Reference no: EM132274137

Knowledge

1. Investigate a range of key management accounting models and concepts.

2. An understanding of specific analytical skills in key areas within management accounting found in the UK and international level.

3. Compare and contrast of the role and scope of management accounting theory.

Skills

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

Learning outcomes:

The assignment covers all module learning outcomes.

Assignment brief: Answer all three questions

1. Critically investigate the benefits and limitations of variable costing compared to full costing as an aid to management decision making within manufacturing and service providers industries. Critically investigate by considering the following areas:

a) Demonstrate and discuss the underlying differences between the variable costing and full costing approach?

b) What has been the basis of theoretical criticism of both approaches?

c) Outline the practical problems that may be encountered in implementing each technique in manufacturing industry and service industry and comment on how they may be overcome?

This should be approximately 1,500 words.

2. Strategic management accounting (SMA) is concerned with providing information that will support the strategic plans and decisions made within a business: you are required to critically review this statement.

In doing so you should consider the following areas:

a) Discuss the fundamental characteristics of strategic management accounting in comparison to the traditional approach?
b) Discuss and evaluate strategic planning (5 steps) in strategic management accounting practices.

This should be approximately 1,200 words.

3. Energy Limited produce electronic parts. The fixed costs of operating the factory is $6,000 per month. Each electronic parts requires 2 units of Material A at $10 each, 3 units of Material B at $2 each and two labour hours to make. Energy Limited employs labour on a contract basis at $50 per hour. If they do not work for any reason, they are not paid. The selling price for electronic parts is $150 each.

A newly invented machine can speed up the production process and reduce the labour time from two labour hours to one labour hour for each electronic part. The extra cost for using the machine is $8,800. The labour rate is still $50 per hour.

The target profit for Energy Limited is $10,000 per month.

Required:

(a) What is the break-even point for the production of electronic parts for

- without the machine;

- with the machine

(b) What volume of activity is required to achieve the target profit for

- without the machine;

- with the machine

c) Discuss on the pros and cons for the usage of break-even analysis on profit analysis.

This should be approximately 300 words.

Your assignment should aim to provide readers with comprehensive knowledge and critical reviews of these areas covering, for example:

• Knowledge of variety of topic related to management accounting within the concept of decision making by managers.

• Knowledge of c ompare and contrast of the role and scope of management accounting theory and identifying the costs and benefit that is relevant to a particular decision within the business.

• Your own understandings of, comments on, arguments and contributions to the topic, such as key qualitative characteristics, true and fair view/fair presentation, creative accounting, etc..

• Any other important issues which you think should be addressed