APC309 Strategic Management Accounting
Weighting – 100% of the marks for this module
This is an individual assignment limited to 3,000 words (+or- 10%), excluding the reference list, bibliography and any appendices. The word count MUST be shown on the front cover of the assignment. Note: see quality Handbook Ref AQH-F15 Guidance for students on the penalty for exceeding the limit for assessed work.
All of the learning outcomes for the module are being assessed in this assignment. The learning outcomes are shown in the section entitled “Marking Guide”, which is further on in this document.
The University’s policy on cheating collusion and plagiarism will be applied to this piece of work.
The assignment has three questions. Only two of the three questions should be answered each question carries the same maximum mark.
Students are required to submit their coursework through CANVAS. Only assessments submitted through CANVAS will be marked. Any other submission including submission to your study centre in hardcopy will be treated as a non-submission.
If your centre supports Turnitin©, a copy of your Turnitin© originality report must be submitted in conjunction with your assignment.
THE FRONT COVER OF YOUR ASSIGNMENT MUST SHOW:
- YOUR NAME;
- YOUR STUDENT REGISTRATION NUMBER;
- THE WORD COUNT (excluding the reference list and bibliography and any appendices)
The assignment has three questions only two should be answered. Each question carries the same maximum mark.
QUESTION 1 – Compulsory
a) “Working capital management is all about having a good Cash Budget. Having a good Cash Budget which shows cash inflows, cash outflows as well as cash surplus or deficit can ensure a business maintain its survival amongst economic downturns and uncertainties”
Critically evaluate the above statement
b) Wanneroo Company is preparing the annual budgets for the upcoming year 2023.
Information for the last quarter of year 2022 are provided as follows:
- Sales for December 2022 were $80,000 and sales are expected to increase by 10% each month from January 2023 onwards. All sales are made on credit terms. Customers are expected to pay for 60% of sales in the month of sale, 35% in the month following sale and the balance is considered to be bad debts.
- Gross profit is budgeted at 35% of sales.
- Since November 2022, it has been the policy to have a stock level at the end of each month sufficient to cover 35% of the following month’s sales. All purchases will be made on credit and paid for in the month following purchase.
- Administrative expenses are budgeted at $11,000 per month, including $1,600 for depreciation. Payments are to be made in the month in incurred.
- Selling and distribution expenses are estimated to be 11% of monthly sales value. Payments for these expenses are to be made one month later.
- The bank balance on 1 January 2022 is $30,220 overdrawn as bank overdraft.
Prepare a cash budget for the company for each of the three months June 2009, July 2009 and August 2009. (15 marks)
(Total 50 marks)
Question 1 – Compulsory
Choose to answer ONLY one question from Question 2 & Question 3
Solera Company manufactures a standard product SV1 which is a smart vacuum cleaner. SV1 currently fully utilises the available production capacity of 6,000 machine hours per period.
Solera Company has been approached by a potential customer with a view to the placement of an order for 3,000 units of the product at a price of $30 per unit. The product would need to be modified to the customer’s own specification. Modifications will include changes in power voltage, packaging and design which will result in additional operating costs being incurred.
Details of operating costs, both for the standard product and for the modified version, are as follows:
|Standard product||Modified product|
|Production overheads||6.00 (0.4 machine hrs)||9.00 (0.6 machine hrs)|
- Fixed production overheads are currently $67,500 per period
- The selling price of the standard product is $23 per unit
- Further to the costs set out above, investment of $4,500 would be required in specialised equipment in order to be able to manufacture the modified product
(a) Advise the Solera Company whether accepting the new order would be worthwhile. Support your advice with appropriate calculations and explanations based on the above figures. (40 marks)
(b) State three other factors that may influence the decision. (10 marks)
(Total 50 marks)
Bliing Company produces a single product. Budgeted data relating to the product for the period just ended was:
|Standard production cost||$ per unit|
|Direct material||(3 kilos @ $38.50 per kilo)||115.50|
|Direct labour||(2.5 hours @ $19.20 per hour)||48.00|
|Fixed overheads||(2.5 hours @ $21.50 per hour)||53.75|
Production and sales: 2,500 units
Standard selling price $280 per unit
Actual results for the next period were :
Production: 3,040 units
Sales: 2,880 units sold for $781,200
Direct material (purchased and used): 9,630 kilos costing $360,485
Direct labour: 7,120 hours costing $149,520
Fixed overheads: $138,650
(a) Calculate the following variances for the period:
- selling price (5 marks)
- sales volume profit (5 marks)
- direct material price (5 marks)
- direct material usage (5 marks)
- direct labour rate (5 marks)
- direct labour efficiency (5 marks)
- fixed overheads expenditure (5 marks)
- fixed overheads volume (5 marks)
(b) Give three possible causes of the direct labour rate variance calculated in part (a) and possible ways to reduce the variance (10 marks)
(Total 50 marks)
END OF QUESTION PAPER