lOMoARcPSD| 62788957
ACC3200 Tutorial:
Table of Contents
TUTORIAL 1---------------------------------------------------------------------------------------------------1
TUTORIAL 2--------------------------------------------------------------------------------------------------4
TUTORIAL 3-------------------------------------------------------------------------------------------------14
CUSTOMER----------------------------------------------------------------------------------------------------19
IMPROVE QUALITY OF PRODUCTS--------------------------------------------------------------------20
FINANCE-------------------------------------------------------------------------------------------------------23
OPERATE WITHIN BUDGET-----------------------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
IMPROVE CLIENT SATISFACTION----------------------------------------------------------------------23
CLIENTS--------------------------------------------------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
PROVIDE TIMELY INTERVENTIONS--------------------------------------------------------------------23
SERVICE DELIVERY---------------------------------------------------------------------------------------------23
INCREASE FLEXIBILITY OF SERVICE DELIVERY------------------------------------------------------23
PROVIDE EFFECTIVE SUPPORT TO CLIENTS---------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
IMPROVE OPPORTUNITIES FOR COMMUNICATION---------------------------------------------23
GOVERNMENT AND OTHER STAKEHOLDERS-----------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------24
EMPLOYEES----------------------------------------------------------------------------------------------------24
IMPROVE SKILLS BASE OF EMPLOYEES--------------------------------------------------------------24
IMPROVE EMPLOYEE SATISFACTION-----------------------------------------------------------------24
TUTORIAL 4-------------------------------------------------------------------------------------------------27
TUTORIAL 5-------------------------------------------------------------------------------------------------39
TUTORIAL 6:------------------------------------------------------------------------------------------------47
TUTORIAL 7-------------------------------------------------------------------------------------------------60
TUTORIAL 8-------------------------------------------------------------------------------------------------64
TUTORIAL 9:------------------------------------------------------------------------------------------------73
Tutorial 1
, lOMoARcPSD| 62788957
1.4 Examine the definition of management accounting provided in this chapter and
explain what is meant by customer value and shareholder value.
Management accounting is defined as ‘processes and techniques that are focused on the
effective and efficient use of organisational resources to support managers in their task of
enhancing both customer value and shareholder value’. Value creation is a central focus for
contemporary managers. Customer value refers to the value that a customer places on
particular features of a good or service (and which is what leads to them purchase the product).
Shareholder value is the value that shareholders, or owners, place on a business, usually
expressed in the form of increased profitability, increased share prices or increased
1.7 The ‘Real life’ scenario titled ‘Increasing competitive pressures faced by Asian
airlines’ in the section ‘Australian organisations in the twenty-first century’ highlights the
turbulent competitive environment faced by many airlines. Explain how such events might
impact the type of information provided by management accountants in those
organisations.
The ‘Real life’ report of Australian organisations in the twenty-first century
demonstrates issues such as increasing competition and pressure to reduce costs. This
pressure makes it imperative to have a clear idea of a business’ costs. Management
accountants’ role then has become essential to the continuing success of organisations, in
terms of providing information that allows management to plan and control their
organisations in response to today’s rapidly changing business environment.
1.10 Outline the major processes that management accounting systems use to create
value and manage resources.
Major processes that management accounting systems use to create value and manage
resources include:
product costing systems that estimate the cost of resources consumed in producing
goods and services
processes that compile information that is required in planning and control, the
preparation of budgets (financial plans) and the monitoring of progress in comparison
to planned progress (control)
performance measurement and evaluation processes relating to individuals, discrete
parts of the organisation and the organisation as a whole.
1.11 Give examples of how management accounting information could assist in
managing resources in the Australian Football League.
A management accountant might provide the following types of information to assist
management in managing resources in the Australian Football League (AFL):
• costing of individual functions and competitions
• analysis of revenues from various media outlets
• activity analysis of interactions with the different member clubs (which could also
be costed)
• costing of a project designed to enhance and improve the AFL website
• costing of the resources consumed in each department
, lOMoARcPSD| 62788957
• variances of costs and revenues from budget
• a breakdown of costs, such as promotions of AusKick, community clubs and AFL
membership
• forecast costs for strategies including recruitment, overtime and outsourcing
• analysis of member needs, inquiries and complaints
number of complaints
number of new members
member retention rate
member satisfaction with service
• membership profitability analysis
• a cost benefit analysis of proposed new products.
1.17 Explain how specific aspects of management accounting systems may be used to
motivate employees and managers.
Specific aspects of management accounting systems that may be used to motivate
employees and managers include performance measurement systems, which form part of the
control process. Employees can be held responsible for various financial and nonfinancial
performance targets and may be rewarded, for example with bonuses, if those targets are
achieved. Employees may be motivated to achieve those targets when they participate in
setting them, when they regard those targets as fair and achievable and when they value the
rewards that they earn for achieving targets.
1.25 Give an example of management accounting information that could be used by a
manager to make each of the following decisions. Remember to consider non-financial
information where relevant.
The manager of a discount department store is deciding how many cleaning staff to
employ.
Estimates of how long it would take to clean the store, how much it would cost to
outsource this task and the cost of employing cleaning staff would be relevant to this
decision.
A local council is deciding whether to add a ‘green waste’ recycling service.
The cost of extra collections and the cost of providing the special bins. Forecasts of the
popularity of this service may help estimate the amount likely to be collected and
therefore the frequency of collection, which would help with the cost estimations. Some
value judgments may need to be made about the views of residents (will they separate
their waste and will they be unhappy if this service is not provided?).
The CEO of a major football organisation is contemplating changing the timing of the
football season to start and finish one month earlier from next year.
Whether the earlier matches would clash with the summer season for other sports and
how this would impact on availability of players, attendance of crowds and appeal to
television viewers, if appropriate, and the impact this could have on revenue; the availability
of sports arenas if they are shared with other sports codes, and the cost of using a different
arena if necessary; the difference in running costs, such as more watering if the pitch has
greater usage during drier months, and more or less use of lights in early evening (if used); if
, lOMoARcPSD| 62788957
the football season has an extra month in warmer weather there may be a change in
refreshment consumption, such as more cold drinks being sold in the warmer month.
The director of nursing at the local hospital is deciding whether to hire short-term
agency staff or employ additional full-time nurses to service an increase in the number of
patients admitted to the hospital.
A forecast of future trends such as whether the increase in patient numbers is likely to
be permanent or temporary, the cost to employ additional permanent staff and the cost to
hire agency staff would all be relevant
1.36
1. Use the internet to find a vision and mission statement for an organisation. Bath
& Body Works Mission Statement
we've created the scents that make you smile. Whether you're shopping for
fragrant
body care or a 3-wick candle, we have hundreds of quality products perfect for treating
yourself or someone else.
2. Identify objectives and strategies for this organisation. (If this information is not
included on the website, suggest some likely objectives and strategies for this
organisation. Explain your suggestions.)
"The goal of BathandBodyWorks.com is to educate our customers about reducing
stress and improving their overall well-being, and the role our products play in helping to
achieve those goals," said Beth Pritchard, President & CEO of Bath & Body Works. "We
want BathandBodyWorks.com to be an important resource to our customers before they
come into the store and long after their purchases."
TutoriAL 2
13.1, 13.5, 13.6, 13.16, 13.26, 13.32 (1 & 2), 13.33, 13-38
13.1 Explain why it is useful to focus on the margin and turnover component ratios of
the ROI calculation, in addition to the ROI ratio itself .
It is useful to examine both component (margin and turnover) ratios of ROI because they
provide additional insights that can be used to interpret and to improve future ROI. For
example, when comparing ROI over several years examining the two components of ROI can
assist in identifying whether a decreasing ROI is due to a reduction in return on sales or a
reduction in investment turnover. If the reason is a poor return on sales, this can lead to a
search for reasons why profitability has decreased and the formulation of strategies to
improve return on sales and hence improve future ROI.
13.5 Provide two specific examples of decisions the manager of an
investment centre might make to improve its ROI, but which may harm the future
competitiveness of the company.
ACC3200 Tutorial:
Table of Contents
TUTORIAL 1---------------------------------------------------------------------------------------------------1
TUTORIAL 2--------------------------------------------------------------------------------------------------4
TUTORIAL 3-------------------------------------------------------------------------------------------------14
CUSTOMER----------------------------------------------------------------------------------------------------19
IMPROVE QUALITY OF PRODUCTS--------------------------------------------------------------------20
FINANCE-------------------------------------------------------------------------------------------------------23
OPERATE WITHIN BUDGET-----------------------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
IMPROVE CLIENT SATISFACTION----------------------------------------------------------------------23
CLIENTS--------------------------------------------------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
PROVIDE TIMELY INTERVENTIONS--------------------------------------------------------------------23
SERVICE DELIVERY---------------------------------------------------------------------------------------------23
INCREASE FLEXIBILITY OF SERVICE DELIVERY------------------------------------------------------23
PROVIDE EFFECTIVE SUPPORT TO CLIENTS---------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------23
IMPROVE OPPORTUNITIES FOR COMMUNICATION---------------------------------------------23
GOVERNMENT AND OTHER STAKEHOLDERS-----------------------------------------------------------------23
-----------------------------------------------------------------------------------------------------------------24
EMPLOYEES----------------------------------------------------------------------------------------------------24
IMPROVE SKILLS BASE OF EMPLOYEES--------------------------------------------------------------24
IMPROVE EMPLOYEE SATISFACTION-----------------------------------------------------------------24
TUTORIAL 4-------------------------------------------------------------------------------------------------27
TUTORIAL 5-------------------------------------------------------------------------------------------------39
TUTORIAL 6:------------------------------------------------------------------------------------------------47
TUTORIAL 7-------------------------------------------------------------------------------------------------60
TUTORIAL 8-------------------------------------------------------------------------------------------------64
TUTORIAL 9:------------------------------------------------------------------------------------------------73
Tutorial 1
, lOMoARcPSD| 62788957
1.4 Examine the definition of management accounting provided in this chapter and
explain what is meant by customer value and shareholder value.
Management accounting is defined as ‘processes and techniques that are focused on the
effective and efficient use of organisational resources to support managers in their task of
enhancing both customer value and shareholder value’. Value creation is a central focus for
contemporary managers. Customer value refers to the value that a customer places on
particular features of a good or service (and which is what leads to them purchase the product).
Shareholder value is the value that shareholders, or owners, place on a business, usually
expressed in the form of increased profitability, increased share prices or increased
1.7 The ‘Real life’ scenario titled ‘Increasing competitive pressures faced by Asian
airlines’ in the section ‘Australian organisations in the twenty-first century’ highlights the
turbulent competitive environment faced by many airlines. Explain how such events might
impact the type of information provided by management accountants in those
organisations.
The ‘Real life’ report of Australian organisations in the twenty-first century
demonstrates issues such as increasing competition and pressure to reduce costs. This
pressure makes it imperative to have a clear idea of a business’ costs. Management
accountants’ role then has become essential to the continuing success of organisations, in
terms of providing information that allows management to plan and control their
organisations in response to today’s rapidly changing business environment.
1.10 Outline the major processes that management accounting systems use to create
value and manage resources.
Major processes that management accounting systems use to create value and manage
resources include:
product costing systems that estimate the cost of resources consumed in producing
goods and services
processes that compile information that is required in planning and control, the
preparation of budgets (financial plans) and the monitoring of progress in comparison
to planned progress (control)
performance measurement and evaluation processes relating to individuals, discrete
parts of the organisation and the organisation as a whole.
1.11 Give examples of how management accounting information could assist in
managing resources in the Australian Football League.
A management accountant might provide the following types of information to assist
management in managing resources in the Australian Football League (AFL):
• costing of individual functions and competitions
• analysis of revenues from various media outlets
• activity analysis of interactions with the different member clubs (which could also
be costed)
• costing of a project designed to enhance and improve the AFL website
• costing of the resources consumed in each department
, lOMoARcPSD| 62788957
• variances of costs and revenues from budget
• a breakdown of costs, such as promotions of AusKick, community clubs and AFL
membership
• forecast costs for strategies including recruitment, overtime and outsourcing
• analysis of member needs, inquiries and complaints
number of complaints
number of new members
member retention rate
member satisfaction with service
• membership profitability analysis
• a cost benefit analysis of proposed new products.
1.17 Explain how specific aspects of management accounting systems may be used to
motivate employees and managers.
Specific aspects of management accounting systems that may be used to motivate
employees and managers include performance measurement systems, which form part of the
control process. Employees can be held responsible for various financial and nonfinancial
performance targets and may be rewarded, for example with bonuses, if those targets are
achieved. Employees may be motivated to achieve those targets when they participate in
setting them, when they regard those targets as fair and achievable and when they value the
rewards that they earn for achieving targets.
1.25 Give an example of management accounting information that could be used by a
manager to make each of the following decisions. Remember to consider non-financial
information where relevant.
The manager of a discount department store is deciding how many cleaning staff to
employ.
Estimates of how long it would take to clean the store, how much it would cost to
outsource this task and the cost of employing cleaning staff would be relevant to this
decision.
A local council is deciding whether to add a ‘green waste’ recycling service.
The cost of extra collections and the cost of providing the special bins. Forecasts of the
popularity of this service may help estimate the amount likely to be collected and
therefore the frequency of collection, which would help with the cost estimations. Some
value judgments may need to be made about the views of residents (will they separate
their waste and will they be unhappy if this service is not provided?).
The CEO of a major football organisation is contemplating changing the timing of the
football season to start and finish one month earlier from next year.
Whether the earlier matches would clash with the summer season for other sports and
how this would impact on availability of players, attendance of crowds and appeal to
television viewers, if appropriate, and the impact this could have on revenue; the availability
of sports arenas if they are shared with other sports codes, and the cost of using a different
arena if necessary; the difference in running costs, such as more watering if the pitch has
greater usage during drier months, and more or less use of lights in early evening (if used); if
, lOMoARcPSD| 62788957
the football season has an extra month in warmer weather there may be a change in
refreshment consumption, such as more cold drinks being sold in the warmer month.
The director of nursing at the local hospital is deciding whether to hire short-term
agency staff or employ additional full-time nurses to service an increase in the number of
patients admitted to the hospital.
A forecast of future trends such as whether the increase in patient numbers is likely to
be permanent or temporary, the cost to employ additional permanent staff and the cost to
hire agency staff would all be relevant
1.36
1. Use the internet to find a vision and mission statement for an organisation. Bath
& Body Works Mission Statement
we've created the scents that make you smile. Whether you're shopping for
fragrant
body care or a 3-wick candle, we have hundreds of quality products perfect for treating
yourself or someone else.
2. Identify objectives and strategies for this organisation. (If this information is not
included on the website, suggest some likely objectives and strategies for this
organisation. Explain your suggestions.)
"The goal of BathandBodyWorks.com is to educate our customers about reducing
stress and improving their overall well-being, and the role our products play in helping to
achieve those goals," said Beth Pritchard, President & CEO of Bath & Body Works. "We
want BathandBodyWorks.com to be an important resource to our customers before they
come into the store and long after their purchases."
TutoriAL 2
13.1, 13.5, 13.6, 13.16, 13.26, 13.32 (1 & 2), 13.33, 13-38
13.1 Explain why it is useful to focus on the margin and turnover component ratios of
the ROI calculation, in addition to the ROI ratio itself .
It is useful to examine both component (margin and turnover) ratios of ROI because they
provide additional insights that can be used to interpret and to improve future ROI. For
example, when comparing ROI over several years examining the two components of ROI can
assist in identifying whether a decreasing ROI is due to a reduction in return on sales or a
reduction in investment turnover. If the reason is a poor return on sales, this can lead to a
search for reasons why profitability has decreased and the formulation of strategies to
improve return on sales and hence improve future ROI.
13.5 Provide two specific examples of decisions the manager of an
investment centre might make to improve its ROI, but which may harm the future
competitiveness of the company.
