... unlimited quantities of products C and D
to the business, charging £40 per unit for product C and £55 per unit for product D.
Next year’s estimated demand for the products, from the market (in the ... its
basket makers have some spare time. An overseas retail chain has offered the business
an order for 300 baskets at a price of £13 each.
Without considering any wider issues, shou...
... the business operates when we are undertaking
a position analysis or when we are formulating plans for the future. Management
What is strategic management accounting?
CHAPTER 9 STRATEGIC MANAGEMENT ... in Step 3) and
formulating long- and short-term plans to pursue them.
5 Reviewing business performance and exercising control by assessing actual perform-
ance against planned perf...
... EVA
®
is used by many large businesses, both in the US and Europe, it tends
to be used for management purposes only: few businesses report this measure to share-
holders. One business that does, however, ... World 9 .11 describes the way in which the business uses EVA
®
and the results of
doing so.
CHAPTER 9 STRATEGIC MANAGEMENT ACCOUNTING
354
Can you work out the EVA
®
for the s...
... Similar businesses within the same industry. The performance of similar divisions of
other businesses, or whole businesses operating within the same industry, may pro-
vide a useful basis for comparison. ... another business, or a
whole business entity?
We may encounter a number of problems such as:
l Obtaining the information required. This is particularly true for a division within a...
... (recovery)
rate p. 101
Cost centre p. 110
Product cost centre p. 111
Service cost centre p. 111
Cost allocation p. 112
Cost apportionment p. 112
Batch costing p. 119
Cost-plus pricing p. 121
Variable ... seems
likely that this is not true for most of these businesses. At the same time, most of the
68 per cent treat all overheads as a fixed cost. It seems likely that, for mos...
... cater for a range of
products and no single product decision will cause the business to amend it.
Required:
(a) Prepare a summary of information that would help with the pricing decision for the ... be
sold. For every £5 below this price, the business is able to sell 10 more units. For example, at a
price of £95, 10 units would be sold, at £90, 20 units would be sold, and so o...
... to use the May figures for explaining
the variances.
Note that the business had budgeted for a higher level of output for June than it did
for May.
CHAPTER 7 ACCOUNTING FOR CONTROL
224
What else ... and therefore working towards achieving the
objectives of the business. (We should remember that budgets are the short-term plans
for achieving the business s objectives.) This enab...
... of the businesses concerned for the financial year ending in 2007.
When managers are making decisions involving capital investments, what should the
decisions seek to achieve?
Investment decisions ... popularity of standards in practice
Figure 7 .11
Standards for materials were used by all businesses in the survey, and standards for
labour were used by nearly all businesses.
The main p...
... probabilities are based on information
gathered from past experience. Thus, for example, the transport manager of a business
operating a fleet of vans may be able to provide information concerning the ... estimated price before a zero NPV is obtained. The margin
of safety is, therefore, not very high for this factor. In practice this should not
represent a real risk because the business...
... question 11. 1
M11_ATRI3622_06_SE_C11.QXD 5/29/09 3:32 PM Page 428
Real World 11. 1 gives some impression of the working capital involvement for five
very well-known UK businesses. These businesses ... waste management, mainly in the UK.
Source: Table constructed from information appearing in the financial statements for the year ending in 2007 for each of the five
businesses concer...