问答题
The Rotech group comprises two companies, W Co and C Co.<br>W Co is a trading company with two divisions: The Design division, which designs wind turbines and supplies the designs to customers under licences and the Gearbox division, which manufactures gearboxes for the car industry.<br>C Co manufactures components for gearboxes. It sells the components globally and also supplies W Co with components for its Gearbox manufacturing division.<br>The financial results for the two companies for the year ended 31 May 2014 are as follows:<br>Required:<br>(a) Discuss the performance of C Co and each division of W Co, calculating and using the following three performance measures:<br>(i) Return on capital employed (ROCE)<br>(ii) Asset turnover<br>(iii) Operating profit margin<br>Note: There are 4·5 marks available for calculations and 5·5 marks available for discussion. (10 marks)<br>(b) C Co is currently working to full capacity. The Rotech group’s policy is that group companies and divisions must always make internal sales first before selling outside the group. Similarly, purchases must be made from within the group wherever possible. However, the group divisions and companies are allowed to negotiate their own transfer prices without interference from Head Office.<br>C Co has always charged the same price to the Gearbox division as it does to its external customers. However, after being offered a 5% lower price for similar components from an external supplier, the manager of the Gearbox division feels strongly that the transfer price is too high and should be reduced. C Co currently satisfies 60% of the external demand for its components. Its variable costs represent 40% of revenue.<br>Required: Advise, using suitable calculations, the total transfer price or prices at which the components should be supplied to the Gearbox division from C Co. (10 marks)
问答题
Budgeted production and sales volumes for X, Y and Z for the next year are 20,000 units, 16,000 units and 22,000 units respectively.<br>The budgeted direct costs of the three products are shown below:<br>In the next year, Duff Co also expects to incur indirect production costs of $1,377,400, which are analysed as follows:<br>Duff Co wants to boost sales revenue in order to increase profits but its capacity to do this is limited because of its use of cost plus pricing and the application of the standard mark-up. The finance director has suggested using activity based costing (ABC) instead of full absorption costing, since this will alter the cost of the products and may therefore enable a different price to be charged.<br>Required:<br>(a) Calculate the budgeted full production cost per unit of each product using Duff Co’s current method of absorption costing. All workings should be to two decimal places. (3 marks)<br>(b) Calculate the budgeted full production cost per unit of each product using activity based costing. All workings should be to two decimal places. (11 marks)<br>(c) Discuss the impact on the selling prices and the sales volumes OF EACH PRODUCT which a change to activity based costing would be expected to bring about. (6 marks)
问答题
Wash Co assembles and sells two types of washing machines – the Spin (S) and the Rinse (R). The company has two divisions: the assembly division, and the retail division.<br>The company’s policy is to transfer the machines from the assembly division to the retail division at full cost plus 10%. This has resulted in internal transfer prices, when S and R are being transferred to the retail division, of $220·17 and $241·69 respectively. The retail division currently sells S to the general public for $320 per machine and R for $260 per machine. Assume it incurs no other costs except for the transfer price.<br>The retail division’s manager is convinced that, if he could obtain R at a lower cost and therefore reduce the external selling price from $260 to $230 per unit, he could significantly increase sales of R, which would be beneficial to both divisions. He has questioned the fact that the overhead costs are allocated to the products on the basis of labour hours; he thinks it should be done using machine hours or even activity based costing.<br>You have obtained the following information for the last month from the assembly division:<br>Required:<br>(a) Using traditional absorption costing, calculate new transfer prices for S and R if machine hours are used as a basis for absorption rather than labour hours. Note: round all workings to 2 decimal places. (3 marks)<br>(b) Using activity based costing to allocate the overheads, recalculate the transfer prices for S and R. Note: round all workings to 2 decimal places. (8 marks)<br>(c) (i) Calculate last month’s profit for each division, showing it both for each product and in total, if activity based costing is used. (3 marks)<br>(ii) You have calculated the profits that both divisions made last month using traditional absorption costing and found them to be as follows:<br>* Note: small differences arise in figures because of rounding.<br>Required:<br>Given these two sets of figures and your calculations in (c) (i), discuss whether activity based costing should be implemented. Consider the decision from the view of each of the divisional managers. (6 marks)
问答题
Web Co is an online retailer of fashion goods and uses a range of performance indicators to measure the performance of the business. The company’s management have been increasingly concerned about the lack of sales growth over the last year and, in an attempt to resolve this, made the following changes right at the start of quarter 2:<br>Advertising: Web Co placed an advert on the webpage of a well-known online fashion magazine at a cost of $200,000. This had a direct link from the magazine’s website to Web Co’s online store.<br>Search engine: Web Co also engaged the services of a website consultant to ensure that, when certain key words are input by potential customers onto key search engines, such as Google and Yahoo, Web Co’s website is listed on the first page of results. This makes it more likely that a customer will visit a company’s website. The consultant’s fee was $20,000.<br>Website availability: During quarter 1, there were a few problems with Web Co’s website, meaning that it was not available to customers some of the time. Web Co was concerned that this was losing them sales and the IT department therefore made some changes to the website in an attempt to correct the problem.<br>The following incentives were also offered to customers:<br>Incentive 1: A free ‘Fast Track’ delivery service, guaranteeing delivery within two working days, for all continuing customers who subscribe to Web Co’s online subscription newsletter. Subscribers are thought by Web Co to become customers who place further orders.<br>Incentive 2: A $10 discount to all customers spending $100 or more at any one time.<br>The results for the last two quarters are shown below, quarter 2 being the most recent one. The results for quarter 1 reflect the period before the changes and incentives detailed above took place and are similar to the results of other quarters in the preceding year.<br>Required:<br>Assess the performance of the business in Quarter 2 in relation to the changes and incentives that the company introduced at the beginning of this quarter. State clearly where any further information might be necessary, concluding as to whether the changes and incentives have been effective.
问答题
Truffle Co makes high quality, hand-made chocolate truffles which it sells to a local retailer. All chocolates are made in batches of 16, to fit the standard boxes supplied by the retailer. The standard cost of labour for each batch is $6·00 and the standard labour time for each batch is half an hour. In November, Truffle Co had budgeted production of 24,000 batches; actual production was only 20,500 batches. 12,000 labour hours were used to complete the work and there was no idle time. All workers were paid for their actual hours worked. The actual total labour cost for November was $136,800. The production manager at Truffle Co has no input into the budgeting process.<br>At the end of October, the managing director decided to hold a meeting and offer staff the choice of either accepting a 5% pay cut or facing a certain number of redundancies. All staff subsequently agreed to accept the 5% pay cut with immediate effect.<br>At the same time, the retailer requested that the truffles be made slightly softer. This change was implemented immediately and made the chocolates more difficult to shape. When recipe changes such as these are made, it takes time before the workers become used to working with the new ingredient mix, making the process 20% slower for at least the first month of the new operation.<br>The standard costing system is only updated once a year in June and no changes are ever made to the system outside of this.<br>Required:<br>(a) Calculate the total labour rate and total labour efficiency variances for November, based on the standard cost provided above. (4 marks)<br>(b) Analyse the total labour rate and total labour efficiency variances into component parts for planning and operational variances in as much detail as the information allows. (8 marks)<br>(c) Assess the performance of the production manager for the month of November. (8 marks)
问答题
The Universal Health System (UHS) provides the entire healthcare service to residents in Illopia. The UHS is funded centrally through revenues from taxpayers. However, the government is not involved in the day-to-day running of the UHS, which is largely managed regionally by a number of self-governing trusts, such as the Sickham UHS Trust.<br>The Sickham UHS Trust runs one hospital in Sickham and, like other trusts in Illopia, receives 70% of its income largely from the UHS’ ‘payments by results’ scheme, which was established two years ago. Under this scheme, the trust receives a pre-set tariff (fee income) for each service it provides. If the Trust manages to provide any of its services at a lower cost than the pre-set tariff, it is allowed to use the surplus as it wishes. Similarly, it has to bear the cost of any deficits itself. Currently, the Trust knows that a number of its services simply cannot be provided at the tariff paid and accepts that these always lead to a deficit. Similarly, other services always seem to create a surplus. This is partly because different trusts define their services and account for overheads differently. Also, it is partly due to regional differences in costs, which are not taken into account by the scheme, which operates on the basis that ‘one tariff fits all’.<br>The remaining 30% of the Trust’s income comes from transplant and heart operations. Since these are not covered by the scheme, the payment the Trust receives is based on the actual costs it incurs in providing the operations. However, the Trust is not allowed to exceed the total budget provided for these operations in any one year.<br>Over recent years, the Trust’s board of directors has become increasingly dissatisfied with the financial performance of the Trust and has blamed it on poor costing systems, leading to an inability to control costs. As a result, the finance director and his second in command – the financial controller – have now been replaced. The board of directors has taken this decision after complaining that ‘the Trust simply cannot sustain the big deficit between income and spending’. The new financial controller comes from a manufacturing background and is a great advocate of target costing, believing that the introduction of a target costing system at the Sickham UHS Trust is the answer to all of its problems. The new financial director is unconvinced, believing target costing to be only really suitable in manufacturing companies.<br>Required:<br>(a) Explain the main steps involved in developing a target price and target cost for a product in a typical manufacturing company. (6 marks)<br>(b) Explain four key characteristics that distinguish services from manufacturing. (4 marks)<br>(c) Describe how the Sickham UHS Trust is likely, in the current circumstances, to try to derive: (i) a target cost for the services that it provides under the ‘payment by results’ scheme; and (2 marks) (ii) a target cost for transplants and heart operations. (2 marks)<br>(d) Discuss THREE of the particular difficulties that the Sickham UHS Trust may find in using target costing in its service provision. (6 marks)
问答题
It currently produces and sells 80,000 units per annum, with production of them being restricted by the short supply of labour. Each control panel includes two main components – one key pad and one display screen. At present, Robber Co manufactures both of these components in-house. However, the company is currently considering outsourcing the production of keypads and/or display screens. A newly established company based in Burgistan is keen to secure a place in the market, and has offered to supply the keypads for the equivalent of $4·10 per unit and the display screens for the equivalent of $4·30 per unit. This price has been guaranteed for two years.<br>The current total annual costs of producing the keypads and the display screens are:<br>Notes:<br>1. Materials costs for keypads are expected to increase by 5% in six months’ time; materials costs for display screens are only expected to increase by 2%, but with immediate effect.<br>2. Direct labour costs are purely variable and not expected to change over the next year.<br>3. Heat and power costs include an apportionment of the general factory overhead for heat and power as well as the costs of heat and power directly used for the production of keypads and display screens. The general apportionment included is calculated using 50% of the direct labour cost for each component and would be incurred irrespective of whether the components are manufactured in-house or not.<br>4. Machine costs are semi-variable; the variable element relates to set up costs, which are based upon the number of batches made. The keypads’ machine has fixed costs of $4,000 per annum and the display screens’ machine has fixed costs of $6,000 per annum. Whilst both components are currently made in batches of 500, this would need to change, with immediate effect, to batches of 400.<br>5. 60% of depreciation and insurance costs relate to an apportionment of the general factory depreciation and insurance costs; the remaining 40% is specific to the manufacture of keypads and display screens.<br>Required:<br>(a) Advise Robber Co whether it should continue to manufacture the keypads and display screens in-house or whether it should outsource their manufacture to the supplier in Burgistan, assuming it continues to adopt a policy to limit manufacture and sales to 80,000 control panels in the coming year. (8 marks)<br>(b) Robber Co takes 0·5 labour hours to produce a keypad and 0·75 labour hours to produce a display screen. Labour hours are restricted to 100,000 hours and labour is paid at $1 per hour. Robber Co wishes to increase its supply to 100,000 control panels (i.e. 100,000 each of keypads and display screens). Advise Robber Co as to how many units of keypads and display panels they should either manufacture and/or outsource in order to minimise their costs. (7 marks)<br>(c) Discuss the non-financial factors that Robber Co should consider when making a decision about outsourcing the manufacture of keypads and display screens. (5 marks)
套餐购买该问题答案仅对会员开放，欢迎开通会员 ¥ 19.9
0.64/天
1个月(不限次)
¥ 19.9
1000次
(不限时)
¥ 29.9
0.32/天
3个月(不限次)
¥ 59.9
0.16/天
1年(不限次)
立即支付
微信支付 
支付宝支付