Distinguish Planning Decisions From Control Decisions: Accounting And Financial Management Assignment
Question 1
Management Accounting
Distinguish planning decisions from control decisions.
Where does the management accounting function fit into an organization’s structure?
Master Budget
What is the master budget and why is it useful?
“The sales forecast is the cornerstone for budgeting.” Why?
What is budgetary slack? What are the pros and cons of building slack into the budget from the point of view of an employee?
Define rolling budgets. Give an example.
Question 2
Flexible Budgets and Variances
The following information relates to ABC Table Ltd, a manufacturer of tables for colleges for 2018:
Budget
Sales 44,000 units at €55 per table
Variable cost €35 per unit
Fixed costs €660,000
Actual
Sales 46,000 units at €57 each
Variable costs €33 per unit
Fixed cost €627,000
Net Profit €477,000
Required:
Prepare a Budgetary Control Statement, in a marginal costing format, showing the original fixed budget, the flexible budget, the actual results, and the variances.
The following information relates to XYZ Ltd, a company producing chairs for colleges.
Why should a company calculate price and efficiency variances?
How do managers use variances?
How might a manager gain insight into the causes of a flexible-budget variance for direct materials?
The following information relates to XYZ Ltd, a company producing chairs for colleges.
Required:
Calculate the following sub-variances
Material price variance
Material usage/efficiency variance
Labour rate/price variance
Labour efficiency variance
Question 3
Interpretation of Financial Statement/Performance Appraisal
The following are the summarized financial statement of the Kimberly Hotel Group for the years ended 31 December 2018 and 2019.
Required:
Prepare 15 key financial ratios under the headings profitability, liquidity, management use of assets/efficiency, capital structure, and operating for both years. There should be at least two ratios under each heading.
Discuss some factors that may have contributed to the performance between 2018 and 2019 for each ratio.
Write a report assessing the financial performance of the Kimberly Hotel Group under the headings identified in part (a) of the question