• Explaining in your own words how Managerial Accounting differs from Financial Accounting, indicating Managerial and financial accounting users, indicating the three different responsibility Centers found in Luzern AG, mentioning by name and Title who head each Centre and how each of the center Performance and input mix can be measured. Defining what direct Materials, Direct labor and Manufacturing overhead entail and how they can be measured. Defining the process of Cost-Volume-Profit analysis, drawing the graph and explaining the notations. Defining the concept of transferring goods between mother-daughter companies; how the concept works in the context of Luzern AG by giving examples and random computations of how that would take place. The report should also explain the concept of Incremental Analysis and giving examples.

Due to mis-handing and making of inappropriate decisions resulting from the current COVID-19 pandemic, the CEO, Dr. Alviano has been asked by the Board of Directors to retire today. Upon retirement, Dr Alviano has the option of taking his retirements benefits either as a lump sum or as an annuity. The Pension Manager, Ms Veenanat presents him two alternatives:

• An immediate lump sum of CHF 2 million
• An annuity with 20 payments of 200000 each year starting today

The interest rate at Dr. Alvianos Bank is 7% per year annually compounded.

• Which option would you recommend Dr. Alvaino to take based on Quantitative calculus?

Besides, your report should also answer below questions (minimum 1750 words):

• From the previous information determine the net monetary advantage or disadvantage of Purchasing (rather than manufacturing) the blades required for Motor Production in the coming year 2021 for Luzern AG.
• Determine the Volume of Motor production where Luzern AG would be indifferent between buying and producing the blades. If the volume level is predicted to decrease, would that influence Luzern AGs decision?
• Name at least four other factors Luzern AG should take in making decision?
• Luzern Pension Fund manager Ms Veenanat estimates that the corporate sponsor will make CHF 10 Million contribution, 5 years from now. The rate of return on the Pension plan assets is estimated to be 9% per year. Ms Veenanat wants to calculate the Future Value of this contribution 15 years from (date at which the funds will be distributed to retirees). Compute and explain that Future Value?

• From previous Job Costing information given on Luzern AG indicate and answer the following sub-points:

- The Work in process inventory for at June 30.

- The Finished goods inventory at June 30.

- The Cost of goods sold during July.

- The Work in process inventory at July 31 as well as The Finished goods inventory at July 31.

• Summarizing the flow of manufacturing costs through the ledger accounts of Luzern AG for the month of June 2020 by completing the following T accounts by entering summary amounts for the month in each of the blank spaces provided (lettered a through j).

Materials Inventory			Work in Process Inventory
Beg. Bal. 37,000 a End. Bal. 44,000	B		Beg. Bal. 8,000 f End. Bal. 4,000	g
Direct Labour			Finished Goods Inventory
c	Beg. Bal. 0 d End. Bal. 4,000		Beg. Bal. 52,000 h End. Bal. 46,000	i
Manufacturing Overhead			Cost of Goods Sold
23,000	E		j

• For new Luzern AG subsidiary in Geneva, What should Luzern AG establish as Sales price per unit if it sets a target of earning an operating income of CHF 260000 by producing and selling 50000 during the first year of operations?
• At the unit sales price computed in a) above, how many units must the company produce and sell to Break-even?
• What will be the Margin of safety (MOS) in CHF if the company produce and sell 50000 units at the sales price computed previously (above)
• Using the MOS, compute operating income at 50000 units.
• Assuming that the Marketing Manager of Luzern AG, Mr. Chan thinks that the price of this product to be produced by GNV SA must be no higher than CHF 94 to ensure market penetration. Will setting the sales price at CHF 94 enable GNV to break-even given the plans to manufacture and sell 50000 units? (You must Compute and explain your answer.