ASSIGNMENT 1 SEMESTER : MANAGEMENT ACCOUNTING ... - imm
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ASSIGNMENT 1st SEMESTER : MANAGEMENT ACCOUNTING (MA) STUDY UNITS COVERED
: SECTION B (UNITS 1-3)
DUE DATE
: 3:00 p.m. 19 MARCH 2013
TOTAL MARKS
: 100
INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, the relevant Student Support Centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes. 1. You are required to submit ONE assignment per subject. 2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%. 3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam. 4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and subject at the top of each page. 5. The IMM GSM requires assignments to be presented on plain A4 paper. You must show all working calculations, including and where appropriate multiple choice working calculations. 6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front cover of each assignment. 7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM. 8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 19 March 2013. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m. on 19 March 2013 and up to 5:00 p.m. the following day, after which no assignments will be accepted. 9. If you fail to follow these instructions carefully, the IMM Graduate School of Marketing cannot accept responsibility for the return of the assignment. It may even result in your assignment not being marked. Results will be available on the IMM GSM website, www.immgsm.ac.za, on Friday, 3 May 2013.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 2 of 8
SPECIFIC INSTRUCTIONS: The use of calculators is permitted. NB!!!! Show ALL calculations. Read all questions carefully to determine exactly what is required before attempting to answer. Number your answers clearly and set them out under appropriate headings and sub-headings.
ANSWER ALL THE QUESTIONS QUESTION 1 – Planning and control – EOQ
[15]
Gotta Grow Landscapers (GGL) is deciding on the economic order quantity (EOQ) for two brands of compost: Grow Fast and Plant Power. The following information has been made available to you:
Annual demand (sales) Relevant ordering costs per purchase order Annual relevant carrying costs per bag
Grow Fast 2 000 bags R30 R12
Plant Power 1 280 bags R35 R14
Required: 1.1
Calculate the EOQ for Grow Fast and Plant Power.
(6)
1.2
For the EOQ, calculate the number of deliveries per year for Grow Fast and Plant Power. (2)
The CEO of GGL has investigated Just-In-Time (JIT) systems in order to cut costs. As a result GGL signed a long-term contract with the Grow Fast supplier and it set up a new procedure for placing purchase orders. GGL will not have to make any incoming inspections of the bags and the supplier has guaranteed to maintain 100% product quality level in return for the signing of the long-term contract. As a result the relevant ordering costs and annual relevant carrying costs were revised as follows:
Relevant ordering costs per purchase order Annual relevant carrying costs per bag
Grow Fast R_0.50 R20.00
Required: 1.3
Considering the new figures, calculate GGL’s EOQ and number of deliveries per year for Grow Fast. (4)
1.4
Provide a brief definition of a JIT purchasing system. Go on to comment on the effect of the changes experienced as a result of GGL restructuring the relationship with its supplier. (3)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 3 of 8
QUESTION 2 – Relevant costs
[15]
As a budding marketing student you have realised that at specific points in your career as a marketing manager you are going to have to review financial information and make various decisions based on taking particular, relevant costs into account. You have been asked to assist the financial manager of X-Sell Ltd in this regard. Budgeted information for X-Sell Ltd for a particular period, analysed per product, is shown below: Product X Product Y Product Z Sales units (000’s) 225 376 190 Selling price (R per unit) 11.00 10.50 8.00 Variable costs (R per unit) 5.80 6.00 5.20 Attributable fixed costs (R000’s) 275 337 296 General fixed costs, which are apportioned to products as 21% of sales, are budgeted at R1 668 000. Required: 2.1
Calculate the total budgeted profit per product and in total for X-Sell Ltd. (A suggested format has been provided below; you may incorporate additional items/lines for workings, subtotals, etc. You are required to round your answers to the nearest whole thousand (R000).) (6) Product X (R000’s)
Product Y (R000’s)
Product Z (R000’s)
Total (R000’s)
Sales Contribution Attributable fixed cost General fixed costs Profit 2.2
Based on your calculations in 2.1 only, do you believe X-Sell should consider discontinuing one of its products? Be sure to justify your response. (2)
Assume that Product Z is discontinued, with no effect on sales of the other two products. It is assumed that variable costs and specific fixed costs associated with Product Z are avoidable, however, general fixed costs are general and unavoidable. 2.3
Considering the above decision, recalculate the budgeted total profit for XSell Ltd. (I.e., it is not necessary to separate Product X and Y.) (4)
2.4
Taking your calculations from 2.3 into account, comment on the decision of XSell to discontinue Product Z. You are required to comment on whether you agree/disagree with the decision based on ‘profits/losses’, ‘fixed costs’ and ‘contribution’ amongst any other factors you feel are relevant. (3)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 4 of 8
QUESTION 3 – Break-even analysis (changing inputs)
[30]
This question comprises two unrelated parts. You are required to answer each part separately. PART A FlyFast Travel is a travel agent that specialises in flights between Johannesburg and Dubai. It books its passengers on Empire Airlines (EA). EA charges passengers R2 700 per return ticket. EA airlines paid FlyFast Travel 10% commission on each ticket bought for each passenger. (This commission was FlyFast’s only source of revenue.) FlyFast has fixed costs of R42 000 per month which comprise rent, salaries, office insurance, etc., and its variable costs are R60 per ticket purchased for a passenger. The R60 includes a R45 per ticket delivery fee paid to DeliverIT Express. (Assume that every ticket is delivered separately and that the R45 delivery fee applies to each ticket.) Recently, EA has announced that it will revise its commission structure for travel agents. It will now pay travel agents the 10% commission per ticket limited to R150. In other words any ticket worth more than R1 500 will lead to only R150, irrespective of the ticket price. (This is what FlyFast will now receive as it sells its return tickets for R2 700 each.) Required: 3.1 3.1.1 Assuming the old 10% commission structure, calculate how many return tickets FlyFast must sell each month to break even. (5) 3.1.2 Assuming the old 10% commission structure, calculate how many return tickets FlyFast must sell each month to break even, if a target operating income of R21 000 per month is required. (4) 3.2 3.2.1 Assuming the new payment structure adopted by EA, calculate how many return tickets FlyFast must now sell each month to break even. (5) 3.2.2 Comment on the effect on FlyFast (travel agents) as a result of EA’s decision to adjust commissions. How do you think FlyFast would have reacted to the decision by EA? (Use your calculations from 3.1.1 and 3.2.1.) (4) 3.3
FlyFast is approached by PHL Express (another courier company), that offers to charge R27 per ticket delivered (as apposed to the R45 charged by DeliverIT).
3.3.1 Calculate how accepting this offer would affect the break even point calculated in 3.2.1. (I.e., assume the maximum commission of R150.) (5)
P.T.O for Part B
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 5 of 8
PART B Rebecca Pillay owns a small boutique which specialises in selling cocktail dresses. Rebecca purchases each dress for R32 from a local factory. Other variable costs she incurs amount to R10 per dress. The following additional information has been provided to you: Average selling price per dress R70 Total fixed costs R84 000 Expected sales (budgeted) 5000 dresses The contribution margin percentage has been correctly calculated at 40%. Required 3.4
Calculate the break-even point in rands. (I.e., the sales revenue required to break even.) (2)
3.5
Briefly describe what is meant by the margin of safety.
(1)
3.6
Calculate the margin of safety (as a %) for Rebecca’s Boutique.
(3)
Rebecca’s friend, studying cost accounting, gave her a break-even chart and suggested she draw up her own for analysis purposes. Rebecca was confused as to how to identify the fixed costs from the graph. Below is the example that was given to Rebecca: Example of break-even chart R
230 000 125 000
4 200 3.7
Q
What is the amount of fixed costs shown by the break-even chart above?
Assignment: 1st Semester 2013
(1)
© IMM Graduate School of Marketing MA
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QUESTION 4 – Variable costing
[25]
The following information has been provided to you by the management accountant of Bricks Ltd for the year ended February 2013.
Direct materials Direct labour - fixed - variable Variable production overhead Packaging costs Selling costs Delivery costs Depreciation - administrative - factory Insurance charges Marketing costs Bank charges
Note 1 2
3 4 5 6
R 5 310 2 350 4 484 2 360 2 006 132 435 120 600 154 1 100 110
Additional information – notes 1 No inventory of raw materials is held in stock at the end of the financial year. 2
The fixed labour is comprised of administrative salaries.
3
Packaging costs are an inherent part of the production process and are essential before the completed product is taken into inventory.
4
Selling costs shown of R132 are a fixed cost. The accountant still has to account for sales commission of 5% per unit sold for the year ended February 2013. (This is a variable sales cost.)
5
Delivery costs are a non-manufacturing, variable cost.
6
The factory depreciation is included in the budgeted fixed overhead per year of R1 800. This overhead is based on budgeted production of 120 units per year. Bricks Ltd produced 118 products for the current year.
7
110 units were sold during the period at R260 per unit.
8
There were 6 completed units in opening stock at the beginning of the period valued at R60 each.
Required: 4.1
Calculate the per unit production cost of each unit manufactured during the year assuming a variable costing system is used. (Remember to only include those variable costs directly attributable to the product/incurred in the manufacturing process of the product, namely direct labour, direct materials, variable manufacturing overheads and other variable manufacturing costs.) (4)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 7 of 8
4.2
Using the amount calculated in 4.1 (amongst others), calculate the cost of sales amount assuming a variable costing system is applied. (Show all workings clearly.) (4)
4.3
Prepare a variable costing income statement for the year ended 28 February 2013. (A suggested layout, which has been partly filled in, is provided below:) R Sales Cost of sales Other variable costs (non-manufacturing) ? ? ? Less period costs ? ? ? ? ? ? ? Profit/loss for the period
( (
) )
(
)
(15) 4.4
Identify any TWO differences if you were asked to prepare an absorption costing income statement in 4.3. (2)
QUESTION 5 – Activity based costing
[15]
The management accountant of XRT Ltd recently went on training and learnt of the possibility of accurately allocating overheads in his organisation using activity based costing (ABC). He has collected the following cost information for XRT Ltd and has asked for your assistance in assessing his current and possible future costing options. XRT produces TWO major storage units, an aluminium unit and a stainless steel unit. The two products have each utilised the following machine hours during the year. Aluminium Stainless steel
90 000 hours 130 000 hours
The total fixed overhead has been apportioned between the aluminium and stainless steel products on the basis of machine hours worked during the year.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 8 of 8
The following cost information has been extracted relating to the fixed overheads: Machine set-ups R 5 420 000 Quality assurance checks R 1 300 000 Packaging of products R 1 200 000 After doing some research, the accountant was able to establish the following relationships in terms of usage: Activity Set-ups Checks Product orders
Aluminium
Stainless steel 66 60 65
Total 154 60 130
220 120 195
Required: 5.1
Calculate the overhead rate per machine hour using the traditional approach and allocate the costs to both the aluminium and stainless steel products. (4)
5.2
Using ABC principles, allocate the fixed overhead to both products. (A suggested layout has been provided below. You are entitled to use your own format but ensure you disclose all workings.) (8)
Activity
Aluminium Workings
Total
Stainless steel Workings Total
Set-ups Checks Product orders
5.3
Give a brief definition of the key characteristics of activity based costing and comment on the differences in the case of XRT Ltd by comparing the amounts you have calculated. (3) ASSIGNMENT TOTAL: 100
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
ASSIGNMENT 1st SEMESTER : MANAGEMENT ACCOUNTING (MA) STUDY UNITS COVERED
: SECTION B (UNITS 1-3)
DUE DATE
: 3:00 p.m. 19 MARCH 2013
TOTAL MARKS
: 100
INSTRUCTIONS TO CANDIDATES FOR COMPLETING AND SUBMITTING ASSIGNMENTS The complete ‘Instructions to Students for Completing and Submitting Assignments’ must be collected from any IMM GSM office, the relevant Student Support Centre or can be downloaded from the IMM GSM website. It is essential that the complete instructions be studied prior to commencing your assignment. The following points highlight only a few important notes. 1. You are required to submit ONE assignment per subject. 2. The assignment will contribute 20% towards the final examination mark, and the other 80% will be contributed by the examination, however, the examination papers will count out of 100%. 3. Although your assignment will contribute towards your final examination mark, you do not have to earn credits for admission to the examinations; you are automatically accepted on registering for the exam. 4. Number all the pages of your assignment (e.g. page 1 of 4) and write your name and surname, student number and subject at the top of each page. 5. The IMM GSM requires assignments to be presented on plain A4 paper. You must show all working calculations, including and where appropriate multiple choice working calculations. 6. A separate assignment cover, which is provided by the IMM GSM, must be attached to the front cover of each assignment. 7. Retain a copy of each assignment before submitting, in case the original does not reach the IMM GSM. 8. The assignment due date refers to the day up to which assignments will be accepted for marking purposes. The deadline is 3:00 p.m. on 19 March 2013. Late assignments will be accepted, but 25 marks will be deducted from the maximum mark, if received after 3:00 p.m. on 19 March 2013 and up to 5:00 p.m. the following day, after which no assignments will be accepted. 9. If you fail to follow these instructions carefully, the IMM Graduate School of Marketing cannot accept responsibility for the return of the assignment. It may even result in your assignment not being marked. Results will be available on the IMM GSM website, www.immgsm.ac.za, on Friday, 3 May 2013.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 2 of 8
SPECIFIC INSTRUCTIONS: The use of calculators is permitted. NB!!!! Show ALL calculations. Read all questions carefully to determine exactly what is required before attempting to answer. Number your answers clearly and set them out under appropriate headings and sub-headings.
ANSWER ALL THE QUESTIONS QUESTION 1 – Planning and control – EOQ
[15]
Gotta Grow Landscapers (GGL) is deciding on the economic order quantity (EOQ) for two brands of compost: Grow Fast and Plant Power. The following information has been made available to you:
Annual demand (sales) Relevant ordering costs per purchase order Annual relevant carrying costs per bag
Grow Fast 2 000 bags R30 R12
Plant Power 1 280 bags R35 R14
Required: 1.1
Calculate the EOQ for Grow Fast and Plant Power.
(6)
1.2
For the EOQ, calculate the number of deliveries per year for Grow Fast and Plant Power. (2)
The CEO of GGL has investigated Just-In-Time (JIT) systems in order to cut costs. As a result GGL signed a long-term contract with the Grow Fast supplier and it set up a new procedure for placing purchase orders. GGL will not have to make any incoming inspections of the bags and the supplier has guaranteed to maintain 100% product quality level in return for the signing of the long-term contract. As a result the relevant ordering costs and annual relevant carrying costs were revised as follows:
Relevant ordering costs per purchase order Annual relevant carrying costs per bag
Grow Fast R_0.50 R20.00
Required: 1.3
Considering the new figures, calculate GGL’s EOQ and number of deliveries per year for Grow Fast. (4)
1.4
Provide a brief definition of a JIT purchasing system. Go on to comment on the effect of the changes experienced as a result of GGL restructuring the relationship with its supplier. (3)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 3 of 8
QUESTION 2 – Relevant costs
[15]
As a budding marketing student you have realised that at specific points in your career as a marketing manager you are going to have to review financial information and make various decisions based on taking particular, relevant costs into account. You have been asked to assist the financial manager of X-Sell Ltd in this regard. Budgeted information for X-Sell Ltd for a particular period, analysed per product, is shown below: Product X Product Y Product Z Sales units (000’s) 225 376 190 Selling price (R per unit) 11.00 10.50 8.00 Variable costs (R per unit) 5.80 6.00 5.20 Attributable fixed costs (R000’s) 275 337 296 General fixed costs, which are apportioned to products as 21% of sales, are budgeted at R1 668 000. Required: 2.1
Calculate the total budgeted profit per product and in total for X-Sell Ltd. (A suggested format has been provided below; you may incorporate additional items/lines for workings, subtotals, etc. You are required to round your answers to the nearest whole thousand (R000).) (6) Product X (R000’s)
Product Y (R000’s)
Product Z (R000’s)
Total (R000’s)
Sales Contribution Attributable fixed cost General fixed costs Profit 2.2
Based on your calculations in 2.1 only, do you believe X-Sell should consider discontinuing one of its products? Be sure to justify your response. (2)
Assume that Product Z is discontinued, with no effect on sales of the other two products. It is assumed that variable costs and specific fixed costs associated with Product Z are avoidable, however, general fixed costs are general and unavoidable. 2.3
Considering the above decision, recalculate the budgeted total profit for XSell Ltd. (I.e., it is not necessary to separate Product X and Y.) (4)
2.4
Taking your calculations from 2.3 into account, comment on the decision of XSell to discontinue Product Z. You are required to comment on whether you agree/disagree with the decision based on ‘profits/losses’, ‘fixed costs’ and ‘contribution’ amongst any other factors you feel are relevant. (3)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 4 of 8
QUESTION 3 – Break-even analysis (changing inputs)
[30]
This question comprises two unrelated parts. You are required to answer each part separately. PART A FlyFast Travel is a travel agent that specialises in flights between Johannesburg and Dubai. It books its passengers on Empire Airlines (EA). EA charges passengers R2 700 per return ticket. EA airlines paid FlyFast Travel 10% commission on each ticket bought for each passenger. (This commission was FlyFast’s only source of revenue.) FlyFast has fixed costs of R42 000 per month which comprise rent, salaries, office insurance, etc., and its variable costs are R60 per ticket purchased for a passenger. The R60 includes a R45 per ticket delivery fee paid to DeliverIT Express. (Assume that every ticket is delivered separately and that the R45 delivery fee applies to each ticket.) Recently, EA has announced that it will revise its commission structure for travel agents. It will now pay travel agents the 10% commission per ticket limited to R150. In other words any ticket worth more than R1 500 will lead to only R150, irrespective of the ticket price. (This is what FlyFast will now receive as it sells its return tickets for R2 700 each.) Required: 3.1 3.1.1 Assuming the old 10% commission structure, calculate how many return tickets FlyFast must sell each month to break even. (5) 3.1.2 Assuming the old 10% commission structure, calculate how many return tickets FlyFast must sell each month to break even, if a target operating income of R21 000 per month is required. (4) 3.2 3.2.1 Assuming the new payment structure adopted by EA, calculate how many return tickets FlyFast must now sell each month to break even. (5) 3.2.2 Comment on the effect on FlyFast (travel agents) as a result of EA’s decision to adjust commissions. How do you think FlyFast would have reacted to the decision by EA? (Use your calculations from 3.1.1 and 3.2.1.) (4) 3.3
FlyFast is approached by PHL Express (another courier company), that offers to charge R27 per ticket delivered (as apposed to the R45 charged by DeliverIT).
3.3.1 Calculate how accepting this offer would affect the break even point calculated in 3.2.1. (I.e., assume the maximum commission of R150.) (5)
P.T.O for Part B
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 5 of 8
PART B Rebecca Pillay owns a small boutique which specialises in selling cocktail dresses. Rebecca purchases each dress for R32 from a local factory. Other variable costs she incurs amount to R10 per dress. The following additional information has been provided to you: Average selling price per dress R70 Total fixed costs R84 000 Expected sales (budgeted) 5000 dresses The contribution margin percentage has been correctly calculated at 40%. Required 3.4
Calculate the break-even point in rands. (I.e., the sales revenue required to break even.) (2)
3.5
Briefly describe what is meant by the margin of safety.
(1)
3.6
Calculate the margin of safety (as a %) for Rebecca’s Boutique.
(3)
Rebecca’s friend, studying cost accounting, gave her a break-even chart and suggested she draw up her own for analysis purposes. Rebecca was confused as to how to identify the fixed costs from the graph. Below is the example that was given to Rebecca: Example of break-even chart R
230 000 125 000
4 200 3.7
Q
What is the amount of fixed costs shown by the break-even chart above?
Assignment: 1st Semester 2013
(1)
© IMM Graduate School of Marketing MA
Page 6 of 8
QUESTION 4 – Variable costing
[25]
The following information has been provided to you by the management accountant of Bricks Ltd for the year ended February 2013.
Direct materials Direct labour - fixed - variable Variable production overhead Packaging costs Selling costs Delivery costs Depreciation - administrative - factory Insurance charges Marketing costs Bank charges
Note 1 2
3 4 5 6
R 5 310 2 350 4 484 2 360 2 006 132 435 120 600 154 1 100 110
Additional information – notes 1 No inventory of raw materials is held in stock at the end of the financial year. 2
The fixed labour is comprised of administrative salaries.
3
Packaging costs are an inherent part of the production process and are essential before the completed product is taken into inventory.
4
Selling costs shown of R132 are a fixed cost. The accountant still has to account for sales commission of 5% per unit sold for the year ended February 2013. (This is a variable sales cost.)
5
Delivery costs are a non-manufacturing, variable cost.
6
The factory depreciation is included in the budgeted fixed overhead per year of R1 800. This overhead is based on budgeted production of 120 units per year. Bricks Ltd produced 118 products for the current year.
7
110 units were sold during the period at R260 per unit.
8
There were 6 completed units in opening stock at the beginning of the period valued at R60 each.
Required: 4.1
Calculate the per unit production cost of each unit manufactured during the year assuming a variable costing system is used. (Remember to only include those variable costs directly attributable to the product/incurred in the manufacturing process of the product, namely direct labour, direct materials, variable manufacturing overheads and other variable manufacturing costs.) (4)
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 7 of 8
4.2
Using the amount calculated in 4.1 (amongst others), calculate the cost of sales amount assuming a variable costing system is applied. (Show all workings clearly.) (4)
4.3
Prepare a variable costing income statement for the year ended 28 February 2013. (A suggested layout, which has been partly filled in, is provided below:) R Sales Cost of sales Other variable costs (non-manufacturing) ? ? ? Less period costs ? ? ? ? ? ? ? Profit/loss for the period
( (
) )
(
)
(15) 4.4
Identify any TWO differences if you were asked to prepare an absorption costing income statement in 4.3. (2)
QUESTION 5 – Activity based costing
[15]
The management accountant of XRT Ltd recently went on training and learnt of the possibility of accurately allocating overheads in his organisation using activity based costing (ABC). He has collected the following cost information for XRT Ltd and has asked for your assistance in assessing his current and possible future costing options. XRT produces TWO major storage units, an aluminium unit and a stainless steel unit. The two products have each utilised the following machine hours during the year. Aluminium Stainless steel
90 000 hours 130 000 hours
The total fixed overhead has been apportioned between the aluminium and stainless steel products on the basis of machine hours worked during the year.
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
Page 8 of 8
The following cost information has been extracted relating to the fixed overheads: Machine set-ups R 5 420 000 Quality assurance checks R 1 300 000 Packaging of products R 1 200 000 After doing some research, the accountant was able to establish the following relationships in terms of usage: Activity Set-ups Checks Product orders
Aluminium
Stainless steel 66 60 65
Total 154 60 130
220 120 195
Required: 5.1
Calculate the overhead rate per machine hour using the traditional approach and allocate the costs to both the aluminium and stainless steel products. (4)
5.2
Using ABC principles, allocate the fixed overhead to both products. (A suggested layout has been provided below. You are entitled to use your own format but ensure you disclose all workings.) (8)
Activity
Aluminium Workings
Total
Stainless steel Workings Total
Set-ups Checks Product orders
5.3
Give a brief definition of the key characteristics of activity based costing and comment on the differences in the case of XRT Ltd by comparing the amounts you have calculated. (3) ASSIGNMENT TOTAL: 100
Assignment: 1st Semester 2013
© IMM Graduate School of Marketing MA
