B5

MARGINAL AND ABSORBTION COSTING
IRELAND
REQUIREMENT:1 AUGOST 2014
(a) Prepare profit statements for Ludo Limited for the months of July and August using:
(i) Absorption costing
(ii) Variable costing (20 marks)
(b) Reconcile the profit calculated using Absorption costing to that calculated using Variable costing.
(c) Provide a brief explanation of the effect on profit of using each of the methods at (a) above.
(a) Prepare management accounts for the most recent period showing profit calculated using:
(i) Variable (marginal) costing;
(ii) Absorption costing. (15 marks)
(b) Reconcile the profit calculated at (a) (i) and (ii) above. (3 marks)
(c) Suggest TWO reasons why JK Ltd. should use absorption costing
REQUIREMENT:1 APRIL 2016
(a) Show the product cost for one keyring under variable (marginal) costing and absorption costing.
(b) Prepare management accounts for the year ending 31 March 2016 and 2015 showing profit calculated
using:
(i) Variable (marginal) costing
(ii) Absorption costing (14 marks)
(c) reconcile the profit calculated at (b) (i) and (ii) above. (3 marks)
(d) from the perspective of Keypuzzle limited, outline TWO benefits and TWO limitations of using
absorption costing
ACTIVITY BASED COSTING
Required:1 NO DATE
(b) Calculate the cost per unit for each product using ABC principles (work to two decimal places).
(c) Explain why costs per unit calculated under ABC are often very different to costs per unit calculated
under more traditional methods. Use the information from Triple Limited to illustrate. (4 marks)
(d) Discuss the implications of a switch to ABC on pricing and profitability
Required: 5 DEC 2012

Given these two sets of figures and your calculations in (c) (i), discuss whether activity based costing
should be implemented. Consider the decision from the view of each of the divisional managers.
Required: 1 JUNE 2010
(a) Calculate the cost and quoted price of a GC and of an EX using labour hours to absorb the
overheads.
(b) Calculate the cost and the quoted price of a GC and of an EX using ABC to absorb the overheads.
(c) Assuming that the cost of a GC falls by nearly 7% and the price of an EX rises by about 2% as a
result of the change to ABC, suggest possible pricing strategies for the two products that BBB sells and
suggest two reasons other than high prices for the current poor sales of the GC. (6 marks)
(d) One BBB manager has suggested that only marginal cost should be included in budget cost
calculations as this would avoid the need for arbitrary overhead allocations to products. Briefl y discuss
this point of view and comment on the implication for the amount of mark-up that would be applied to
budget costs when producing quotes for jobs.
(a) Calculate the full cost per unit for products A, B and C under traditional absorption costing, using
direct labour hours as the basis for apportionment. (5 marks)
(b) Calculate the full cost per unit of each product using activity based costing. (9 marks)
(c) Using your calculation from (a) and (b) above, explain how activity based costing may help The
Gadget Co improve the profitability of each product.
Required:1 JUNE 2014
(a) Calculate the budgeted full production cost per unit of each product using Duff Co’s current
method of absorption costing. All workings should be to two decimal places. (3 marks)
(b) Calculate the budgeted full production cost per unit of each product using activity based costing. All
workings should be to two decimal places. (11 marks)
(c) Discuss the impact on the selling prices and the sales volumes OF EACH PRODUCT which
a change to activity based costing would be expected to bring about.
(a) Calculate the full cost per procedure using activity-based costing. (6 marks)
(b) Making reference to your findings in part (a), advise the finance director as to whether activity-based
costing should be implemented at BH
IRELAND
(a) Calculate the total cost of each of the two orders referred to above using activity based costing (ABC)
to allocateoverheads.
(b) using the company’s policy, compute the selling price that would be charged for the orders referred to
at (a) above.
(c) Outline TWO advantages and TWO disadvantages of activity based costing compared to a traditional
absorption costing system.
REQUIREMENT: 3 APRIL 2016
(a) using the information provided above, estimate the production cost per unit for each of the three
products using:
(i) the division’s existing product costing system, and
(ii) an abc system. (13 marks)
(b) compare and contrast the effects of the two costing systems in this case. in particular,
provide a specific assessment as to why the costs of each product differ between each of the two systems
and critically evaluate whether and how the division should use the activity-based costing information as
a basis for revising its product selling prices
(a) Calculate the total product cost for each of the three types of office chair using:
(i) The costing approach currently used by Apex Design Ltd; (8 marks)
(ii) Activity based costing. (10 marks)
(b) Compare and comment on your answers in (i) and (ii) above, providing recommendations to improve
the profitability of Apex Design Ltd.
REQUIREMENT: 1 AGOST 3013
(a) On the basis of the information provided above, prepare a schedule which presents figures for total
budgeted overheads for each of the five departments. The bases of apportionment adopted should be
clearly shown.
(b) Calculate the total budgeted overheads for each of the three production departments after the service
departments have been re-apportioned to them.
(c) Calculate pre-determined overhead absorption rates for each of the production departments
d) For customer order B519 shown below, calculate the total price that would be quoted by Camping
Adventures Limited for the required tent:
Direct materials €
105.50 Direct labour hours: Cutting 0.5 hour
Stitching 1 hour
Finishing 0.75 hour

Machine hours
Cutting 0.25 hour
Stitching 0.50 hour
Finishing 0.25 hour
EQUIREMENT:6 AUGOST 2014
(a) Calculate the total cost of each of the two jobs noted above using:
(i) The costing approach currently used by Expert Solutions. (6 marks)
(b) Compare and comment on your answers in (a)(i) and (ii) above
REQRED 6 APRIL 2015
Calculate the total cost of each of the two surgeries noted above using:
(i) The costing approach currently used by Dendale Private Hospital.
(b) Comment on your answers in (a) (i) and (ii) above
(a) Calculate the cost of each of the orders received using:
(i) The existing overhead allocation method;
(ii) Activity based costing (ABC). (15 marks)
(b) Comment briefly on your answers at (a) (i) and (ii) above. (3 marks)
(c) Outline TWO disadvantages of ABC
(a) Calculate the total product cost and selling price for each of the two storage products noted using:
(i) The costing approach currently used by XY Storage Ltd.; (7 marks)
(ii) Activity based costing (ABC). (11 marks)
(b) Compare and briefly discuss your answers in (a) (i) and (ii) above. (4 marks)
(c) Outline TWO reasons why XY Storage Ltd. may decide NOT to adopt ABC
(a) Calculate the total cost of each of the cases noted above using:
(i) The existing costing method;

(b) Comment briefly on your answers at (a) (i) and (ii) above.
TARGET COST
equired: 3 DEC 2006
(a) Calculate the ‘profit gap’ that is forecast to exist at 30 November 2009. (10 marks)
(b) (i) Explain how the use of Ansoff’s product-market matrix might assist the management of Vision
plc to reduce the profit-gap that is forecast to exist at 30 November 2009. (3 marks)
(ii) Explain how the existing product range and the actions per Note (3) would feature in Ansoff’s
product-market matrix.
Required: 2 DECE 2009
(a) Calculate the average cost for the first 128 chairs made and identify any cost gap that may be present
at that stage. (8 marks)
(b) Assuming that a cost gap for the chair exists suggest four ways in which it could be closed. (6 marks)
The production manager denies any claims that a cost gap exists and has stated that the cost of the 128th
chair will be low enough to yield the required margin.
(c) Calculate the cost of the 128th chair made and state whether the target cost is being achieved on the
128th
Required: 1DECEMBER 2015
(a) Briefly describe the main steps involved in deriving a target cost. (3 marks)
(b) Explain any difficulties which may be encountered and any benefits which may arise when
implementing target costing at C Co
(d) Calculate the expected cost per unit for the radio and identify any cost gap that might exist.
IRELAND (TARGET COST)
REQUIREMENT: 3APRIL 2018
(a) Calculate the target cost and lifecycle cost (per unit) of the dash cam and, on this basis, justify whether
the product should be manufactured.
(b) Assume that, by increasing its R & D expenditure on the dash cam by 15% the division will achieve a
42% reduction in the end-of-life costs, together with an as-yet unspecified reduction in the manufacturing
cost per unit. The sales volume or price will not be affected. Prepare calculations to show what size of
reduction in the manufacturing cost per unit would enable the division to achieve the required markup.
(c) The manager of the Arctic Division has asked you to illustrate how the changes in part (b) might
occur in practice.
Recommend and justify one example of how a design change would bring about the cost savings (without
adversely affecting sales), as referred to in part (b) above
THROGHPUT ACCNT
(a) Calculate the throughput accounting ratio for procedure C.
Note: It is recommended that you work in hours as provided in the table rather than minutes. (6 marks)
(b) The return per factory hour for products A and B has been calculated and is $2,612·53 and $2,654·40
respectively. The throughput accounting ratio for A and B has also been calculated and is 8·96 and 9·11
respectively. Calculate the optimum product mix and the maximum profit per annum. (7 marks)
(c) Assume that your calculations in part (b) showed that, if the optimum product mix is adhered to, there
will be excess demand for procedure C of 696 procedures per annum. In order to satisfy this excess
demand, the company is considering equipping and using its own theatre, as well as continuing to rent the
existing theatre. The company cannot rent any more theatre time at either the existing theatre or any other
theatres in the area, so equipping its own theatre is the only option. An additional surgeon would be
employed to work in the newly equipped theatre.
Required:
Discuss whether the overall profit of the company could be improved by equipping and using the extra
theatre. Note: Some basic calculations may help your discussion
(a) Find by appropriate calculation the optimal production mix and related maximum contribution that
could be earned by CS. (4 marks)
(b) Calculate the shadow prices of the fabric per metre and the tailor time per hour.
Required: 1JUNE 2009
(a) Identify the bottleneck process and briefly explain why this process is described as a ‘bottleneck’.
(b) Calculate the throughput accounting ratio (TPAR) for each product assuming that the bottleneck
process is fully utilised. (8 marks)
(c) Assuming that the TPAR of product C is less than 1:
(i) Explain how Yam could improve the TPAR of product C. (4 marks)
(ii) Briefly discuss whether this supports the suggestion to cease the production of product C and briefly
outline three other factors that Yam should consider before a cessation decision is taken
Required: 2 DECEMBER 2014

(a) Briefly explain why the senior stylists’ time has been described as the ‘bottleneck activity’,
supporting your answer with calculations. (4 marks)
(b) Calculate the throughput accounting ratio (TPAR) for ‘cuts’ and the TPAR for ‘treatments’
assuming the bottleneck activity is fully utilised
Required:2 DECEMBER 2013
(a) Calculate the throughput accounting ratio for large panels and for small panels and explain
what they indicate to S Co about production of large and small panels. (9 marks)
(b) Assume that your calculations in part (a) have shown that large panels have a higher throughput
accounting ratio than small panels.
Required:
Using throughput accounting, prepare calculations to determine the optimum production mix and
maximum profit of S Co for the next year.
LIFE CYCLE COST
Applying the principles of life cycle costing, calculate the total expected profit for Shoe Co for the two-
year period.
Required: 4 DE 2011
(a) Calculate the life cycle cost per unit. (6 marks)
(b) After preparing the cost estimates above, the company realises that it has not taken into account the
effect of the learning curve on the production process. The variable manufacturing cost per unit above, of
$40 in year 2 and $42 in year 3, includes a cost for 0·5 hours of labour. The remainder of the variable
manufacturing cost is not driven by labour hours. The year 2 cost per hour for labour is $24 and the year 3
cost is $26 per hour. Subsequently, it has now been estimated that, although the first unit is expected to
take 0·5 hours, a learning curve of 95% is expected to occur until the 100th unit has been completed.
Calculate the revised life cycle cost per unit, taking into account the effect of the learning curve.
Note: the value of the learning co-efficient, b, is –0·0740005. (10 marks)
(c) Discuss the benefits of life cycle costing
LIMITING FACTOR
(a) Find by appropriate calculation the optimal production mix and related maximum contribution that
could be earned by CS. (4 marks)
(b) Calculate the shadow prices of the fabric per metre and the tailor time per hour
The tailors have offered to work an extra 500 hours provided that they are paid three times their normal
rate of $1·50 per hour at $4·50 per hour.
Required:
(c) Briefl y discuss whether CS should accept the offer of overtime at three times the normal rate. (6
marks)
(d) Calculate the new optimum production plan if maximum demand for W falls to 200 units.
Required:3 DEC 2010
(a) On the graph paper provided, use linear programming to calculate the optimum number of each
product that the Cosmetic Co should make per week, assuming that it wishes to maximise contribution.
Calculate the total contribution per week for the new production plan. All workings MUST be rounded to
2 decimal places.
(b) Calculate the shadow price for silk powder and the slack for silk amino acids. All workings MUST
be rounded to 2 decimal places
(a) On the graph paper provided, use linear programming to calculate the optimum number of
each product which Tablet Co should make in the next quarter assuming it wishes to maximise
contribution. Calculate the total profit for the quarter. (14 marks)
(b) Calculate the amount of any slack resources arising as a result of the optimum production plan and
explain the implications of these amounts for decision-making within Tablet Co.
IRELAND
(a) Based on the information provided, state whether Deasgreen limited has sufficient production
capacity to satisfy sales demand for the coming year. You should provide calculations to support your
answer.
(b) Compute the optimal production plan for Deasgreen limited for the current year, clearly showing
total profit expected.
(c) explain the meaning of the following terms:
(i) Opportunity cost
(ii) limiting factor
CVP
(a) State the breakeven sales revenue for Swim Co and estimate, to the nearest $10,000, the company’s
profit if 500 athletes attend a training course. (2 marks)
(b) Using the chart above, explain the cost and revenue structure of the company
(a) Calculate the weighted average contribution to sales ratio for Hair Co.
Note: round all workings to 2 decimal places. (6 marks)
(b) Calculate the total break-even sales revenue for the next year for Hair Co.
(c) Using the graph paper provided, draw a multi-product profit-volume (PV) chart showing clearly the
profit/loss lines assuming:
(i) you are able to sell the products in order of the ones with the highest ranking contribution to sales
ratios first; and
(ii) you sell the products in a constant mix.
Note: only one graph is required. (9 marks)
(d) Briefly comment on your findings in (c)
(a) Calculate the weighted average contribution to sales ratio for Cardio Co. (4 marks)
(b) Calculate the margin of safety in $ revenue for Cardio Co. (3 marks)
(c) Using the graph paper provided and assuming that the products are sold in a CONSTANT
MIX, draw a multi-product breakeven chart for Cardio Co. Label fully both axes, any lines drawn on
the graph and the breakeven point. (6 marks)
(d) Explain what would happen to the breakeven point if the products were sold in order of the most
profitable products first
(a) Using the current annual budgeted igures, and ignoring the two proposed projects, calculate the
breakeven number of occupied room nights and the margin of safety as a percentage. (4 marks)
(b) Ignoring the two proposed projects, calculate the budgeted proit or loss for Q1 and explain whether
the hotel should close for the duration of Q1. (4 marks)
(c) Calculate the breakeven point in sales value of Project 1 and explain whether the hotel should adopt
the project. (4 marks)
(d) Using the graph, quantify and comment upon the inancial effect of Project 2 on the Alka Hotel.
Note: There are up to four marks available for calculations.
IRELAND
REQUIREMENT: 4 AGOST 2016
(a) for eACH option:
(i) Calculate the breakeven point in sales revenue. (7 marks)

(ii) If Bonne Bia limited requires a profit of €17,500, how many units must be sold? (5 marks)
(iii) If actual sales achieved are equal to budgeted sales, compute the margin of safety in units and
percentages.
(b) recommend which option Bonne Bia limited should choose giving reasons for your answer
(a) For each of the events featuring well known artists:
(i) Calculate the number of tickets that must be sold to breakeven.
(ii) Assuming the maximum number of tickets are sold, if the board of management would like to earn a
profit of €5,000 on the event what ticket price should be charged?
(b) Assuming a ticket price of €25, at what level of ticket sales will the profit earned from The Sols equal
the profit earned from Jill M?
(c) Outline the main assumptions on which the Cost-Volume-Profit model is based
(a) Calculate the expected profit for the current year. (3 marks)
(b) Based on the forecast activity for the year, calculate:
(i) The breakeven point in packets of biscuits.
(ii) The margin of safety in percentage terms.
(iii) The sales revenue required to earn a profit of €1,440,000. (7 marks)
(c) For each of the three options above calculate:
(i) Profit.
(ii) Breakeven point in packets of biscuits.
Recommend which option, if any, the company should adopt giving reasons for your answer
REQUIREMENT: 6 AUGOST 2015
(a) for each type of class:
(i) Calculate the breakeven point in sales revenue. (6 marks)
(ii) If Herald Sports limited requires a profit of €10,000 how many classes must be held? (4 marks)
(b) Assume that the price charged per class is €7 for both the mixed ability circuits and the dance fitness
class. How many classes must be held for the profit earned from the mixed ability circuits class to equal
the profit from the dance fitness class?
(c) The company is considering paying the mixed ability circuits instructor a fixed fee of €2,600 for the
year instead of a fee per class. Calculate the effect that this change will have on the breakeven point in
sales revenue. Should the company make this change?
(d) Outline TWO assumptions on which the Cost-Volume-Profit model is based
RERELLEVANT COST
Prepare, on a relevant cost basis, the lowest cost estimate which could be used as the basis for the
quotation. Explain briefly your reasons for including or excluding each of the costs in your estimate.
Required:1 DEC 2011
(a) Prepare a cost statement, using relevant costing principles, showing the minimum cost that T Co
should charge for the contract. Make DETAILED notes showing how each cost has been arrived at and
EXPLAINING why each of the costs above has been included or excluded from your cost statement. (14
marks)
(b) Explain the relevant costing principles used in part (a) and explain the implications of the minimum
price that has been calculated in relation to the final price agreed with Push Co.
IRELAND
EQUIREMENT:5 APRI 2013
(a) Briefly explain the following terms:
(i) Relevant cost
(ii) Limiting factor (4 marks)
(b) On the basis of the financial information provided above, calculate the lowest quotation that Promo
Tees Ltd can offer for the contract without incurring a loss.
(c) Outline TWO qualitative factors that Promo Tees Ltd should take into consideration before going
ahead with the contract
DECISION UNDER UNCERTANITY
(a) Construct a pay off table to show all the possible profit outcomes. (8 marks)
(b) Decide the level of cement production the company should choose, based on the following decision
rules:
(i) Maximin (1 mark)
(ii) Maximax (1 mark)
(iii) Expected value (4 marks)
You must justify your decision under each rule, showing all necessary calculations.
(c) Describe the ‘maximin’ and ‘expected value’ decision rules, explaining when they might be used and
the attitudes of the decision makers who might use them

(a) Calculate each of the six possible profit outcomes which could arise for Gam Co in the coming year.
(b) Calculate the expected value of profit for each of the two price options and recommend, on this basis,
which option Gam Co would choose. (3 marks)
(c) Briefly explain the maximin decision rule and identify which price should be chosen by management
if they use this rule to decide which price should be charged. (3 marks)
(d) Discuss the factors which may give rise to uncertainty when setting budgets.
(a) Using the criterion of expected value, prepare and fully label a decision tree that shows the two
options available to GB. Recommend the decision that GB should make.
Note: Ignore time value of money. (12 marks)
(b) Calculate the maximum price that GB should pay for perfect information about the expansion’s exact
effect on MEMBERSHIP NUMBERS. (6 marks)
(c) Briefly discuss the problems of using expected values for decisions of this nature
LEANING CURVER
(a) Calculate the price which Chair Co expects to charge for the new seat.
Note: The learning index for a 75% learning curve is –0·415. (5 marks)
(b) The first phase of production has now been completed for the new car seat. The first unit
actually took 12·5 hours to make and the total time for the first eight units was 34·3 hours, at which
point the learning effect came to an end. Chair Co are planning on adjusting the price to reflect the actual
time it took to complete the 8th unit.
Required:
(i) Calculate the actual rate of learning and state whether this means that the labour force actually learnt
more quickly or less quickly than expected. (3 marks)
(ii) Briefly explain whether the adjusted price charged by Chair Co will be higher or lower than the price
you calculated in part (a) above. You are NOT required to calculate the adjusted price.
BUDGET
Required:4 DEC 2012
(a) Explain what a monthly rolling budget is and how it would operate at Designit. (4 marks)
(b) Discuss the problems that may be encountered if Designit decides to introduce monthly rolling
budgets together with a new bonus scheme, such as the one outlined above. (6 marks)
(c) Discuss the problems with the current bonus scheme and, assuming that the company decides against
introducing rolling budgets, describe and justify an alternative, more effective bonus scheme that could be
introduced. (6 marks)
(d) Discuss the risk of using the company accountant’s own spreadsheets for budgeting
(a) Prepare a flexed budget for the month of May, assuming that the standard mix of customers remains
the same as budgeted
(a) Identify and explain SIX objectives of a budgetary control system. (9 marks)
(b) Discuss the concept of a participative style of budgeting in terms of the six objectives identified in
part (a)
Required:5 DE 2010
(a) Discuss the particular difficulties encountered when budgeting in public sector organisations
compared with
budgeting in private sector organisations, drawing comparisons between the two types of organisations.
(b) Explain the terms ‘incremental budgeting’ and ‘zero-based budgeting’. (4 marks)
(c) State the main stages involved in preparing zero-based budgets. (3 marks)
(d) Discuss the view that ‘there is no longer a place for incremental budgeting in any organisation,
particularly public sector ones,’ highlighting any drawbacks of zero-based budgeting that need to be
considered
Required:5 june 2009
(a) Calculate the overheads budget for 2010. (3 marks)
(b) Calculate the budgets for road repairs for 2010. (6 marks)
(c) Explain the problems associated with using expected values in budgeting by an LGO and explain why
a contingency for road repairs might be needed. (8 marks)
(d) Explain the process involved for zero based budgeting.
(a) Describe the main steps involved in preparing a zero-based budget. (3 marks)
(b) Discuss the problems which the Lesting Regional Authority (LRA) may encounter if it decides to
introduce and use ZBB to prepare its budget for the coming financial year. (9 marks)
(c) Outline THREE potential benefits of introducing zero-based budgeting at the LRA
5 JUNE 2013
a) Considering the views of the board of governors, recalculate the budget surplus/deficit for the year
ending
31 May 2014.
(b) Discuss the advantages and disadvantages of using incremental budgeting. (4 marks)
(c) Briefly outline the three main steps involved in preparing a zero-based budget. (6 marks)
(d) Discuss the extent to which zero-based budgeting could be used by Newtown School to improve the
budgeting process.
IRELAND
REQUIREMENT:6 AGOST 2016
(a) Prepare a cash budget for Joy Dunne’s business, on a monthly basis, for the six month period
commencing 1 September 2016, clearly showing the closing cash balance at the end of each month.
(b) explain Zero Based Budgeting (ZBB) and outline TWO benefits of ZBB over traditional budgeting
methods
(a) Prepare a cash budget for Greatfone Style limited, on a monthly basis, for the six month period
commencing 1 May 2015, clearly showing the closing cash balance at the end of each month.
(b) Outline TWO benefits of cash budgets. (2 marks)
(c) explain the following terms:
(i) flexible budget
(ii) Zero based budgeting
(a) Prepare a cash budget for JB Plaid Ltd on a monthly basis, for the four-month period commencing 1
May 2017.
(b) Explain the meaning of the following terms:
(i) Master budget.
(ii) Flexible budget
VARIENCE
Required: 2 NO DATE
(a) Using the information in table 1:
(i) Explain the meaning of each type of variances above (price, mix and yield but excluding the total
variance) and briefly discuss to what extent each type of variance is controllable by the production
manager.
(ii) Evaluate the performance of the production manager considering both the cost variance results above
and the sales director’s comments. (6 marks)
(iii) Outline two suggestions how the performance management system might be changed to better reflect
the performance of the production manager
(a) Calculate the material variances in as much detail as the information allows for the month of
February.
(b) Calculate the labour efficiency variances in as much detail as the information allows for the
month of February. (5 marks)
(c) Assess the performance of the production manager for the month of February
(a) Calculate the total labour rate and total labour efficiency variances for the last quarter. (2 marks)
(b) Analyse the above total variances into component parts for planning and operational variances in as
much detail as the information allows. (6 marks)
(c) Assess the performance of the production manager for the last quarter
(a) Calculate the total labour rate and total labour efficiency variances for November, based on the
standard cost provided above. (4 marks)
(b) Analyse the total labour rate and total labour efficiency variances into component parts for planning
and operational variances in as much detail as the information allows. (8 marks)
(c) Assess the performance of the production manager for the month of November.
(a) Calculate the following variances for the last month:
(i) the material usage variance for each ingredient and in total; (4 marks)
(ii) the total material mix variance; (4 marks)
(iii) the total material yield variance. (3 marks)
(b) Discuss the problems with the current system of calculating and reporting variances for assessing the
performance of the production manager.
(a) Calculate the following variances for materials in Ooze:
(i) Total materials usage variance; (4 marks)

(ii) Total materials mix variance; (4 marks)
(iii) Total materials quantity (yield) variance. (4 marks)
(b) Calculate the following activity-based variances in relation to the set-up cost of the machines:
(i) The expenditure variance; (3 marks)
(ii) The efficiency variance. (3 marks)
(c) Briefly outline the steps involved in allocating overheads using activity based costing.
Required 2 JUNE 2010
(a) Assess the performance of the production director using all the information above taking into
account both the decision to use a new supplier and the decision to de-skill the process.
Required:
(b) Calculate the materials, labour and sales variances for May 2010 in as much detail as the
information allows. You are not required to comment on the performance of the business.
Required: 1 dec 2010
(a) Calculate the following for the month of November, showing all workings clearly:
(i) The sales price variance and sales volume contribution variance; (6 marks)
(ii) The material price planning variance and material price operational variance; (2 marks)
(iii) The labour rate variance and the labour efficiency variance. (7 marks)
(b) Explain the reasons why Carad Co would be interested in the material price planning variance and the
material price operational variance
Required: 1 dec 2009
(a) Calculate the total material price and total material usage variances ignoring any possible planning
error in the figures. (4 marks)
(b) Analyse the above total variances into component parts for planning and operational variances in as
much detail as the information allows. (8 marks)
(c) Assess the performance of the production manager.
Required: 3 june 2009
(b) Calculate the material price, mix and yield variances and the sales price and sales contribution
volume variances for April. You are not required to make any comment on the performance of the
managers.
1 dece 2006 b1
Calculate the sales price and sales volume contribution variances for last month showing clearly whether
each variance is favourable or adverse. (4 marks)
(b) Explain how the two variances calculated in (a) could be interrelated. (3 marks)
(c) Calculate the BUDGETED profit for last month assuming that the company was using absorption
costing.
(a) Using the data provided for full valets and mini valets, calculate:
(i) The total sales mix contribution variance; (4 marks)
(ii) The total sales quantity contribution variance. (4 marks)
(b) Briefly describe the sales mix contribution variance and the sales quantity contribution variance. (2
marks)
(c) Discuss the SALES performance of the business for the period, taking into account your calculations
from part (a) AND the information provided in the scenario
Required:5DECEMBER 2014
(a) Calculate the total material mix variance and the total material yield variance for September
Required:
(i) Briefly explain what the adverse materials mix and favourable materials yield variances indicate
about production at Safe Soap Co in October.
Note: You are NOT required to discuss revision of standards or operational and planning variances.
(ii) Discuss whether the sales manager could be justified in claiming that the change in the materials mix
has caused an adverse sales volume variance in October.
(a) Calculate the labour efficiency planning variance and the labour efficiency operational variance
AFTER taking account of the learning effect.
Note: The learning index for a 90% learning curve is –0·1520 (5 marks)
(b) Discuss the likely consequences arising from the production manager’s failure to take into
account the learning effect before production commenced.
(a) Calculate, for Commodity 3 only, the sales price operational variance and the sales price planning
variance.
(b) Using the data provided for Commodities 1, 2 and 3, calculate the total sales mix variance and the
total sales quantity variance. (11 marks)
(c) Briefly discuss the performance of the business and, in particular, that of the sales manager for the
quarter ended 31 May 2013

(a) Calculate the total material mix variance and the total material yield variance for OBC for the last
quarter.
(b) Using the information in the question, suggest THREE possible reasons why an ADVERSE
MATERIAL YIELD variance could arise at OBC
(a) Calculate the following variances for the month of November, for both bed sheets and pillow cases,
and in total:
(i) Material price planning variance; (3 marks)
(ii) Material price operational variance; (3 marks)
(iii) Material usage planning variance; (3 marks)
(iv) Material usage operational variance. (3 marks)
(b) Assess the performance of the production manager for the month of Novembe
IRELALND(VARIENCE)
(a) Prepare the two labour cost variance analysis reports referred to above i.e., the BVAR and the AVAR.
(b) John Robertson has stated that: “I don’t see the point of the AVAR. Ultimately, where cost overruns
of any kind occur, the buck stops with me and the middle managers who report to me. I need to find out
what the problems are and how to resolve them, but the AVAR doesn’t help me to do that: all it does is
provide numbers which can be cherry- picked in an attempt to provide excuses for poor performance”.
In a detailed response to John Robertson critically evaluate the usefulness of the AVAR in improving the
future performance of the division. Support your answer by reference to the results of your calculations in
part (a) above
(a) based on the information provided construct the division’s variance analysis report and (without
preparing further calculations) critically evaluate why the materials usage variance is of only limited
usefulness in assessing the division’s performance in relation to raw materials efficiency.
(b) recommend and justify how the division should expand its variance analysis in relation to raw
materials. Your answer should include calculations (for last month) of the additional variances which you
recommend and a detailed interpretation of their significance.
(c) evaluate how else the division might regularly assess the consequences of its decisions in relation to
the purchase, use, and mixing of raw materials. Justify your answer in detail. calculations are not required
(a) analyse the oceanic division’s sales and marketing variances in as much detail as is possible from the
information provided.
(b) prepare a report for pat bradley in which you critically evaluate the performance of the oceanic
division’s sales & marketing department, using the variance analysis information which you have
determined in your answer to part (a) and any other information which is relevant.
(c) Joe murphy, the manager of the facility which manufactures product 1, has argued that the effects of
certain cost changes in relation to direct materials were beyond his control and that the effects of
these supposed “uncontrollables” need to be quantified separately. these two “uncontrollable” cost
changes are (i) a 25% increase in the amount of direct material per unit of output, which was a foreseeable
consequence of Joe’s decision to defer the preventative maintenance of production equipment, and (ii) a
12% increase in the list price per kilogram charged by the supplier of the direct materials for product 1.
perform a detailed variance analysis in respect of the direct materials used to produce product 1. Your
answer should quantify separately the effect of each of these two “uncontrollable” cost changes and
evaluate whether it is appropriate to make this separation for purposes of assessing Joe murphy’s
performance
REQUIREMENT: 3 APRLI 2015
(a) analyse tiber’s labour variances in as much detail as possible from the information provided. (14
marks)
(b) recommend options as to how mary ross might interpret the financial and strategic success (or
otherwise) of tiber for last month. support your answer by reference to the results of your analysis in part
(a) and advise mary as to the principal additional information which she would require in order to
interpret the outcome.
using the information provided above:
(a) Prepare a cost statement showing the original budget, flexed budget and actual results. (5 marks)
(b) Calculate all variances in as much detail as the information permits. (12 marks)
(c) Outline TWO possible reasons to explain the direct labour variances that you have calculated at (b)
above
REQUIREMENT:6 JUNE 2013
(a) Prepare a profit statement, based on variable (marginal) costing principles, showing the original
budget, a flexed budget and actual results.
(b) Calculate all relevant variances. (13 marks)
(c) Prepare a statement reconciling the profit that was originally budgeted to actual profit achieved
(a) Prepare the standard cost card for ONE ‘plantform’. (4 marks)
(b) Calculate all relevant variances. (15 marks)
(c) Prepare a statement reconciling the profit that was originally budgeted to actual profit achieved.
(d) Suggest TWO reasons to explain the direct materials variances

(a) Prepare a production budget in units for the quarter ending 31 December 2015. (5 marks)
(b) Prepare a materials purchase budget (in units and €) for each material for the quarter ending 31
December 2015.
(c) Prepare a labour cost budget (in hours and €) for the quarter ending 31 December 2015. (3 marks)
(d) Prepare a variable production overhead cost budget for the quarter ending 31 December 2015. (2
marks)
(e) Prepare a budgeted income statement for the quarter ending 31 December 2015 based on the results
you have obtained in (a) to (d) above
(a) Prepare a profit statement showing the original budget, flexed budget and actual results. (5 marks)
(b) Calculate relevant variances in as much detail as the information above permits. (13 marks)
(c) Briefly explain how variances can be inter-related providing an example that supports your answer
REQUIREMENT: 4 AUGOST 2017
(a) State whether Tasty Crumbe Ltd. has sufficient production capacity to satisfy sales demand for the
year ahead, providing calculations to support your answer.
(b) Compute and show the ranking for the optimal production plan for Tasty Crumbe Ltd. for the year,
clearly showing total profit expected.
(c) Another artisan bakery has offered to supply up to 4,000 loaves, of any of the three types, to Tasty
Crumbe Ltd. during the year for a fixed price of €5.00 per loaf. Should the company avail of this offer?
Give reasons for your answer
(a) Prepare a standard cost card for ONE kickboard. (4 marks)
(b) Using the information provided calculate all relevant variances. (11 marks)
(c) Reconcile budgeted profit to actual profit achieved. (3 marks)
(d) Suggest TWO reasons to explain the material variances.
(a) Prepare a cost statement showing the original budget, flexed budget and actual results. (6 marks)
(b) Calculate relevant variances in as much detail as the information permits. (12 marks)
(c) Briefly explain the meaning of the following terms:
(i) Ideal standard costs.
(ii) Attainable standard costs.

PERFOMENCE MEASURE
(a) (i) Calculate the return on the average capital employed by each of the divisions during the years
ended 30 November 2005 and 30 November 2006. (6 marks)
(ii) Comment briefly on how divisional managers might respond to the results achieved and ONE
potential problem that might be experienced by Our Timbers Ltd
Using the above information, analyse and discuss the performance of EAJ for the year ended 31 May
2006 under the following headings:
(i) Financial performance and competitiveness;
(ii) External effectiveness;
(iii) Internal efficiency
(a) Prepare detailed calculations to show whether the manufacture of Mighty Ben cakes will provide the
required rate of return for GWCC over periods of twelve months and eighteen months. (20 marks)
(b) (i) Advise the directors of GWCC on specific actions which may be considered in order to improve
the estimated return on their investment of £1,900,000. (8 marks)
(ii) Briefly discuss TWO factors which could reduce the rate of return earned by the investment as per
the results in part (a). (4 marks)
(c) Explain the term ‘target costing’ and how it may be applied by GWCC. Briefly discuss any potential
limitations in its application
Required:2 DECE 2007
(a) Assess the financial performance of the business during its first two quarters using only the data in
table 1 above. (12 marks)
(b) Briefly consider whether the losses made by the business in the first two quarters are a true reflection
of the current and likely future performance of the business
Required: 4 NO DATE
(a) Using the information in appendix 1 only, comment on the financial performance of the
business (briefly consider growth, profitability, liquidity and credit management). (8 marks)
(b) Explain why non financial information, such as the type shown in appendix 2, is likely to
give a better indication of the likely future success of the business than the financial information given
in appendix 1.
(c) Using the data given in appendix 2 comment on the performance of the business. Include
comments on internal business processes, customer knowledge and learning/growth, separately, and
provide a concluding comment on the overall performance of the business.
(a) Explain why the balanced scorecard approach to performance measurement is more useful to
measure performance for The People’s Bank than a traditional approach using solely financial
performance measures.
(b) Using all of the information provided, including The People’s Bank’s vision and values,
discuss the performance of The People’s Bank in 20X6.
(a) Calculate the incremental profit/(loss) per component for the group if Division M accepts the new
supplier’s offer and recommend how many components Division L should sell to Division M if group
profits are to be maximised. (3 marks)
(b) Using the quantities calculated in (a) and the current transfer price, calculate the total annual profits
of each division and the group as a whole. (6 marks)
(c) Discuss the problems which will arise if the transfer price remains unchanged and advise the divisions
on a suitable alternative transfer price for component L.
Assess the performance of the business in Quarter 2 in relation to the changes and incentives that the
company introduced at the beginning of this quarter. State clearly where any further information might be
necessary, concluding as to whether the changes and incentives have been effective
(a) For each of the dimensions of the building block model, calculate one performance indicator for
MSC and one for the OSC average using the data available. Briely justify your choice of performance
indicator and discuss MSC’s performance relative to the other OSC service centres. (16 marks)
(b) Explain how the standards and rewards blocks support the dimensions block in Fitzgerald and
Moon’s building block model.
Calculate both the return on investment and residual income of the new investment for each of the two
divisions. Comment on these results, taking into consideration the manager’s views about residual income
(a) Calculate the amount of bonus that the manager should expect to be paid for the latest fi nancial
year.
(b) Discuss to what extent the targets set are controllable by the local manager (you are required to
make a case for both sides of the argument). (9 marks)
(c) Describe two methods as to how a manager with access to the accounting and other records could
unethically manipulate the situation so as to gain a greater bonus.
Required:dec 2010
Assess the performance of the business in 2010 using both financial performance indicators calculated
from the above information AND the non-financial performance indicators provided.
(a) Assess the performance of the production manager and the sales manager and indicate whether the
current bonus scheme is fair to those concerned.
(a) Calculate the average price for hair services per male and female client for each of the years 2008 and
2009.
(b) Assess the financial performance of the Salon using the data above. (11 marks)
(c) Analyse and comment on the non-financial performance of Oliver’s business, under the headings of
quality and resource utilisation.
Required:4 dec 2009
(a) Assess the financial performance of TIP using the information given above. (14 marks)
During the early part of 2008 TIP employed a newly qualified management accountant. He quickly
became concerned about the potential performance of TIP and to investigate his concerns he started to
gather data to measure some non-financial measures of success. The data he has gathered is shown below:
Tabl e 1
2008 2009
Hours lost due to breakdown of rides (see note 1) 9,000 hours 32,000 hours
Average waiting time per ride 20 minutes 30 minutes
Note 1: TIP has 50 rides of different types. It is open 360 days of the year for 10 hours each day
Required:
(b) Assess the quality of the service that TIP provides to its customers using Table 1 and any other
relevant data
and indicate the risks it is likely to face if it continues with its current policies.
(a) (i) Calculate the return on investment (ROI) for each of the two divisions of Sports Co.
(ii) Discuss the performance of the two divisions for the year, including the main reasons why their
ROI results differ from each other. Explain the impact the difference in ROI could have on the behaviour
of the manager of the worst performing division. (6 marks)
(b) (i) Calculate the residual income (RI) for each of the two divisions of Sports Co and briely
comment on the results of this performance measure. (4 marks)
(ii) Explain the advantages and disadvantages of using residual income (RI) to measure divisional
performance. Required:SEPT 2016 31 Discuss the financial and non-financial performance of Jungle Co
for the year ending 31 August 20X6
(a) Discuss the performance of C Co and each division of W Co, calculating and using the
following three performance measures:
(i) Return on capital employed (ROCE)
(ii) Asset turnover
(iii) Operating profit margin
Note: There are 4·5 marks available for calculations and 5·5 marks available for discussion
Using all the information above, assess the financial performance of Division S in the year ended 30
November 2013. State clearly where further information might be required in order to make more
reasoned conclusions about the division’s performance.
(a) For each division, for the year ended 31 August 2015, calculate the appropriate closing return on
investment (ROI) on which the payment of management bonuses will be based. Briefly justify the figures
used in your calculations.
Note: There are 3 marks available for calculations and 2 marks available for discussion. (5 marks)
(b) Based on your calculations in part (a), calculate each manager’s bonus for the year ended 31 August
2015.
(c) Discuss whether ROI is providing a fair basis for calculating the managers’ bonuses and the
problems arising from its use at CIM Co for the year ended 31 August 2015.
IRELAND (PERFOMANCE MEASURE)
(a) determine the residual income earned by each division in accordance with the company’s existing
performance measurement rules. then, insofar as is possible from the information provided, determine the
economic Value added (eVatm) of each division.
(b) after reviewing your answer to part (a), pat bradley has queried the appropriateness of eVatm in
measuring the amount of shareholder value created by each division. in particular, pat argues that your
eVatm calculation significantly overstates the shareholder value generated by the away division. he also
argues that it takes no account of what pat calls “extraordinarily difficult ongoing macroeconomic
circumstances” faced by the home division in the markets in which that division operates. prepare a
memo to pat bradley in which you respond appropriately to these arguments. You should make full use of
the elements of your calculation in part (a) to support your point.
(a) Prepare a more detailed calculation of the divisional net profit, using the information above. Your
answer should include subtotals showing the profit measures most appropriate for reporting managerial
performance and economic performance. Justify, in detail, your choice regarding the most appropriate
measures of managerial and economic performance.
(b) You have determined that Group-level expenses are allocated to divisions in proportion to each
division’s turnover for the year. Critically evaluate this approach.
(c) Should the Carpentaria Division be treated as a profit centre rather than an investment centre? Justify
your answer fully, referring in specific detail to the level of autonomy available to the division.
(a) the manager of the red division has observed that, on average, the actual profit which it earns on
software development contracts is substantially less than the 25% markup which it adds to estimated costs
when setting the sealed bid prices. prepare a detailed analysis to show why this is so.
(b) prepare calculations to indicate the profit markup which, if added to estimated costs by both bidders
(red division and opaque ltd), would result in the winner achieving an average actual profit of 18% of the
actual cost of developing the software.
(c) the manager of the red division believes that the number of competitors will increase significantly
over the next two years. he believes that this will make it more difficult for the red division to win
contracts and will adversely affect profit margins actually achieved, as it will increase the potential for
being undercut on price by a competitor which underestimates its costs.
as a way of dealing with this intensified competition, the manager of the red division is considering
refusing to take part in “sealed bid” processes and instead insisting that customers agree to reimburse
actual costs plus an agreed percentage. critically evaluate this suggestion. identify and justify more
effective responses for dealing with the new competitive situation.
EQUIREMENT: 5 APRIL 2017
recommend to the Yellow division manager the actions that should be taken in response to the
results of the benchmarking analysis. Your answer to this part should include a detailed response to the
suggestion that the Yellow division should impose a minimum spend for “click-and-collect” transactions
while simultaneously reducing its minimum spend for “home delivery” transactions.
(a) evaluate the likely reasons for the behaviour identified above, i.e., the refusal of the managers of
components profit centres to make any components available for transfer even where spare production
capacity exists in the components profit centres.
(b) critically assess in detail, the range of options available to Jim cox in order to increase the likelihood
that the components profit centre managers will behave in a goal congruent way in relation to making
components availablefor transfer.
(c) John sullivan believes that Jim cox himself may sometimes engage in behaviour which is not goal
congruent, and that the performance evaluation system in use may be to blame. as an example, John cites
the instance where (in the last week of the most recent financial year) Jim sold trade receivables with a
book value of €500,000 to a factoring agency at a discount of €20,000 and immediately remitted the cash
proceeds to colour Group plc’s headquarters. John sullivan notes that there was no likelihood of any of
these debts turning “bad” and that (had the factoring not taken place) the €500,000 could have been
collected in full in the normal course of business one month later. Jim receives a fixed annual bonus in a
year when the Green division reaches or exceeds a target level of residual income. critique the likely
reasons why Jim engaged in this behaviour, and recommend and justify changes which John should
consider making in terms of Jim’s performance is measured and rewarded.
LIMITING FACTOR
(a) Assuming that CSC Co keeps to its agreement with Encompass Health, calculate the shortage of
Betta, the resulting optimum production plan and the total profit for next month.
Required:
(c) (i) Explain what the line labelled ‘C = 2·6x + 1·75y’ on the graph is and what the area represented
by the points 0ABCD means. (4 marks)
(ii) Explain how the optimum production plan will be found using the line labelled ‘C = 2·6x + 1·75y’
and identify the optimum point from the graph. (2 marks)
(iii) Explain what a slack value is and identify, from the graph, where slack will occur as a
result of theoptimum production plan.
TRANSFER PRICING
(a) Calculate and discuss the transfer prices per consulting day at which the IT division should provide
consulting services to the HR division in order to ensure that the profit of the RJ Business Consulting
Group is maximised in each of the following situations:
(i) Every pair of consultants in the IT division is 100% utilised during the required 48-week period in
providing consulting services to external clients, i.e. there is no spare capacity.
(ii) There is one team of consultants who, being free from other commitments, would be available to
undertake the provision of services to the HR division during the required 48-week period. All other
teams of consultants would be 100% utilised in providing consulting services to external clients.
(iii) A major client has offered to pay the IT division £264,000 for the services of two teams of
consultants
during the required 48-week period.
(a) Using traditional absorption costing, calculate new transfer prices for S and R if machine hours are
used as a basis for absorption rather than labour hours.
(b) Using activity based costing to allocate the overheads, recalculate the transfer prices for S and R.
(c) (i) Calculate last month’s profit for each division, showing it both for each product and in total, if
activity based costing is used.
(a) Under the current transfer pricing system, prepare a proit statement showing the proit for each of the
divisions and for The Portable Garage Co (PGC) as a whole. Your sales and costs igures should be split
into external sales and inter-divisional transfers, where appropriate. (9 marks)
(b) Assuming that the new group purchasing policy will ensure the optimisation of group proits,
calculate and discuss the number of adaptors which Division B should buy from Division A and the
number of adaptors which Division A should sell to external customers.
Note: There are 3 marks available for calculations and 3 marks for discussion
Assume now that no external supplier exists for the adaptors which Division B uses.
(c) Calculate and discuss what the minimum transfer price per unit would be for any additional adaptors
supplied above the current level by Division A to Division B so that Division B can meet its maximum
annual demand for the new portable batteries.
Note: There are 2 marks available for calculations and 3 marks available for discussion.
Required:2 DEC 2011
(a) Under the current transfer pricing system, prepare a profit statement showing the profit for each of the
divisions and for Bath Co as a whole. Your sales and costs figures should be split into external sales and
inter-divisional transfers, where appropriate. (6 marks)
(b) Head Office is considering changing the transfer pricing policy to ensure maximisation of company
profits without demotivating either of the divisional managers. Division A will be given autonomy to buy
from external suppliers and Division B to supply external customers in priority to supplying to Division
A.
Calculate the maximum profit that could be earned by Bath Co if transfer pricing is optimised. (8 marks)
(c) Discuss the issues of encouraging divisional managers to take decisions in the interests of the
company as a whole, where transfer pricing is used. Provide a reasoned recommendation of a policy Bath
Co should adopt.
Required:5 dec 2006 b1
(a) Calculate the expected after tax profits that would result from each of the three transfer pricing
methods.
(b) Discuss the advantages and disadvantages of each of the methods
Assuming that the group’s current policy could be changed, advise, using suitable calculations, the
number of motors which Division M should supply to Division S in order to maximise group profits.
Recommend the transfer price or prices at which these internal sales should take place.
(a) Calculate and conclude whether any of the products should be further processed in Division B in
order to optimise the profit for the company as a whole. (10 marks)
(b) It has been suggested that Division A should transfer products L and M to Division B for further
processing, in order to optimise the profit of the company as a whole. Divisions A and B are both
investment centres and all transfers from Division A to Division B would be made using the actual
marginal cost. As a result, if Division A were to make the transfers as suggested, their divisional
profits would be much lower than if it were to sell both products externally at split-off point. Division B’s
profits, however, would be much higher.
Required:
Discuss the issues arising from this suggested approach to transfer pricing. (5 marks)
(c) Process Co is becoming increasingly concerned that environmental costs may be increasing within the
company. However, the company has not yet developed a structured way for accounting for these costs. It
has heard of a number of different management accounting techniques which can be used to account for
environmental costs,including ‘input/output analysis’, ‘flow cost accounting’, ‘environmental
activity-based costing’ and ‘life cycle costing’.
Required:
Briefly describe TWO of these techniques in the context of environmental management accounting.
NONE
Required:3 DEC 2013
(a) Calculate the actual total monthly labour costs for producing the microphones for each of the five
months from July to November. (9 marks)
(b) Discuss the implications of the learning effect coming to an end for Mic Co, with regard to costing,
budgeting and production. (4 marks)
(c) Discuss the potential advantages and disadvantages of involving senior staff at Mic Co in the budget
setting process, rather than the managing director simply imposing the budgets on them.
(a) For each perspective of the balanced scorecard, identify two goals (objectives) together with a
corresponding performance measure for each goal which could be used by the company to assess whether
the changes have been successful. Justify the use of each of the performance measures that you choose.
(b) Discuss how the company could reduce the problem of customers terminating their pay-tv service
after only three months.
Required: 3 DECEMBER 2013
(a) Recalculate the estimated lifetime cost per unit for the webcam after taking into account points 1 to 3
above.
(b) Explain the ‘market skimming’ (also known as ‘price skimming’) pricing strategy and discuss, as far
as the information allows, whether this strategy may be more appropriate for Cam Co than charging one
price throughout the webcam’s entire life.
(a) Calculate the total variable cost per unit and total fixed overheads. (3 marks)
(b) Calculate the optimum (profit maximising) selling price for the new product AND calculate the
resulting profit for the period.
Note: If P = a – bx then MR = a – 2bx. (7 marks)
(c) The sales director is unconvinced that the sales price calculated in (b) above is the right one to charge
on the initial launch of the product. He believes that a high price should be charged at launch so that those
customers prepared to pay a higher price for the product can be ‘skimmed off’ first.
Required:
Discuss the conditions which would make market skimming a more suitable pricing strategy for ALG,
and recommend whether ALG should adopt this approach instead
(a) Describe each of the four perspectives of the balanced scorecard. (6 marks)
(b) For each perspective of the balanced scorecard, identify one goal together with a corresponding
performance measure which could be used by Jamair to measure the company’s performance. The goals
and measures should be specifically relevant to Jamair. For each pair of goals and measures, explain why
you have chosen them.
Required: 2 2014 JUNE
(a) On the graph paper provided, use linear programming to calculate the optimum number of
each product which Tablet Co should make in the next quarter assuming it wishes to maximise
contribution. Calculate the total profit for the quarter. (14 marks)
(b) Calculate the amount of any slack resources arising as a result of the optimum production plan and
explain the implications of these amounts for decision-making within Tablet Co
(a) Calculate the optimum (proit-maximising) selling price for Parapain and the resulting annual proit
which TR Co will make from charging this price.
Note: If P = a – bQ, then MR = a – 2bQ (12 marks)
(b) Discuss and recommend whether market penetration or market skimming would be the most suitable
pricing strategy for TR Co when launching the new anti-malaria drug.
(a) Calculate the shortfall in general purpose machine hours next month. (2 marks)
(b) Determine how many units of which components should be purchased from Sergeant Ltd next month.
(c) Briefly explain THREE other factors that the management of Merryl Ltd should consider before
making a final decision to buy in components from Sergeant Ltd for next month
Required: 4 dec 2006 b1
(a) Prepare the Process G Account for last month in £ and litres. (10 marks)
(b) Identify TWO types of organisation where it would be appropriate to use service (operation) costing.
For each one suggest a suitable unit cost measure.
(a) Calculate:
(i) the machine hour absorption rate for cost centre P1, and
(ii) the direct labour hour absorption rate for cost centre P2. (6 marks)
(b) Explain the difference between production overheads that have been ‘allocated’ and those which have
been ‘apportioned’ to cost centres. Explain why some manufacturing companies are able to allocate
electric power costs to production cost centres, whereas others can only apportion them
Required:3 dec 2009
(a) Calculate the tonnes of waste to be expected in the calendar year 2010. (4 marks)
(b) Calculate the variable operating cost and fixed operating cost to be expected in 2010 using regression
analysis on the 2009 data and allowing for inflation as appropriate. (10 marks)
Many local government organisations operate incremental budgeting as one of their main budgeting
techniques. They take a previous period’s actual spend, adjust for any known changes to operations and
then add a % for expected inflation in order to set the next period’s budget.
(c) Describe two advantages and two disadvantages of a local government organisation funded by
taxpayer’s money using incremental budgeting as its main budgeting technique
(a) Calculate the price that Nail would charge for the garden shears under the existing policy of
variable cost plus 30%.
(b) Calculate the increase or decrease in price if the pricing policy switched to total cost plus 10%.
(c) Discuss whether or not including fi xed costs in a transfer price is a sensible policy. (4 marks)
(d) Discuss whether the retail stores should be allowed to buy in from outside suppliers if the prices are
cheaper than those charged by Nail.
(a) (i) Establish the demand function (equation) for air conditioning units; (3 marks)
(ii) Calculate the marginal cost for each air conditioning unit after adjusting the labour cost as required
by the note above; (6 marks)
(iii) Equate marginal cost and marginal revenue in order to calculate the optimum price and quantity.
(b) Explain what is meant by a ‘penetration pricing’ strategy and a ‘market skimming’ strategy and
discusswhether either strategy might be suitable for Heat Co when launching the Energy Buster.
Required:3 NO DATE
(a) Calculate how many batches Jewel Co should import and sell. (6 marks)
(b) Explain why Jewel Co could not use the algebraic method to establish the optimum price for its
product.
Required:
(a) Prepare detailed calculations to show whether product S-pro will provide the target net cash flow.
(b) Calculate what length of time then second batch will take if the actual rate of learning is:
(i) 80%;
(ii) 90%.
Explain which rate shows the faster learning. (5 marks)
(c) Suggest specific actions that BFG could take to improve the net cash flow calculated above.
IRELAND
(a) Calculate the total cost of Job A134. (14 marks)
(b) Calculate the price charged by Top Glass Ltd to the customer. (2 marks)
(c) Briefly explain the main differences between job costing and process costing.

(a) Prepare the following completed accounts for the most recent financial period:
(i) Mixing process account
(ii) Normal loss account
(iii) Abnormal loss/Abnormal gain account
(iv) Thinning process account (18 marks)
(b) In relation to process costing, explain the difference between the FIFO and Average (Weighted
Average) methods for valuing inventory
(a) On the basis of the information provided above, prepare a schedule that presents figures for total
budgeted overheads for each of the four departments, clearly showing the basis of apportionment adopted.
(b) Calculate the total budgeted overheads for both production departments after the service departments
have been re-apportioned to them.
(c) Calculate pre-determined overhead absorption rates for each of the production departments. (3 marks)
(d) For the Moulding department, actual information relating to the month of May was subsequently
available: Actual production overheads €132,565
Actual labour hours 13,150
Actual machine hours 12,900
Calculate the UNDER or OVER absorption of production overhead for the month of May. (3 marks)
(e) Briefly explain what the answer obtained in (d) above means and how it should be treated in the
accounting records
REQUIREMENT: 5 DEC 214
(a) Prepare the following completed accounts for the most recent financial period.You must show all
workings clearly.
(ii) Blending process account
(iii) Normal loss account
(iv) Abnormal loss/Abnormal gain account (18 marks)
(b) Explain the difference between a normal loss and an abnormal loss
(a) for the month of March prepare the following accounts, ensuring that all workings are clearly shown:
(i) The Mixing process account (9 marks)

(ii) The Cooking process account. (8 marks)
(b) In some cases a scrap value is placed on the loss arising from a production process. for example, this
scrap material can be sold for cash. In such cases, explain how the scrap value of a normal loss and the
scrap value of an abnormal loss are treated in the cost accounts.
(a) Prepare calculations to show whether Sunny Dezigns DAC will have sufficient production capacity to
meet budgeted demand for its products.
(b) Compute the optimal production plan for Sunny Dezigns DAC and show the annual profit expected.
(c) Briefly explain the following terms, providing examples to illustrate your answer:
(i) Sunk cost.
(ii) Opportunity cost
Prepare the following accounts, where applicable, for the most recent financial period. You should ensure
that all workings
are shown clearly:
(ii) Finishing process account
(iii) Normal loss account
(iv) Abnormal loss/Abnormal gain account.
(a) prepare a report for mary ross in which you assess critically the manager’s assertion that the
shortening of contract durations has not significantly damaged the profitability of operations. Your report
should include a comparison of the contribution for danube from each customer based on the 2014 and
2011 contracts, insofar as is possible from the information provided.
(b) in assessing danube’s prospects for the future, the manager has noticed two trends. one is for some
customers to purchase ‘unlock codes’ on the internet for their danube phones. this means customers can
cut short their contracts with danube and switch to using their smartphones on other operators’ networks.
the second trend is for customers to purchase unlocked phones for use with danube (or other operators’)
sim cards. many of these unlocked phones have dual sim capability so that their users can insert two
different sim cards into the same smartphone. the manager has stated that danube should not feel
threatened by these developments and that in any case it is beyond the capability of any network operator
to prevent them. he states that since danube’s margin on handsets
is small, he would be quite happy for the business unit to stop supplying handsets altogether. furthermore,
in order to build up as large a customer base as possible, he plans to reduce phone call and text message
rates to below those charged by competitors. he also plans to increase prices for data usage significantly
to fund these reductions in the prices of other services, on the basis that market research indicates that
there is less public awareness of data charges than of the charges for the other services.
evaluate critically the manager’s positive assessment of the business unit’s future prospects in the light of
these developments. calculations are not required in your answer to this part.
the manager of tbu has asked you, the management accountant, for a report in which you:
(a) critically assess mary’s view that there is no need to replace the website, referred to above. (8 marks)
(b) on the assumption that the decision is taken to replace the existing website with the new one, appraise
the usefulness and feasibility of the following in implementing and managing the new website:
• internal benchmarking
• competitive benchmarking
• functional benchmarking
(a) evaluate critically for mary ross, the current low-cost manufacturing strategy implemented by the
neva business unit.
(b) assess the suitability of a balanced scorecard as a performance management model for the neva
business unit, assuming that neva continues with its existing strategy. Your answer should include a
detailed explanation and justification of one key performance indicator (Kpi) from each section of a
balanced scorecard, and an explanation of the linkages between the sections
(a) critique the most likely reasons why the smartphone division requires bpc to sell all of its output to
ppc.
(b) recommend and justify appropriate changes that the smartphone division would make to the policy
requiring bpc to sell all of its output to ppc and / or to the way in which bpc’s performance is assessed?
REQUIREMENT: 4APRIL 2016
(a) critically evaluate the importance of each of the six metrics listed above in terms of strategic
performance and (foreach metric) briefly assess the performance of the critical division as compared with
its competitor.
(b) recommend and justify two other significant performance metrics which should be used to assess the
strategic performance of the critical division and its competitor.
identify and evaluate the costs and benefits to the division arising from the consultants' reorganisation of
the dmp. Your analysis should include (but not be limited to) appropriate calculations.

(a) Assess whether the decision to change raw materials supplier with effect from 1 February was
financially justified. Present a detailed and comprehensive financial analysis to support your answer.
(b) Emer Wall has commented: “I think it’s a mistake to get accountants involved in the management of
quality, and let me give you three instances of that. First, all that the report in part (a) does is to confirm
what I know intuitively already, i.e., that investing in better quality is always a good thing. Second, I
don’t see any point in me receiving a monthly Cost of Quality report since all it would do is list certain
costs which are already included in the Income
Statement. Third, I don’t want to receive any information about non-financial quality measurements from
my accountants: I prefer to wait until there is clear evidence that quality problems are affecting our
‘bottom-line’ net profit, and then is the time to take action”. Critically evaluate Emer Wall’s comments
(a) Advise how Bothnia Division might use its cost driver rates in a benchmarking exercise with other
online book retailers. Your answer should include an examination of the main barriers to and limitations
of such an exercise.
(b) Apart from benchmarking, recommend two other appropriate ways in which Bothnia Division could
use the information about cost driver rates provided above to bring about improved cost-efficiency in its
business

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MARGINAL AND ABSORBTION COSTING

REQUIREMENT:1 AUGOST 2014

(i) Absorption costing

(ii) Variable costing (20 marks)

REQUIREMENT:6 AUGOST 2017

(i) Variable (marginal) costing;

(ii) Absorption costing. (15 marks)

REQUIREMENT:1 APRIL 2016

(i) Variable (marginal) costing

(ii) Absorption costing (14 marks)

ACTIVITY BASED COSTING

(d) Discuss the implications of a switch to ABC on pricing and profitability

Required: 5 DEC 2012

Required: 1 JUNE 2010

Required: 4 DEC 2010

Required:1 JUNE 2014

Required: 1 JUNE 2015

REQUIREMENT:6 APRIL 2016

REQUIREMENT: 3 APRIL 2016

(i) the division’s existing product costing system, and

(ii) an abc system. (13 marks)

REQUIREMENT:1 APRIL 2013

(ii) Activity based costing. (10 marks)

REQUIREMENT: 1 AGOST 3013

105.50 Direct labour hours: Cutting 0.5 hour

Finishing 0.75 hour

Cutting 0.25 hour

Stitching 0.50 hour

Finishing 0.25 hour

EQUIREMENT:6 AUGOST 2014

(i) The costing approach currently used by Expert Solutions. (6 marks)

(ii) Activity based costing. (11 marks)

REQRED 6 APRIL 2015

(i) The costing approach currently used by Dendale Private Hospital.

(ii) Activity based costing. (17 marks)

(b) Comment on your answers in (a) (i) and (ii) above

REQUIREMENT: 4 APRIL 2018

(a) Calculate the cost of each of the orders received using:

(i) The existing overhead allocation method;

(ii) Activity based costing (ABC). (15 marks)

(c) Outline TWO disadvantages of ABC

REQUIREMENT:1 AUGOST 2017

(i) The costing approach currently used by XY Storage Ltd.; (7 marks)

(ii) Activity based costing (ABC). (11 marks)

REQUIREMENT:5 APRIL 2017

(i) The existing costing method;

equired: 3 DEC 2006

Required: 2 DECE 2009

Required: 1DECEMBER 2015

Required: 1 DECE 2007

IRELAND (TARGET COST)

REQUIREMENT: 3APRIL 2018

Required:5 JUNE 2011

(a) Calculate the throughput accounting ratio for procedure C.

theatre. Note: Some basic calculations may help your discussion

Required:3 JUNE 2010

Required: 1JUNE 2009

(c) Assuming that the TPAR of product C is less than 1: