HI5017 Managerial Accounting Final Assessment 2023
| Unit Details | Name | Managerial Accounting |
| Code | HI5017 | |
| Trimester, Year | Trimester 1, 2023 |
| Assessment Details | Name | Final Assessment |
| Due Date | 17 June, 2023 | |
| Due Time | 3.00 pm | |
| Weight | 50% |
| Student Number | |
| First Name | |
| Family Name |
| Duration | LATE SUBMISSIONS ARE NOT ACCEPTED |
| Answers | must be entered using the answer boxes provided in this paper. DO NOT CUT AND PASTE INTO A NEW DOCUMENT |
| File Format | |
| Submission Information | |
| Academic Integrity Information | |
| Penalties |
NOTE: YOU MUST SHOW OUR WORKING FOR ALL QUESTIONS
Question 1 (7 marks)
- Assume you are the new global manager for Continental Cruise Ltd, which sails to popular European and Asian cities. You receive the quarterly profit and loss statement reports and notice that it is similar to the financial performance reports for external users.
Required:
- What additional information would you require? (4 marks)
ANSWER a (i): (answer box will enlarge as you enter your response)
- Suggest a financial performance report format that would provide you with some of the information required in (i) (1 mark)
ANSWER a (ii):
- Fashion Bags incurs these costs for the month:
Required:
Determine each of the following costs: (list the costs under each cost category when calculating the answer).
- Product costs (1 mark)
ANSWER b (i):
- Period costs (1 mark)
ANSWER b (ii):
SHOW YOUR WORKING
| Response Box |
Question 2 (11 marks)
- Explain if using volume-based cost drivers are relevant in the costing systems of 21st-century organisations. (3 marks)
ANSWER a:
- Can an organisation use more than one costing system? Explain with an example. (3 marks)
ANSWER b:
- Summary information from KL Ltd’s job cost sheets show the following information:
Required:
What are the balances for January, February and March for each of the following for KL Ltd:
- work in process inventory
- finished goods inventory and
- cost of goods sold (5 marks)
Present your answers (and work out) using the table below:
| Work in Process Inventory | Finished Goods Inventory | Cost of Goods Sold | |
| January | |||
| February | |||
| March |
- Zoom Tech Ltd investigates all variances above 10 percent of the flexible budget. The flexible budget for direct labour is $50,000. The direct labour rate variance is $4 000 unfavourable, and the direct labour efficiency variance is $6,000 favourable.
Required:
Provide two possible explanations for each variance identified in this question. (4 marks)
ANSWER a:
- A flexible budget for Aqua Company for 5 000 hours is shown below:
Variable overhead $ 20 000
Fixed overhead $ 11 000
Total overhead $ 31 000
Required:
Prepare a flexible budget for 10 000 hours and 14 000 hours. (3 marks)
ANSWER b:
Question 4 (7 marks)
- The following information is from Musical Inc. Ltd. It sells musical instruments with three stores in three different states across Australia. The July income statement for all stores is shown below:
Required:
- Comment on the operating income results for each store. (1.5 marks)
ANSWER a (i):
- Now assume the costs allocated from corporate is an uncontrollable cost for each store. How does this change your assessment of each store? Explain. (1.5 marks)
ANSWER a (ii):
- The owner of Advertising Pro wants to adopt the Balanced Scorecard in the company. There are two divisions: Video production and Radio. He has asked you to explain how BSC can improve his company’s performance. Write a short report to convince him to implement BSC, and justify your reasons. (4 marks)
ANSWER b:
Question 5 (11 marks)
Stylo Company produces a single product. Their most recent data is shown below:
Required:
- Calculate the current breakeven point in units and dollars. (3 marks)
ANSWER a:
- Prepare a contribution margin income statement showing the company’s profitability performance. (2 marks)
ANSWER b:
- They have recently received the result of a market survey that indicates that they can increase the retail price of their product by 10% without losing customers or market share. The company can also source a cheaper raw material, decreasing the unit raw material cost by 8%. Demonstrate how these changes will benefit the company. (4 marks)
ANSWER c:
- What is the margin of safety in dollars, assuming projected sales are based on the new retail price. (2 marks)
ANSWER d:
Student 1 – We can drop prices in the short run to cover differential variable and fixed costs. But in the long run, prices must cover all variable and fixed costs.
Student 2 – How is that possible? Shouldn’t we always cover all our costs, short-term and long-term?
Required:
Write an appropriate response to clarify the pricing concept the students are discussing. (3 marks)
ANSWER a:
The manufacturing overhead consists of $2 000 of variable costs, with the balance being allocated to fixed costs. Assume that 40% of the fixed costs would be avoidable if the almond biscuits were purchased externally rather than produced internally.
Required:
ANSWER b (i):
ANSWER b (ii):
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