Management Accounting Concepts, Cost of Goods Sold and Balanced Scorecards

1. At a recent meeting, Carolina Dos Santos was looking for your help. She has been tasked to explain one of the following Management accounting concepts to her colleague Shalini Jayashankar at work. Based on your knowledge pick only one of the topics below:

1. Variance Analysis
2. Job Order Costing

Once you select the concept, Carolina has the following questions for you. Please answer ALL the parts below: (10 marks)

a) Explain the concept in a concise manner I.e. what is this concept about? (2 mark)

b) How is this concept used in the workplaces either one you worked in or one that you can think of? Please use a company example to support your answer. (3 marks)

c) Please list and explain 2 advantages and 2 disadvantages (4 marks)

d) What do you think the future will hold for this concept? Will it still be around in 10 years time (1 mark)

2. Benedetto Fallica is a manufacturer of fashionable clothing. He hired Nadim Youkim as his CFO 5 years ago. Nadim has been happily working at the company for the past 7 years. Nadim has recently been asked by Benedetto to assess the following manufacturing records from the manufacture of the new clothing line with sales of $2,550,000

Beginning Direct Materials Inventory	$45,000
Direct Materials Purchased	$756,000
Beginning Work in Progress Inventory	$58,500
Beginning Finished Goods Inventory	$175,600
Wages paid for direct labourers	$456,000
Wages paid to factory supervisors	$234,000
P?e?iden??? Sala??	$450,000
Head office salary costs	$350,000
Wages paid for Indirect Labour	$23,450
Advertising and marketing expenses	$356,000
Electricity used in plant	$130,000
Overhead supplies used in plant	$23,500
Marketing Manager wages	$125,000
Fuel purchased for delivery trucks	$35,600
Oil for factory heating	$87,000
Depreciation on factory equipment	$86,000
Property Tax for the factory	$32,000
Rent paid for head office	$75,000
Rent paid for factory equipment	$34,000
Ending Direct Materials Inventory	$24,500
Ending Work in Progress Inventory	$102,000
Ending Finished Goods Inventory	$164,300

Required (16 marks)

a) Calculate the Cost of Goods Manufactured for the year (8 marks)

b) Calculate the Cost of Goods Sold (2 marks)

c) Calculate Operating Income (2 marks)

d) Compute the prime costs and the conversion costs (2 marks)

e) Based on your results comment on what is happening at the plant, why is the division getting the results you have calculated? (2 marks)

3. Find your name in the table below

The company assigned to you will the basis of your answer

No	Company	Headquarters	Name	Last Activity
3	Canadian National Railway	Montreal		Student

Research the company you have been assigned and create a balanced scorecard for the company. Generic balanced scorecards will not score well, you are responsible to do the research on the company to understand what they do and make a tailored balanced scorecard based on all publicly available information. (20 marks)