Acca Questions Lrp

Only available on StudyMode
  • Download(s) : 580
  • Published : December 27, 2010
Open Document
Text Preview
QUESTIONS

KAPLAN PUBLISHING

1

PAPER F5 : PERFORMANCE MANAGEMENT

SPECIALIST COST AND MANAGEMENT ACCOUNTING TECHNIQUES
MANAGEMENT ACCOUNTING
‘In the broadest sense, all accounting is management accounting. All financial and cost information generated by accountants is of some interest to management. But, in practice, where management accounting differs from financial accounting ...’ (from An Insight into Management Accounting by John Sizer) Required: (a) (b) Give a brief definition of management accounting. (6 marks) Give a discussion of the major differences between management and financial accounting. (20 marks) (Total: 25 marks)

2

KAPLAN PUBLISHING

LECTURER RESOURCE PACK – QUESTIONS

A COLLEGE
A college offers a range of degree courses. The college organisation structure consists of three faculties, each with a number of teaching departments. In addition, there is an administrative/management function and a central services function. The following cost information is available for the year ended 30 June 20X7: (1) Occupancy costs Total £1,500,000. Such costs are apportioned on the basis of area used which is: Square feet Faculties 7,500 Teaching departments 20,000 Administration/management 7,000 Central services 3,000 (2) Administration/management costs Direct costs: £1,775,000. Indirect costs: an apportionment of occupancy costs. Direct and indirect costs are charged to degree courses on a percentage basis. (3) Faculty costs Direct costs: £700,000. Indirect costs: an apportionment of occupancy costs and central service costs. Direct and indirect costs are charged to teaching departments. (4) Teaching departments Direct costs: £5,525,000. Indirect costs: an apportionment of occupancy costs and central service costs plus all faculty costs. Direct and indirect costs are charged to degree courses on a percentage basis. (5) Central services Direct costs: £1,000,000. Indirect costs: an apportionment of occupancy costs. Direct and indirect costs of central services have in previous years been charged to users on a percentage basis. A study has now been completed which has estimated what user areas would have paid external suppliers for the same services on an individual basis. For the year ended 30 June 20X7, the apportionment of the central services cost is to be recalculated in a manner which recognises the cost savings achieved by using the central services facilities instead of using external service companies. This is to be done by apportioning the overall savings to user areas in proportion to their share of the estimated external costs.

KAPLAN PUBLISHING

3

PAPER F5 : PERFORMANCE MANAGEMENT

The estimated external costs of service provision are as follows: £000 Faculties 240 Teaching departments 800 Degree courses: Business studies 32 Mechanical engineering 48 Catering studies 32 All other degrees 448 ____ 1,600 ____ (6) Additional data relating to the degree courses are as follows: Degree course Business Mechanical Studies Engineering Number of graduates 80 50 Apportioned costs (as % of totals) Teaching departments 3% 2.5% Administration/management 2.5% 5% Central services are to be apportioned as detailed in (5) above. The total number of graduates from the college in the year to 30 June 20X7 was 2,500. Required: (a) (b) Prepare a flow diagram which shows the apportionment of costs to user areas. No values need be shown. (5 marks) Calculate the average cost per graduate, for the year ended 30 June 20X7, for the college and for each of the degrees in business studies, mechanical engineering and catering studies, showing all relevant cost analysis. (15 marks) Suggest reasons for any differences in the average cost per graduate from one degree to another, and discuss briefly the relevance of such information to the college management. (5 marks) (Total: 25 marks)

Catering Studies 120 7% 4%

(c)

4

KAPLAN PUBLISHING

LECTURER RESOURCE PACK – QUESTIONS

ADMER
Admer owns...
tracking img