Arab Open University B292: TMA – Spring 2021-2022-V2 Cut-Off Date: About TMA:

Arab Open University
B292: TMA – Spring 2021-2022-V2
Cut-Off Date:
About TMA:
The TMA covers the management accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the important concepts in management accounting like incremental costing and benefit, the contribution analysis factor & non-financial elements that must be accounted for in the decision making process. Besides, Students will explore the importance of cost-volume-profit analysis for making business decisions and also its uses by different stakeholders.
Enhance student ability to understand incremental cost/benefit analysis.
To Explore the uses of cost-volume profit analysis by different stakeholders in different organizations.
Assess students’ understanding of key learning points within units 1, 2, 3 & 4.
Increase the students’ knowledge about the reality of the Managerial Accounting as a profession.
Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
Develop the ability to understand and interact with the nature of the managerial accounting tools in reality.
The TMA requires you to:
Review various study sessions beside the supplementary materials.
Conduct a simple information search using the internet.
Present your findings in no more than 2,000 words ± 10%.
You should use a Microsoft Office Word/excel and Times New Roman Font of 12 points.
You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
Criteria for Grade Distribution:
Criteria
Content
Referencing
(to deduct)
Structure and Presentation of ideas
(to deduct)
Total marks
Part A
Part B
Calculations
Analysis
Marks
65
35
(5)
(5)
100
PART A
Question 1: (30 Marks)
Al Manara Company sells its single product for $ 30 per unit . The contribution margin ratio is 45%; and fixed costs are $ 10,000 per month.
Required
If Al Manara sells 1,000 units in the current month, what would Al Manara’s variable expenses be? (10 marks)
Moon Company makes product S1 and has the following costs at the given levels of production:
Month
Units Produced
Total Costs
January
150
120,000
February
225
135,000
March
300
150,000
April
375
165,000
May
450
180,000
June
525
195,000
Required
1. Use the high-low method to compute the variable and fixed elements of Moon’s total costs. (15 marks)
2. Estimate the total cost of making 750 items of S1, assuming that total fixed costs and the variable cost rate do not change. (5 marks)
Question 2: (35 Marks)
Two companies, Ghost and Phantom manufacture similar printer color cartridges. The following data for the two companies for the year 2020 are provided below:
Ghost ($)
Phantom ($)
Sales revenue
90,000
108,000
Total costs
63,000
72,000
Variable Costs
40 % of sales revenue
40%
Required:
Calculate the Break Even Point (BEP) in dollars for each company. (8 Marks)
Calculate the percentage margin of safety for each company. (8 Marks)
If sales of the product in Ghost company are equal to 3,000 units, determine the BEP (in units), and present the Break-even chart. (8 marks)
In 2020, Phantom plans to increase the variable cost by $4 while the fixed cost and the selling price will remain constant. Calculate the number of units to be sold in order to earn the same profit as Ghost in 2020. (6 Marks)
Based on your answers to parts 1 and 2, Discuss which company has a safer financial position, and why. (5 Marks)
PART B (35 Marks)
Dell Corporation is one of the leading car manufacturers with its main rival being the IBM Company. It has been a very successful firm that has gained exceptional sales accomplishments because of its unique direct marketing model. One of the main reasons for this company’s success is because it has transitioned into adopting the JIT manufacturing system, a system first pioneered by Toyota.
Required:
Clearly explain the concept of Just-in-Time (JIT) and briefly identify at least 4 problems such a sytem is designed to overcome. (10 Marks)
In your opinion, what would be the requirements of a company like Dell to successfully implement the JIT system? (5 Marks)
Identify and briefly discuss 5 advantages and 5 disadvantage of implementing such a system. (10 Marks)
Analyze and briefly explain how the JIT has benefited Dell. (5 Marks)
Explain how such a system can benefit and be applied to an ecommerce retail company? (5 Marks)
-END OF TMA-
B292-TMA-Spring 2021-2022-V2
B292-TMA-Spring 2021-2022-V2
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