APC309 Strategic Management Accounting

This is an individual assignment of 3,000 words. (+ or – 10%), excluding the reference list, bibliography and any appendices. The word count MUST be shown on the front cover of the assignment. Note: see quality Handbook Ref AQH-F15 Guidance for students on the penalty for exceeding the limit for assessed work.

All of the learning outcomes for the module are being assessed in this assignment. The learning outcomes are shown in the section entitled “Marking Guide”, which is further on in this document. The University’s policy on cheating collusion and plagiarism will be applied to this piece of work.

There is a maximum of 2000 machine hours available per week.

(a) Determine the production plan which will maximize the weekly profit ofGeminiplcand prepare a profit statement showing the profit your plan will yield.

(b) The marketing director of Gemini plc is concerned at the company’s inability to meet the quantity demanded by its customers. One consideration to overcome this is to increase the number of hours worked using the existing machinery by working overtime. Such overtime would be paid at a premium of 50% above normal labour rates, and variable overhead costs would be expected to increase in proportion to labour costs.

Critically evaluate this strategy and state your findings (quantitative and qualitative) as to the expected increase in contribution (if any) and discuss any issues (in particular in regard to overtime working) that could arise and would need to be resolved.

Companies have found that offering discounts to customers in return for early payment can be counterproductive in terms of the resulting adverse effect on profitability. This is when the reduction in profitability outweighs any marginal improvements gained from the benefit of a reduction in the working capital requirement.

a) Given the above critically discuss the alternative measures to offering discounts to customers that could prove more effective in reducing the working capital requirement for a company with only minimal potential reductions in profitability.

b) Critically evaluate the methods that can be adopted to manage and achieve the efficient control of inventories and gain the resulting benefits for improving cash-flow and ultimately profit in a business.

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

1) Market based transfer prices;

2) Full cost transfer prices;

3) Marginal/variable cost transfer prices;

4) Cost-plus a mark-up transfer prices; and

5) Negotiated transfer prices. Choose any two of the above five transfer pricing methods:

(a) The first chosen method 25 marks

(b) The second chosen method

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.

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

1. A Critical understanding of a range of key strategic management accounting models and concepts.

2. A Critical understanding of the strategic role of management accounting at local and international level

3. A Critical understanding of the merits and limitations of management accounting theory.  Skills

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

Assessment Criteria

Your seminar lecturer on the basis of the following generic criteria will assess the paper:

Assessment Regulations.

For further information regarding Assessment Regulations, extenuating circumstances or extensions and academic integrity, please refer to your Programme