Management Accounting and Management Control

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Management Accounting and Management Control

Learning outcomes

1. Appraise the changing role of management accounting in the context of organisational, technological, social and economic change.

2. Critically evaluate a range of strategic management accounting techniques and how they contribute to the success of an organisation.

Submission dates

• Submit via Moodle before 12:00 noon on Friday 27 March 2015

• Make sure that the feedback sheet and marking criteria are attached to the beginning of your document and you have entered your student number on the shaded part.

• Upload the completed spreadsheet which forms part of Section 1 as well as your written answers.

Instructions

There are two parts to this assignment. You must complete both parts.

Section 1 50 marks budgeting exercise and written report

Section 2 50 marks essay

Section 1: The excel spreadsheet allows you to enter figures into the cells coloured pink on the first worksheet (entitled Detailed budgets). The results will be calculated automatically and carried forward to the Budgeted Income Statement and Budgeted Statement of Financial Position. Do not attempt to enter anything onto any of the worksheets except Detailed Budgets. You must use the spreadsheet provided, do not prepare your own.

Section 1 (50% of marks)

Scenario:

You are the assistant to the Finance Director of Bespoke Wedding Gowns Ltd, a company which commenced to trade on 1 January 2014. It manufactures one specialist product, very expensive wedding dresses. Although every gown is different and individually designed, the cost of buying in materials and manufacture are so similar for each gown that standard costing techniques can be applied.

The major shareholder of the company, Mr Satin, is a non-executive director who is not involved in the day to day running of the company. He is very interested in any financial information presented at Board meetings, which he always attends.

The Finance Director, Mrs Silk, has given you the task of preparing the budgets for next financial year (i.e. year ended 31 December 2015). Mrs Silk has told you that the directors wish to avoid the use of an overdraft facility because of the costs involved, and the budgets should incorporate a 10% increase in profits on last year (after tax). An overall gross profit percentage of 55% for the year is required.

The following information is available:

Bespoke Wedding Gowns Ltd

Statement of financial position as at 31 December 2014

Note £000 £000

ASSETS

Non-current assets

Property, plant and equipment 1 173

Current assets

Inventories 2 18

Trade receivables 3 20

Cash at bank 50 88

Total assets 261

EQUITY AND LIABILITIES

Equity

Share Capital – 10,000 £1 ordinary shares 4 10

Retained earnings 5 151

Total equity 161

Current liabilities

 




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