Level 3 Accounting, 2017

Transcription

1 SUPERVISOR S Level 3 Accounting, Demonstrate understanding of management accounting to inform decision-making 2.00 p.m. Friday 10 November 2017 Credits: Four Achievement Achievement with Merit Achievement with Excellence Demonstrate understanding of management accounting to inform decision-making. Demonstrate in-depth understanding of management accounting to inform decision-making. Demonstrate comprehensive understanding of management accounting to inform decision-making. Check that the National Student Number (NSN) on your admission slip is the same as the number at the top of this page. Pull out Resource Booklet 91408R from the centre of this booklet. You should attempt ALL the questions in this booklet. If you need more room for any answer, use the extra space provided at the back of this booklet. Check that this booklet has pages 2 12 in the correct order and that none of these pages is blank. YOU MUST HAND THIS BOOKLET TO THE SUPERVISOR AT THE END OF THE EXAMINATION. TOTAL New Zealand Qualifications Authority, All rights reserved. No part of this publication may be reproduced by any means without the prior permission of the New Zealand Qualifications Authority.

2 2 Notes: Ignore GST for all calculations. For any required calculations, you must provide detailed and labelled workings. Labelled workings may be assessed. Refer to the information provided in Resource Booklet 91408R to answer all questions. In your answers, you can use HS to refer to Haiku Sushi and Mr and Mrs N to refer to Mr and Mrs Nakamura. QUESTION ONE (a) Explain why rice is a variable cost for Haiku Sushi. (b) Haiku Sushi sells their sushi in packs for a selling price of $9 per pack. (i) If selling price is $9 per pack of sushi, variable costs are $1.50 per pack of sushi, and fixed costs are $ per annum, calculate the contribution margin per pack of sushi. Contribution margin: (per pack of sushi) (ii) Explain what contribution margin per pack of sushi means for Haiku Sushi.

3 3 (iii) Calculate the break-even in dollars of sales. Break-even in dollars of sales: $ (iv) Haiku Sushi expects to sell approximately packs for the year ending 31 March Calculate the margin of safety for Haiku Sushi. Margin of safety in packs: (c) Justify the importance of break-even and margin of safety calculations to Mr and Mrs Nakamura. In your answer: identify a routine decision that Mr and Mrs Nakamura make in Haiku Sushi explain the impact of this decision on the break-even and margin of safety calculations explain how this knowledge of the impact could influence the decision Mr and Mrs Nakamura make for Haiku Sushi.

4 4 QUESTION TWO (a) Use the information from the Budgeted Income Statement and the additional information in Resource Booklet 91408R to complete the Cash Budget below for Haiku Sushi Limited showing the receipts and payments for February and March Haiku Sushi Limited Cash Budget February March $ $ Receipts TOTAL RECEIPTS Less payments TOTAL PAYMENTS Surplus (deficit) of cash Opening bank balance 9500 Closing bank balance

5 5 (b) Justify why Mr and Mrs Nakamura should be concerned about the council s plans. In your answer: explain how the council plans have affected the cash budget of Haiku Sushi explain a decision that Mr and Mrs Nakamura may need to make for Haiku Sushi based on the Cash Budget information explain why it might be important for Mr and Mrs Nakamura to look at the actual results for March 2017 and how this might affect a decision they might make for Haiku Sushi.

6 6 QUESTION THREE Use information from Resource Booklet 91408R and your comments and calculations for Question One and Question Two for your answer to this question. Recommend whether Mr and Mrs Nakamura should: (a) continue to operate Haiku Sushi in Main Street throughout the council work project OR (b) close their business in Main Street and move to a nearby small shopping centre (10 minutes drive away) that has free parking and has already had sewer and high-speed broadband cabling projects completed. Additional information: On 1 December 2016, Haiku Sushi renewed their rental agreement with the current shop for the following year. There is a penalty of two months rent to break this rental agreement. If they set up in the new location, they will have to arrange an inspection of their food control plan with the local council. Rental for the old shop and the new shop are the same, but the new shop does not have accommodation upstairs; so Mr and Mrs Nakamura s family will have to rent a home at approximately $600 per week. If they set up in the new location, fixed costs for Haiku Sushi will increase to $ per year. Mr and Mrs Nakamura will have to travel further to purchase supplies from the fishing boats and the wholesale warehouse. This is expected to increase variable costs to $1.80 per pack. You should provide detailed and justified reasons for your recommendation. Your report should consist of: an introduction that includes a clear statement of your recommendation a main body (with sub-headings if appropriate) consisting of reasons explaining your recommendation a justified conclusion. Your report should expand on the resource information, and must include: both financial and non-financial information relevant calculations from Question One and Two, AND any other calculations you consider important in helping Mr and Mrs Nakamura to understand the key issues in making this decision.

7 7 The following planning template is provided for you to use to develop ideas for your report. Recommendation: Financial considerations Non-financial considerations More answer space is available on the next page

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10 10 QUESTION NUMBER Extra space if required. Write the question number(s) if applicable.

11 11 QUESTION NUMBER Extra space if required. Write the question number(s) if applicable.

12 12 QUESTION NUMBER Extra space if required. Write the question number(s) if applicable