MANAGERIAL ACCOUNTING ASSIGNMETS
ASSIGNMENT 1 -
Q1. (a) Distinguish management accounting from financial accounting and explain how management accounting supports the management process?
(b) The following transactions pertain to 2014, the first-year operations of Hall Company. All inventories was started and completed during 2014. Assume that all transactions are cash transactions.
i. Acquired Rs. 4,000 cash by issuing common stock.
ii. Paid Rs. 720 for materials used to produce inventory.
iii. Paid Rs. 1,800 to production workers.
iv. Paid Rs. 540 rental fee for production equipment.
v. Paid Rs. 180 to administrative employees.
vi. Paid Rs. 144 rental fee for administrative office equipment.
vii. Produced 300 units of inventory of which 200 units were sold at a price of Rs. 12 each.
Required: Prepare an income statement and a balance sheet.
Q2. Target Systems, Inc., makes heat-seeking missiles. It has recently been offered a government contract from which it may realize a profit. The contract purchase price is Rs. 130,000 per missile, but the number of units to be purchased has not yet been decided. The company's fixed costs are budgeted at Rs. 3,973,500, and variable costs are Rs. 68,500 per unit.
Requirement:
i. Compute the number of units the company should agree to make at the stated contract price to earn a profit of Rs. 1,500,000.
ii. Using a lighter material, the variable unit cost can be reduced by Rs. 1,730, but total fixed overhead will increase by Rs. 27,500. How many units must be produced to make Rs. 1,500,000 in profit?
iii. Given the figures in 2, how many additional units must be produced to increase profit by Rs. 1,264,600?
Q3. Iowa Soy Products (ISP) buys soybeans and processes them into other soy products. Each ton of soybeans that ISP purchases for Rs. 300 can be converted for an additional Rs. 200 into 500 pounds of soy meal and 100 gallons of soy oil. A pound of soy meal can be sold at split off for Rs. 1 and soy oil can be sold in bulk for Rs. 4 per gallon.
ISP can process the 500 pounds of soy meal into 600 pounds of soy cookies at an additional cost of Rs. 300. Each pound of soy cookies can be sold for Rs. 2 per pound. The 100 gallons of soy oil can be packaged at a cost of Rs. 200 and made into 400 quarts of Soyola. Each quart of Soyola can be sold for Rs. 1.25.
Required:
i. Allocate the joint cost to the cookies and the Soyola using the following:
a. Sales value at split off method
b. NRV method
ii. Should ISP have processed each of the products further? What effect does the allocation method have on this decision?
Q4. SABA Enterprises needs a cash budget for the month of June. The following information is available. You are required to prepare a cash budget for SABA Enterprises for the month of June:
i. The cash balance on June 1 is Rs.4,000.
ii. Sales for May and June are Rs.50,000 and Rs.40,000, respectively. Cash collections on sales are 40 percent in the month of sale and 50 percent in the month after the sale; 10 percent of sales are uncollectible.
iii. General expenses budgeted for June are Rs.20,000 (depreciation represents Rs.1,000 of this amount).
iv. Inventory purchases will total Rs.40,000 in May and Rs.30,000 in June. The company pays for half of its inventory purchases in the month of purchase and for the other half the month after purchase.
v. The company will pay Rs.5,000 in cash for office furniture in June. Sales commissions for June are budgeted at Rs.6,000.
vi. The company maintains a minimum ending cash balance of Rs.4,000 and can borrow from the bank in multiples of Rs.100. All loans are repaid after 60 days.
Q5. Malik Industries uses standard costing and a flexible budget for cost planning and control. Its monthly budget for overhead costs is Rs. 200,000 of fixed costs plus Rs. 5.20 per machine hour. Monthly normal capacity of 100,000 machine hours is used to compute the standard fixed overhead rate. During December, employees worked 105,000 machine hours. Only 98,500 standard machine hours were allowed for good units produced during the month. Actual overhead costs incurred during December totaled Rs. 441,000 of variable costs and Rs. 204,500 of fixed costs. Compute (i) the under- or overapplied overhead during December and (ii) the variable overhead spending and efficiency variances and the fixed overhead budget and volume variances.
Q6. How does activity-based costing (ABC) differ from the traditional approach? What is the underlying difference in the philosophy of each of them?
ASSIGNMENT 2 -
This assignment is a research-oriented activity. You are required to select any trading/ manufacturing/ non-trading organization of your interest which supports you in preparing a report of about 1000 words on the topic allotted to you, to be submitted to your teacher for evaluation.
Select one of the following topics according to the last digit of your roll number. For example, if your roll number is P-3427180 then you will select issue # 0 (the last digit): -
TOPICS:
1. Identify the value added and non-value added activities in your selected organization and apply the concept of activity based management.
2. Evaluate the procedures for materials procurement and use of your chosen business organization.
3. How does an organization works out the labour costing?
4. How the efficiency of a manager as well as the business can be improved by using the CVP analysis techniques?
5. Report the Budgeting procedure, which exists in the organization.
6. Managerial usefulness of variance analysis
7. Prepare a comprehensive report on a managerial accounting information system.
8. How the deferential cost analysis is performed in the organization?
9. Describes the complete cost accumulation procedures in manufacturing organizations.
10. Explain the concept of departmentalization and describes that how the various Factory overheads have been assigned to different departments.
The report should follow the following format:
1. Title page
2. Acknowledgements
3. An abstract (one page summary of the paper)
4. Table of contents
5. Introduction to the issue (brief history & significance of issue assigned)
6. Practical study of the organization (with respect to the issue)
7. Data collection methods
8. SWOT analysis (strengths, weaknesses, opportunities & threats) relevant to the issue assigned
9. Conclusion (one page brief covering important aspects of your report)
10. Recommendations (specific recommendations relevant to issue assigned)
11. References (as per APA format)
12. Annexes (if any)