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QUESTION ONE a ) Explain the following concepts as applied in Management Accounting: Standard Costing Fixed costs Variance analysis Contribution Margin ( 4 Marks )
QUESTION ONE
a Explain the following concepts as applied in Management Accounting:
Standard Costing
Fixed costs
Variance analysis
Contribution Margin Marks
b Joan Piri and Joseph Tatu decided to venture into the same business in the year They sell the same type of produc in the same type of market. The following is their budgeted Income Statement for the year ending June ;
Joan Piri
Business
Sh Joseph Tatu
Business
Sh
Sales
Variable cost
Fixed Cost
Budgeted Profit
Required: Calculate:
i Breakeven point for each business Marks
ii The sales volume at which each business will earn a profit of shs Marks
QUESTION TWO
d Illustrate how Management accountant can help to turn around the fortune of an organization by using the following key function of a management accountant:
i Planning Marks
iii Internal control Marks
b Discuss the advantages which may be claimed for Kaplan and Nortons balanced scorecard as a basis for performance measurement over traditional management accounting views of performance management. Your answer should include specific examples of quantitative measures for each aspect of the balance scorecard. Marks
c The introduction of improved quality into products has been a strategy applied by many organizations to obtain competitive advantage. Some organizations believe it is necessary to improve levels of product quality if competitive advantage is to be preserved or strengthened.
Required;
Discuss how a management accountant can assist an organization to achieve competitive advantage by measuring the increase in added value from improvement in its product quality
Marks
d The following relates to Sauti productions ltd
Budget to June Actual to June
Production in units
Materials in Shillings
Labour in shillings
Fixed Overheads in Shillings
Required:
Flex the budget to the actual levels Marks
e It has suggested budgets and standard cannot motivate unless budget holders participate in the budget and standard setting process. Discuss the argument for and against involving budget holders
Marks
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