Questions -
Question 1 - Do you think the statement "management decisions must always be based on information that is objective and verifiable" is correct? Justify your answer with specific examples. (Word limit: 100 words).
Your case company is "KFC". Please conduct research about this company in regards to following two theory questions.
Question 2 - Would zero-based budgeting be suitable for marketing department in your company? Explain the positive and negative implications with reference to your case company. (Word limit: 150-250 words).
Question 3 - Would value chain analysis be useful for your case company? In your justification, show specific examples. (Word limit: 150-250 words).
Question 4 - World-Explorer is a car manufacturer manufactures small sized cars. Their accountant have collected the cost data for the past 4 months in 2017. All the employees, except supervisors and admin staff, working on their production line is paid by number of working hours. According to the industry agreement with the union, there would be an increase on supervisor's salary in Dec. Their delivery company-Punctual charged them a base rate and car handling cost for each car they delivered. The rental cost would also increase in Dec.
|
|
Sep
|
Oct
|
Nov
|
Dec
|
|
Number of Cars Manufactured
|
2,800
|
2,700
|
2,500
|
2,000
|
|
Raw Material cost
|
14,000,000
|
13,500,000
|
12,500,000
|
10,000,000
|
|
Administration & Sales
|
364,000
|
363,500
|
358,000
|
360,000
|
|
Direct Labor cost
|
8,120,000
|
7,830,000
|
7,250,000
|
5,800,000
|
|
Supervisor Salary
|
20,000
|
20,000
|
20,000
|
26,000
|
|
Product delivery
|
328,000
|
327,000
|
315,000
|
320,000
|
|
Rent
|
200,000
|
200,000
|
200,000
|
250,000
|
The accountant of World-Explorer also prepared a budget (displayed below) for the company for its operation from Jan 2018 to April 2018. The accountant advises you following points:
- Unit cost remain unchanged
- Manufacturing fixed and variable overhead costs are allocated based on number of production
- The company keeps 5% of each month's projected sales volume as the ending inventory
|
|
Jan
|
Feb
|
March
|
April
|
|
Projected sales
|
1,700
|
2,100
|
2,300
|
2,100
|
|
Selling Price
|
15,000
|
14,000
|
13,000
|
13,000
|
|
Required production
|
|
2,120
|
|
|
|
Direct Materials Cost
|
|
10,600,000
|
|
|
|
Direct labor cost
|
|
6,148,000
|
|
|
|
Fixed and Variable Manufacturing Overhead
|
|
31,800
|
|
|
World-Explorer's accountant noticed every month 50% cars are purchased by cash and another 50% is credit sale. Money for credit sales is collected in the following pattern. 60% of the credit sales amount will be collected in the month of sale, 38% will be collected in the following month and 2% is uncollectable. On the 1st of Jan, account receivable from Dec's sale is 4000000.
Using the information given, answer the following questions. Show your calculations.
1. What is the cost function for World-Explorer?
2. If they would manufacture 2200 cars in Jan 2018, what is the total cost?
3. Prepare Cost of Goods Sold Budget for Feb 2018.
4. Prepare Cash receipts (inflow) budget for each month in the first quarter.