🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH
141 TUTORIAL QUESTIONS on
acc 303- MANAGEMENT ACCOUNTING
(CONTACT PATRIOT FOR SOLUTIONS ON 08038454008)
141 TUTORIAL QUESTIONS ON
ACC 303-MANAGEMENT ACCOUNTING
TOPIC 1: EVALUATE AND APPLY APPROPRIATE BUDGETING AND
STANDARD COSTING TECHNIQUES TO PLANNING AND
CONTROL IN BUSINESS AS WELL AS ESTIMATION AND
PROCESS COSTING
- Explain the concept of budgetary control and discuss any five of its benefits in an organization.
- Describe forecasting and explain its relationship to budgeting.
- Enumerate and explain the main components of a master budget.
- Write short notes on the following:
(a) Sales Budget
(b) Production Budget
(c) Direct Labour Budget
(d) Capital Expenditure Budget - What is a cash budget? Explain five of its importance.
6. Explain the concept of a flexible budget and outline five advantages of using it
- Differentiate between a fixed budget and a flexible budget.
- ABC Limited
expects to sell 5,000 units
of Product Z next month.
Opening inventory is 800 units and the company desires a closing inventory of 1,200 units.
Required:
Prepare the production budget
for the period.
- Foyegbe Nigeria Limited is operating a system of flexible budgetary control.
The budget for the year 2025 is as follows:
Level of Activity
80% 90% 100%
800Units 900Units 1,000Units
Prime Cost 16,000 18,000 20,000
Variable Selling Overhead 2,400 2,700 3,000
18,400 20,700 23,000
Selling Variable Selling Overhead:
Distribution 3,600 3,800 4,000
Other Fixed Overhead 5,000 5,000 5,000
Total Cost 27,000 29,500 32,000
You are required to present the above to the management, separating the semi-variable overhead to variable and fixed, and also include the cost of attaining 120% level of activity. Fixed costs remain unchanged.
10. Enumerate five each merits and demerits of the Standard Costing Techniques.
11. List six needs for Variance Analysis.
12. For a product, the following data are given by Foyegbe Nigeria Limited.
Standard details per unit of product:
Direct material 4kgs at N0.75 per kg
Direct labour 2hours at N1.60 per hour
Actual details for given financial period:
Output produced in units 38,000
Direct materials:
Purchases 180,000kgs for N126,000
Issued to production 154,000kgs
Direct labour 78,000hours worked for N136,500.
There was not work-in-progress at the beginning or end of the period.
As a student of Management and Business Studies, you are required to calculate the following variances:
(i) Direct Material Cost
(ii) Direct Material Price based on issue to production.
(iii) Direct Material Usage
(iv) Direct wage Cost
(v) Direct Wage Rate
(vi) Direct Labour Efficiency
13. Below is the budget of maintenance department of Jejelaye Nigeria Limited which is
currently working at 80% capacity.
N`000
Variable Costs:
Direct Labour 60,000
Direct Materials 48,000
Other direct expenses 56,000
Mixed Costs:
Indirect labour 30,000
Maintenance 24,000
Other supplies 32,000
Discretionary fixed costs:
Training cost 15,000
Committed fixed costs:
Depreciation 15,000
280,000
In addition to the above information, you are to note the following:
Indirect labour 60% fixed
Maintenance Expenses 50% fixed
Other supplies 40% variable
You are required to prepare a flexible budget at 60%, 70% and 100% capacities.
(b) Write short note on the following:
(i) Budget Committee
(ii) Zero Based Budget
(iii) Flexible Budget
14, Brits Nigeria Limited manufactures local bread, using two chemical pounds Mang and Dang. The standard materials usage and cost of unit of bread are as follows:
N
Mang 6kg @ N3 per kg 18
Dang 12kg @ N4 per kg 48
66
At particular period, 100 units of bread were produced from 700kg of Mang and 1,140kg of Dang.
Required:
Calculate the materials usage, mix and yield variances.
15. Bamishaye Nigeria Limited produces and sells Red Soft Drinks. The standard direct cost per crate is as follows:
Material:
100 litres of concentrated juice at N2.00 per litre.
200 litres of carbonated water at N2.50 per litre
10 labour hours at N9.00 per hour.
The budgeted monthly production and sales is 500 crates and the selling price is N1,000 per crate.
The following details relate to October 2025, when 510 crates of Red Soft Drinks were produced and sold:
N
Sales 506,500
Materials used:
Concentrated juice- 51,600 litres 102,500
Carbonated water- 101,500 litres 258,800
Labour:
5,000 hours cost 45,750
Required:
(a) Compute the price and usage variance for each material.
(b) Calculate the wage rate and efficiency variances.
(c) Comment briefly upon the information revealed by each of the variances you have computed.
16. Aseye Limited Operate a standard absorption costing system to control the manufacturing cost of single product. The following standards have been set.
N/Unit
Direct Materials 2kg @ N6/kg 12
Direct Labour 1 hour @ N7/hr 7
Variable overhead 1 hour@ N9/hr 9
Total production cost 28
The fixed overhead standard cost per unit is based on a budgeted monthly production of 4,000 units actual results for most recent month were:
Production 4,300 units
Direct material cost N56,000 for 9,000kg
Direct labour cost N32,800 for 4,600hrs
Variable overhead N35,000
Only 4,000 hrs were worked
No material inventory held
Required: Calculate all relevant variances
Sales (N) Purchases (N)
November 2023 960,000 -
December 2023 1,080,000 720,000
January 2024 900,000 660,000
February 2024 900,000 540,000
March 2024 960,000 660,000
Notes:
i. Analysis of record shows that debtors settle according to the following pattern: 60% within the month of sales, 25% in the month following and remaining 15% the next month.
ii. All purchases are on credit and past experience shows that 90% are settled in the month of purchase and the balance settled the month after.
iii. Wages of N180, 000 and overheads of N240, 000 (including N60, 000 depreciation) are settled monthly.
iv. Taxation of N96, 000 has to be settled in February and the company will receive insurance claim of N300, 000 in March.
You are required to prepare a cash budget for January 2024, February 2024 and March 2024.
18. (a) SUN Water Limited has a cash balance of N200,000 at the beginning of January 2025.
The sales and purchases for the first 5 months are given below:
Month Sales Purchases
Jan. 200,000 50,000
Feb. 300,000 80,000
Mar. 450,000 120,000
Apr. 600,000 170,000
May 750,000 200,000
(b) 70% of sales are realised in the month following sales and the remainder in the following 2 months.
(c) Creditors are settled one month in arrears.
(d) Overhead expenses of N40,000 is incurred on monthly basis.
(e) The company plans to purchase a new generator costing N70,000 in April 2025
(f) Wages of N50, 000 are incurred on monthly basis.
Required:
Prepare cash budget for January to April 2025.
19. Moribatise Ajepeaiye, an able Electrical Engineer, was informed that he was going to be promoted to Assistant Plant Manager.
Moribatise was elated but uneasy. In particular, his knowledge of Accounting was sparse. He had taken one course in Financial Accounting but had not been exposed to the Management Accounting that his superiors found helpful.
Moribatise planned to enrol in Management Accounting course at Southwestern University Nigeria at Ogun state as soon as possible.
Meanwhile, he asked Mosorire Moyege, an Assistant Financial Controller to state ten of the principle distinctions between Financial Accounting and Management Accounting using some concrete factors.
As an Assistant Financial Controller, prepare a written response to Moribatise Ajepeaiye.
19. To produce
one unit of Product Z requires 3 kg of
raw material.
Expected production: 6,000 units
Opening materials inventory: 2,000 kg
Desired closing inventory: 3,000 kg
Required: Prepare the direct materials purchase budget.
20. XYZ Ltd provides the following information for March:
Opening cash balance: N50,000
Cash receipts: N120,000
Cash payments: N140,000
Required:
Prepare the cash budget for March.
21. A company has the following cost structure at 60% capacity (producing 6,000 units):
Fixed cost: N200,000
Variable cost per unit: N10
Required:
Prepare the flexible budget for 80%
capacity (8,000 units).
22. Actual cost: N500,000
Budgeted cost: N450,000
Required:
Compute the variance and state whether it is favourable or unfavourable.
23. Discuss the role of responsibility accounting in effective budgetary control.
24. .(a) What do you understand by cash budget?
(b) Enumerate four benefits to be derived from the preparation of detailed cash budget.
(c) Sogbae Nigeria Limited wishes to arrange for overdraft facilities with its banker during the period of April 2025 to June 2025 when it will be manufacturing mostly for stock.
|
Month/Year |
Sales |
Purchases |
Wages |
|
|
N |
N |
N |
|
February 2025 |
180,000 |
124,000 |
12,000 |
|
March 2025 |
192,000 |
144,000 |
14,000 |
|
April 2025 |
108,000 |
243,000 |
11,000 |
|
May 2025 |
174,000 |
246,000 |
10,000 |
|
June 2025 |
126,000 |
268,000 |
15,000 |
50% of the credit sales are realized in the month following the sales and the remaining sales in the second month.
Creditors are paid in the following month of purchase.
Cash in hand on April 1, 2025 estimated at N25,000.
Required:
Prepare a cash budget for the above period indicating the extent of bank facilities the company will require at the end of each month.
25. The following information relates to Feyikogbon Nigeria Limited:
|
Month |
Wages |
Material |
Overhead |
Sales |
|
N |
N |
N |
N |
|
|
February |
6,000 |
20,000 |
10,000 |
30,000 |
|
March |
8,000 |
20,000 |
12,000 |
40,000 |
|
April |
10,000 |
25,000 |
16,000 |
60,000 |
|
May |
9,000 |
35,000 |
14,000 |
50,000 |
|
June |
12,000 |
30,000 |
18,000 |
70,000 |
|
July |
10,000 |
25,000 |
16,000 |
60,000 |
|
August |
9,000 |
25,000 |
14,000 |
50,000 |
Additional Information:
i. It is expected that cash balance on 1st May 2025 will be N22,000
ii. The wages may be assumed to pay within the month they are incurred.
iii. It is company policy to pay suppliers for material three months after receipt.
iv. Credit customers are expected to pay two months after delivery.
v. There is one month delay in paying the overhead expenses.
vi. It is intended to repay a loan of N25,000 on 30th June 2025
Required: Prepared a cash budget for the month of June 2025 to August 2025.
26. (a) Management Accounting is a branch of accounting that focuses on providing financial and operational information to managers and internal stakeholders to support decision making, planning and control within an organisations.
Outline five each distinctions and similarities between management accounting and financial accounting.
(b) Asiwaju Nigeria Limited proposed the budget for the production of 100,000 units of the commodities manufactured by the company for the costing period.
Cost Per Unit
N
Direct Material 2.52
Direct Labour 0.75
Direct Expenses 0.10
Factory Overhead ( 60% Fixed) 2.50
Admin. Overhead (80% Fixed ) 0.40
Selling and Distribution (50% Fixed) 0.20
The actual production during the costing period was 60,000 units.
Required:
Compute the Reverse Flexible Budgeted Cost Per Unit and show all workings.
27. Oluwalogbon Nigeria Limited is considering investing in a project costing N500,000. The project is expected to have a life of 5 years with a salvage value of N15,000.
An analysis of future cash flows from the project is given as follows:
|
Year |
Cash Revenue |
Cash Operating Expenses |
|
N |
N |
|
|
1 |
300,000 |
150,000 |
|
2 |
400,000 |
220,000 |
|
3 |
450,000 |
250,000 |
|
4 |
500,000 |
280,000 |
|
5 |
525,000 |
300,000 |
Assume the company`s cost of capital is 14%, you are required to calculate the following:
(a) The Pay Back Period (PBP) of the project
(b) Net Present Value (NPV)
(c) Internal Rate of Return (IRR)
Will you advise the company to embark of the project? Give reasons
28. Product Zee passes through two processes to completion. The costs of production were as follows:
|
Element of cost |
A |
B |
Total |
|
N |
N |
N |
|
|
Direct Material |
2,000 |
3,020 |
5,020 |
|
Direct Labour |
3,000 |
4,000 |
7,000 |
|
Direct Expenses |
500 |
226 |
726 |
|
Production Overhead |
3,500 |
||
1,000 units at N5 each were issued to process A.
Output of each processes were:
Process A 920
Process B 870
Normal loss per process was estimated as:
Process A 10%
Process B 5%
The loss in each process represented scrap which could be sold as:
Process A N3 per unit
Process B N5 per unit
Production overhead is absorbed by each process on the basis of 50% cost of direct labour.
The output of each process passes directly to the next process.
You are required to compute:
a. Process A Account
b. Process B Account
c. Abnormal Gain or Loss Account
29. SUN has just developed a new micro computer in the rapidly expanding home market. As a Management accountant, you are consulted as to the viability of marketing the computer.
In conjunction with the Manager of Research and Development, the Production Manager, the Buyer and the Sales Manager, you have been able to ascertain the following estimates.
|
Month |
Sales Level Unit |
Profit/(Loss) |
|
N |
||
|
January |
12,000 |
(30,000) |
|
February |
15,000 |
150,000 |
|
March |
18,000 |
330,000 |
The selling Price will be N150.
Required:
a. Calculate the variable cost and fixed cost using high and low method.
b. Cost Function
c. Calculate the break-even point in:
i. Unit
ii. Naira
30. Foyegbe Nigeria Limited has provided below its operating and maintenance costs for the last four months:
Months/year Production (Units) Cost (N)
June 2025 12,000 194,000
July 2025 4,000 220,000
August 2025 15,000 222,000
September 2025 16,000 230,000
You are required to use High and Low Method to calculate:
i. Variable cost per unit and the fixed cost for the period.
ii. Express the company`s operating and maintenance costs in linear equation form:
Y = a + bx
iii. What is the expected costs for the last three months of 2025 when the planned activity
level were:
October 2023 17,200
November 2023 25,500
December 2023 37,400
31. Aiyefele Nigeria Limited manufactures the following, with the standard labour hours.
Products:
A 20 minutes
B 45 minutes
C 30 minutes
D 25 minutes
The following information was further provides:
Product Budgeted output (units) Actual output (units)
A 45,000 48,000
B 70,000 62,000
C 53,000 58,000
D 64,000 53,000
Actual hours recorded was 100,000 direct labour hours.
Required to complete:
(i) Activity ratio (ii) Efficiency ratio (iii) Capacity ratio
32. The corporate planning manager of Motungbede Limited is in the process of preparing the 2023 plan for his organisation, just having obtained the requisite import licence.
The following data have been gathered:
|
Finished Goods: |
|
|
||||||
|
Products |
Opening Stock |
Closing Stock |
Sales |
|
||||
|
SsA |
8,000 |
6,000 |
30,000 |
|
||||
|
B |
18,000 |
10,000 |
20,000 |
|
||||
|
Labour Requirement: |
|
|
||||||
|
Products |
Hours per unit |
Rate per unit |
|
|
||||
|
A |
5 |
3.20 |
|
|
||||
|
B |
3 |
6.00 |
|
|
||||
|
Materials: |
|
|||||||
|
Usage in production |
|
|
||||||
|
Type |
Price |
|
A |
B |
||||
|
1 |
3.00 |
|
3 |
1 |
||||
|
2 |
2.00 |
|
4 |
- |
||||
|
3 |
2.50 |
|
- |
6 |
||||
|
4 |
4.00 |
|
5 |
- |
||||
|
5 |
1.00 |
|
- |
7 |
||||
Production overhead is applied at the rate of X N3 per direct labour hour.
You are required to prepare:
(a) Production budget
(b) Direct materials purchase budget
(c) Direct labour budget
(d) The cost of finished goods
(e) If a profit of 1/3 of the selling price is desired, for how much should each unit be sold?
33. (a) What do you understand by Cost-Volume-Profit Analysis Technique?
(b) List five each usefulness and assumptions of Cost-Volume-Profit Analysis
Technique.
(c) The following information has been summarised from the records of Alajeju
Limited.
Period 1 Period 2
N N
Sales 30,000 38,000
Profit 800 2,300
You are required to calculate using any assumption reasonable thought:
(i) The Profit/ Volume Ratio
(ii) The Loss when sales are 24,000
(iii) The Profit when sales are 60,000
(iv) The sales required to earn a profit of N4,000
(v) The Break-Even Point
(vi) The Margin of safety for period 1 and period 2.
34. Wise-Up Communications Limited which manufactures the “Campus” Radio Receiver commenced trading on June 29th, 2023. The company`s budget for each four-week period is as follows:
N N
Sales (20,000 receivers) 400,000
Manufacturing costs of goods sold:
Variable Cost 240,000
Fixed Overhead 60,000 (300,000)
Gross Profit 100,000
Selling and distribution cost (fixed) (20,000)
Net Profit 80,000
The following date relates to the first two trading periods:
Period 1 Period 2
Production 24,000 18,000
Sales 18,000 21,000
Required:
Prepare operating statement for each of the two periods on each of the following bases:
(a) Where fixed manufacturing overhead is absorbed into product cost at the budgeted rate and selling and distribution costs are treated as period costs.
(b) Where all fixed costs are treated as period costs. You may assume that the selling price, fixed costs and unit variable costs for the two periods are in line with budget.
35. Ojutonsoro recently convinced her friends and relatives to grant her a loan of N75,000 which she intends to invest in a farming project. She estimates that the project will yield the following returns annually for next ten consecutive years.
Year Cash flows (N)
1-3 10,000
4 15,000
5-8 5,000
9-10 13,000
If the cost of capital is 12%, calculate and show all workings:
(a) Net Present Value (NPV)
(b) Internal Rate of Return (IRR)
36. Aiyegbajeje recently convinced his friends and relatives to grant her a loan of N12,000 which she intends to invest in a farming project. She estimates that the project will yield the following returns annually for next ten consecutive years.
Year Cash flows (N)
1-6 4,500
7 3,000
8-10 2,500
If the cost of capital is 5%, calculate and show all workings:
(a) Net Present Value (NPV)
(b) Internal Rate of Return (IRR)
TOPIC 2: THE BEHAVIOURAL ASPECT OF BUDGETING AND
BUDGETARY CONTROL
37. Explain the behavioural aspects of budgeting and why they are important in organizational performance.
38. Discuss four behavioural problems that may arise from budgeting and budgetary control.
39. Explain the concept of participative budgeting and outline three advantages and two disadvantages.
40. Write short notes on:
(a) Goal congruence
(b) Budget pressure
(c) Communication in budgeting
(d) Performance evaluation
41. Using behavioural theories, explain how budgeting can be used to improve employee performance.
42. ABC Ltd sets its budget targets without consulting departmental managers. As a result, most managers complain that targets are unrealistic, leading to poor performance and tension during performance reviews.
Required:
Explain four behavioural issues arising from the above situation and provide
solutions.
43. A department manager deliberately inflates cost estimates during budget preparation to make performance appear favourable.
Required:
(a) Identify this behaviour.
(b) Explain two reasons why it occurs.
(c) Suggest two ways management can reduce this behaviour.
44. Explain how poor communication can affect the effectiveness of budgeting and budgetary control.
45. Distinguish between positive behavioural consequences and negative behavioural consequences of budgeting.
46. XYZ Manufacturing introduced a tight budget system to improve efficiency. However, within six months, employee morale dropped, conflict increased between departments, and reports were manipulated.
Required:
Evaluate the behavioural implications and suggest recommendations for
improvement.
TOPIC 3: STRATEGIC PERFORMANCE MANAGEMENT IN EVALUATING
AND IMPROVING ORGANISATIONAL PERFORMANCE
47. Define Strategic Performance Management and explain its role in evaluating organisational performance.
48. State and explain four objectives of Strategic Performance Management.
49. Discuss the Balanced Scorecard as a tool for Strategic Performance Management.
50. Explain the importance of non-financial performance measures in strategic performance management.
51. Identify and explain three challenges of implementing Strategic Performance Management.
52. A division of a company recorded an operating profit of N900,000 and capital employed of N4,500,000.
Required:
Calculate the Return on Investment (ROI) and interpret the result.
53. A company budgeted to produce 12,000 units at a standard cost of N40 per unit. Actual production was 11,000 units at an actual cost of N42 per unit.
Required:
Calculate the cost variance and comment on performance.
54. The following data relate to a company’s customer performance:
Target customer satisfaction score: 90%
Actual customer satisfaction score: 82%
Required:
Calculate the performance gap and state its implication
55, A firm reported sales revenue of N5,000,000 and operating profit of N750,000.
Required:
Calculate the profit margin and explain its significance in performance
evaluation.
56. A department has the following Balanced Scorecard results:
Financial target ROI: 25%, Actual ROI: 20%
Customer retention target: 85%, Actual: 80%
Required:
Evaluate performance using the Balanced Scorecard approach.
57. Explain how Strategic Performance Management can be used to improve organisational performance.
58. A group of companies have many divisions which are engaged in diverse and highly specialised manufacturing and trading activities. Some of the divisions which through served their divisional interest were, however, not in the overall group interest.
The Group Managing Director now intends to halt this trend and has requested you as the Financial Controller to advice on the following areas:
(a) Types of decisions that should be allowed to be made at the divisional level.
(b) The type of decisions that should be referred to the Group Office.
59. Foyegbe Nigeria Limited has three divisions operating in Lagos, Port-Harcourt and Abuja. The following data are in respect of them:
Lagos Port-Harcourt Abuja
Total Assets (N) 5m 7m 9m
Total Sales (N) 15m 18m 14m
Total Costs (N) 13.5m 16.8m 13m
Cost of Capital (%) 18 16 10
Required:
(a) Calculate the annual returns on investment.
(b) Calculate the residual income
TOPIC 4: EVALUATE AND APPLY COST REDUCTION AND CONTROL
TECHNIQUES FOR EFFICIENCY OF BUSINESS OPERATIONS
60. Define cost control and cost reduction. Distinguish between them.
61. Explain five techniques of cost control used in business operations.
62. Discuss five cost reduction techniques that can permanently improve operational efficiency.
64. XYZ Limited has the following information:
|
Particulars |
Amount (N) |
|
Standard cost of materials/unit |
50 |
|
Actual production units |
1,000 |
|
Actual cost of materials |
55,000 |
Calculate the Material Cost Variance (MCV) and explain its significance.
65. A company spends ₦20,000 per month on electricity. A cost reduction program reduces usage by 12%. Calculate the new monthly cost and savings achieved.
66. ABC Limited has the following labor data for February:
Standard labor hours/unit = 4 hours
Actual units produced = 500 units
Actual labor hours used = 2,100 hours
Standard labor rate = N400/hour
Calculate:
(a) Labor Efficiency Variance (LEV)
(b) Labor Rate Variance (LRV),
assuming actual labor cost = N900,000
67. The standard cost for 1 unit of Product X:
Direct materials = N30
Direct labor = N20
Overhead = N10
During March, 500 units were produced. Actual costs:
Materials = N16,000
Labour = N11,000
Overhead = N5,500
Calculate:
a) Total Cost Variance
b) Comment on efficiency
68. Explain how responsibility accounting supports effective cost control.
69. Describe five advantages of cost reduction techniques for business operations.
TOPIC 5: THE USE OF SPREADSHEET APPLICATIONS IN PERFORMANCE
MANAGEMENT
70. Explain the role of spreadsheet applications in performance management.
71. List and explain any five spreadsheet functions commonly used in performance management.
72. Discuss the advantages and limitations of using spreadsheet applications in performance management.
73. Explain
how spreadsheets can be used for:
(a) Budgeting and variance analysis
(b) KPI calculation and trend analysis
74. A company has the following budgeted and actual expenses:
|
Department |
Budget (N) |
Actual (N) |
|
Sales |
500,000 |
480,000 |
|
Production |
300,000 |
350,000 |
|
HR |
200,000 |
210,000 |
Required:
(a) Calculate the variance (N) for each department.
(b) Calculate the variance % for each department.
(c) Identify departments over and under budget.
75. An employee’s productivity is measured as units produced per hour worked. Data for two employees is given:
|
Employee |
Hours Worked |
Units Produced |
|
A |
40 |
200 |
|
B |
35 |
175 |
Required:
(a) Calculate productivity (Units/Hour) for each employee.
(b) Identify the most productive employee.
76. The monthly sales for a company for Q1 are:
|
Month |
Sales (N) |
|
Jan |
100,000 |
|
Feb |
120,000 |
|
Mar |
90,000 |
Required:
(a) Calculate the percentage change in sales month-to-month.
(b) Suggest a suitable chart type to visualize sales trend in Excel.
TOPIC 6: THE UNDERLYING CONCEPTS IN PERFORMANCE MANAGEMENT
77. Define performance management and explain its main objectives
78. List and explain any five underlying concepts of performance management.
79. Explain the difference between financial and non-financial performance metrics, giving examples.
80. Describe the performance management cycle.
81. A company’s sales revenue increased from N12,000,000 last year to N14,400,000 this year. Calculate the sales growth percentage.
82. A company has the following KPIs for its balanced scorecard:
Financial: 85%
Customer: 75%
Internal Processes: 70%
Learning & Growth: 80%
Calculate the overall BSC score.
83. A company has the following KPIs for its balanced scorecard:
Financial: 85%
Customer: 75%
Internal Processes: 70%
Learning & Growth: 80%
Calculate the overall BSC score.
84. An employee is rated on 5 parameters as follows (scale 1–5):
|
Parameter |
Score |
|
Quality of Work |
5 |
|
Timeliness |
4 |
|
Initiative |
3 |
|
Teamwork |
4 |
|
Attendance |
5 |
Calculate the average performance score and interpret it if: 4–5 = Excellent, 3 = Good, 2 = Fair, 1 = Poor.
85. A company invested N8,000,000 in a new project and earned a net profit of N1,600,000. Calculate the Return on Investment (ROI).
86. A manufacturing company produced 2,000 units last month. After implementing performance improvement strategies, output increased to 2,200 units. Calculate the improvement rate (%).
87. A manufacturing company produced 2,000 units last month. After implementing performance improvement strategies, output increased to 2,200 units. Calculate the improvement rate (%).
88. The industry average net profit margin is 18%, but a company achieved only 15%. Calculate the performance gap and explain its significance.
89. A company uses KPIs to monitor departmental performance:
|
Department |
KPI Target (%) |
Actual Performance (%) |
|
Sales |
90 |
85 |
|
Production |
95 |
100 |
|
Customer Service |
80 |
75 |
|
HR |
85 |
80 |
Tasks:
(a) Calculate the performance variance
for each department.
(b) Identify which department exceeded
its target.
TOPIC 7: PREPARE COST INFORMATION FOR DECISION MAKING, USING
RELEVANT COSTS
90. Define relevant costs and irrelevant costs. Explain the characteristics of relevant costs.
91. Explain three types of business decisions where relevant cost information is required.
92. Discuss the difference between relevant costs and sunk costs, giving examples.
93. XYZ Limited can make 500 units of a product in-house or purchase from a supplier.
|
Cost Component |
Per Unit (N) |
|
Direct Materials |
40 |
|
Direct Labor |
30 |
|
Variable Overhead |
10 |
|
Fixed Overhead (unavoidable) |
20 |
Supplier price = N85 per unit.
Required: Using relevant costs, decide whether XYZ Limited should make or buy the product.
94. A company receives a special order for 200 units at N90/unit.
Variable cost/unit = N60
Fixed cost/unit = N30 (already incurred)
The company has sufficient capacity.
Required: Should the company accept the order?
95. ABC Limited is considering discontinuing Product Y.
|
Particulars |
Amount (N) |
|
Revenue |
80,000 |
|
Variable costs |
50,000 |
|
Traceable fixed costs |
20,000 |
|
Allocated overhead |
10,000 |
Required: Should Product Y be discontinued?
96. DEF Limited can replace an old machine with a new one.
|
Particulars |
Old Machine (N) |
New Machine (N) |
|
Annual operating cost |
50,000 |
30,000 |
|
Purchase cost |
Already paid |
100,000 |
|
Expected life |
5 years |
5 years |
Required: Should DEF Limited replace the old machine?
97. Explain opportunity cost and how it is used in decision making.
98. State the steps needed to be observed whenever marginal costing technique is to be used in making decision.
99. Efunwontan Nigeria Limited manufactures two products B and T, the selling prices of which are N48 and N72 respectively. Standard cost data are as follows:
Product B Product T
Per Article: N N
Direct Material 10 12
Direct Wages (N4 per hour):
Department 1 8 12
Department 2 4 8
Department 3 12 -
Department 4 - 16
Variable Overhead 2 6
Per annum fixed overhead N50,000
Efunwontan Nigeria Limited operates a 40-hour week for 50 weeks each year.
Currently the employees in each department are:
Department 1 15
Department 2 8
Department 3 9
Department 4 12
You are required to state if one product only were to be made:
(a) Which product would give maximum profit and the problems that you envisage could arise.
(b) Which product should be made and the amount of profit per annum resulting assuming that product B and T use the same direct material and that there is a shortage of the material with supply limited at current price to maximum of N200,000 per annum.
(c) Which product should be made and the amount of profit per annum resulting assuming that there is a shortage of persons possessing the skills required in department 2, with the result that the number of employees there cannot be increased.
(d) How many employees with evidence do we have in Efunwontan Nigeria Limited?
TOPIC 8: EVALUATE DIVISIONAL PERFORMANCES AND DISCUSS DIFFERENT
TRANSFER PRICING TECHNIQUES
100. Define divisional performance evaluation and explain its importance in a decentralized organization.
101. Explain any three methods used to evaluate divisional performance.
102. Define transfer pricing and discuss two advantages and two disadvantages of using transfer pricing techniques.
103. Discuss the different transfer pricing techniques commonly used by organizations.
104. A company has the following data for its two divisions:
|
Division |
Operating Profit (N) |
Capital Employed (N) |
|
A |
500,000 |
2,500,000 |
|
B |
400,000 |
1,000,000 |
Required:
(a) Calculate the ROI for each division.
(b) Calculate the RI for each division if the minimum required rate of return
is 15%.
105. Division X manufactures a component at a production cost of N30/unit. The selling division wants a 20% markup. Division Y requires 500 units. Calculate:
(a)
Cost-based transfer price per unit
(b) Total transfer price for 500 units
106. The monthly sales and operating profits for a division are:
|
Month |
Sales (N) |
Operating Profit (N) |
|
Jan |
100,000 |
20,000 |
|
Feb |
120,000 |
25,000 |
|
Mar |
90,000 |
15,000 |
Required:
(a) Calculate the Profit Margin for each month
(b) Suggest a suitable chart type in Excel to visualize the trend
107. (a) What do you understand by Transfer Pricing?
(b) Transfer pricing system may be based upon the following:
i. Cost based transfer pricing ii. Market based transfer pricing
iii. Negotiated based transfer pricing iv. Arbitrary transfer pricing
As a student of Southwestern University Nigeria, State two each merits and demerits of transfer pricing enumerated above.
TOPIC 9: VARIOUS PRICING STRATEGIES AND CALCULATE PRODUCT PRICES
USING THESE STRATEGIES;
108. Define pricing strategy and explain its importance in business.
109. List and briefly explain four types of pricing strategies.
110. Explain the difference between premium pricing and penetration pricing.
111. What is psychological pricing, and why is it used?
112. A company produces a product at a cost of N600 and wants to earn a 25% profit margin. Calculate the selling price using cost-based pricing.
113. A competitor sells a similar product for N1,000. If a company wants to undercut the competitor by 10%, calculate the product price.
114. If the perceived customer value of a product is N2,000 and the company wants a 15% profit margin, calculate the selling price using value-based pricing.
115. Two products are being bundled for sale. Product A costs N500, Product B costs N300, and the company wants to offer a 10% bundle discount. Calculate the bundle price.
116. A company launches a new product with a skimming pricing strategy at N3,000. After 3 months, it lowers the price by 20%. Calculate the new price.
117. A product is priced at N1,500. Using psychological pricing, the company wants to set it just below the nearest thousand. Calculate the psychologically adjusted price.
118. A company wants to use premium pricing. If the industry standard price is N800 and the company wants a 25% premium, calculate the selling price.
119. A
hotel uses dynamic pricing. The
base price is N5,000. During peak season, it increases prices by 15%, and
during off-season, it decreases by 10%. Calculate:
(a) Peak season price
(b) Off-season price
120. A company wants to calculate the selling prices for a product using different strategies. Cost Price = N600, Competitor Price = N700, Perceived Value = N800, Markup = 20%, Premium = 15%, Bundle Discount = 10% with another product costing N400.
Tasks:
(a) Cost-based price
(b) Competitor-based price (10% below competitor)
(c) Value-based price (20% margin)
(d) Premium price (15% above competitor)
(e) Bundle price
121. Ninalowo Nigeria Limited has budget to make 50,000 units of its product time. The variable cost of a Tin is N5 and annual fixed cost are expected to be N150,000.
The Financial Director of Ninalowo Nigeria Limited has suggested that a profit margin of 25% on full cost should be charged for every product sold. The Marketing Director has challenged the wisdow of the suggestion and has produced the following estimates of sales demand for units:
Price per unit Demand (units)
9 42,000
10 38,000
11 35,000
12 32,000
13 27,000
Required:
(a) What will be the profit for the year if cost plus price were charged with a 25% profit mark up?
(b) What would be the profit for the year if a profit maximizing price were charged?
Assume in both (a) and (b) above that 50,000 units were produced regardless of sales volume.
TOPIC 10: ETHICAL PRINCIPLES RELATING TO PERFORMANCE
MANAGEMENT; AND
122. Explain the importance of ethical principles in performance management. Include at least four points in your answer.
123. List and explain five core ethical principles that should guide performance management.
124. Discuss three common ethical challenges in performance management.
125. Explain how ethical principles impact performance evaluation and employee morale.
126. A manager inflates performance scores for certain employees to hide poor results. Identify the ethical principles violated and explain the consequences.
127. An organization evaluates employees based on the following criteria:
|
Criteria |
Weight (%) |
|
Productivity |
40 |
|
Quality of Work |
30 |
|
Attendance & Punctuality |
20 |
|
Teamwork & Communication |
10 |
|
Total |
100 |
An employee receives the following ratings (1–5 scale):
|
Criteria |
Rating |
|
Productivity |
4 |
|
Quality of Work |
5 |
|
Attendance & Punctuality |
3 |
|
Teamwork & Communication |
4 |
a. Calculate the weighted performance
score.
b. If the company follows
ethical principles, explain whether the score fairly reflects performance.
128. Scenario: Two employees, A and B, are assessed using the same criteria below:
|
Criteria |
Weight (%) |
Employee A Rating |
Employee B Rating |
|
Productivity |
50 |
5 |
3 |
|
Quality of Work |
30 |
4 |
5 |
|
Attendance & Punctuality |
20 |
3 |
4 |
a. Calculate the total weighted scores
for both employees.
b. Discuss which employee
performed better ethically, considering the ratings are truthful and unbiased
129. Scenario: A manager wants to reward employees above 80% performance score. Using Question 6 results:
a. Identify if the employee qualifies
for a reward.
b. Explain an ethical approach
the manager should take when rewarding employees.
TOPIC 11: EVALUATE TOPICAL ISSUES IN PERFORMANCE MANAGEMENT
130. Define performance management and explain its key objectives in modern organizations.
131. Discuss three topical issues in performance management and their implications for organizations.
132. Explain the difference between financial and non-financial performance measures.
133. List four challenges organizations face in implementing effective performance management systems.
134. A company set a monthly revenue target of N60,000,000. The actual revenue achieved was N54,000,000. Calculate the financial performance score.
135. A sales team had a target of 250 units per month but sold only 200 units. Calculate the KPI achievement percentage.
136. An employee is expected to handle 150 tasks per month. Actual tasks completed = 120. Calculate employee efficiency.
137. A company invested N100,000,000 in a project. The net profit generated is N15,000,000. Calculate the Return on Investment (ROI).
138. A department has 50 employees. During the year, 5 employees left the organization. Calculate the employee turnover rate.
139. A production unit produced 600 units using 120 hours of labor. Calculate labour productivity (units per hour).
140. XYZ Company uses a balanced scorecard approach with the following targets for the month:
|
Metric |
Target |
Actual |
|
Revenue (N) |
80,000,000 |
70,000,000 |
|
Units Sold |
1,000 |
900 |
|
Customer Satisfaction (%) |
90 |
85 |
|
Employee Training Hours |
200 |
180 |
Required:
(a) Calculate the performance score for each metric.
(b) Provide an interpretation for the results.
141. Write short note briefly on the following cost management techniques in advanced manufacturing industries:
(a) Cost Reduction
(b) Life Cycle Costing
(c) Target Costing
(d) Benchmarking
(e) Activity Based Management
(f) Just In Time System
(g) Business Process Re-Engineering
(h) Management Audit
(i) Advanced Manufactured Technology
(j) Balanced Scorecard
🇳🇬 PATRIOT ODUNARO BABATUNDE JIMOH MAY ALLAH BLESS YOU ABUNDANTLY ALLAHUMO KUNFAYAKUN AMIN!
No comments:
Post a Comment