maintenance of sales ledger

The following scenario relates to questions 6–10.

Corfe Co is a business which manufactures computer laptop batteries and it has developed a new battery which has a longer usage time than batteries currently available in laptops. The selling price of the battery is forecast to be $45.

The maximum production capacity of Corfe Co is 262,500 units. The company’s management accountant is currently preparing an annual flexible budget and has collected the following information so far:

In addition to the above costs, the management accountant estimates that for each increment of 50,000 units produced, one supervisor will need to be employed. A supervisor’s annual salary is $35,000.

The production manager does not understand why the flexible budgets have been produced as he has always used a fixed budget previously

Assuming the budgeted figures are correct, what would the flexed total production cost be if production is 80% of maximum capacity？

A.$2,735,000

B.$2,770,000

C.$2,885,000

D.$2,920,000

In the first month of production of the new battery, actual sales were 18,000 units and the sales revenue achieved was $702,000. The budgeted sales units were 17,300.

Based on this information, which of the following statements is true？

A.When the budget is flexed, the sales variance will include both the sales volume and sales price variances

B.When the budget is flexed, the sales variance will only include the sales volume variance

C.When the budget is flexed, the sales variance will only include the sales price variance

D.When the budget is flexed, the sales variance will include the sales mix and quantity variances and the sales price variance

Which of the following statements relating to the preparation of a flexible budget for the new battery are true？

(1) The budget could be time-consuming to produce as splitting out semi-variable costs may not be straightforward

(2) The range of output over which assumptions about how costs will behave could be difficult to determine

(3) The flexible budget will give managers more opportunity to include budgetary slack than a fixed budget

(4) The budget will encourage all activities and their value to the organisation to be reviewed and assessed

A.1 and 2 only

B.1, 2 and 3

C.1 and 4

D.2, 3 and 4

The management accountant intends to use a spreadsheet for the flexible budget in order to analyse performance of the new battery.

Which of the following statements are benefits regarding the use of spreadsheets for budgeting？

(1) The user can change input variables and a new version of the budget can be quickly produced

(2) Errors in a formula can be easily traced and data can be difficult to corrupt in a spreadsheet

(3) A spreadsheet can take account of qualitative factors to allow decisions to be fully evaluated

(4) Managers can carry out sensitivity analysis more easily on a budget model which is held in a spreadsheet

A.1, 3 and 4

B.1, 2 and 4

C.1 and 4 only

D.2 and 3

The management accountant has said that a machine maintenance cost was not included in the flexible budget but needs to be taken into account.

The new battery will be manufactured on a machine currently owned by Corfe Co which was previously used for a product which has now been discontinued. The management accountant estimates that every 1,000 units will take 14 hours to produce. The annual machine hours and maintenance costs for the machine for the last four years have been as follows:

What is the estimated maintenance cost if production of the battery is 80% of maximum capacity (to the nearest $’000)？

A.$575,000

B.$593,000

C.$500,000

D.$735,000

请帮忙给出每个问题的正确答案和分析，谢谢！

ubject: Computer problem Date: Thursday, March 7,10: 30 A.M. Hi, Richard, Thank you for returning my call about the broken computer in room 3453. I had to leave the office early yesterday, so I didnt receive your request for additional information until this morning. The problem is that the computer was unstable and caused the computer to crash just after I tried to compute our monthly sales figures. Actually the computer seemed to run much more slowly than it used to. I wasnt running a resource-heavy application but the computer was very slow. I turned it off and on again and again. However, it was very time-consuming. Ill need to make a monthly sales report for my boss. He has to attend the board meeting next Friday, March 15. Do you think youll be able to repair the computer by then？ Since the computer contains very important figures, I desperately need the computer without any files damaged. Thanks in advance for your help. Sara Sales Department From: Richard Harris＜rharris@tmgto.org＞ To: Sara Davis＜sdavis@tmgto.org＞ Subject: Re: Computer problem Date: Thursday, March 7, 2: 30 P.M. Dear Sara, Thanks for getting back to me. This is the third computer the building reported to have the same malfunction. I called the technician yesterday, who said that the new accounting program installed last Friday probably needs to be reinstalled because there are some errors in the software program. However, you dont need to worry about losing your data since it is not a virus problem. I have to receive new installation CDs from headquarters, and they are expected to arrive on Monday. I should be able to repair the computer in your area two days before the board meeting. If I run into any delays, I will let you know so that you can make other arrangements. Thank you. Richard Maintenance Department

To whom did Ms. Davis send her e-mail？

A．A computer sales person

B．A training consultant

C．A customer of her company

D．A colleague at work

？Read the text below about after-sale service.

？In most of the lines 41—52 there is one extra word. It is either grammatically incorrect or does not fit in with the meaning of the text. Some lines, however, are correct.

？If a line is correct, write CORRECT on your Answer Sheet.

？If there is an extra word in the line, write the extra word in CAPITAL LETTERS on your Answer Sheet.

0 Service is the prompt delivery of the product. It is courteous sales personnel. It is a

00 user or service manual modified to meet for your customer's needs. It is ready

41 access to a service facility. It is knowledgeable, cost-effective maintenance, and

42 repair, or replacement. Service is dealer support. Service varies by the product type,

43 the quality of the product, the price of the product, and the distribution channel of

44 employed. So for export products that require no service - such as food products,

45 some consumer goods, and commercial disposables, the issue is resolved when

46 once distribution channels have been identified. On the other hand, because the

47 characteristics of the consumer durables and some consumables demand that

48 service be available. For such products, service is a feature that expected by the

49 consumer. In fact, foreign buyers of industrial goods typically place service at the

50 forefront of the criteria they evaluate when they making a purchase decision. An

51 exporting firm' s strategy and market entry decision may be dictate that it does not

52 provide with after-sale service. It may determine that its export objective is the single or multiple opportunistic entry into export markets. Although this approach may work in the short term, subsequent product offerings will be less successful as buyers recall the failure to provide expected levels of service. As a result, market development and sales expenditures may result in one-time sales.

(41)

f the millions of dollars in revenue Alaska is losing as a result of the Prudhoe Bay oilfield shutdown, and said he would support hearings into BP's maintenance practices. The governor also said he would direct Alaska's attorney general to investigate whether the state could hold the oil giant fully accountable for the state's losses.

Earlier this week, BP said it would shut down Prudhoe Bay -- the biggest oilfield in the nation -- because of a small leak and severe pipeline corrosion. Energy officials have said the pipeline repairs are likely to take months, curtailing Alaskan production into next year.

The expected loss of 400,000 barrels per day at today's oil prices means the state is losing about ＄6.4 million a day in royalties and taxes, Revenue Commissioner Bill Corbus said.

The state receives 89 percent of its income from oil revenue; Alaska has no state sales tax and no personal income tax. Without money coming in from Prudhoe Bay, Alaska's government can operate for only about two months before going into the red, Corbus said.

BP, the world's secondlargest oil company, said it would replace 16 miles of pipeline that carries oil from Prudhoe Bay to the 800-mile Trans-Alaska Pipeline. The Prudhoe Bay field accounts for 8 percent of US domestic output. Because oil demand is so high and the nation's petroleum supplies are so tight, the shutdown has already driven oil prices up and could mean higher prices at the gasoline pump as well.

The Alaska Governor has taken the following steps in response to the Prudhoe Bay oil field shutdown EXCEPT ______.

A．initiating investigation into BP's liability for the state's losses caused

B．calling hearings into BP's maintenance practices

C．imposing a state hiring freeze

D．taking measures to reduce oil consumption in the state

？Look at the sentences below and the following advertisements.

？Which business for sale does each sentence (1-7) refer to？

？For each sentence, mark one letter (A, B, C or D) on your Answer Sheet.

？You will need to use some of these letters more than once.

A

ICM specialises in health foods and other products associated with a healthy life-style. It is located in ground-floor premises in a busy street in the centre of town, and has a reputation for first class quality. Health food is a growth industry and the profits can be enormous.

Cost: ￡ 125,000 (includes fridges, freezers and all fittings)

B

This import-export business specialising in spare parts is completely risk-free and could provide an income in excess of ￡200, 000. It can be operated from a small office or even your home. No experience or capital are required. We will provide you with clients in over 220 countries and help you with initial contracts.

C

This bakery currently occupies the second floor of a two-storey building in a quiet area. It has traditionally been very profitable, with a turnover of ￡258, 400 last year. The business employs a number of staff and comes complete with all plant machinery and live delivery vans.

Cost: ￡370,000

D

This bicycle sales and maintenance business was established in 1973 and has a very profitable trading history. It is currently trading at below previous levels but is a great opportunity for the right person Five very experienced staff are currently employed. The premises consist of a large showroom and workshop Competitively priced.

This business isn't as successful as it was.

To: Mark Hopkins＜hopkinsm@mgc.com＞ From: George Wallace＜gwallace@solarsys.com＞ Subject: March 10 Installation Date: March 1 Dear Mr. Hopkins, As we discussed earlier, I know how important it is for an assembly line to have a power source it can trust. I am sure you will find that our solar backup system is as reliable as conventional backup batteries, in addition to being more cost-effective and requiring very little maintenance. Since we will install the system outside work hours, it will not affect your schedule or cause inconvenience for your workers. If you have any questions before the installation on Saturday, do not hesitate to ask questions. Otherwise, I will see you then. Yours sincerely, George Wallace Sales Director To: George Wallace＜gwallace@solarsys.com＞ From: Mark Hopkins＜hopkinsm@mgc.com＞ Date: March 2 Dear Mr. Wallace, Thank you for your e-mail. I regret to say that we have to postpone the installation of the solar backup system. When I met you last week, I totally forgot we have an annual safety inspection by the Wellington City Fire Department on the same day we are planning to install the solar backup system. Id like to install the system on March 15 instead. I apologize for the inconvenience this may cause. Please let me know whether the date is convenient for you. Thank you. Mark Hopkins Floor Manager Micro Goods Company

For what type of business does Mr. Wallace most likely work？

A．A maintenance service

B．An energy company

C．A fire equipment manufacturer

D．An internet service provider

Zelda Haggerty was recently promoted to project manager at Verban Automation, a maker of industrial machinery. Haggerty’s first task as project manager is to analyze capital-spending proposals.

The first project under review is a proposal for a new factory. Verban wants to build the plant on land it already owns in India. Below are details included on a fact sheet regarding the factory project:

§ The initial outlay to the builder would be $85 million for the building. Verban would spend another $20 million on specialized equipment in the first year.

§ The factory would open up new markets for Verban’s products. Production should begin July 1 of the second year.

§ Verban’s tax rate is 34 percent.

§ Verban expects the factory to generate $205 million in annual sales starting in the third year, with half of that amount in the second year.

§ At the end of the sixth year, Verban expects the market value and the book value of the building to be worth $35 million, and the market value and the book value of the equipment to be worth $3.25 million.

§ Fixed operating costs are expected to be $65 million a year once the factory starts production.

§ Variable operating costs should be 40 percent of sales.

§ Verban uses straight-line depreciation.

§ New inventories are likely to boost working capital by $7.5 million in the first year of production.

§ Verban’s cost of capital for the factory project is 14.3 percent.

Verban’s chief of operations, Max Jenkins, attached a note containing some of his thoughts about the project. His comments are listed below:

§ Comment 1: “We spent $5 million up front on an exclusive, 10-year maintenance contract for all of our equipment in Asia two years ago, before an earlier project was canceled. Your budget should reflect that.”

§ Comment 2: “Some Asian clients are likely to switch over to the equipment from the new factory. They account for about $5 million a year in sales for the U.S. division. Your budget should reflect that.”

§ Comment 3: “I expect variable costs to take a one-time hit in Year 1, as we should plan for about $1.5 million in installation expense for the manufacturing equipment.”

§ Comment 4: “We bought the land allocated for this factory for $30 million in 1998. That money is long spent, so don’t worry about including it in the budget analysis.”

Haggerty is unimpressed with the advice she received from Jenkins and calculates cash flows and net present values using numbers from the fact sheet without taking any of the advice. She assumes all inflows and outflows take place at the end of the year.

Verban is also considering upgrading two smaller, outdated factories, projects for which the cost of capital is 14.3 percent. Both of the remodeled factories would have a three-year life and cash flows as follows:

Initial outlayYear 1Year 2Year 3

-$30 million$15 million$17 million$28 million

Verban is willing to pursue the new factory or the renovations, but not both projects. Haggerty decides which project makes the most sense and prepares models and recommendations for Verban’s executives. Haggerty is concerned that her budgeting calculations do not accurately affect inflation, so she attempts to tweak her models to reflect the 2.5 percent inflation expected annually over the next five years.

Part 1)

If Haggerty decides to properly allocate the maintenance, land-purchase, and equipment-installation expenses Jenkins claimed were connected with the new factory project, which of the followingnumbers on the capital-budgeting model will be least likely to change？

A) The accept/reject recommendation.

B) The initial outlay.

C) Year 4 depreciation.

D) Working capital.

Callisto Retail (Callisto) is an on-line reseller of local craft products related to the historic culture of the country of Callistan. The business started ten years ago as a hobby of two brothers, Jeff and George. The brothers produced humorous, short video clips about Callistan which were posted on their website and became highly popular. They decided to use the website to try to sell Callistan merchandise and good initial sales made them believe that they had a viable business idea.

Callisto has gone from strength to strength and now boasts sales of $120m per annum, selling anything related to Callistan. Callisto is still very much the brothers’ family business. They have gathered around themselves a number of strategic partners into what Jeff describes as a virtual company. Callisto has the core functions of video clip production, finance and supplier relationship management. The rest of the functions of the organisation (warehousing, delivery and website development) are outsourced to strategic partners.

The brothers work from their family home in the rural North of Callistan while other Callisto employees work from their homes in the surrounding villages and towns. These employees are involved in video editing, system maintenance, handling customer complaints and communication with suppliers and outsourcers regarding inventory. The employees log in to Callisto’s systems via the national internet infrastructure. The outsourced functions are handled by multinational companies of good reputation who are based around the world. The brothers have always been fascinated by information technology and so they depend on email and electronic data interchange to communicate with their product suppliers and outsourcing partners.

Recently, there have been emails from regular customers of the Callisto website complaining about slow or non-delivery of orders that they have placed. George has commented that this represents a major threat to Callisto as the company operates on small profit margins, relying on volume to drive the business. He believes that sales growth will drive the profitability of the business due to its cost structure.

Jeff handles the management of outsourcing and has been reviewing the contracts that exist between Callisto and its strategic partner for warehousing and delivery, RLR Logistics. The current contract for warehousing and delivery is due for renewal in two months and currently, has the following service level agreements (SLAs):

1. RLR agree to receive and hold inventory from Callisto’s product suppliers.

2. RLR agree to hold 14 days inventory of Callisto’s products.

3. RLR agree to despatch from their warehouse any order passed from Callisto within three working days, inventory allowing.

4. RLR agree to deliver to customers anywhere in Callistan within two days of despatch.

Breaches in these SLAs incur financial penalties on a sliding scale depending on the number and severity of the problems. Each party to the contract collects their own data on performance and this has led to disagreements in the past over whether service levels have been achieved although no penalties have been triggered to date. The most common disagreement arises over inventory levels held by RLR with RLR claiming that it cannot be expected to deliver products that are late in arriving to inventory due to the product suppliers’ production and delivery issues.

Required:

Assess the difficulties of performance measurement and performance management in complex business structures such as Callisto, especially in respect of the performance of their employees and strategic partners.

维持阶段(maintenance stage)

A、perfective maintenance

B、adaptive maintenance

C、corrective maintenance

D、none of the above