management accounting questions
QUESTION 1
Decision makers are variably constrained by the environmental factors, their education, and mental ability. Besides these, decision makers may be constrained by the deficiencies in the information that is available to them.
Required
Elaborate this statement with reference to information deficiency with regard to information timeliness, information accuracy and clarity, information relevance, and information aggregation levels. Cite examples to support your points
QUESTION 2
a) Ujamaa Ltd is a manufacturer of a fertilizer product which is packed in 50 kg bags. The following report for year ended 31st December 2013 based on account analysis classification is availed to you
Manufacturing costs
Account
Nature or Classification
Amount in Tshs 000
Direct Materials
All variable
360,000
Direct Labour
All variable
200,000
Overhead costs:
Electricity and water
60% variable
60,000
Managerial salaries
20% variable
100,000
Maintenance costs
40% variable
100,000
Depreciation
0% variable
120,000
Indirect labor
50% variable
120,000
Non manufacturing costs
Accounts
Nature or Classification
Amount in Tshs 000
Administration expenses
0% variable
120,000
Marketing expenses
40% variale
100,000
Depreciation costs
0% variable
80,000
During the year 2013, Ujamaa Ltd produced 80,000 bags. Management is forecasting sales price for the year 2014 based on 2013 cost data.
The following additional data is available for the year 2014 compared to the data for the year 2013
1. Price for direct materials are expected to increase by 10%
2. Under the terms of labour contract, both direct and indirect labour rates are expected to increase by 20%
3. All depreciation costs are expected to increase by 10%
4. Administration and marketing expenses to increase by 20%
5. Electricity and water, maintenance costs and managerial salaries are not expected to change
6. Ujamaa ltd expects to produce and sell 96,000 bags of
Decision makers are variably constrained by the environmental factors, their education, and mental ability. Besides these, decision makers may be constrained by the deficiencies in the information that is available to them.
Required
Elaborate this statement with reference to information deficiency with regard to information timeliness, information accuracy and clarity, information relevance, and information aggregation levels. Cite examples to support your points
QUESTION 2
a) Ujamaa Ltd is a manufacturer of a fertilizer product which is packed in 50 kg bags. The following report for year ended 31st December 2013 based on account analysis classification is availed to you
Manufacturing costs
Account
Nature or Classification
Amount in Tshs 000
Direct Materials
All variable
360,000
Direct Labour
All variable
200,000
Overhead costs:
Electricity and water
60% variable
60,000
Managerial salaries
20% variable
100,000
Maintenance costs
40% variable
100,000
Depreciation
0% variable
120,000
Indirect labor
50% variable
120,000
Non manufacturing costs
Accounts
Nature or Classification
Amount in Tshs 000
Administration expenses
0% variable
120,000
Marketing expenses
40% variale
100,000
Depreciation costs
0% variable
80,000
During the year 2013, Ujamaa Ltd produced 80,000 bags. Management is forecasting sales price for the year 2014 based on 2013 cost data.
The following additional data is available for the year 2014 compared to the data for the year 2013
1. Price for direct materials are expected to increase by 10%
2. Under the terms of labour contract, both direct and indirect labour rates are expected to increase by 20%
3. All depreciation costs are expected to increase by 10%
4. Administration and marketing expenses to increase by 20%
5. Electricity and water, maintenance costs and managerial salaries are not expected to change
6. Ujamaa ltd expects to produce and sell 96,000 bags of