Question 1:
List and define four ethical standards (codes of professional conduct) that are part of the Australian Society of Certified Practising Accountant's Code of Professional Conduct. Give an example of an imaginary situation where the management accountant would be in breach of each of these standards (one situation for each standard/code).
Question 2:
Consider any product/brand (for 'a') and the given service-sector company (for 'b') and describe the aspects of the products that you value as a customer (name any four 'values' for each category).
- A recent model car
- 'City-Link' membership (an electronic toll-road billing device)
Question 3:
ArmidaleAluminium Company, a manufacturer of recyclable soft drink cans, had the following inventory balances at the beginning and end of the current year:
|
Inventory Account
|
January 1($)
|
December 31($)
|
|
Raw Material
|
120,000
|
140,000
|
|
Work in Process
|
240,000
|
230,000
|
|
Finished Goods
|
300,000
|
330,000
|
During the year the company purchased $500,000 of raw material and spent $800,000 on direct labour. Manufacturing overhead costs were as under:
|
Indirect Materials
|
20,000
|
|
Indirect Labour
|
50,000
|
|
Depreciation on Plant and Equipment
|
200,000
|
|
Electricity
|
50,000
|
|
Other
|
60,000
|
Sales revenue was 2,210,000 for the year. Selling and administrative expenses for the year amounted to 220,000. The firm's tax rate is 40%.
Required:
- Prepare a schedule of cost of goods manufactured
- Prepare a schedule of cost of goods sold
- Prepare an income statement for the company
Question 4:
Kinzhong, a florist, operates retail stores in several shopping malls. The average selling price of an arrangement is $30 and the average cost of each sale is $18. A new mall is opening where Kinzhong wants to locate a store, but the location manager is not sure about the rent method to accept. The mall operator offers the following three options for its retail store rentals:
- paying a fixed rent of $15,000 a month, or
- paying a base rent of $9,000 plus 10% of revenue received, or
- paying a base rent of $4,800 plus 20% of revenue received up to a maximum rent of $25,000.
Required:
- For each option, compute the breakeven sales and the monthly rent paid at break-even.
- Compare option 1 with, i. Option 2, and with ii. Option 3, and analyse, at what level of sale both options will have same preference (for both i, and ii), and how these preferences will change if sale goes beyond those levels.