UNIVERSITY OF SUNDERLAND PROGRAMME

ASSESSMENT COVER SHEET / FEEDBACK FORM

Student Name & ID: SHONAZAROV Module Name/Code: APC309 Strategic

DAVRONBEK Management Accounting
B1905005

Center / College: Mdist Due Date: Hand in Date:

Assessment Title:

Learning Outcomes Assessed:

Learning Feedback relating learning outcomes assessed and assessment criteria given to
Outcome students:
s

Areas for Commendation:

Areas for Improvement:

General Comments:

Assessors Signature: Overall Mark (subject to Moderators Signature:

ratification by the assessment
board)

Students Signature: (you must sign this declaring that it is all your own work and all sources of
information have been referenced)
Table of Contents
ASSESSMENT COVER SHEET / FEEDBACK FORM...............................................................1
.............................................................................................................................................................1
Word count: 2547.......................................................................................................................................2
1-Question...................................................................................................................................................3
Introduction.............................................................................................................................................3
Divisional performance management.....................................................................................................3
Controllability is the ability to discriminate between profit that can be controlled and profit that
cannot be controlled...............................................................................................................................3
Controllability is a problem.....................................................................................................................4
Performance evaluation..........................................................................................................................4
ROСE (return on capital employed).........................................................................................................4
Limitations in Financial Measurement.....................................................................................................5
6 Marketer's Must-Know Non-Financial Metrics.....................................................................................6
3-Question...................................................................................................................................................7
Calculation of Cash Budget......................................................................................................................7
Calculation of cash collection from sales.............................................................................................8
Calculation of payment for material....................................................................................................9
Calculation of payment for labour.....................................................................................................10
Calculation of payment for selling expenses.....................................................................................10
Calculation of payment for factory overhead....................................................................................11
Calculation for office overhead..........................................................................................................11
Calculation of sewing equipment......................................................................................................12
Calculation for repayment of loan.....................................................................................................12
Reference..............................................................................................................................................13

Word count: 2547

1-Question
Introduction
Two questions serve as the basis for dividing this assignment into two halves. To begin, I provided an
analysis of the first issue, which concerned the accuracy of financial measurement. There are numerous
difficulties arising in organizations with several divisions because of poor financial performance
assessment, and I've outlined some of the issues and possible remedies. As a follow-up to the first part
of the project, I created a cash budget for the six-month period beginning January 1 and ending
December 31, 2022.

Divisional performance management

Specifications for evaluating performance

Applied Skills' Performance Management course should have familiarized you with the features of
effective divisional performance metrics.

Alignment of objectives - metrics should encourage divisional managers to make choices that benefit the
whole business.

Performance should only be evaluated in terms of what managers and divisions can control.

A focus on both the organization's long-term as well as its short-term aims

Concerning the benefits and drawbacks of various approaches, the topic of aim congruence will be
critical. Prior to determining what performance factors are monitored, the necessity of controllability is
discussed.

Controllability is the ability to discriminate between profit that can be controlled and
profit that cannot be controlled.
A division's performance and its manager's performance must be distinguished, as stated in the
introduction. An important consideration here is the concept of controllability: managers should only be
judged on the parts of performance they can really influence, while a division should be judged on its
total results.

For this reason, it is important to differentiate between expenses that can be controlled (i.e., traceable)
and those that cannot be controlled (controllable).

Controllable expenses are those that the division's management can alter.

Costs that may be traced include those that can be controlled, as well as those that can't be controlled.

Only those factors that the divisional manager can influence should be included in the assessment of his
or her performance. Traceable expenses, rather than controllable ones, should be considered as
expenditures related to the division but approved by the head office, not the divisional manager. If the
Head Office marketing director (not the divisional manager) approves marketing costs for the division,
such expenditures may be tracked but not controlled. Legal expenses or audit fees linked to the division,
but agreed upon by the main office, are another example.

Traceable profit should be utilized as an indicator of divisional performance, whereas manageable profit
should be used as an indicator of the manager's success.

The difference between traceable and divisional profit, on the other hand, should be made:
Overhead expenditures that are incurred centrally and subsequently reassigned to a division should be
excluded from a company's tradable profit. Instead of affecting just one branch, these charges are given
by the company's headquarters for the benefit of many (eg central marketing services, HR, IT or
finance).

Controllability is a problem.
It may be difficult to draw the difference between expenses that are 'controlled' and those that aren't in
reality, since certain costs are only partly controllable. For example, costs of raw materials might be
afffected by supply constraints beyond a manager’s control. It is possible to mitigate the negative effects
of a price fluctuation by substituting alternative materials.

Equally, certain traceable expenses (such as the marketing activities in Example 1) might add to a
division’s income. As a result, the manager's performance (i.e. controllable profit) will be overstated if
all of the division's income is deemed 'controllable,' but not all of the expenses. It is, however, difficult
to determine how much income directly related to the non-controllable cost and should thus be
removed from divisional revenue to establish a "like for like" comparison of controllable costs and
revenues.

Specifying which budget lines are to be treated as controllable and which are not might be a solution to
the classification problem of controllable and non-controllable variables.

Performance evaluation
In any performance assessment calculations, the problem of 'controllability' is critical since it will impact
the statistics utilized based on whether it is a division or a manager being evaluated. However, the
performance indicators used to make that judgment are probably an even more critical factor for
corporate management.

Return on investment (ROI) and residual income (ROI) are two of the most often utilized metrics for
measuring the success of a division (RI).

Operating profit is calculated as a proportion of the division's total assets. For a division to be successful
in the long run, the return on investment (ROI) must outweigh the cost of capital.

ROI (return on investment) is calculated as the product of a measurable (controllable*) profit and a
measurable (controllable*) investment.

ROI should be based on 'controllable' numbers rather than 'traceable' ones if manager performance
rather than division performance is being judged.

If a division has a cost of capital charge (imputed interest) on assets it uses, the remaining revenue is
referred to as "residual income."

R = Profit minus imputed interest** on traceable (controllable) investment.

Calculating implied interest involves multiplying the traceable (or measurable) investment by the
capital's cost of acquisition. Weighed average capital costs are often expressed in this way (WACC).
Instead of utilizing WACC, a business may choose to establish a target rate of return on the capital it
receives as an alternative measure. If a division's return on investment (RI) is positive, it indicates that it
is outpacing its aim.

ROСE (return on capital employed)

We're using ROI instead of ROCE to evaluate divisional performance since that's where our attention is
focused. As you can see, they're pretty comparable, however ROCE is more suitable when you're looking
at the whole firm as opposed to just the division. The divisional profit would be appropriate in this
situation.
A company's efficiency in generating profits is gauged by its return on capital employed (ROCE).

Earnings before interest and taxes, or ROCE (percentage): (or divisional profit)

Employed funds

When calculating capital utilized, subtract current liabilities from total assets.

For a corporation to be long-term profitable, ROCE must be larger than the cost of capital.

Using ROCE to compare capital expenditures by various businesses or divisions operating in the same
company might be valuable. RCE and ROI are both measures of performance, and the similarities (or
differences) between them will have an impact on their respective values. If the industry or competitive
environment in which firms operate has considerable disparities, ROCE's value will be diminished. For
example, ROCE is most effective when comparing performance across companies within the same
industry.

Limitations in Financial Measurement

Using financial measurements has been criticized for the following reasons:

Inconsistent with the reality of today's business. The firm's physical, fixed assets do not adequately
reflect the value-creating activities of the modern organization. People's ideas, customer and supplier
connections, essential information databases, and innovation and quality cultures are where real value
is found. When comparing earlier periods, traditional financial indicators were based on the company's
own criteria of performance.

Driving with the aid of a mirror in the rearview. Financial metrics are a fantastic way to look back on the
organization's previous performance and occurrences. It is impossible to forecast the future based on
this extensive financial analysis.

Silos of work tend to be reinforced. Previously unimagined solutions to critical challenges and value
creation are now possible thanks to teams made up of people from a wide range of disciplines. These
interactions cannot be valued or costed using our current financial measuring techniques.
Give up thinking about the long term. The long-term value-creating operations of the company, such as
R&D, associate development, and customer relationship management, are commonly targeted in cost
reduction attempts. A lack of consideration for long-term value creation in favor of short-term benefits
might lead to underutilization of an organization's resources.

Because they assess whether or not increases in customer happiness, quality, on-time delivery, and
innovation result in increased financial performance and wealth creation for shareholders, financial
statements will continue to be an essential tool for firms. For the organization's future financial success,
we need a way to balance accuracy and integrity of our financial measurements.

6 Marketer's Must-Know Non-Financial Metrics

To help you get started, we've put up a list of non-financial criteria to consider. Marketers should be
responsible for the following six non-financial metrics:

Brand Preference is a useful tool for assessing how well your company's goods and services stack up
against those of the competition. A lot of people speak about "awareness," but the most important
thing is whether you're in the "selected" group. If you're doing awareness surveys, think about changing
them to find out how your firm and its offers stack up. You want to know where you stand in relation to
your competitors.

Non-financial metrics such as your take rate are the next important non-financial statistic once you've
created preference. For example, if you're offering a free trial, you'll see how many clients or prospects
take advantage of your call to action. It's not difficult to figure out take rate. Let me give you a simple
illustration of what I mean. As an example, imagine that you're a cyber security business and you've
launched a campaign to give 20% off a risk assessment to everyone who joins up during the next 30
days. It costs $10,000 to run the campaign (direct and indirect.) Your email distributes the offer to 1000
clients in your database, and only 100 of them take advantage of the deal. Subtract 100 from the total
number of consumers you enrolled to arrive at a percentage (1000). Your take rate is 10% in this
scenario. The purchase cost per registrant is $10,000/100, or $100. Do you think it's a good one? It is
possible to determine whether the expenditure is worthwhile by looking at the campaign's success and
whether or not the customers who accepted the offer purchased security services.

These are two sides of the same coin: customer retention and customer turnover. Adding new
consumers when a substantial proportion of current customers are leaving the company is an indication
of problems for a marketing business. When it comes to customer retention and churn, the former
refers to the number of customers who are still using your goods or services while the latter refers to
the number of customers who have stopped doing so. Of course, the ultimate aim is to improve
customer loyalty and decrease attrition. When a consumer no longer qualifies as a customer, that's
when you know you've got a problem. For instance, After 30 days, your organization could determine
that churn is acceptable for a subscription-based offering.

Customer experience: Customer retention and churn are directly influenced by the quality of the
customer experience. You need to take into consideration all of the primary contact points where a
client interacts with your firm in order to assess customer experience. With this information in hand,
you may begin defining what makes an experience exceptional vs just adequate.

Preference, customer retention, take rate, customer experience, and innovation all have an effect on
your company's market share, as does the overall market share. The term "market" appears many times
in this statistic. A company's and its marketing efforts are judged mostly by their share of the market.
There are several advantages to gaining market share, and one of the financial measures that companies
often monitor is improved operating margins. Determine the number of consumers and dollars in the
market, and then compute the percentage of these numbers that you have access to in your portfolio of
goods and services, in order to determine market share.
3-Question
Calculation of Cash Budget
January-June July-December
Opening balance $0.00 ($16,676.67)

Add Receipts
Sales,W1 $72,066.67 $55,200.00
Borrowing $0.00 $35,000.00

Total cash inflow $72,066.67 $73,523.33

Less Payments

Materials, W2 $48,366.67 $13,666.67

Labour, W3 $18,000.00 $21,000.00
Selling Expences, W4 $10,016.67 $4,593.33
Factory Overheads, W5 $8,160.00 $9,600.00
Office Overheads, W6 $4,000.00 $4,100.00

Repayment of Loan, W7 $0.00 $10.500.00

Sewing Equipment, W8 $0.00 $5.500.00

Tatal cash outflow $88,743.33 $68,960.00

Closing balance ($16,676.67) $4,563.33

Calculation of cash collection from sales
Janu Febru Marc April May June July Augus Septe Octo Nove Dece
ary ary h t mber ber mber mber

$65,0 $40,0 $30,0 $10,0

00.00 00.00 00.00 00.00
0,9 21,6 21,66 21,6 13,3 13,33 13,3 10,0 10,00 10,00 3,33 3,333. 3,333
2 66.6 6.67 66.6 33.3 3.33 33.3 00.0 0.00 0.00 3.33 33 .33
7 7 3 3 0
0,9 19,9
2 33.3
Jan 3
0,9 19,9
2 33.3
Fe 3
b
0,9 19,93
2 3.33
Ma
rch
0,9 12,2
2 66.6
Apr 7
il
0,9 12,2
2 66.6
Ma 7
y
0,9 12,26
2 6.67
Jun
e
0,9 9,200
2 .00
Jul
y
0,9 9,20
2 0.00
Au
g
0,9 9,200.
2 00
Se
pt
0,9 3,066
2 .67
Oct
0,9
2
No
v
0,9
2
De
c
Tot 0.00 0.00 19,9 19,9 19,93 12,2 12,2 12,26 9,200 9,20 9,200. 3,066
al 33.3 33.3 3.33 66.6 66.6 6.67 .00 0.00 00 .67
3 3 7 7
Qu 19,93 52,13 33,73 21,46
art 3.33 3.33 3.33 6.66
S/ 72,0 55,20
An 66.6 0.00
n 7

Calculation of payment for material

Janua Febru Marc April May June July Augus Septe Octo Nove Dece
ry ary h t mber ber mber mber

$35,0 $20,0 $13,6 $4,60

00.00 00.00 00.00 0.00
11.66 11.66 11.66 6,90 6,900. 6,90 1,53 1,533. 1,533. 3,33 3,333 3,333
6.67 6.67 6.67 0.00 00 0.00 3.33 33 33 3.33 .33 .33
Jan 11.66
6.67
Feb 11.66
6.67
Ma 6,900
rch .00
Apr 6,90
il 0.00
Ma 6,900.
y 00
Jun 4,53
e 3.33
Jul 4,53
y 3.33
Au 4,533.
g 33
Sep 1,533.
t 33
Oct 1,53
3.33
No 1,533
v .33
De
c
Tot 11.66 11.66 6,900 6,90 6,900. 4,53 4,53 4,533. 1,533. 1,53 1,533 0.00
al 6.67 6.67 .00 0.00 00 3.33 3.33 33 33 3.33 .33
Qu 30,23 18,33 10,60 3,066
art 3.33 3.33 0.00 .67
S/ 48,56 13,66
An 6.57 6.67
n
Calculation of payment for labour
Janu Februa Mar Apr May Jun Jul August Septe Octo Nove Dece
ary ry ch il e y mber ber mber mber

$12,00 $9,00 $12,00 $9,000

0.00 0.00 0.00 .00
4,00 4,000 4,00 3,0 3,000 3,0 4,0 4,000 4,000 3,00 3,000 3,000
0 0 00 00 00 0
Jan 4,000
Feb 4,00
0
Mar 4,0
ch 00
Apri 3,000
l
Ma 3,0
y 00
Jun 3,0
e 00
July 4,000
Aug 4,000
Sep 4,00
t 0
Oct 3,000
Nov 3,000
Dec
Tot 0 4,000 4,00 4,0 3,000 3,0 3,0 4,000 4,000 4,00 3,000 3,000
al 0 00 00 00 0
Qua 8,000 10,00 11,000 10,000
rt 0
S/ 18,0 21,000
Ann 00

Calculation of payment for selling expenses

Janu Febru Mar Apr May Jun July Aug Septem Octo Novem Decem
ary ary ch il e ust ber ber ber ber

$6,60 $4,1 $3,0 $1,200

0 00 10
2,200 2,200 2,20 1,3 1,36 1,3 970 970 970 400 400 400
0 67 7 67
0.5 1,100
0.5 1,100
0.5 1,100 1,10
0
0.5 1,10 1,1
0 00
0.5 683 683
0.5 683 683
0.5 683 683
 0.5 485 485
0.5 485 485
0.5 485 485
0.5 200 200
0.5 200 200
Tot 1,100 2,200 2,20 1,7 1,36 1,3 1,1 970 970 685 400 200
al 0 83 7 67 68
Qua 5,500 4,51 3,10 1,285
rt 7 8
S/ 10,0 4,393
Ann 17

Calculation of payment for factory overhead

jan-march april-june july-sept Oct-dec
$4,800 $4,800 $4,800 $4,800

jan-march 0.7 $3,360

0.3 $1,440
0.7 $3,360
april-june 0.3 $1,440
0.7 $3,360
july-sept 0.3 $1,440
0.7 $3,360
Oct-dec 0.3
total $3,360 $4,800 $4,800 $4,800
Semi-annual
$8,160 $9,600

Calculation for office overhead

Janu Febru Mar Apr May Jun Jul Aug Septem Octo Novem Decem
ary ary ch il e y ust ber ber ber ber

$800 $800 $800 $8 $800 $8 $8 $800 $800 $450 $450 $450

00 00 00
Jan $800
Feb $800
Mar $8
ch 00
April $800
May $8
00
June $8
00
July $800
Aug $800
Sept $450
Oct $450
Nov $450
Dec
Tota $0 $800 $800 $8 $800 $8 $8 $800 $800 $450 $450 $450
l 00 00 00
 Qua $1,60 $2,4 $2,4 $1,700
rt 0 00 00
S/ $4,0 $4100
Ann 00

Calculation of sewing equipment

Janua Febru Mar Ap Ma Jun July Augu Septem Octob Novem Decem
ry ary ch ril y e st ber er ber ber

$5,5 $3,85
00 0
Jan
Feb
Mar
ch
April
May
June $1,6
50
July $770
Aug $770
Sept $770
Oct $770
Nov $770
Dec
Tota $0 $0 $0 $0 $0 $0 $1,6 $770 $770 $770 $770 $770
l 50
Qua $0 $0 $3,1 $2,310
rt 90
S/ $0 $5,500
Ann

Calculation for repayment of loan

Janua Febru Mar Apr Ma Jun Jul Augu Septem Octob Novem Decem
ry ary ch il y e y st ber er ber ber

$35,000
Jan
Feb
Mar
ch
April
May
June
July
Aug
Sept
Oct $3,50
0
Nov $3,500
Dec $3,500
 Tota $0 $0 $0 $0 $0 $0 $0 $0 $0 $3,50 $3,500 $3,500
l 0
Quar $0 $0 $0 $10,500
t
S/ $0 $10,500
Ann

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