Assignment:
Assignment brief: Answer all three questions
1. Critically investigate the benefits and limitations of budgeting as an aid to management decision making by considering the following areas:
a) Discuss the benefits in budgeting and the assumptions behind a well-performing budgeting process.
b) What has been the basis of criticism of budgeting?
c) Outline the practical problems that may be encountered in implementing the budgeting process and how they may be overcome?
2. Strategic management accounting is concerned with providing information that will support the strategic plans and decisions made within a business: you are required to critically review this statement.
In doing so you should consider the following areas of strategic planning:
a) Establishing mission, vision and objectives
b) Undertaking a position analysis such as SWOT
c) Identifying and assessing strategic options
d) Selection of strategic options and formulation of long and short-term plans
e) Performance review and control
3. XYZ Co. have been analyzing the performance of one of its product PC111. In an attempt to win over key customers in their industry and to increase its market share, XYZ Co. has decided to charge a price lower than its normal price for PC111 when selling to the key customers who are being targeted.
Details of component PC111 standard costs are as follows:
Group 1 Group 2 Group 3 Assembly
Costs (£) (£) (£) (£)
Materials (per unit) 150 300 ---- 50
Labour (per unit) 70 80 80 80
Variable overheads (per unit) 15 30 25 30
Fixed overheads (per unit) 50 75 100 20
285 485 205 180
a) Compute the lowest selling price at which one PC111 could be offered, and critically evaluate the adoption of such a pricing policy.
b) The company is also considering the regular selling price of PC111, and has provided you with the following information:
Market research forecast of demand:
Selling Price (£) 1500 1400 1300 1200
Demand (units) 5000 6000 7000 10000
Prepare and present a computation which illustrates which price should be selected in order to maximise profits.
Your assignment should aim to provide readers with comprehensive knowledge and critical reviews of these areas covering, for example:
• Knowledge of variety of topic related to management accounting within the concept of decision making by managers.
• Knowledge of compare and contrast of the role and scope of management accounting theory and identifying the costs and benefit that is relevant to a particular decision within the business.
• Your own understandings of, comments on, arguments and contributions to the topic, such as key qualitative characteristics, true and fair view/fair presentation, creative accounting, etc..
• Any other important issues which you think should be addressed