FIN704 - Managerial Accounting

Re: FIN704 GDB 1 Solution and discussion Total Marks 5 Starting Date Tuesday, June 02, 2020 Closing Date Friday, June 05, 2020 Status Open Question Title Types of Budget Question Description GDB (FIN704) Managerial Accounting Topic for Discussion: “Types of Budget” Learning Objectives: To assess the knowledge related to the budget and its different types To understand the importance of budgeting process for effective planning and control To know the significance of budgeting as per nature of the business and its industry To assess the importance of budget in decision making Scenario: Xee & Co. is one of the manufacturing concerns in local electronics market. Recently, it has launched screens for smartphones, car navigators and other consumer electronics. The company belongs to an industry which is notable for its fierce competition, short product life cycle, price pressure from online stores and the need for continuous innovation. Currently, the company is using the incremental annual budgeting technique for planning and controlling which sets the targets for both sales and production departments. The manager accounts of the company recently attended the conference “Budgeting Requirements of High-Tech Industry” and realized that the incremental annual budgeting technique used by Xee & Co. is not suitable for such a dynamic industry in which company works. He urged that the budgeting technique needs to be adjusted quarterly or even monthly for better planning and controlling to form realistic targets with prediction of market changes. Required: What type of budgeting technique would you recommend to Xee & Co which will support the argument of manager accounts concluded by him after attending the conference? Important Instructions: Carefully review your GDB before submission as it cannot be replaced once it is submitted. Your discussion must be based on logical aspects of the topic requirements with proper justification. There is a limit of 200 Words for discussion. Use the font style “Times New Roman” and font size “12”. Your answer should be relevant to the topic i.e. clear and concise. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed. Obnoxious or ignoble answer should be strictly avoided. You cannot participate in the discussion after the due date via email. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over. For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VULMS. As you know that load shedding problem is also prevailing in our country. Keeping in view the fact, you are advised to submit your GDB well before time without waiting for the due date. For your convenience; you have been communicated so that you can manage your activities, therefore no excuse will be entertained after due date of GDB.

Re: FIN704 GDB 1 Solution and discussion Scenario: Liquidity and profitability are the two measures which always concerned with the stakeholders of a businesses while managing working capital. Profitability, as performance measure, is preferable by the management and owners. But lenders, on the other hand, look for liquidity of the business with more cash in hand position. You are working as chief control accounts in Xee Ltd. Top management of the company decided to hold more cash for short term need of operating expenses and to attract lenders. However, you as controller of accounts disagreed with the decision of top management and tried to convince that company should keep minimum cash balance when there is lucrative return offered by the market. Top management did not completely convince with your argument and asked for two alternatives cash management policies with relevant justification which may trade off both investment opportunity and minimum acceptable cash position to attract lenders.

Semester Fall 2019 Managerial Accounting (FIN704) Assignment Due Date: 20th November,2019 Case: Total Marks: 20 You are working as cost consultant on costing matters of the business of Mr.Xee who is a manufacturer of automobile spare parts. Mr.Xee is a main supplier of three renowned car manufacturing companies in the country. Currently, he is manufacturing different sub-parts and accessories related to mid-range cars in his factory. One of such parts is the “Cam Shaft” that constitutes 1/6 of his annual production. This part is sold to the car manufacturers at a unit price of Rs. 36,000. For the recent quarter, the unit production cost of “Cam Shaft” is here as under: Description Raw Material Milling Grinding Chrome Coating Polishing Packaging Rs. 14,000 4,000 6,500 3,000 1500 200 Apart from production cost, he is also paying Rs. 20 million and Rs. 28 million as wages and factory rent respectively. Further, Rs. 6 million has been traced as other fixed cost. Required: • Compute factory’s Break Even Point (BEP) in terms of total sales and the number of units to be sold. (5 marks) • Would there be any change in BEP if the ratio between variable cost and sales increases assuming no change in the fixed cost. Support your answer with logical reasoning. (5 marks) • Currently, at its full capacity, the factory is producing and selling 160,000 units of Cam Shaft annually. Mr.Xee is convinced to reduce the selling price by 10% which will result a 25% increase in the sales units. Would this decision be a favorable or unfavorable? Justify facts with working of current and proposed net operating income for the product. (5+5 = 10 marks) IMPORTANT: Semester Fall 2019 Managerial Accounting (FIN704) Assignment 24 hours extra / grace period after the due date is usually available to overcome uploading difficulties. This extra time should only be used to meet the emergencies and above-mentioned due date should always be treated as final to avoid any inconvenience. IMPORTANT INSTRUCTIONS/ SOLUTION GUIDELINES/ SPECIAL INSTRUCTIONS BE NEAT IN YOUR PRESENTATION OTHER IMPORTANT INSTRUCTIONS: DEADLINE: • Make sure to upload the solution file before the due date on VULMS. • Any submission made via email after the due date will not be accepted. FORMATTING GUIDELINES: • Use the font style “Times New Roman” or “Arial” and font size “12”. • It is advised to compose your document in MS-Word format. • You may also compose your assignment in Open Office format. • Use black and blue font colors only. REFERENCING GUIDELINES: Use APA style for referencing and citation. For guidance search “APA reference style” in Google and read various websites containing information for better understanding or visit http://linguistics.byu.edu/faculty/henrichsenl/apa/APA01.html RULES FOR MARKING: Please note that your assignment will not be graded or graded as Zero (0), if: • It is submitted after the due date. • The file you uploaded does not open or is corrupt. Semester Fall 2019 Managerial Accounting (FIN704) Assignment • It is in any format other than MS-Word or Open Office; e.g. Excel, PowerPoint, PDF etc. • It is cheated or copied from other students, internet, books, journals etc. Note related to load shedding: Please be proactive Dear Students As you know that Pre Mid-Term semester activities have been started and load shedding problem is also prevailing in our country. Keeping in view the fact, you all are advised to post your activities as early as possible without waiting for the due date. For your convenience; activity schedule has already been uploaded on VULMS for the current semester to manage the time.

Total Marks 10 Starting Date Monday, January 13, 2020 Closing Date Friday, January 17, 2020 Status Open Question Title EVA (Economic Value Added) Question Description GDB (FIN704) Managerial Accounting Topic for Discussion: “EVA (Economic Value Added)” Learning Objectives: To assess the knowledge related to the EVA To understand the importance of EVA for management accountant/consultant To know the significance of EVA in investment decisions To assess investment opportunity via EVA and make decision Scenario: ABT Ltd. – located in SDIE industrial area, is one of the renowned pharmaceutical companies in the country. The company is progressing by leaps and bounds. It has a wide range of medical healthcare product line. Currently, it is planning to add a cough syrup with the brand name of “ABT Cough Relief” in its product line and hopeful this project would create value addition in the net worth of its shareholders. The project requires net investment on training and R&D as Rs. 7.50 million and Rs. 23 million respectively, whereas Rs. 310 million and Rs. 22.70 million are estimated for fixed assets and cost of trademark. The project is expected to generate net operating profit after tax (NOPAT) as Rs. 60 million which is 9.92% of the sales. Further, weighted average cost of capital is 11.20%. Required: Being a student of Managerial Accounting, you are required to calculate net investment, EVA (Economic Value Added) and comment with four valid reasons (not more than 50 words) why or why not ABT Ltd. invest in this project? Important Instructions: Carefully review your GDB before submission as it cannot be replaced once it is submitted. Your discussion must be based on logical aspects of the topic requirements with proper justification. Use the font style “Times New Roman” and font size “12”. Your answer should be relevant to the topic i.e. clear and concise. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed. Obnoxious or ignoble answer should be strictly avoided. You cannot participate in the discussion after the due date via email. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over. For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VULMS. As you know that load shedding problem is also prevailing in our country. Keeping in view the fact, you are advised to submit your GDB well before time without waiting for the due date. For your convenience; you have been communicated so that you can manage your activities, therefore no excuse will be entertained after due date of GDB.

Total Marks 10 Starting Date Friday, August 02, 2019 Closing Date Wednesday, August 07, 2019 Status Open Question Title Receivables Management Question Description GDB-II (FIN704) Managerial Accounting Topic for Discussion: “Receivables Management” Learning Objectives: To assess the knowledge related to accounts receivables management To understand the process of receivables management To understand the importance of credit policies for customers To know the importance of receivables management software for the business To understand how effectively receivables can be managed through automation Scenario: Does every customer pay in time for his outstanding invoices? Has the already requested payment amount finally arrived? This is where receivables management play its role for the companies. It is in fact, one of the most concerned areas where companies strive to keep cash collection cycle as quick as they can to maintain liquidity. However, in case of bigger customer base, it becomes more difficult for the companies to keep track their receivables. There are several researches related to working capital and receivables management already done in the past. Most of them came up by saying that it is more like a technological phenomenon where automation of the system has significant impact for effective management of receivables. Therefore, incorporation of a good receivables management software in existing system of the companies is a key to survive where technology is rapidly changing and reshaping the business environment. Required: Being the student of Managerial Accounting, you are supposed to comment on the importance of receivables management software for the companies and how it can bring automation in the system? Important Instructions: Carefully review your GDB before submission as it cannot be replaced once it is submitted. Your discussion must be based on logical aspects of the topic requirements with proper justification. Use the font style “Times New Roman” and font size “12”. Your answer should be relevant to the topic i.e. clear and concise. Word limit for GDB is 250. Do not copy or exchange your answer with other students. Two identical / copied comments will be marked Zero (0) and may damage your grade in the course. Books, websites and other reading material may be consulted before posting your comments; but copying or reproducing the text from books, websites and other reading materials is strictly prohibited. Such comments will be marked as Zero (0) even if you provide references. You should post your answer on the Graded Discussion Board (GDB), not on the Moderated Discussion Board (MDB). Both will run parallel to each other during the time specified above. Therefore, due care will be needed. Obnoxious or ignoble answer should be strictly avoided. You cannot participate in the discussion after the due date via email. Questions / queries related to the content of the GDB, which may be posted by the students on MDB or via e-mail, will not be replied till the due date of GDB is over. For planning your semester activities in an organized manner, you are advised to view schedule of upcoming Assignments, Quizzes and GDBs in the overview tab of the course website on VULMS.