ACCG3030 Strategic Management Accounting Sample Examination The objective of the sample examination is to assist students in their preparation for the final examination and to allow you to practice answering the examination online via ilearn. The sample examination is similar in format to the final examination. However, questions and topics in the final examination may be different, so students should revise all topics and materials discussed in the lectures and tutorials including the solutions to the case studies i.e. you need to revise all lecture notes, tutorial discussions, and the reading material that supplements the lecture notes. Finally, please review the learning outcomes that are stated in the unit guide in relation to the final examination. Question 1 (8 marks) There are four different frameworks that can be used to analyse the strategic position of a company and/or product. Discuss each of these frameworks and describe the nature of the different strategy classifications within these frameworks. (8 marks) Question 2 (8 marks) The traditional approach to product costing has long been criticised. Discuss three alternative approaches that manufacturing companies can adopt that result in more accurate product costing. In your discussion include the advantages and disadvantages of each alternative. (8 marks) Question 3 (7 marks) (i) “Different controls for different strategies”. Explain this statement and discuss how strategic planning is dependent upon the strategy adopted. (4 marks) (ii) Use Porter’s theory of competition (low cost / product differentiation) strategies to discuss how Australia Post competes. (3 marks) Question 4 (8 marks) (i) Discuss the differences in the three levels of activity-based management. (4 marks) 2 (ii) Choose two of the four types of ABC systems and discuss the nature and purposes of the systems. (4 marks) Question 5 (10 marks) Engage Pty Ltd designs, manufactures and sells products for home entertainment including video game consoles, VCRs and DVD players. While their DVD products are still very profitable and experiencing rapid growth, the company is concerned that their DVD market will soon reach maturity and decline shortly afterwards. To address this issue, the company wishes to enter the newly developing market of read/write DVD players and believed the following will occur: The product would require 12 months of research and development, commencing in 20X0. Production would then commence in 20X1. The product would be further refined for 6 months after production commences By 20X5 sales are expected to fall as the product becomes outdated The company conducted the following life cycle costing analysis. (i) Make three recommendations as to what action Engage Pty Ltd should take to maximize profit. (4 marks)
(ii) Describe the advantages and the disadvantages of life cycle costing (6 marks) 20X0 20X1 20X2 20X3 20X4 20X5 TOTAL Sales 0 800 1400 2100 1600 900 6800 Expenses R&D 800 200 0 0 0 0 1000 Production 0 1100 950 1300 800 500 4650 Marketing 150 400 100 100 100 0 850 Sales/logistics/support 0 130 110 150 90 70 550 Profit (950) (1030) 240 550 610 330 (250) 3 Question 6 (14 marks) Company A calculates a sales mix variance, a sales volume variance and a sales price variance. Company B only calculates a sales volume variance and a sales price variance. Required: (i) What is the main difference between the products that A and B produce that indicates a sales mix variance should be calculated for A but not for B Please explain your answer. (3 marks) (ii) The calculation of the sales volume variance informs an organization that there is a difference between the actual and budgeted number of units sold. The sales volume variance can be split into two other variances which provide organizations with a greater insight into why there was a difference between actual and budgeted sales. a. List these two variances and discuss their value to managers. (4 marks) b. Discuss how the calculation of these two variances would differ for the two companies. (3 marks) (iii) Discuss four problems that can be encountered when conducting variance analysis. (4 marks) Question 7 (10 marks) The following exhibit appeared in Weirton Steel Corporation’s 1990 annual report: We are bound together in serving our stakeholders with the following objectives: For the customer: 1. Have a total quality commitment to consistently meet the product, delivery and service expectation of all customers. 2. Give customers increased value through processes that eliminate waste, minimise costs, and enhance production efficiency. For the employee 1. Reward teamwork, trust, honesty, openness, and candour. 2. Ensure a safe workplace. 3. Recognise that people are the corporation and provide them with training and information that allows for continuous improvement. 4. As employee-owners, obligate ourselves to provide a high level of performance and be accountable for our own actions. 5. Respect the dignity, rights, and contributions of others. 4 For the company 1. Continuously invest in new technology and equipment to ensure competitiveness and enhance shareholder value. 2. Manage our financial and human resources for long term profitability. For the community 1. Commit to environmental responsibility. 2. Fulfil our responsibility to enhance the quality of community life. Required: (i) How does the measurement system above differ from a balanced scorecard approach (5 marks) (ii) Explain the advantages that the balanced scorecard approach offers over traditional performance measurement systems. (5 marks)