Module Code: UGB253
ASSIGNMENT Deadline Hand in 7th January 2016, 2pm
1. Investigate a range of key management accounting models and concepts.
2. An understanding of specific analytical skills in key areas within management
accounting found in the UK and international level.
3. Compare and contrast of the role and scope of management accounting theory.
4. Analysis the key management accounting concepts and techniques in order to contribute to successful decision making in an organisation.
Learning outcomes:
The assignment covers all module learning outcomes.
Page 1 of 6
Assignment brief: Answer all three questions
1. Research evidence tends to indicate that Activity based costing (ABC) lacks impact in the UK manufacturing industry. Critically investigate this argument by considering the following areas:
1. a) Demonstrate and discusses the underlying differences between the ABC and traditional approach?
2. b) What has been the basis theoretical criticism of ABC?
3. c) Outline the practical problems that may be encountered in implementing ABC
techniques in manufacturing industry and comment on how they may be overcome?
This should be approximately 1,500 words.
Marks 50
2. Strategic management accounting is concerned with providing information that will support the strategic plans and decisions made within a business: you are required to critically review this statement.
In doing so you should consider the following areas of strategic planning:
1. a) Establishing mission, vision and objectives
2. b) Undertaking a position analysis such as SWOT
3. c) Identifying and assessing strategic options
4. d) Selection of strategic options and formulation of long- and short-term plans
5. e) Performance review and control
This should be approximately 1,200 words.
Page 2 of 6
Marks 30
3. Machine Makers Ltd (MM) makes specialist machinery to customers specifications. Recently, just as MM completed a particular machine for a customer, it received information that the customer had gone bankrupt with no possibility of any payment to MM being seen as likely. The total contract price was £110,000. The contract specified that payment must be made in stages, as the machines manufacture progressed. MM had received £60,000 in progress payments for the machine. It is estimated that the machine could be sold, as it stands, for £80,000.
Another potential customer has been identified for the machine, but this would require alterations to it. Details of the alterations are as follows:
1. 1) Material A. The required quantity is held in inventories. This cost £6,000 when it was bought. It would cost £6,400 to replace it. The material is hazardous and would cost the business £1,000 to scrap it. The business uses it constantly.
2. 2) Material B. By coincidence the appropriate quantity of this material was ordered recently for another contract that was subsequently abandoned because the material was not delivered in time. MM does not normally use this material and its scrap value is £4,000. The original cost price was agreed at £10,000. Though the contract to buy this material is binding, the supplier will accept £8,000 to compensate for the late delivery. The current market buying price is now £7,000.
3. 3) Material C. 20 units of this material will be required. This is in general use in the business. An order for 35 units is shortly to be placed for another job. The price for this material is £130 a unit, but the supplier allows a bulk discount of £10 a unit, for the entire order, for orders of 50 units and above.
4. 4) Labour. 50 hours of labour will be required for the alterations. Labour is a fixed cost to MM, because members of staff are paid in full the normal £12 an hour whether there is work for them to do or not. 20 hours, of the required 50 hours, can be provided by members of staff who currently have no work to do. Only taking staff off other work can provide the remaining 30 hours. This other work is charged out to customers at £30 an hour.
1. (a) Definetheterms‘costand‘relevantcostsanddescribethetypeofcoststhat‘relevant
costs may include. (6 marks)
2. (b) Show,withsupportingexplanations,theminimumpricethatMMcouldchargethe customer for the altered machine, such that the shareholders would be no worse off as a
This should be approximately 300 words.
(14 marks) (Total marks 20)
Page 3 of 6
Your assignment should aim to provide readers with comprehensive knowledge and critical reviews of these areas covering, for example:
• Knowledge of variety of topic related to management accounting within the concept of decision making by managers.
• Knowledge of c ompare and contrast of the role and scope of management accounting theory and identifying the costs and benefit that is relevant to a particular decision within the business.
• Your own understandings of, comments on, arguments and contributions to the topic, such as key qualitative characteristics, true and fair view/fair presentation, creative accounting, etc..
• Any other important issues which you think should be addressed Further details:
This is an individual assignment each question has its own word count this should be adhered to with a tolerance between +10%.
This assignment contributes 100% to the final assessment mark for this module.
Please note that the University policy on cheating collusion and plagiarism will be applied to this piece of work.
The assignment must be handed in both through TURNITIN and at the library by the due date. Your turnitin summary needs to be attached to the copy handed in at the library.
Marking Guide:
Marks will be awarded with respect to the following assessment criteria.

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