HA2011 MANAGEMENT ACCOUNTING FINAL ASSESSMENT TRIMESTER 1, 2021

Assessment Weight:      50 total marks

Instructions:

• All questions must be answered by using the answer boxes provided in this paper.
• Completed answers must be submitted to Blackboard by the published due date and time. 
  
  Submission instructions are at the end of this paper.

Purpose:
This assessment consists of six (6) questions and is designed to assess your level of knowledge of the key topics covered in this unit

Question 1                                                                                                    ( 7 marks)

15. a) Assume Domino’s Pizza is considering offering a new product—a 6-inch (15.24 cm) pizza. Identify two specific financial and two specific non-financial information the management accountant might provide to assist the management of Domino’s Pizza with the new product idea?(2 marks)

1. b) ‘Management accounting is always evolving due to changes in the business environment.’Explain what this statement means and give examples on what some of the changes are. (5 marks)

Question 2                                                                                                    (7 marks)

1. a) A company has the following transactions during the week.

            Purchase of $1,000 raw materials inventory

Assignment of $500 of raw materials inventory to Job 5

Payroll for 20 hours with $1,000 assigned to Job 5

Factory utility bills of $750

Overhead applied at the rate of $10 per hour

Required: What is the cost assigned to Job 5 at the end of the week? (2 marks)

1. b) When setting its predetermined overhead application rate, Tasty Turtle estimated its overhead would be $75,000 and manufacturing would require 25,000 machine hours in the next year. At the end of the year, it found that actual overhead was $74,000 and manufacturing required 24,000 machine hours.

Required:

1. i) Determine the predetermined overhead rate.(1.5 marks)
2. ii) What is the overhead applied during the year?(1.5 marks)

iii) Determine the under- or overapplied overhead. (2 marks)

Question 3                                                                                                    (7 marks)

1. a) Which of the following are likely to use service costing? Justify your answer in each case.

  (3 marks)

                (i) A college

                (ii) A hotel

                (iii) A plumber

1. b) The following information relates to a management consultancy organisation:

                                                                                                                                                                                                                                                                                                                                $

Salary cost per hour for senior consultants                                                                                                           40

Salary cost per hour for junior consultants                                                                                                            25

Overhead absorption rate per hour applied to all hours                                   20

The organisation adds 40% to total cost to arrive at the final fee to be charged to a client.

Client number 209 took 54 hours of a senior consultant’s time and 110 hours of junior consultants’ time.

Required: What is the final fee to be charged for Client number 209? (4 marks)

Question 4                                                                                                    (11 marks)

2020. a) Golden Point Company has applied at a local bank for a short-term loan of $150,000 starting on October 1, 2020. The bank’s loan officer has requested a cash budget from the company for the quarter ending December 31, 2020. The following information is needed to prepare the cash budget:

A cash balance of $24,000 is planned for October 1. Accounts receivables are expected to be $48,000 on October 1. All of these accounts will be collected in the quarter ending December 31. In general, sales are collected as follows: 90% in the quarter of sale, and 10% in the quarter after sale. Accounts payable will be $480,000 on October 1 and will be paid during the quarter ending December 31. All purchases are paid in the quarter after purchase.

Required:

2020. a) Prepare a cash budget for the quarter ending December 31, 2020. Assume that the $150,000 loan will be made on October 1 and will be repaid with interest at 10% on December 31.(7 marks)

1. b) If the company desires a minimum cash balance of $18,000, will the company be able to repay the loan as planned on December 31?(4 marks)

Question 5                                                                                                    (11 marks)

1. a) The income statement comparison for Rush Delivery Company shows the income statement for the current and prior year.

Required:

1. a) Determine the operating income (loss) for each year.(2 marks)
2. b) Determine the operating income (% of sales) for each year.(2 marks)
3. c) The company made a strategic decision to invest in additional assets in the current year. These amounts are provided. Using the total assets amounts as the investment base, calculate the ROI. Was the decision to invest additional assets in the company successful? Explain.(3.5 marks)
4. d) Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to your findings in (c).(3.5 marks)

Question 6                                                                                                    (7 marks)

100. a) Viking Corporation’s variable cost per unit produced is $100. Wholesaler Y offers to buy 2,000 additional units at $120 each. Wholesaler Z proposes to buy 1,500 additional units at $140 per unit. Viking has enough excess capacity to produce one but not both of the orders. Fixed costs are not affected by accepting either offer.

Required: Which offer should Viking accept and why? (4 marks)

1. b) Colin O’Shea has a carpentry shop that employs 4 carpenters. Colin received an order for 1,000 coffee tables. The coffee tables have a round tabletop and four decorative legs. An offer for $500 per table was received. Colin found an unfinished round tabletop that he could buy for $50 each.

The quantitative cost data to make the tabletop is shown below:

Required: What qualitative factors would Colin consider before he decides to buy the tabletop or make it? (Hint: No calculations required] (3 marks)

Submission instructions:

• Save submission with your STUDENT ID NUMBER and UNIT CODE e.g.EMV54897 HA2011
• Submission must be in MICROSOFT WORD FORMAT ONLY
• Upload your submission to the appropriate link on Blackboard 
• Only one submission is accepted.  Please ensure your submission is the correct document.
• All submissions are automatically passed through SafeAssign to assess academic integrity.