2011_wk13_review tutorial_ student

2011_wk13_review tutorial_ student - `THE UNIVERSITY OF NEW...

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1 `THE UNIVERSITY OF NEW SOUTH WALES SCHOOL OF ACCOUNTING ACCT2522 Management Accounting 1 Session 1, 2011 Tutorial Week 13 – Review Tutorial Overall Theme This week we will be going through some past year examination questions. Some of the questions have been modified to cover more topics. The purpose of this review tutorial is not only to go through some of the concepts that have been taught over the past 11 weeks, but also to provide some guidance on answering calculative and discursive questions. Therefore, students must be prepared to present their answers in class, and their answers would be discussed and “graded”. Tutorial Questions (must be prepared prior to the tutorial) Practice Question 1 [20 marks] Rivendell Company Ltd manufactures boutique Bonsai equipment for Bonsai clubs throughout Australia. The company uses a comprehensive budgeting process and compares actual results to budgeted amounts on a monthly basis. Each month, Rivendell’s accounting department prepares a variance analysis and distributes the report to all responsible parties. Gillinin Elendil, the manager of the Bonsai pots manufacturing department, is upset about the results for May. Gillinin, has implemented several cost-cutting measures in the manufacturing area and is discouraged by the unfavourable budget variances reported in the May budget report (see below): Budget ($) Actual ($) Variance ($) Direct Costs Direct Material used 17,600 17,760 160 U Direct Labour Cost 32,000 36,960 4,960 U Total 96,000 105,160 9,160 U As a result of these unfavourable results, Denethor Darth (the president of Rivendell Company Ltd) called Gillinin in and with a thunderous look on his face, Denethor yelled at Gillinin, “You have to be totally incompetent to let these variances get so out of hand!” Denethor then ordered Gillinin to conduct further investigations into the budget and report back to him by tomorrow. In his investigation, Gillinin discovered the following information relating to the May budget: Direct Material: Bonsai pots’ are primarily made out of high quality clay. Each pot is expected to require 4 kilograms of clay. It is expected that standard cost for clay is $11 per kilogram.
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2011_wk13_review tutorial_ student - `THE UNIVERSITY OF NEW...

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