Question 1 Refer to the quotation provided below. "Distorted cost information is the result of sensible accounting decisions made when most businesses either provided or manufactured a narrow range of services or products. Distortions from allocating overhead by rates based on direct labour were minor and the high cost of collecting and processing data made it hard to justify more sophisticated methods to allocate these overhead costs. However, intensified global competition, radically new production and information technology, and the development of alternative costing systems have made possible the accurate product/service cost information vital to competitive success in the 21st century Required: Identify the alternative cost systems and discuss how they contribute to better decision making in the 21st century business environment. Ensure you discuss the quotation with reference to all materials and ideas sourced from the literature. Your discussion should be well referenced using APA referencing format (Word Limit: 1000 words maximum) (15 marks) Question 2 a) .... corporate planning and budgeting are complementary, rather than the former superseding the latter Required: Compare the aims and main features of 'corporate planning' and budgeting' systems. (10 marks) b) The aims of zero-base budgeting have been described recently in the following terms: Zero base budgeting is a general management tool that can provide a systematic way to evaluate all operations and programmes; a means of establishing a working structure to recognise priorities and performance measures for current and future plans; in essence, a methodology for the continual redirection of resources into the highest priority programmes, and to explicitly identify tradeoffs among long-term growth, current operations, and profit needs. Required: Explain how a system of zero-base budgeting works, and to assess its likely success in attaining the aims set out above. (10 marks) Section B Discussion and Short Answers (50 marks) Question 1 Refer to the quotation provided below. Distorted cost information is the result of sensible accounting decisions made when most businesses either provided or manufactured a narrow range of services or products. Distortions from allocating overhead by rates based on direct labour were minor and the high cost of collecting and processing data made it hard to justify more sophisticated methods to allocate these overhead costs. However, intensified global competition, radically new production and information technology, and the development of alternative costing systems have made possible the accurate product/service cost information vital to competitive success in the 21st century". Required: Identify the alternative cost systems and discuss how they contribute to better decision making in the 21st century business environment. Ensure you discuss the quotation with reference to all materials and ideas sourced from the literature. Your discussion should be well referenced using APA referencing format (Word Limit: 1000 words maximum) (15 marks) Question 2 a) ... corporate planning and budgeting are complementary, rather than the former superseding the latter.' Required: Compare the aims and main features of 'corporate planning' and 'budgeting' systems. (10 marks) b) The aims of zero-base budgeting have been described recently in the following terms: Zero base budgeting is a general management tool that can provide a systematic way to evaluate all operations and programmes; a means of establishing a working structure to recognise priorities and performance measures for current and future plans; in essence, a methodology for the continual redirection of resources into the highest priority programmes, and to explicitly identify tradeoffs among long-term growth, current operations, and profit needs.' Required: Explain how a system of zero-base budgeting works, and to assess its likely success in attaining the aims set out above. (10 marks)
