Reference no: EM132682665 , Length: 2260 Words

03100 Management Accounting - University of Birmingham

Question 1:
a) Describe briefly what a budget is and critically discuss the main reasons for producing budgets.

b) Describe what ‘bottom up' and ‘top down' budget approach means. Critically discuss the main advantages and limitations with each approach and how the limitations can be reduced.

c) Incremental budget, Zero-based budget, Flexible budget, Rolling budget and Activity Based budget are different budget systems. Choose two and briefly describe its main features, and critically discuss its strengths and limitations.

Question 2:

Cost-Volume-Profit (CVP) analysis is among the most basic tools available to mangers. It is said to be quite simple and simplistic.

a) Draw a simple CVP graph and point the following categories: fixed costs, variable cost, total costs, sales/revenue and ‘break-even' point.

b) Briefly explain the meaning of the term ‘break even' point and discuss the different techniques that may be used to determine the ‘break-even' point.

c) Describe the underlying assumptions of CVP analysis and provide an argument if CVP analysis is an adequate tool to make decisions.

Or

Question 3
"Balanced Scorecards need to be dynamic and flexible, able to accommodate the changes in organisational objectives, structure and markets that can be expected to occur during their lifetime." Cobbold (2001)

a) Define the Balanced Scorecard as developed by Kaplan and Norton (1992) and describe its four main aspects.

b) Critically discuss how the four aspects of a Balanced Scorecard may combine to promote flexibility and dynamism in either a private-sector or a public-sector organization. Indicate in your answer which type of BSC measures are, in your view, most important in promoting flexibility and dynamism.

Question 4
a) Discuss the key features of activity-based costing and how it differs from traditional costing systems in its approach to indirect and overhead costs. What in your view are the major impacts of ABC in terms of production efficiency?

b) Japanese companies have developed target costing as a response to the problem of controlling and reducing costs over the product life cycle. Describe the key features of Target Costing, and evaluate how far it may help an organisation to achieve strategic advantage over competitors who do not use the approach.