moodle page to allow for a similarity report from Turnitin, giving you ample time to make any necessary changes that may be required before the final due date. Please upload them in the correct assignment drop box. Your assignment file must be carefully labelled (see below). For more information on acceptable file types for assignment submission, please visit this link: http://elearn.usp.ac.fj/mod/book/view.php?id=95144 Hard copy You should submit all assignments by the dates given on your study schedule. Please submit them in the correct order and address the envelope to the Course Coordinator. For each assignment, you should fill out a yellow assignment cover form which you collect from Student Administrative Services (SAS). If you do not have assignment covers, contact your USP Campus. For Suva based FL students, all assignments are to be posted or dropped off at the allocated boxes in your Faculty at Laucala Campus. Foundation and Preliminary students are to post or drop off their assignments at the College of Foundation Studies in the Communications Building. The only assignment(s) that are to be posted or dropped off at Student Administrative Services at Laucala Campus are for the Agriculture courses. For all other FL students, please confirm with your Course Coordinator about your assignment submission. It is very important that you keep to the study schedule and complete the assignments so that you get regular feedback on your progress through this course. C o r r ec t l ab el l i n g o f a s si g n m en t s Please be very careful to correctly label your assignments. On each assignment cover or e-copy file that you send in or upload for marking, you should write or type: the full name you used to enrol in this course; your student identification number; the correct course code and title; and the assignment number. Correct labelling will help ensure that the marker receives your assignment on time, and that you get the credit for the work that you do. If your marker receives one of your assignments late because you did not label it correctly, you may lose marks. 14 L at e as si g n men t s If you expect to be over two weeks late in submitting an assignment, it is compulsory that you write to your course coordinator. You should explain why you are late and suggest a revised schedule that will allow you to complete the remaining assignments on time. Your course coordinator may mark a late assignment if there is a good reason for its delay. In deciding whether to mark late assignments, your course coordinator will give greater consideration to students in remote areas with little or no access to their USP Campus, Centre or tutorial help. USP reserves the right to decide whether or not to mark late assignments. It is in your interest to send in your assignments on time. The assignment schedule gives your course coordinator time to provide you with regular feedback on your progress, before it is too late for you to use this information constructively in your studies. Your course coordinator will not mark any assignment received after the final examination. M a rki n g c ri t e ri a We will grade all assignment according to the following criteria where applicable: evidence of reading; evidence of good understanding of the topic; good coverage of the topic; relevance and correctness of information; validity and support of opinion; conciseness; precision; logical presentation of information (flow); and use of illustrations, examples and/or reasons to support statements or arguments. 15 Plagiarism Plagiarism is the copying of another person's creative work and using it as one's own - without explicitly giving credit to the original creator. Work copied without acknowledgement from a book, from another student's work, from the internet or from any other source is plagiarism. Plagiarism includes the following: a) Copying of the published or unpublished words of another writer without acknowledging the source using acceptable reference citation methods. Thus, to; 'cut and paste' from internet sources or 'lift' sentences, ideas and sections from a textual source qualifies as plagiarism. b) Lifting or cutting and pasting extracts without quotation marks or appropriate acknowledgement of sources. c) Paraphrasing of content and ideas without proper acknowledgement of the source. d) The use of images, diagrams, photographs and material from blogs and social networks, without acknowledgement. e) Copying part or all, of another student's assignment. In this instance, 'student assignment' refers to a piece of academic work submitted for assessment purposes for any course, in past or current years at any educational institutional including USP or any other university. i) Collusion Collusion means working with someone else to deceive or mislead to gain an unfair academic advantage. It includes: a) Submission of a paper that has been written by an author other than the author credited for that piece of writing. This includes the use of paid services of a student, or any other person that has been solicited for that purpose. b) Facilitating or enabling another student to plagiarise in any way. 16 ii) Cheating Cheating involves acting in any way that directly contradicts the explicit rules and guiding principles of that form of assessment. It applies in any form of examination including short tests, quizzes and final examinations. Cheating includes (inter alia): a) Doing anything to gain an unfair or illicit academic advantage in an examination; b) Possessing, referring to or having access to any material, or to access the internet 'crib' notes or device containing information directly or indirectly related to the subject matter under examination other than what is explicitly approved for examination purposes; c) Using a cell phone to communicate with any other student or person inside or outside the examination venue; d) Copying from another student in a test or examination; enabling another student to cheat in a test or examination; e) Soliciting a person to sit a test or final examination in place of the student enrolled; sitting a test or final examination in the place of another student; f) Manipulation of scores in tests or examination or in any other form of assessment; and g) Enabling another student in any or a combination of any of the above. [Extracted from 2015 Handbook & Calendar, pp. 462-463 (hard copy), pp. 461-462 (e-copy)] 17 Major assignment Due Date: Friday 2nd September, 2016 Marks: 60 marks Weighting towards final grade: 20% Course learning outcome: This assignment addresses the following course learning outcomes: 1. Explain the distinguishing features of managerial accounting. 2. Define and apply common managerial accounting terms and concepts including the various cost concepts. 3. Calculate costs for cost accounting and decision making purposes, including determining cost behaviour patterns. 4. Discuss how managerial accounting is used for incremental analysis 5. Discuss how managerial accounting is used for control purposes, including cost-volume profit analyses. QUESTION 1 MANAGERIAL ACCOUNTING (15 MARKS) Bakery Limited Background Bakery Limited operates a chain of bakeries in Tokelau and is solely owned and operated by Vauvau. There are 5 branches around the major towns and cities. Each of the bakeries operate fairly autonomously and is headed by a manager. The manager at each branch is responsible for the revenue generated, costs incurred and the profits derived. All capital expenditure decisions are made by the head office located in Suva. There are various performance measurement systems in place as well as incentives for each shop team to outperform the other. There are 5 products that this bakery chain sells and the product offerings are the same across the branches while a system is in place to ensure the same levels of quality management be maintained at all branches. Operations Each bakery has a baker, 2 sales people and 3 helpers. This is standard across all the bakeries. Salary: Manager $25,000 p.a., sales $12,000 p.a. and baker $17,000 p.a. and helpers: $11,500 p.a. each. Expected increase in salary is 5% per annum for all staff. 18 Product offerings: Product Long Loaf Mini Slice(600 grams) Medium Slice Plain Buns Cake Unit Selling Price ($) 0.68 0.65 0.95 0.25 10.45 The long loaves and the sandwich loaves are the most popular products. Considering the market inflation rates it is expected that prices will rise over the years at a rate of 5%. Required: 1. Identify four (4) cost objects in the above case. Use the following table: Cost Object 1. 2. Etc. (2 marks) 2. Identify and classify the specific costs associated with two (2) of the cost objects identified in (1) the following cost categories (Identify at least 2 costs for each of the category applicable): Tabulate your answer in the following table: Cost object #: # Product Cost Period Cost Direct cost Indirect cost Variable cost Fixed cost Semi Variable Prime cost Controllable cost 1 2 Note that a cost may fall into more than one category e.g. wages for factory staff is a product cost and also a variable cost. (4 marks) 3. The functions of a manager are planning, directing and controlling. Assume you are the manager of the bakery at the head office. Outline two (2) specific activities and/or responsibilities that you would be required to perform under each of the 3 functions stated. (3 marks) 19 Uncontrollable cost 4. Outline two ways in which the management and staff of a branch of the company can improve the profitability of their branch so as to put perform the other branches. (2 marks) 5. Currently, the bakery is using the traditional or conventional costing system (process of job order costing) to cost their products. Identify one contemporary costing system, in your opinion, may be suitable alternative for the bakery. (In order to answer this question, you must do a research on contemporary costing systems.) (4 marks) Total marks: 15 marks Rubric Evaluation Criteria Managerial cost concepts analysis (Part 1-5) Fails to meet Expectations Lacks statistical skills or use inappropriate formulae, excessive errors, illogical explanations. Meet Expectations Applies correct statistical techniques, with minimal, minor errors 20 Exceeds Expectations Utilizes appropriate formulae, correct statistical skills and with virtually flawless results QUESTION 2 COSTING SYSTEMS AND SPECIAL ANALYSIS (25 MARKS) Part A After operating in December and processing many jobs, the manager for Laucala branch came to know that Nausori Bakery sells plain cakes without decorations. It is estimated that the branch will require 100 cakes per month. The cakes will be produced in 20 batches. The manager came to an agreement with the owner of Nausori Bakery to buy plain cakes at a price of $15.00 per cake. Actual costs for making cakes (without decorations) in December were as follows: Direct Materials Indirect Materials Direct Labour Indirect Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead $70.00 per batch $10.00 per 20 cakes $600.00 per month $150.00 per fortnight $40.00 per batch $200.00 per month It is forecasted that the branch will not be able to avoid $100 for fixed manufacturing overhead if it buys plain cakes from Nausori Bakery. Required: If you are the manager of Laucala branch, would you make or buy plain cakes from Nausori Bakery? Show all necessary calculations (10marks) Part B The Draketi Branch received a special order from Kana Kao (with an intention of more orders) on 15 December to supply plain buns for 5 days (45 dozens buns per day) at a price of $2.80 per dozen commencing on 15th. If the branch accepts this order then they will require one additional baker and one additional helper. The baker will be paid $40.00 per night and the helper will be paid $20.00 per night. The raw materials cost is $1.00 per dozen buns. The branch will also incur delivery costs of $7.50 per day. Also the branch will use the only oven available; meaning the sales for plain buns to general customers will decline by 2 dozens per day. The normal selling price of buns is $3.00 per dozen. Unavoidable costs are $200 for normal production, with an additional increase of $2.00 per nine dozens per day. 21 Required: 1. State whether Suva branch should accept the special order from Kana Kao. Show all relevant working. (10 marks) 2. Assuming there is spare capacity, what additional factors they should consider before accepting/rejecting the order. (5 marks) Evaluation Criteria Incremental Analysis Fails to meet Expectations Lacks statistical skills or use inappropriate formulae, excessive errors, illogical explanations. QUESTION 3 Meet Expectations Applies correct statistical techniques, with minimal, minor errors CVP ANALYSIS Exceeds Expectations Utilizes appropriate formulae, correct statistical skills and with virtually flawless results (20 MARKS) Narruhn & Company manufactures and sells a specialised cordless telephone for high electromagnetic radiation environments. The company's contribution format income statement for the most recent year is given below: Sales (20,000 units) Variable expenses Contribution margin Fixed expenses Net operating income Total $1 200 000 900,000 300,000 240,000 60,000 Per Unit $60 45 $15 Percent of Sales 100% ?% ?% Management is anxious to increase the company's profit and has asked for an analysis of a number of items. Required: 1. Compute the company's CM ratio and variable expenses ratio.(2 marks) 2. Compute the company's break-even point in both units and sales dollars. Use the equation method. (2 marks) 22 3. Assume that sales increase by $400,000 next year. If cost behaviour patterns remain unchanged, by how much will the company's net operating income increase? Use the CM ratio to compute your answer. (2 marks) Refer to the original data. 4. Assume that next year management wants the company to earn a profit of at least $90,000. How many units will have to be sold to meet this target profit? (2 marks) 5. Compute the company's margin of safety in both dollar and percentage form. (3 marks) 6. Compute the company's degree of operating leverage at the present level of sales. (2 marks) 7. Assume that through a more intense effort by the sales staff, the company's sales increase by 8% next year. By what percentage would you expect net operating income to increase? Use the degree of operating leverage to obtain your answer. (3 marks) 8. Verify your answer to part (7) be preparing a new contribution format income statement showing an 8% increase in sales. (4 marks) Evaluation Criteria CVP Analysis Fails to meet Expectations Lacks statistical skills or use inappropriate formulae, excessive errors, illogical explanations. Meet Expectations Applies correct statistical techniques, with minimal, minor errors THE END 23 Exceeds Expectations Utilizes appropriate formulae, correct statistical skills and with virtually flawless results Past mid-semester test You are given the following past mid-semester test paper to help you to prepare for your test(s). However, remember that the test paper that you will take this semester may not follow exactly the same structure, format or content as this one. 24 25 26 27 28 29 30 31 32 33 Past examination paper You are given the following past examination paper to help you to prepare for your final examination. However, remember that the examination paper that you will take this semester may not follow exactly the same structure, format or content as this one. 34 35 36 37 38 39 40 41