Financial Management Assignments

The assignment consists of three questions related to management accounting. Question 1 discusses the role of feedback in a manager's work, while Question 2 compares the contribution approach with the traditional approach to preparing a profit and loss statement. Question 3 involves calculating budgeted cash collections from sales and identifying important factors to consider when planning cash collection and disbursement. The question also includes variance calculations for direct materials and labor.

ACC00146 – Management Accounting
S3, 2016
Assignment 2 (20 marks)
Question 1 (5 marks)
What function does feedback play in the work of the manager and who provides it?
Discuss. Your discussion must be supported by the relevant readings and real world
examples. You must disclose the source of your information by referencing.
Question 2 (5 marks)
What is the difference between the contribution approach to the profit and loss
statement and the traditional approach to the profit and loss statement? And why
the contribution approach is preferred by the managers. Discuss. Your discussion
must be supported by the relevant readings and real world examples. You must
disclose the source of your information by referencing.
Question 3 (5 marks)
Valcor company produces a product which has peak sales in March of each year.
The company’s budgeted sales for the first quarter of 2013 are given below:
January February March Total
Budgeted sales $50,000 $65,000 $75,000 $190,000
In order to have data available for preparing a cash budget, the company is keen to
determine the budgeted cash collections from sales. To this end, the following
information has been assembled:
Collections on sales:
60% in month of sale
30% in month following sale
8% in second month following sale
2% uncollectable
The company gives a 2 percent cash discount for payments made by customers
during the month of sale. The account receivable balance to start the year is
$22,000, of which $4,000 represents uncollected November sales and $18,000
represents uncollected December sales.

Required:
a. What were the total sales for November? For December? (1 mark)
b. Prepare a schedule showing the budgeted cash collections from sales, by
month and in total, for the three-month period. (2 marks)
c. In structuring a cash budget, what important factors must be considered
in planning cash collection from sales? In planning cash disbursement
from suppliers? Discuss. Your discussion must be supported by the
relevant readings and real world examples. You must disclose the source
of your information (2 marks)
Question 2 (5 marks)
The following data are available on the single product produced by the Bart
Company:
Direct Materials Direct Labour
Budgeted quantity per unit 3kg hours?
Budgeted price/rate $5 per kg per hour?
Budgeted cost per unit $15 ?
During the most recent period, the company paid $55,650 for direct materials, all of
which were used in the production of 3,200 units of the product, and worked 4,900
direct labour hours at a cost of $36,750. The following variance data are available:
Direct Material Efficiency variance $4,500 U
Total Direct Labour variance $1,650 F
Labour Efficiency variance $800 U
Required: (1.25 mark each)
a.Calculate the actual cost paid per kg for direct materials.
b. Calculate the materials price variance.
c.Calculate the budgeted direct labour rate per direct labour-hour.
d. Calculate the budgeted hours allowed for the production of the period and
the budgeted hours allowed per unit.
THE END