What are the recent changes in the management accounting environment that have, in part, made traditional management accounting systems inadequate for the modern business environment?
XYZ Pty Ltd manufactures a wide range of products and has adopted many aspects of Advanced Manufacturing Technology (AMT). A factory-wide direct labour hour rate has traditionally been used to absorb all production overheads into product costs.
Provide three reasons why a direct labour hour rate might not be appropriate for a company such as XYZ Pty Ltd.
Suggest a suitable cost driver for each of the following overhead costs.
- machine set-up costs
- short-run variable overhead costs
- materials receiving costs
- materials handling costs
- quality control costs
Your production director has stated: ‘Now that we are using ABC we have completely accurate product unit costs that will help us to make better decisions and improve our ability to control costs in the future.’
Discuss whether or not you agree with this statement.
What responsibilities would a management accountant of a medium sized manufacturing operation have with regard to data protection and security?
Adelphi Ltd is a large multinational company with annual revenue of approximately $20 billion. During a particular period, a variance report revealed an unfavourable labour rate variance of $38,500. Should this variance be investigated? Give reasons for your answer.
Identify reasons why a calculated variance, such as those listed below, might not be worthy of further investigation because of the likelihood that its cause is outside the control of management.
- Materials price variance
- Labour rate variance
- Labour efficiency variance
- Selling price variance
Identify 3 useful non-financial performance measures for each of the following business activities:
- a company selling household goods to consumers online
- a hotel
Ensure that each of the measures provided are relevant to the specific business activity, rather than appropriate for any business activity.
Birstall Ltd. makes high-tech electronic components. Customers place orders online or by phone, and then Birstall delivers the components to its customers. Birstall. has just carried out a customer account profitability analysis and has identified various customer groups that are less profitable than others. However, Birstall is reluctant to stop selling to the less profitable customer groups altogether and would prefer to increase their profitability.
How could Birstall increase the profitability of the less profitable customer groups?
You are a senior management accountant working for a petrochemicals company. There has been a fire at a chemical plant. There were no injuries but there has been some damage to assets, and there have been unconfirmed reports of serious air and ground pollution. Your manager has asked you to prepare an estimate of the cost of the damage for the board, but has given you a hint that the board is expecting the cost to be small.
What are the individual, organisational and professional influences that might affect the way that you approach this work?