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HA2011
MANAGEMENT ACCOUNTING
FINAL ASSESSMENT
TRIMESTER 1, 2021

Assessment Weight: 50 total marks

Instructions:
 All questions must be answered by using the answer boxes provided in this paper.
 Completed answers must be submitted to Blackboard by the published due date
and time.

Submission instructions are at the end of this paper.

Purpose:
This assessment consists of six (6) questions and is designed to assess your level of
knowledge of the key topics covered in this unit

HA2011 Final Assessment T1 2021

Question 1 ( 7 marks)
a) Assume Domino’s Pizza is considering offering a new product—a 6-inch (15.24 cm) pizza.
Identify two specific financial and two specific non-financial information the management
accountant might provide to assist the management of Domino’s Pizza with the new product
idea? (2 marks)

b) ‘Management accounting is always evolving due to changes in the business environment.’

Explain what this statement means and give examples on what some of the changes are. (5
marks)

ANSWER: ** Answer box will enlarge as you type

Question 2 (7 marks)
a) A company has the following transactions during the week.
Purchase of $1,000 raw materials inventory
Assignment of $500 of raw materials inventory to Job 5
Payroll for 20 hours with $1,000 assigned to Job 5
Factory utility bills of $750
Overhead applied at the rate of $10 per hour

Required: What is the cost assigned to Job 5 at the end of the week? (2 marks)

b) When setting its predetermined overhead application rate, Tasty Turtle estimated its
overhead would be $75,000 and manufacturing would require 25,000 machine hours in
the next year. At the end of the year, it found that actual overhead was $74,000 and
manufacturing required 24,000 machine hours.

Required:
i) Determine the predetermined overhead rate. (1.5 marks)
ii) What is the overhead applied during the year? (1.5 marks)
iii) Determine the under- or overapplied overhead. (2 marks)

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HA2011 Final Assessment T1 2021

ANSWER:

Question 3 (7 marks)
a) Which of the following are likely to use service costing? Justify your answer in each case.
(3 marks)
(i) A college
(ii) A hotel
(iii) A plumber

b) The following information relates to a management consultancy organisation:

$
Salary cost per hour for senior consultants 40
Salary cost per hour for junior consultants 25
Overhead absorption rate per hour applied to all hours 20

The organisation adds 40% to total cost to arrive at the final fee to be charged to a client.
Client number 209 took 54 hours of a senior consultant's time and 110 hours of junior
consultants' time.

Required: What is the final fee to be charged for Client number 209? (4 marks)

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ANSWER:

HA2011 Final Assessment T1 2021

Question 4 (11 marks)
a) Golden Point Company has applied at a local bank for a short-term loan of $150,000 starting
on October 1, 2020. The bank’s loan officer has requested a cash budget from the company for
the quarter ending December 31, 2020. The following information is needed to prepare the cash
budget:

Sales $600,000

Purchases 350,000

Salaries and wages to be paid 125,000

Rent payments 7,000

Supplies (payments for) 4,500

Insurance payments 1,500

Other cash payments 22,000

A cash balance of $24,000 is planned for October 1. Accounts receivables are expected to be
$48,000 on October 1. All of these accounts will be collected in the quarter ending December 31.
In general, sales are collected as follows: 90% in the quarter of sale, and 10% in the quarter after
sale. Accounts payable will be $480,000 on October 1 and will be paid during the quarter ending
December 31. All purchases are paid in the quarter after purchase.

Required:

HA2011 Final Assessment T1 2021

a) Prepare a cash budget for the quarter ending December 31, 2020. Assume that the $150,000
loan will be made on October 1 and will be repaid with interest at 10% on December 31. (7
marks)

b) If the company desires a minimum cash balance of $18,000, will the company be able to repay
the loan as planned on December 31? (4 marks)

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ANSWER:

Question 5 (11 marks)

a) The income statement comparison for Rush Delivery Company shows the income statement
for the current and prior year.

Required:

HA2011 Final Assessment T1 2021

a) Determine the operating income (loss) for each year. (2 marks)
b) Determine the operating income (% of sales) for each year. (2 marks)
c) The company made a strategic decision to invest in additional assets in the current year. These
amounts are provided. Using the total assets amounts as the investment base, calculate the ROI.
Was the decision to invest additional assets in the company successful? Explain. (3.5 marks)
d) Assuming an 8% cost of capital, calculate the RI for each year. Explain how this compares to
your findings in (c). (3.5 marks)

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ANSWER:

Question 6 (7 marks)
a) Viking Corporation’s variable cost per unit produced is $100. Wholesaler Y offers to buy 2,000
additional units at $120 each. Wholesaler Z proposes to buy 1,500 additional units at $140 per
unit. Viking has enough excess capacity to produce one but not both of the orders. Fixed costs
are not affected by accepting either offer.

Required: Which offer should Viking accept and why? (4 marks)

b) Colin O’Shea has a carpentry shop that employs 4 carpenters. Colin received an order for
1,000 coffee tables. The coffee tables have a round tabletop and four decorative legs. An offer
for $500 per table was received. Colin found an unfinished round tabletop that he could buy for
$50 each.

The quantitative cost data to make the tabletop is shown below:

Direct materials $10

Direct labor 35
Variable overhead 10
Fixed overhead 7

Required: What qualitative factors would Colin consider before he decides to buy the tabletop or
make it? (Hint: No calculations required] (3 marks)

HA2011 Final Assessment T1 2021

ANSWER:

END OF FINAL ASSESSMENT

Submission instructions:
 Save submission with your STUDENT ID NUMBER and UNIT CODE e.g.EMV54897 HA2011
 Submission must be in MICROSOFT WORD FORMAT ONLY
 Upload your submission to the appropriate link on Blackboard
 Only one submission is accepted. Please ensure your submission is the correct
document.
 All submissions are automatically passed through SafeAssign to assess academic integrity.

HA2011 Final Assessment T1 2021