MBA 641 Managerial Accounting.

Added on - 25 Sep 2019

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MBA 641 Managerial AccountingAssessment InstrumentCase Assignment # 1(20marks)Due Date: 10 June, 2016 (before 8 pm)Instructor: Professor Mohamed IbrahimThis case assignment addresses the following course learning outcome (CLOs).NoCLOQuestion4Demonstrate an advanced understanding of the process and structure ofmanagement planning and control system with respect to achievement of corporateobjectives.1-5Sultan Company wants to develop a cost formula (function) for its repairs and maintenancecosts (R&M Costs) so it can deal with its contractors in a way that helps maximizing theCompany’s return. Currently, the contractors are charging the Company a monthly flat rate of20,000 AED plus AED 20 per labor hour. Some managers argue that labor hours are the bestpredictor of repair and maintenance costs. Others are claiming that machine hours are a betterpredictor of repair and maintenance costs.The accountant suggested collecting data about repairs and maintenance costs, number oflabor hours, and number of machine hours for the last 24 months. He indicated that analyzingthese data will help judge the fairness of the fees charged by the contractors.The following table presented collected data for possible analysis:MonthMachine hourslaborhoursR&M CostsJanuary,2014290001500095500February240001600099500March2250016500890001
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