Managerial Accounting Assignment

QUESTION 1

Phoenix Smashers is a large company that manufactures all sorts of merchandises related to badminton, such as badminton racket, badminton balls, badminton clothing and badminton shoes. The company's sales have been increasing steadily over the past 10 years.
The Racket Department has recently implemented several advanced manufacturing techniques which include the use of robotic arms to hold the rackets in place while the glue dries and machine vision systems check for defects. The engineering and design team uses computerized drafting and testing of new products.

The following managers work in the Racket Department:

Mr. Muhammad Aiman, Sales Manager (supervises all sales representatives) Ms. Aliya Irdina, Technical Specialist (supervises computer programmers) Mr. Mohamad Salini, Cost Accounting Manager (supervises cost accountants)

Mr. Irfan Daniel, Production Manager (supervises all manufacturing employees) Ms. Aida Amani, Engineer (supervises all new-product design teams)

Instructions:

a) What are the primary information needs of each manager?

b) Which (if any) financial accounting report(s) is each manager likely to use?

c) Name one special-purpose management accounting report that could be designed for each manager. Include the name of the report, the information it would contain and how frequently it should be issued.

QUESTION 2

Instructions:

Go to https://www.youtube.com/watch?v=3AKrzgUSsoA and view the video. Then answer the following questions.

a) In point form, describe the step-by-step process to manufacture paintballs. What departments are involved?

b) From your observation, identify all possible costs that the manufacturing company may incur in the video and classify each of them into the following categories: materials, labor and overhead.

c) From your answer in part b), which do you think would be the greatest cost in making the paintballs?

d) Which is more suitable for the manufacturer to apply, the job order costing or the process costing?

QUESTION 3

Kilometrico, a producer of audio equipment for large computer systems, is reviewing its policies as part of a biannual self-examination of the company. As part of this process, all managers have been asked to carefully examine costs and determine as closely as possible which costs are direct and which are indirect.

Ms. Minah Kilang and Mr. Mamat Gerumbal, managers of different manufacturing departments in the same building, have been working together. They found the following four costs that could be economically traced to the products, but have historically been a part of overhead:

• Cost of setting up the machinery for a different production run.
• Cost of minor assembly components such as knobs and switches.
• Cost of packaging, which is quite different for each model.
• Cost of inspecting and testing each model.

None of the costs is significant by itself, but together these four costs make up between 10 and 15% of the total cost of the product.

Minah favors "leaving well enough alone," as she puts it, and leaving these costs in overhead. She is afraid that her volunteering to trace these costs will result in her having to trace many more costs in the future.

Mamat, on the other hand, prefers to have the product cost as accurate as possible. He points out that these costs are already known, and the process would require little extra work.

Instruction:

You have been called on in your function as accounting manager to resolve the dispute between Minah and Mamat. Write a memo, stating your opinion whether to support or not to support their arguments. Be sure to adequately defend your position, but be brief.