ACC512 Accounting for Managerial Decisions – Graded Exercises

School

Sunway University (SU)

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Assignment Type

Individual Assignment

Subject

ACC512 Accounting for Managerial Decisions

Uploaded by Malaysia Assignment Help

Date

02/25/2025

Graded Exercise 1: Due Date 14/3/2025

Question (20 marks)

Some accountants believe that financial statement analysis is of little benefit as it contradicts the findings of capital markets research. Discuss the findings of capital markets research and its implications for financial statement analysis. Discuss the general limitations of financial statement analysis.

Graded Exercise 2: Due Date 14/3/2025

Question (30 marks)

Liverpool Traders uses 1,000 units of the sporting component every month to manufacture one of its products. The unit costs incurred to manufacture the component are as follows.

Overhead costs include variable material handling costs of $6.50, which are applied to products on the basis of direct material costs. The remainder of the overhead costs are applied on the basis of direct labor dollars and consists of 60% variable costs and 40% fixed costs.

A vendor has offered to supply the component at a price of $200 per unit.

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Required

a) Should Liverpool Traders purchase the component from the outside vendor if Liverpool Traders’s capacity remains idle? Explain. (8 marks)
b) Should Liverpool Traders purchase the component from the outside vendor if it can use its facilities to manufacture another product? What information will Innova need to make an accurate decision? Show your calculations. (8 marks)
c) What are the qualitative factors that Liverpool Traders will have to consider when making this decision? Discuss. (8 marks)
d) “If a product is generating a loss, then it should be discontinued.” Comment on this statement using relevant illustration. (6 marks)

Graded Exercise 3: Due Date 14/3/2025

Question (20 marks)

ABC Manufacturing Ltd. is a medium-sized company that produces electronic components. Due to increasing costs, the management is considering outsourcing the production of one of its main components, Component X, to a third-party supply.

Requirement:

a) Based on the given data, evaluate whether ABC Manufacturing Ltd. should continue in-house production or outsource Component X. Present your analysis with detailed calculations and a recommendation. (12 marks)

b) Discuss four key factors a business should consider before making an outsourcing decision. Provide examples to illustrate your points. (8 marks)

Graded Exercise 4: Due Date 14/3/2025

Question (30 marks)

XYZ Manufacturing Ltd. is preparing its cash budget for the quarter ending June 30, 2025. The company is facing fluctuating demand, additional capital expenditure, and operational challenges. The management wants a comprehensive analysis to manage its cash flow effectively.