College of Business & Finance

Department of Accounting, Finance and Banking

Managerial Accounting (ACCT 301)

Second Semester 2021/2022

Instructor: Dr. Rami Moh'd Abu Wadi Type of Exam: First Second Third
Student Name: ---- Hussain Ali Student ID Number: ---- 202010439
Khalil-----------
Section Number: --------------------------------- Date: 19/4/2022

Questions Q1 Q2 Q3 Q4

ILO’s A1 B1, C1 B1, C2 B, C3 Total

Maximum points 9 13 12 11 45

Points Earned

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Question 1: (9 marks) (A1)

Part A: Multiple Choice Questions (6 marks)

1. A management control system includes the techniques to gather and use

information to ________.
A) motivate employee behavior
B) evaluate performance
C) make planning and control decisions

D) all of the above

2. To increase and improve employees' work efforts in organizations, organizations

should link ________ to ________ such as bonuses.
A) motivation; goal congruence
B) managerial effort; key success factors
C) managerial control; motivation
D) performance measures; personal rewards

3. Which one of the following is NOT a nonfinancial performance measure of

customer satisfaction on a commercial airline?
A) number of lost bag reports
B) number of flights cancelled
C) number of employees with advanced degrees
D) number of flights on time

4. An example of a nonfinancial goal is ________.

A) increase customer satisfaction
B) increase profits
C) increase segment margin
D) increase required return on investment

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5. In a(n) ________ center, managers are responsible for costs only.
A) profit
B) cost
C) investment
D) accounting

6. The manager of a(n) ________ responsibility center is responsible for the

revenues, costs and invested capital from the center.
A) profit
B) cost

C) investment
D) accounting

Part B: True / false Questions (3 marks)

1. The purpose of performance measures is to set direction and to motivate

managers. True
2. Nonfinancial measures of performance include profit targets and required return

on investment. False
3. The term "cost center" may be used to describe responsibility centers that are

assigned responsibility for capital investment. False

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Question 2: (13 marks) (B1, C1)

Ahlia and Zain have two franchises in different parts of town and want to monitor the
performance of the two managers who have full control over investments.

Forecast results for the year are:

Fatima Ahmed
$ $
Profits 80,000 150,000
Investment 500,000 750,000

Fatima is considering investing in a labor-saving piece of equipment which will cost

$10,000. This will generate an increase in net profit of $2,500 each year for 10 years,
after which time the equipment is expected to have no resale value. Fatima uses
straight-line depreciation.

Ahmed has been offered a replacement oven for one of his existing ones. The existing
one is written down in the books to an NBV of $2,000 and is very inefficient.

Total costs are $25,000, including maintenance and depreciation. The replacement
will cost $80,000, will have no downtime and negligible maintenance costs in its early
years.

Depreciation will be 20% p.a. straight-line.

Each oven is estimated to generate $70,000 per year before these costs are considered.

The directors demand a minimum return on capital employed of 14%.

Instructions:

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a. What is the current ROI of each division? (4 marks)

b. What is the ROI of the new labor-saving equipment Fatima is considering? (3

marks)

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c. What is the ROI of the new oven? (3 marks)

d. What is the RI of the new labor-saving equipment Fatima is considering? (3

marks)

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Question 3: (12 marks) (B1, C2)

You are giving the regression equation of how the sales trend varies with time:

y = 300 + 25x

Where:

x = quarter (x increases by two for each new quarter)

y = units sales

Instructions:

Forecast the sales for each quarter using the following SVs:

Q1 Q2 Q3 Q4
-9% +11% -5% +13%

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Question 4: (11 marks) (B1, C3)

Flogel Company’s workforce experiences a 80% learning rate. The budgeted time for
the first batch is 150 hours.

Instructions:

Using the formula Y= aXb, calculate the time to produce:

a) The first 10 batches in total (5 marks)

b) The 10th batch only (6 marks)

Solution
Part a

Learning Rate = 80%

Time For first batch= 150 hours

Formula Y= aXb

B = log (0.80) / log 2

B= -0.3219

aXb = 180 * 10 (-0.3219)

73.7337433081 =

The first 10 batches in total = 73.7337433081 * 10

The first 10 batches in total = 737.337

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Part B

The first 10 batches in total = 73.7337433081 * 10 = 737.337

aXb = 180 * 10 (-0.3219)

The first 9 batches in total = 73.7337433081*9 = 663.60

The 10th Batch is equal to = 737.34 – 663.60

The 10th Batch is equal to = 73.74

The End,

Good Luck

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