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HI5017 Managerial Accounting Assignment Tutorial Questions 2 Answer

Assessment Task  Tutorial Questions

Unit Code: HI5017

Unit Name: Managerial Accounting Assignment: Tutorial Questions 2

Total Assignment Marks: 50 marks

Purpose: This assignment is designed to assess your level of knowledge of the key topics covered in this unit

Unit Learning Outcomes Assessed:

1. Critically evaluate the various approaches to performance measurement and control in various
types of organisations, and devise and evaluate indicators of performance;
2. Demonstrate the need for a balance between financial and non-financial information in decision
making, control and performance evaluation applications of management accounting;
3. Analyse a company’s financial statements and/or management reports and identify the strengths
and weaknesses of the company and articulate these to the various stakeholders.

Description: Each week students were provided with three tutorial questions of varying degrees of difficulty. These tutorial questions are available in the Tutorial Folder for each week on Blackboard. The Interactive Tutorials are designed to assist students with the process, skills and knowledge to answer the provided tutorial questions. Your task is to answer a selection of tutorial questions for weeks 6 to 10 inclusive and submit these answers in a single document.

The questions to be answered are:

Week 6

South Hampton University is preparing its budget for the upcoming academic year. This is a specialised private university that charges fees for all degree courses. Currently, 30,000 students are enrolled on campus. However, the university is forecasting a 5 per cent growth in student numbers in the coming year, despite an increase in fees to $3,000 per subject. The following additional information has been gathered from an examination of university records and conversations with university managers:

  • South Hampton is planning to award scholarships to 200 students, which will cover their fees.
  • The average class has 80 students, and the typical student takes 4 subjects per semester. South Hampton operates 2 semesters per year.
  • The average academic staff salary is $120,000 per annum including on-costs.
  • South Hampton’s academic staff are evaluated on the basis of teaching, research, administration and professional/community service. Each of the academic staff teaches the equivalent of three subjects during the academic year.


  1. Prepare a revenue budget for the upcoming academic year. (3 marks)
  2. Determine the number of staff needed to cover classes. (3 marks)
  3. Assume there is a shortage of full-time academic staff. List at least five actions that South Hampton might take to accommodate the growing student numbers. (4 marks, maximum 200 words)

week 7

The accountant for Barry Ltd compares each month’s actual results with a monthly plan. The standard direct labour rates and the standard hours allowed, given the actual output in April, are shown in the following schedule:

Standard direct labour rate per hour
Standard direct labour hours allowed,
given April output
Labour class III
Labour class II
Labour class I

A new union contract negotiated in March resulted in actual wage rates that differed from the standard rates. The actual direct labour hours worked and the actual direct labour rates per hour for April were as follows.

Actual direct labour rate per hour
Actual direct labour hours
Labour class III
Labour class II
Labour class I


  1. Calculate the following variances for April, indicating whether each is favourable or unfavourable:
    • direct labour rate variance for each labour class. (3 marks)
    • direct labour efficiency variance for each labour class. (3 marks)
  2. Discuss two advantages and two disadvantages of a standard costing system in which the standard direct labour rates per hour are not changed during the year to reflect events such as a new labour contract. (4 marks, maximum 150 words)

Week 8

Spark Ltd has two divisions, assembly and electrical. The assembly division transfers partially completed components to the electrical division at a predetermined transfer price. The assembly division’s standard variable production cost per unit is $550. This division has spare capacity, and it could sell all its components to outside buyers at $680 per unit in a perfectly competitive market.


  1. Determine a transfer price using the general rule.(2 marks)
  2. How would the transfer price change if the assembly division had no spare capacity? (2 marks)
  3. What transfer price would you recommend if there was no outside market for the transferred component and the assembly division had spare capacity? (2 marks)
  4. Explain how negotiation between the supplying and buying units may be used to set transfer prices. How does 


Unit Code: HI5017

Unit Name: Managerial Accounting

Week 6

Following information given
Existing Student30000
Total student31500
scholarship student200
The net student to be charged31300
Student per class80
Number of subjects4
Number of class per subject393.75
Total number of class1575

(A) Revenue budget

Calculation of revenue budget 
ParticularSemester 1Semester 2
Total Student3150031500
Scholarship student200200
The net student to be charged3130031300
Per student Fees $                         3,000.00  $          3,000.00 
Total Revenue $                93,900,000.00  $ 93,900,000.00 

(B) Number of staff needed to cover classes.

Calculation of the number of staff
Total number of class per semester1575
No. of semester2
Total number of class3150
No. of class taken by 1 teacher3
Total Required number of teacher1050

(C ) Five actions that South Hampton might take to accommodate the growing student numbers.

The following action should be taken by South Hampton to grow the number of students:-

Inbound MarketingThe name of the school should be market on every search engine, social media to provide the advertisement and reach of the student. It will help to increase the number of students.
Optimize the website for mobileThe school website should be optimized to run on a mobile browser of the student so that he can search for the school to get useful information (Keynes, 2018).
Register the address with Google mapSchool addresses should be registered with Google so that say access to the location can be provided o students or any other person who is looking for the school.
Utilize the video on sitesSchool video should be on the school official website which demonstrates the school events, study room, library, and playground to attract the student and show the facility that school does have with it (Keynes, 2018).
Principle BlogStudents look for the leadership which they want from the school staff, principle staff can show the leading scenario from their blog and can provide a good understanding t student who is looking for better services (Keynes, 2018).

Week 7

A (1) Calculation of direct labor Rate variance

A (1) Calculation of direct labor Rate variance
CategoryFormula WorkingVarianceRemark
Labour class III[(SR-AR)*AH] $             (2,200.00)Adverse
Labour class II[(SR-AR)*AH] $             (1,300.00)Adverse
Labour class I[(SR-AR)*AH] $             (1,500.00)Adverse

A (2)  Calculation of direct labor Efficiency variance

A (2)  Calculation of direct labor Efficiency variance
CategoryFormula WorkingVarianceRemark
Labour class III[(SH-AH)*SR] $          (2,600.00)Adverse
Labour class II[(SH-AH)*SR] $          (6,600.00)Adverse
Labour class I[(SH-AH)*SR] $            3,000.00 Favorable

(B)Two Advantages of standard costing

Controlling cost

Standard costing systems provide the advantage of cost controlling by setting the predetermine bench market which is to be achieved by the company throughout the year so that production can be done at a lower rate. The direct labor rate will provide the benchmark to come to the actual labor rate if it does not change to reflect the new labor contract (Cristea, & Nguyen, 2016).

Decision Making

Standard costing provides the information regarding the cost so that optimum decisions can be taken to control the cost of production and responsibility can also be determined with concern manager (Chen, et al. 2018).

Two Disadvantages of standard costing


To determine the budget for the standard cost consume the lots of time of the manager and dilute their focus from other aspects of the business. By not reflating the new labor contract impact on the standard cost of labor rate will lead to the wrong comparison of data and lead to the wrong decision of the company (Chen, et al. 2018).


It is expensive for the company to prepare the standard costing system as a benchmark as the staff has to be diluted here and incur extra costs for the company

Week 8

AAs per the general rule of transfer pricing, when one division of the company produces the component which can be used by the other division of the company then it should be transferred from one division to another at appropriates price so that performance of each division can be justified. Transfer price should be $ 680 so that profit opportunity does compromise for Division A by making the transfer to division B with the company.
BIf the Assembly division does not have any spare capacity then it will transfer the component at variable cost plus profit earned from the outside market that means $ 680.
CIf the assembly does not have any market demand then spare capacity should be used to produce components and transfer should be made at a variable cost that is $ 550.
DIf the department head manager's performance is measure as per the profit made by such department then the manger of such department will be justified to transfer the component at market price so that his ranking criteria do not get affected. But if it has been taken from a company perspective then it should be analyzed that component that electronic department required is available in the market and what rate offer by the other supplier. If the outside supplier providing it at a lower rate than the internal department should be purchased it from the outside supplier and if not then buy it from the internal department to save the profit and avoid making a profit from itself (D'Onza, Greco, & Allegrini, 2016).

Week 9

1 (A) 

On-time delivery means providing the goods to the consumer within the time limit. It helps to measure the performance efficiency of the company to produce and deliver the product. Strategic priorities for on-time delivery performance measurement are s under:-

Promise time or require timePromise that means, the time which a supplier has committed to providing his product to consumer while they require time is that which consumer need for the product. Hence supplier has to stick to his commitment to satisfying consumer needs (Konchitchki, et al. 2016).
Quilt of line itemWhile meeting the time limit it also requires to measure the quality of the product to satisfy the consumer.
Buyer and supplier dataThe supplier should take the feedback from the consumer because it will help to measure the OTD process and improvement can also be done with consumer suggestions.

Quality of the product helps the organization to reach a large scale of consumers and help to increase the revenue by satisfying them. Following are the factor measurement for product quality:-

Function measurementThe product should be measure in terms of functionality so that it can be used for the purpose it was intended to be made.
Performance of productPerformance measurement of the product is required to understand, whether the product is underperforming from any perspective to satisfy the consumer need (Konchitchki, et al. 2016).
Object achievementTo observe the quality of the product it is required to understand whether the product of the company is achieving its object as determined while considering the planning of the production of such product.


Yes, if the company can achieve the quality of the product and can deliver it to the consumer on require time then it can enhance the consumer reach and increase the brand image of the company in the market, resulting of that, the profitability of the company will increase if the large consumer chain will associate with the company.

Although the quality of the product and on-time delivery my provide good strategies to grab the market there are other factors too, which require to be given some preference while considering the performance of the company to achieve the market share. These factors are cot control, employee performance, marketing strategies, and post-sale service, and better organization structure, the capital structure of the company, skilled and experienced staff of the company (Homburg, Nasev, & Plank, 2018).

If Duncan’s Pizzas can manage to measure all the factor mansion above and treat them to achieve high profitability then it can lead to high profitability for the longer period and establish the company in a more robust way to compete in the market with their product performance.

Week 10

A     Calculation of BEP
Break-even PointFixed cost / Contribution per unit4000 units
B. Calculation of BEP if fixed cost increased by 10%
Fixed cost increased by 10% $    4,400,000.00 
BEP  (Fixed cost / Contribution per unit)4400 units
C .Calculation of net profit of the company
Sale $  15,000,000.00 
Variable cost $  10,000,000.00 
Net Contribution $    5,000,000.00 
Fixed cost $    4,000,000.00 
Net Profit $    1,000,000.00 
  1. Calculation of BEP if sale price is 2500
Contribution per unit $                                500.00 
Fixed cost $                    4,000,000.00 
BEP  (Fixed cost / Contribution per unit)8000
New sale demand 6200 units

BEP is higher than the sale demand hence selling price should not be reduced as the company will face the losses.

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