Reference no: EM13903997

Part a.

You are required to critically evaluate the following statement:

“Both Return on Investment (ROI) and Economic Value Added (EVA), when used as performance measures in an organisation, encourage managers to be short-term in their focus and decision making”.

If your critical evaluation tends to agree with the statement, briefly outline how the short term nature of such measures can be overcome.   

 Part b.

Many organisations use transfer pricing when transferring products between different divisions of the same organisation. You are required to discuss in detail the advantages and disadvantages of each of the following four methods:

Market based transfer prices;

Full cost transfer prices;

Cost-plus a mark-up transfer prices; and

Negotiated transfer prices.   

Guidance:

Students are encouraged to be inquisitive and innovative in their approach as to what should be included in this report. The following may be of some use in providing guidance as to what could possibly be included, although this is in no way meant to be prescriptive.

The aim of the assignment is to help you understand how key areas of strategic management accounting are applied in practice. This will include investigating topics from throughout the course linked to the above issues. Some of the principles, concepts ad models will be more relevant to your chosen approach than others and so it is likely that different students will formulate different approaches to the problems. This is normal, it is not expected that all of the course content will be used in the analysis, concentrate on that which you feel is most important.

As part of your work you might find it helpful to briefly explore the underlying theory behind the key areas of investigation that you identify before applying them to report.

With a total of 3,000 words you do not have a lot of room for long introductions so assume you are writing to a sophisticated audience who has a working knowledge of strategic management accounting and is well versed in business theory. Numerical example for illustrative purposes may be of use but should not be the main thrust of the work. If used they should be to provide evidence to support your findings from your other analysis of position and policies. If other sources are used remember to reference everything!

Please avoid relying too heavily on descriptive sections reproducing information available from course material or the set text. It is your own logical, evaluation of the situation, the interpretation of course material and presentation, with critical analysis, of a coherent strategic plan that will attract high marks.

Marking Guide

The learning outcomes for this module assessed by this piece of work are

Knowledge

1.    Critically evaluate a range of key strategic management accounting models and concepts.

2.    Critically understand of specific analytical skills in key  areas within management accounting at local and international level

3.    Critically understand of the role and limitations of management accounting theory.

Skills

4.      Applied the key management accounting concepts and methodologies in order to contribute to successful decision making in an organisation.

In light of this the assessment criteria in the grid below will be used when assessing your work.