Management Accounting Information for creating and managing value 8th edition Kim Langfield Smith, David Smith, Paul Andon, Ronald Hilton, Helen Thorne - Solutions

When is it more appropriate to use cost-based transfer prices rather than market-based transfer prices?
What are shared services? What benefits can result from creating shared services units?
Explain the differences between a cost centre, revenue centre, profit centre and an investment centre and explain what type of financial performance measure is suitable for the evaluation of each unit.
What benefits potentially accrue to organisations that decentralise? What negative consequences can arise from decentralisation?
Stephen Ltd is engaged in aerial spraying of vegetables. Operating costs are difficult to control, so standard costs and standard cost variances are reported. The following standards were developed for the ‘maxiprotect’ spraying service. This is one of the company’s major products.During May,
Explain how and why standard costs are used in product costing.
The ‘Real life’ titled ‘Cost pressures and variance analysis in hospitals’ in the section ‘Calculating standard cost variances’ explains how labour cost variances are used in a hospital. Search the internet to find another organisation that uses standard costing or variance analysis.
What is the meaning of the direct material price variance? What are some possible causes?
Describe how a law firm might use standard costs.
Describe the two methods for setting standards and explain why you would choose to use one approach over the other.
Provide an example that demonstrates how the three parts of a control system work to achieve control. (Do not use a thermostat, a budget or standard costing.)
South Coast University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 15 000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the
What is program budgeting? Based on the ‘Real Life’ titled ‘The benefits of program budgeting’ in the section ‘Program budgeting’, identify some of the advantages of program budgeting. How does it differ from line item budgeting?
Explain the advantages of zero-base budgeting.
Explain whether setting more-challenging budget targets will always result in improved performance.
Explain what is meant by top-down budgeting and bottom-up budgeting. Explain whether both practices can be used in the one budgeting system.
Describe the typical role of the accountant in the budgeting process.
A manager of a market research company made the following comment:"The whole budgeting process is a waste of time. I would rather my managers and finance staff focus on improving the business than spend time putting together detailed budgeting schedules." Comment on this statement.
Give three examples of how a university student club could use a budget for planning purposes.
Distinguish between operating budgets and financial budgets. Explain this within the context of formulating the annual budget for a university.
In the ‘Real Life’ titled ‘Budgeting for major events: the Olympic Games’ in the section ‘Budgeting at AVJennings Ltd’, the difficulty of budgeting for the Olympic Games is outlined. Search the internet to find information about the difficulties in managing budgets for other types of
Explain how economic trends and changing consumer preferences may impact on the sales forecasting of the Australian Ballet.
Explain why many companies believe that cash flow budgeting is important.
Draw flowcharts, similar to those in Exhibits 9.1 and 9.2 , to represent the budgeting process used by a fashion retailer.Exhibit 9.1Exhibit 9.2 Strategic planning Budget assumptions Sales budget Cost budgets Capital expenditure budget Budgeted Budgeted Cash budget balance income sheet statement
Explain how the budgeting process can be used to achieve accountability within a responsibility accounting framework.
In the ‘Real Life’ titled ‘“Beyond budgeting” and other budget adaptations’ in the section ‘Responsibility accounting’, the Beyond Budgeting movement is mentioned. Search the internet to find the Beyond Budgeting Round Table website. Do you believe organisations should abandon
Explain how a budget can be used to evaluate a manager’s performance and provide incentives.
How can a budget facilitate communication and coordination?
Explain the differences between strategic plans and budgets.
Top Plating Ltd uses electroplating processes to coat products in silver or gold, to customer specifications. Most of the company’s work is obtained through the tender process, where the company responds to an invitation to submit a competitive bid. Over the last few months Top Plating has been
Review Exhibit 7.5 , which outlines the the steps involved in the two-stage allocation process for overhead costs. Describe examples of each of these steps for a hospital where the cost object is a patient-day of hospital care (i.e. one day of care for one patient).In developing your answer, you
Prestige Auto Repair Ltd is a car repair workshop specialising in the repair of luxury European motor vehicles. The company estimates the costs of repair services by recording the cost of labour used to complete the job and the cost of the spare parts used on the repair job and allocating overheads
The CEO of MyInteriors, an interior design firm, asked her accountant about whether it should implement a service costing system. The accountant responded: ‘all our costs are period costs, which means they are expensed in the period they are incurred. So there’s no value in service costing for
The first ‘Real Life’ in the section ‘Cost drivers’, titled ‘Health teaching, training and research: studying the cost drivers’ provides an example of how Australian governments are attempting to better understand drivers of health-related costs. Why are governments in Australia and
ABC Learning was Australia’s—and one of the world’s largest providers of early childhood education services until it collapsed spectacularly in the late 2000s, when it came to light that its reported financial success was built on a number of questionable accounting practices.Required:1.
Explain how the management of Caribee (an Australian producer of backpacks, travel and outdoor products) can use a budget to assist with their planning and control activities.
Describe some planning and control activities that TVNZ (New Zealand’s national television broadcaster) management would engage in.
AirAsia is a Malaysian-based low-cost international airline. What types of management accounting information might AirAsia management use to maintain their cost leader position for passenger travel?

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