CONTABILIDADE DE GESTÃO/MANAGEMENT ACCOUNTING Spring semester 2012/2013 Mid-term test SURNAME AND NAME: NUMBER:

Transcription

1 CONTABILIDADE DE GESTÃO/MANAGEMENT ACCOUNTING Spring semester 2012/2013 Mid-term test DATE: May 18, 2013 LENGTH: 1h 20 m SURNAME AND NAME: NUMBER: Procedures: The test is composed of Parts A and B; The questions must be answered in the following stapled sheets, which must not be unstapled; You can use the back of each sheet for rough draft, except in the last one. For each wrong answer to multiple choice questions, 20% of the corresponding mark will be deducted with a minimum of zero for the overall mark of QII. PART A QUESTION I a) (2,5 m) Of the three financial measures you learnt in this course to evaluate divisional performance, which is the most: 1. Widely used by the companies? 2. Recommended to be used by the companies? Why? Don t forget to define each financial measure that has to be mentioned in order to answer this question. Página 1 de 8

2 b) (2,5 m) Which responsibility centre represents the highest degree of authority in a company? Why? Página 2 de 8

3 QUESTION II Multiple choice Note: if more than one alternative per question is chosen or your answer/handwriting is unclear, it will not be marked. Also, only the letter chosen as final answer will be marked. 1) (2,5m) If a company sells more than one product the sales margin volume variance is equal to: a. Sales price variance + sales margin quantity variance b. Sales price variance + sales margin quantity variance + sales margin mix variance c. Market share margin variance + sales margin mix variance d. Sales margin quantity variance + sales margin mix variance e. None of the above Answer: 2) (2,5m) The Yellow Company plans to sell units of product A during the month of July knowing that inventory of such product at the beginning of July amounts to units. The company plans to have units on hand at the end of the month. Each unit requires 4 kgs of raw materials. If raw material inventory on July 1 is kgs and desired ending inventory is kgs, how many kgs of raw materials must be purchased during July? a b c d Answer: Página 3 de 8

4 PART B QUESTION III (5 marks) Danoly is a company that manufactures 3 products: Milk, Natural Yoghurt and Fruit Yoghurt. The company has 3 divisions which, from now on, are considered all profit centers. Each produces one of the 3 products and, until now, Danoly has been using the market selling price as transfer price, and requiring each division to satisfy, firstly, the internal demand before it can satisfy the demand from the external market. Two units of milk are needed to produce one unit of natural yoghurt and one unit of natural yoghurt is needed to produce one unit of fruit yoghurt. The expected Profit & Loss Account for next year is as follow: Table A Other information: Table B Milk Natural yoghurt Fruit yoghurt Sales Direct materials Fat milk Milk Natural yoghurt Fruit Other variable costs Contribution margin Fixed costs EBT Milk Natural yoghurt Fruit yoghurt External Demand (units) Internal Demand (units) Installed capacity (units) Used capacity 95,24% 100% 50% Market selling price per unit Number of machine hours used per unit produced However, due to the damage of a machine (used to produce all 3 products), the capacity of production will have to be reduced to Machine hours. 1. Which product mix will maximize the profit for the company as a whole? What will be the expected contribution margin? Página 4 de 8

5 Imagine now that the company can repair/fix the machine on time to the production for next year, and that the installed capacity available is the one in Table B. The Natural yoghurt division receives a special order from a client that is willing to pay for it. This order requires units of milk and of other variable costs. If this special order is accepted, the production of natural yoghurt will have to be reduced in units. 2. Do you think that the Natural yoghurt division must accept this special order? Show your supporting calculations. Página 5 de 8

6 If the Fruit Yoghurt division has to pay 2 of transport cost per unit purchased when it buys the natural yoghurt from external suppliers, 3. Present a proposal for the range of transfer price that is good for both divisions. Don t forget that all divisions are profit centers. Show your supporting calculations. Página 6 de 8

7 QUESTION IV (5 marks) The CFO of SOFT Company prepared a report of the variance analysis of last year, but as a fire destroyed most of the information prepared, the only available was the following: 1. Part of the variance analysis report (in Euros): 2. Other information: P&L Actual Flexible Budget Static Budget Sales?? Variable costs: - Materials - Conversion costs ?? Contribution margin?? Fixed costs?? Profit?? Actual Expected Sales in units Purchasing price of materials per unit 5? Price of conversion costs per unit 4? The expected quantities use of materials per unit of product? 3 Knowing that the conversion costs efficiency variance is 0, calculate: a) The sales margin volume variance and give one possible reason for this variance. Página 7 de 8

8 b) The direct materials usage variance and give one possible reason for this variance. c) The expected units of variable conversion costs in the static budget. (If necessary continue your answer on the back of this sheet) Página 8 de 8