Question: The following selected data pertain to Garfield

> Lance Novak recently acquired Chiefs Loft, a restaurant in an inner city suburb of Brisbane. Past records show the restaurant has generally experienced quite good customer numbers. While conducting his due diligence and from the first few weeks in the re

> Terence Smythe, a veterinariant, decided to join a small group of vets so that he no longer has to be on call every night. Practice members share the responsibility of emergencies with other members of the group. In the past, Terrence differentiated his

> In an Environmental Victoria audit, it was found that Australian supermarkets could save $41.6 million annually if ‘green bags’ were universally adopted. This audit was conducted at Leo’s Fine Foods i

> Consider the carbon footprint of an airline such as Qantas. Could an airline ever become carbon neutral or positive? Explain. What about a botanical garden? Discuss.

> Search the newspapers/web to find examples of Australian companies disclosing their sustainability practices using management accounting information or tools such as the balanced scorecard. Provide a report on your findings.

> Using the following table, classify each sustainability cost according to their appropriate category (level 1–5).

> Read the management accounting case at the beginning of this chapter. Using Bank Australia as an example, list some of the positive externalities that might be achieved as a result of its operations. What are some of the negative externalities that could

> List some costs that may be considered to be ‘contingent’ sustainability-related costs for the mining industry.

> Comment on how the inclusion of environmental and social indicators in a balanced scorecard might contribute to an organisation’s profitability.

> (a) Explain how carbon-trading might reduce greenhouse gas emissions. (b) How might the existence of carbon trading schemes affect the management accounting system within organisations?

> Supply chain analysis focuses particularly on one aspect of value chain analysis. Explain how supply chain analysis is performed and how it relates to value chain analysis.

> The World Coal Institute claims that coal provides over 26.5 per cent of global primary energy needs and generates over 41.5 per cent of the world’s electricity. Coal is one of the cheapest forms of fuel available on the planet. However, burning fuel pro

> Investigate which companies have experienced either one-strike or two-strikes on their remuneration reports in the last year or two. Summarise your results and collect the specifics of one example.

> Sarah Tesar is the lead partner of a medium-sized accounting firm. The eight partners share in an annual bonus pool. The characteristics of the bonus pool system include: • The bonus pool size each year is calculated as 40 per cent of annual profit. • Th

> Harley–Davidson, Inc. has found itself having to confront a number of risk-related issues. These have mainly related to: (a) the need to increase the number of recalls due to faults (b) surging costs of making the repairs to faulty motorbikes (c) increas

> Becky Tan is the CFO at Frosters Systems, a diversified company with eight different business units (divisions). Becky has been asked by the CEO to develop a shared bonus pool system. Required What key decisions will Becky have to make to set up the sha

> Ben, an employee of Joseph’s, appears to be extremely enthusiastic about his back-office accounting role. He has been with Joseph’s company for about four years and has performed well in his position. Ben is very keen to progress in the company and Josep

> The ASX Corporate Governance Principles and Recommendations set out rules to deal with enhanced management performance and effectiveness and requires disclosure of the process for performance evaluation of the board, its committees and individual directo

> You are a remuneration consultant employed by a listed company to assess the CEO’s reward plan. The board is concerned that the CEO is overpaid in absolute terms and also when compared to other CEOs of major corporations. Required How might you determin

> Freshwater is an entity that processes and distributes bottled water throughout Australia and New Zealand. You have been employed as a remuneration consultant to develop a new reward system for the entity. Required Explain how you would develop an incen

> You are a remuneration consultant. The board of a large multi-national bank has asked you to draft a proposal for a new reward system for senior executives. Currently all senior executives are paid a fixed salary. Your investigations at the entity reveal

> Explain market-based pricing and explain where managers and accountants can find information that would help them set prices using this type of approach.

> You are required to offer advice to a small but growing community bank. Describe the steps you would take to prepare a risk profile for this organisation.

> Stevan is the divisional manager with the Liberty Property Development Group. His performance report shows a positive divisional margin but a loss for the year. Stevan has complained to the CEO about the common costs that have been charged to his divisio

> Assume you are a senior manager at a publicly listed company. Under the company’s longer-term incentive plan you have recently received a parcel of share options. These share options can only be exercised (converted to shares) after three years. Require

> Relative performance evaluation at the company level often results in using a market index like the ASX100 as the peer group. Required Outline the potential advantages and disadvantages of this practice.

> Many organisations use a balanced scorecard set of measures to determine the short-term incentive for senior managers and executives. Required Outline any potential difficulties associated with using a set of balanced scorecard measures to determine the

> Describe the factors that need to be considered when structuring a compensation plan for executives.

> Think about the type of work you will perform in your future career. Required (a) Give examples of the types of financial and non-financial information you will probably use in your work. (b) List several methods you could use to produce information tha

> The Galaxy Hotel Group owns and operates a number of mid-level boutique hotels mostly in regional Australia. Galaxy is structured around regions with a regional general manager usually given the responsibility of working closely with the managers of the

> (a) Reflect on the management accounting case and the balanced scorecards used by Qantas and Virgin Australia as part of their incentive plans. How might they use a strategy map in the process of developing their scorecards? (b) With reference to the man

> Perspectives, performance objectives and potential performance measures for the balanced scorecard at Holiday Resorts are as follows: Perspectives (i) Financial (ii) Customer (iii) Internal business (iv) Learning and growth Performance objectives A. Redu

> Explain cost-based pricing and give an example that shows how prices would be determined using this method.

> You have been invited by a classmate to help found a new not-for-profit organisation named Students Care. The organisation’s purpose is to provide scholarship money for children in Africa who have become orphans because of the AIDS epidemic. The organisa

> Part of the process for developing a balanced scorecard is to identify one or more measures for each perspective. Required Categorise each of the following potential balanced scorecard measures according to the following perspectives: F Financial C Cust

> Markman Ltd, a large pharmaceutical company, is concerned about the ability of its research and development department to develop profitable new prescription drugs. Once a drug has been developed and patented, it takes 9 to 12 years to meet all of the re

> Leyland College is in the process of developing a balanced scorecard. The administrators decided that their customers are parents and future employers of their students. They believe the students are their products. Required Discuss whether each of the

> Managers increasingly use a mixture of financial and non-financial measures for organisational performance. Required In the following list of performance measures, identify those that are financial (F) and those that are non-financial (N). (a) Customer

> Following is financial information for last period about Curry House, a regional company with a number of fast-food stores: Required Describe and calculate several measures that could be used for the financial perspective.

> Georgina Chan is the chief financial officer of Colorado Pty Ltd, which has three interdependent divisions where, on average, about 30 per cent of the output of one division is transferred to one of the other divisions. She is currently dealing with a di

> The following information relates to a new computer chip that Hand Held has developed for its new mobile phone that contains a personal organiser: The variable costs of the mobile phone division will be incurred whether it buys from the chip division o

> The Enviro division of Solar Sun produces electric motors, 20 per cent of which are sold to the Energy Plus division of Solar Sun and the remainder to outside customers. Solar Sun treats its divisions as profit centres and allows division managers to cho

> Fowler Electronics produces colour plasma screens in its Bien Hoa plant in Vietnam. The screens are then shipped to the entity’s plant in Sturt, South Australia, where they are incorporated into finished televisions. Although the Bien Hoa plant never sel

> In competitive markets such as the game console industry, how might management respond to techniques such as life cycle costing?

> Refer to the information in Problem 18.21. The manager of Sandy Point Construction is considering a new project. She can buy or lease equipment that will reprocess tailings from old mines to remove any traces of gold left behind by the original separatin

> The following financial data are for the evaluation of performance for Sandy Point Construction: Sandy Point Construction currently uses return on investment to evaluate investment centre managers. An accounting intern from the local university suggest

> Senior management at Harriot Industries, an Italian-based fashion house and cosmetics company, have been engaged in a debate around the best key financial measure relevant to evaluate the performance of senior executives and divisional managers. Currentl

> Following is information for the Fulcrum Company’s three business segments located in Europe. Fulcrum’s applicable tax rate for the segments is 30 per cent, and its weighted average cost of capital for each segment i

> Mirror Industries laminating division, BrightShine, incurred the following costs and expenses in the last period. During the period, BrightShine produced 300 000 units of industrial photo prints, which were sold for $2 each. Mirrorsâ&

> A senior nurse manager working in an endoscopy clinic in the northern suburbs of Melbourne is contemplating issues that have surfaced with the purchase of a new endoscope (colonoscope) used to investigate intestinal problems. This valuable medical equipm

> Livermore Components is a supplier of drive shafts to the motor vehicle industry. Currently it supplies two of the large car manufacturers in Australia and is also highly ranked in a tender bid to supply drive shafts to a Malaysian car manufacturer. Much

> Suppose that the director of lost dogs’ home is concerned about an increase in number of adopted dogs returned to the home because of behaviour problems. When dogs are returned, the home incurs extra animal intake and adoption costs, in addition to extra

> New-Rage Cosmetics uses a traditional cost accounting system to allocate quality control costs uniformly to all products at a rate of 14.5 per cent of direct labour cost. Monthly direct labour cost for Satin Sheen makeup is $27 500. In an att

> How can the principles of target costing assist with the decision to invest or continue to invest in the game console market?

> Big Bertram uses the just-in-time method to manufacture golf clubs. The manufacturing schedule for the clubs is developed as customers place orders. Each club is made within a cell where five workers have production stations. The raw materials are delive

> During its second year of operations, Grilling Machines, an entity that manufactures and sells electric tabletop grills, produced 275 000 units and sold 250 000 units at $60 per unit. The beginning inventory balance was 5000 units. No changes in fixed or

> As introduced in chapter 10, Paisley Insurance Company provides a range of insurance products to residential and commercial customers. Figure 17.16 shows the process map of Paisley’s billing department activities. The following four k

> Synergy Clothing (Synergy) began operations as a clothing manufacturer in the 1940s. It has grown from a small firm into a multi-divisional diversified clothing company with three key divisions: Fashion, which focuses on shirts and jeans; Uniforms which

> Paige Maddern owns and operates Paige Nightwear (PN), an internet-based company specialising in high-quality nightwear for men and women. From the outset, Paige has had a number of key principles in mind which guide most of the business decisions and ope

> Elimination of waste to maximise customer value is at the core of the lean approach. Required Search online to find two organisations that have adopted a lean approach to operations. Identify the objective that led to the adoption of lean thinking and a

> Following is a list of quality-related activities. (a) Inspection of units when they are 100% complete to remove defective units (b) Designing a process with as few parts as possible to reduce the chance of defects (c) Warranty costs for defective produc

> Refer to the information in exercise 16.23. The following cost reduction suggestions were made by the kaizen costing team. Direct materials — Suppliers agreed to cost reductions of $4.50 for direct materials. Direct labour â&#128

> Blade Runner produces regular scooters and motorised scooters. Blade Runner scooters are considered the most reliable in the marketplace. Demand has been volatile, with huge increases in demand during the holiday season. In the past, the entity filled de

> Explain the similarities and differences among target costing, kaizen costing and life cycle costing.

> How might customer profitability analysis be used to improve organisational performance?

> What are the potential benefits from developing an input-output chart of accounts?

> Discuss the importance of ethical decision-making in a sustainability management accounting framework.

> What types of management decisions can benefit through using sustainability cost information?

> Oysters Away shucks and packs oysters and sells them wholesale to fine restaurants across the country. The income statement for last year follows: Pickers, shuckers and packers are employed on an hourly basis and can be laid off whenever necessary. Sal

> Explain the target costing cycle, and discuss the decision criteria used to determine whether a product will be manufactured using a target costing approach.

> Outline the relationship between the scope (levels) of costs and full cost accounting.

> Will organisational efforts towards sustainability result in reduced organisational profits?

> Why should the economic, environmental and cultural dimensions be managed in unison?

> Is sustainability achievable in all organisations regardless of their operating activities?

> Define the terms ‘sustainability’, ‘sustainability management’ and ‘sustainability management accounting’.

> Briefly comment on how legislation and societal expectations could influence the scope of sustainability management practice within organisations.

> What are some of the factors that managers should consider when implementing sustainability practices in their organisations?

> What are some of the sustainability-related considerations that managers should acknowledge when evaluating their organisation’s value chain?

> What key measures should be included in a sustainability balanced scorecard?

> What is the link between sustainability strategies and management accounting?

> Chocolate Creations is a shop located at Docklands in Melbourne. It makes and sells Specialty chocolates in a variety of flavours. Revenue and cost data for a recent week are as follows: All employees work standard shifts, regardless of how many chocol

> The use of RPE systems for the evaluation of individual managers has been abandoned by many organisations. Microsoft is one example. Given this can be conclude that RPE is no good?

> What is the role of rewards and incentives for executives in reducing agency costs?

> Describe agency costs and give several examples of them.

> How can target measures be used to promote either short-term or long-term performance?

> Describe the advantages and disadvantages of equity rewards.

> Discuss why an incentive package might include individual, divisional and corporate-level performance targets.

> What are the arguments for reward systems at the executive level to contain a longer-term component?

> Explain the difference between shares and share options.

> Explain why boards of directors will often employ independent remuneration consultants to assist in developing and assessing compensation plans.

> Why would a company restrict when a senior executive can exercise their share options?

> Refer to Paisley Insurance in comprehensive example 1 in chapter 12. In this example, an ABC and non-ABC version of the costs of servicing each type of account customer — residential and commercial — was determined. Required State some important qualit

> What role does the ASX Corporate Governance Council’s Corporate government principles and recommendations, and the Corporations Act have in executive remuneration?

> What are the advantages and disadvantages of having an individual’s remuneration linked to performance outcomes?

> Should a remuneration plan include a cash bonus or share options? Under which circumstances would either be appropriate?

> Describe two disclosures required by the Corporations Act with respect to executive remuneration.

> ‘Executives should only be compensated based upon the achievement of targets. They should not receive a fixed salary component’. Discuss.

> Identify why RPE would be used t the company level.

> Explain agency theory and how it relates to reward systems.

> Allied Trucking moves produce from farms to markets. Its managers decided to implement a balanced scorecard around the entity’s vision statement: 'We aim to be the industry leader in cost-effective and timely delivery of produce’. Provide two potential