Questions and Answers of Management Cost Accounting

Q: Cam Co. manufactures webcams, devices which can provide live video and audio streams via personal computers. It has recently been suffering from
Q: (a) The year end is 31 December.(b)The comparative figure is for the same month in the previous year.(c) ROCE is an annualized figure.(d) YTD means
Q: Kolmog Hotels is a large, listed chain of branded hotels in Ostland. Its stated mission is: ?To become the No. 1 hotel chain in Ostland, building the
Q: HPR harvests, processes and roasts coffee beans. The company has two divisions: Division P is located in Country Y. It harvests and processes coffee
Q: Division A of a large divisionalized organization manufactures a single standardized product. Some of the output is sold externally while the
Q: SBA is a company that produces televisions and components for televisions. The company has two divisions, Division S and Division B.Division S
Q: Bath Co. is a company specializing in the manufacture and sale of baths. Each bath consists of a main unit plus a set of bath fittings. The company
Q: Stillwater Services (SS) is a listed water utility company providing water and sewage services to the public and businesses of a region of Teeland.
Q: Alpha Division, which is part of the Delta Group, is considering an investment opportunity to which the following estimated information relates:1. An
Q: Beach Foods (Beach) is a family-owned business which has grown strongly over its 100-year history. The objective of the business is to maximize the
Q: Bronte Ltd manufactures a single product, a laminated kitchen unit with a standard cost of £110 made up as
Q: Woodalt plc has two automated machine groups X and Y, through which timber is passed in order to produce two models of an item of sports equipment.
Q: Kattalist Ltd is a distributor of an industrial chemical in the northeast of England. The chemical is supplied in drums that have to be stored at a
Q: Pink Ltd is experiencing some slight problems concerning two stock items sold by the company.The first of these items is product Exe, which is
Q: A domestic appliance retailer with multiple outlets stocks a popular toaster known as the Autocrisp 2000, for which the following information is
Q: Maxmarine plc builds boats. Earlier this year the company accepted an order for 15 specialized ‘Crest’ boats at a fixed price of £100 000 each.
Q: Mic Co. produces microphones for mobile phones and operates a standard costing system. Before production commenced, the standard labour time per
Q: FGH Telecom (FGH) is one of the largest providers of mobile and fixed line telecommunications in Ostland. The company has recently been reviewing its
Q: Navier Aerials Co (Navier) manufactures satellite dishes for receiving satellite television signals. Navier supplies the major satellite TV companies
Q: Telecoms At Work (TAW) manufactures and markets office communications systems. During the year ended 31 May, TAW made an operating profit of $30
Q: JMM is a car manufacturer. It is a relatively new company and the directors are keen to establish a reputation for high quality. The management of
Q: PBB is a toy manufacturer and retailer. PBB sells toys to consumers through its large network of retail outlets in its home country and via the
Q: Graviton Clothing (Graviton) is a listed manufacturer of clothing with a strong reputation for producing desirable, fashionable products which can
Q: Soup operates passenger rail services in Deeland, a technologically advanced country, with high demand for fast reliable rail travel from business
Q: Pharmaceutical Technologies Co. (PT) is a developer and manufacturer of medical drugs in Beeland, It is one of the 100 largest listed companies on
Q: Squarize is a large company which, for many years, operated solely as a pay-tv broadcaster. However, five years ago, it started product bundling,
Q: Iron Chicken (IC) is a multinational business which manufactures commercial building control systems. Building control systems include heating and
Q: The GHYD company comprises two divisions: GH and YD. GH manufactures components using a specialized machine. It sells the same components both
Q: HK Coffee Machines Co. (JHK) manufactures coffee makers for use in bars and cafes. It has been successful over the last five years and has built and
Q: Landual Lamps (Landual) manufactures and delivers floor and table lamps for homes and offices in Beeland. The company sells through its website and
Q: You are the management accountant of the SSA Group that manufactures an innovative range of products to provide support for injuries to various
Q: Distinguish between return on investment, residual income and economic value added.
Q: (a) In high technology small batch manufacture, accountants sometimes take the view that standard costing cannot be applied. The move into high
Q: The Safe Soap Co makes environmentally-friendly soap using three basic ingredients. The standard cost card for one batch of soap for the month of
Q: Chaff Co. processes and sells brown rice. It buys unprocessed rice seeds and then, using a relatively simple process, removes the outer husk of the
Q: HB makes and sells a single product. The company operates a standard marginal costing system and a just-in-time purchasing and production system. No
Q: LM produces two products from different quantities of the same resources using a just-in-time (JIT) production system. The selling price and resource
Q: PTP produces two products from different combinations of the same resources. Details of the selling price and costs per unit for each product are
Q: The Cosmetic Co. is a company producing a variety of cosmetic creams and lotions.The creams and lotions are sold to a variety of retailers at a price
Q: THS produces two products from different combinations of the same resource. Details of the products are shown below: THS is preparing the
Q: Taree Limited uses linear programming to establish the optimal production plan for the production of its two products, A and U, given that it has the
Q: Explain how sensitivity analysis can be applied to the output of a linear programming model.
Q: Provide illustrations of how the information derived from linear programming can be applied to a variety of management accounting problems.
Q: What are slack variables?
Q: Explain the circumstances when it is appropriate to use the simplex method.
Q: Explain what is meant by the term ‘shadow price’.
Q: What is the marginal rate of substitution?
Q: What is the feasible production area?
Q: Explain what is meant by the term ‘objective function’.
Q: Describe the situations when it may be appropriate to use linear programming.
Q: A company has determined that the EOQ for its only raw material is 2000 units every 30 days. The company knows with certainty that a four-day lead
Q: CDE has recently won a contract to supply a component to a major car manufacturer that is about to launch a new range of vehicles. This is a great
Q: BB manufactures a range of electronic products. The supplier of component Y has informed BB that it will offer a quantity discount of 1.0 percent if
Q: The annual demand for an item of raw materials is 4000 units and the purchase price is expected to be £90 per unit. The incremental cost of
Q: N Ltd?s chief executive believes the company is holding excessive stocks and has asked for the management accountant to carry out an
Q: PR is a retailer of bicycles. The most popular children’s bicycle has an annual demand of 30 000 units. Demand is predictable and spread evenly
Q: What are the essential features of just-in-time purchasing arrangements?
Q: Describe the other factors, besides the economic order quantity, that should be taken into account when choosing an order quantity.
Q: Describe the ABC classification method. What purposes does it serve?
Q: Explain what is meant by the re-order point.
Q: What determines which holding and ordering costs should be included in the economic order quantity calculation?
Q: What are holding costs? Provide some examples.
Q: WTI is planning to launch a new component. Production volume will be limited, with only 128 components to be produced in total.WTI expects the
Q: Bokco is a manufacturing company. It has a small permanent workforce but it is also reliant on temporary workers, whom it hires on three-month
Q: Albatross Plc, the Australian subsidiary of a British packaging company, is preparing its budget for the year to 30 June 2019. In respect of fuel oil
Q: A company is estimating its costs based on past information. The total costs incurred by the company at different levels of output were as
Q: The table below shows the output, total costs and the cost inflation index for a business in two periods.Cost behaviour patterns were the same in
Q: Explain the meaning of coefficient of variation.
Q: Describe what is meant by ‘goodness of fit’.
Q: Define the steady-state production level.
Q: Describe what is meant by the learning curve effect.
Q: Why is a scatter graph a useful first step in estimating cost functions?
Q: Describe the steps that should be followed in estimating cost functions.
Q: Describe the least-squares method. Why is this method better than the high–low and scattergraph methods?
Q: Describe how the scattergraph method is used to analyse costs into their fixed and variable elements.
Q: What is the major limitation of the high–low method?
Q: Describe the high–low method.
Q: Under what circumstances can the engineering method be used to estimate costs?
Q: Explain what is meant by the term ‘cost function’.
Q: PLX Refinery Co is a large oil refinery business in Kayland. Kayland is a developing country with a large and growing oil exploration and production
Q: Environmental management is considered to be one of the most important issues facing companies today. An effective environmental costing system will
Q: Explain the meaning of intellectual capital and its implications for management accounting.
Q: Explain why management accounting practices tend not to differ across countries.
Q: Describe the meaning of the term Big Data.
Q: What factors influence the decision as to whether to adopt cloud computing?
Q: Describe enterprise resource planning systems and their impact on management accountants.
Q: Provide examples of unethical behaviour in an organization.
Q: Describe how management accounting can support shared value and sustainable development.
Q: Discuss the value of an environmental cost report.
Q: Describe input/output analysis.
Q: Why was there virtually no innovation in management accounting practices until the mid 1980s.
Q: The budget for the production, planning and development department of Obba plc, is currently prepared as part of a traditional budgetary planning and
Q: Ganymede University (GU) is one of the three largest universities in Teeland, which has eight universities in total. All of the universities are in
Q: Tench Cars (Tench) is a large national car manufacturing business. It is based in Essland, a country that has recently turned from state communism to
Q: Fit Co. specializes in the manufacture of a small range of hi-tech products for the fitness market. They are currently considering the development of
Q: Fit Co. specializes in the manufacture of a small range of hi-tech products for the fitness market. They are currently considering the development of
Q: What are the essential features of just-in-time purchasing arrangements?
Q: Explain how bench-marking can be used to manage costs and improve activity performance. What are the major features of a just-in-time manufacturing
Q: Explain what is meant by value chain analysis. Illustrate how value chain analysis can be applied.
Q: Describe what is meant by a zero defects policy.

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