Question Tag: Decision Making

Search 500 + past questions and counting.

  • Filter by Professional Bodies

  • Filter by Subject

  • Filter by Series

  • Filter by Topics

  • Filter by Levels

  • 5 Marks

SCS – Nov 2024 – L3 – Q4a – Capital Budgeting Framework

Explanation of the five key elements in the capital budgeting framework for investment appraisal.

One of the Board members, Dr. Halimatu Sadia, has expressed concerns regarding Dr. Ayimadu Baffour’s consistent failure to conduct investment appraisals and capital budgeting when making long-term investment decisions.

Required:

Advise Dr. Ayimadu Baffour on the capital budgeting and strategic planning framework used for conducting investment appraisals by briefly outlining the FIVE key elements of the framework.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "SCS – Nov 2024 – L3 – Q4a – Capital Budgeting Framework"

  • 12 Marks

SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types

Discuss the application of Charles Handy's cultural types to BOGML's growth phases and analyze their impact.

Charles Handy identified four distinct categories of corporate culture (cultural stereotypes) that can exist within an organization. Since its formation, BOGML has exhibited all four categories of corporate culture during different phases of its growth.

Required:
Identify and explain the specific and appropriate category of corporate culture applicable, and discuss its impact on the company for each of the following phases of growth when Dr. Ayimadu Baffour:

i) Created the functional departments.
ii) Stated that BOGML is built around him and without him the company will not exist.
iii) Insisted on retaining all authority for decision-making.
iv) Emphasized getting work done through teamwork.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "SCS – Nov 2024 – L3 – Q1a – Charles Handy’s Cultural Types"

  • 16 Marks

MA – Nov 2024 – L2 – Q5a – Limiting Factor Decision and Profit Maximization

Determination of the optimum production plan considering scarce resources.

Manche produces two products from different quantities of the same resources using a just-in-time (JIT) production system. The selling price and resource requirements of each of the products are shown below:

Product C L
Unit Selling Price (GH¢) 130 160
Resources per Unit:
Direct Labour (GH¢8 per hour) 3 hours 5 hours
Material A (GH¢3 per kg) 5 kg 4 kg
Material B (GH¢7 per litre) 2 litres 1 litre
Machine Hours (GH¢10 per hour) 3 hours 4 hours
Fixed Overhead (GH¢8 per hour) 1 hour 1 hour

Market research shows that the maximum demand for products C and L during August 2024 is 500 units and 800 units respectively. This does not include an order that Manche has agreed with a commercial customer for the supply of 250 units of C and 350 units of L at selling prices of GH¢100 and GH¢135 per unit, respectively. Failure by Manche to deliver the order in full by the end of August will cause Manche to incur a GH¢5,000 financial penalty.

At a recent meeting between the Purchasing Manager and Production Manager to discuss the production plans of C and L for August, the following resource restrictions for the year were identified:

  • Direct Labour Hours: 90,000 hours
  • Machine Hours: 90,000 hours

The resource restrictions were evenly distributed throughout the year.

Required:

i) Prepare the optimum production plan for August 2024 using relevant computations. 
ii) Determine the contribution from adopting this plan. 
iii) Using relevant computations, show whether Manche should complete the order from the commercial customer assuming any excess labour hours for not making the contract can be used to produce 300 units of product ‘F’ with a contribution of GH¢55 per unit.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – Nov 2024 – L2 – Q5a – Limiting Factor Decision and Profit Maximization"

  • 10 Marks

MA – Nov 2024 – L2- Q1b – Return on Investment (ROI)

Computation of ROI for different one-off transactions and advice on whether they should be undertaken.

Dondo LTD is a manufacturing company based in Nsawam. The following data represents the budgeted performance of Dondo LTD for the year 2025:

Amount (GH¢’000)
Profit 660
Plant and equipment (net of depreciation) 1,560
Working capital 750

Dondo LTD is considering undertaking the following separate one-off transactions:

  1. A cash discount of GH¢16,000 will be offered to its customers annually. This will, on average, reduce the trade receivables figure by GH¢60,000.
  2. An increase in average inventories by GH¢80,000 throughout the year. The increased inventory level is expected to increase sales, resulting in GH¢30,000 increased contribution per annum.
  3. At the beginning of the year, the company will buy a plant worth GH¢360,000. This is expected to reduce operating costs by GH¢105,000. The plant has a five-year useful life with nil residual value.

Required:

i) Compute the ROI for each of the one-off transactions above. 
ii) Advise Dondo LTD on whether the above one-off transactions should be carried out.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – Nov 2024 – L2- Q1b – Return on Investment (ROI)"

  • 10 Marks

BMIS-Nov 2024-L1-Q1C- Decision-Making in Hospital Management

Centralised vs Decentralised decision-making in hospital management.

For each of the decisions below, identify whom you would expect to make the decision and briefly explain why.

  1. Decisions about the medical treatment or surgical treatment for individual patients.
  2. Establishing policy on hygiene standards in the hospitals.
  3. Scheduling operations in the operating theatres of each hospital.
  4. Discharging patients from hospital.
  5. Deciding the visiting times for patients in each hospital.
  6. Prescribing drugs for the treatment of patients.
  7. Hiring new staff, such as hospital porters and nurses.
  8. Dealing with payments from insurance companies for the treatment of insured patients.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMIS-Nov 2024-L1-Q1C- Decision-Making in Hospital Management"

  • 10 Marks

BMIS – Nov 2024 – L1 – Q1c- Types of Organisations

Identify who should make various decisions in a hospital management context, explaining why.

Within the same business organisation, some decision-making might be centralised, with decisions made by senior management. Other decisions might be decentralised, and taken by managers or employees involved in operations.

Okpoti LTD owns and operates five private hospitals. It has a head office and each hospital has its own management team and staff (including medical staff such as doctors and nurses).

Decisions are expected to be made on the following:

  1. Decisions about the medical treatment or surgical treatment for individual patients.
  2. Establishing policy on hygiene standards in the hospitals.
  3. Scheduling operations in the operating theatres of each hospital.
  4. Discharging patients from hospital.
  5. Deciding the visiting times for patients in each hospital.
  6. Prescribing drugs for the treatment of patients.
  7. Hiring new staff, such as hospital porters and nurses.
  8. Dealing with payments from insurance companies for the treatment of insured patients.

Required:
For each of the decisions above identify from the list below whom you would expect to make the decision and briefly explain why.
i) Head office management
ii) The management of each hospital
iii) Staff in each hospital

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "BMIS – Nov 2024 – L1 – Q1c- Types of Organisations"

  • 20 Marks

AAA – Nov 2022 – L3 – SB – Q3 – Audit Reporting

Examines joint auditors' roles, options for audit disputes, acquisition processes, and reporting requirements.

During the audit of Kofo Plc in 2018, it was observed that there was an omission of liability to the tune of N2 billion. Upon investigation, it was discovered that the error was as a result of unrecorded liability relating to unremitted statutory taxes to the government in prior years. A compensating error was noticed in unsubstantiated investment and receivables balances schedule provided by the management.

The explanation provided by management for this error was that having noted this disparity, the internal audit team was commissioned to reconcile the ledger balances to establish the actual payment to be made to the government. The result of that exercise led to an initial adjustment of N500 million. However, upon further review by the Internal Audit and Risk Management team, the total disparity noted was N5 billion as opposed to the N2 billion initially noted. The reason being that the report with which the Internal Audit Team carried out the reconciliation was understated. Some liability balances were excluded from the report as a result of the approach used to set up the Information System (I.T) System. Therefore, the general command entered into the system to spool the report did not capture the entire transactions. To gain comfort, the audit team:

(i) Reviewed the reconciliation memo to have an understanding of management’s thought process;
(ii) Requested the updated spool of ledger balances from the I.T system;
(iii) Asked the Information Technology team to perform a walkthrough test of the transaction spool;
(iv) Requested the breakdown of the excluded balances and traced them to the supporting documents to which they relate; and
(v) Checked to see that there were no unusual remittances from the bank statements.

You are a member of the audit team which reviewed Kofo Plc’s compliance with International Standards on Auditing (ISA 250) on Non-Compliance with Laws and Regulations (NOCLAR).

Required:

a. Outline the audit procedures to be performed to help identify instances of non-compliance with laws and regulations. (5 Marks)

b. State what the auditor should do when they become aware of an issue of non-compliance with laws and regulations. (5 Marks)

c. State the types of policies and procedures the entity may implement to assist in the prevention and detection of non-compliance with laws and regulations. (4 Marks)

d. Discuss what the auditor should do under the following situations:

  • i. Reporting non-compliance to those charged with governance (2 Marks)
  • ii. Reporting non-compliance in the audit report (2 Marks)
  • iii. Reporting non-compliance to the authorities (2 Marks)

(Total 20 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "AAA – Nov 2022 – L3 – SB – Q3 – Audit Reporting"

  • 15 Marks

FM – Nov 2017 – L3 – Q6 – Ethical Issues in Financial Management

Explore ethical considerations in capital investment and apply the Black-Scholes model in company valuation.

You have recently taken up employment with Large Plc., a Nigerian company with manufacturing subsidiaries in many countries across Africa. As the Financial Analyst, you report directly to the Managing Director who currently requires briefings on the following areas:

(i) Ethical issues and capital investment decisions,
(ii) Options and company valuation

Required:

a. Explain, with examples, ethical issues that might affect capital investment decisions and discuss the importance of such issues for Strategic Financial Management. (8 Marks)

b. Explain the circumstances in which the Black-Scholes Option Pricing (BSOP) model could be used to assess the value of a company, including the data required for the variables used in the model. (7 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FM – Nov 2017 – L3 – Q6 – Ethical Issues in Financial Management"

  • 3 Marks

FR – Nov 2023 – L2 – Q6b – Ethical Issues in Financial Reporting

List three types of non-financial information useful to stakeholders for decision-making.

Businesses are increasingly accepting that they are not only accountable to investors and lenders, but also accountable to a much wider group of people or stakeholders to which non-financial information is useful in understanding and taking informed decisions on financial statements of the entities.

Required:
State THREE of such useful non-financial information. (3 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "FR – Nov 2023 – L2 – Q6b – Ethical Issues in Financial Reporting"

  • 40 Marks

PM – May 2021 – L2 – Q1 – Costing Systems and Techniques

Analyze linear programming application in production and pricing strategy for maximizing scarce resources.

The Managing Director of NTAMS Manufacturing Company Limited, located in Lagos, attended a seminar titled “Optimizing scarce resource utility in a manufacturing setting with particular reference to linear programming.” Upon his return, he initiated a management meeting to discuss key insights, prompted by the board’s decision to prioritize two primary products.

The following are cost data for the anticipated products “Biggi” and “Smalli”:

Costs Biggi (₦) Smalli (₦)
Material Costs (5kg @ ₦50/kg) 250 (3kg @ ₦50/kg) 150
Labour Costs:
Machining Time (4 hours @ ₦15/hr) 60 (2 hours @ ₦15/hr) 30
Processing Time (4 hours @ ₦10/hr) 40 (5 hours @ ₦10/hr) 50

The company adheres to a pricing policy where total cost of production is marked up by 20%. Annual overhead is ₦10,000,000, allocated on a 3:2 basis between Biggi and Smalli, with a projected production of 200,000 Biggis and 100,000 Smallis.

Available resources for the upcoming year:

  • Materials: 1,800,000 kg
  • Machine Time: 800,000 hours
  • Other Processing Time: 1,400,000 hours

Required:

As the management accountant:

  1. Explain briefly the concept of linear programming and its usefulness.
    (5 Marks)
  2. Compute the Prices for Biggi and Smalli using the company’s pricing policy.
    (5 Marks)
  3. Advise the company on the output levels needed to maximize total profit, with full financial analysis support.
    (10 Marks)
  4. Explain the meaning and limitations of “shadow prices” and calculate them for constraints.
    (12 Marks)
  5. Assuming consistent conditions for three years with an investment cost of ₦45,000,000 and a 15% cost of capital:
    • Determine if this venture is justified.
      (4 Marks)
    • Find the breakeven discount factor for this project.
      (4 Marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "PM – May 2021 – L2 – Q1 – Costing Systems and Techniques"

  • 4 Marks

MA – April 2022 – L2 – Q5B – Introduction to management accounting

Explain four reasons why organizations need to measure costs, including valuation, profit measurement, decision making and control.

Cost measurement reflects the relationships between inputs and outputs. It is designed to provide more accurate information about production, support activities and product cost so that management can focus its attention on the products and processes with the most leverage for increasing profits.

Required:

Explain FOUR (4) reasons why organisations need to measure cost. (4 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – April 2022 – L2 – Q5B – Introduction to management accounting"

  • 15 Marks

MA – May 2017 – L2 – Q4a – Relevant cost and revenue, Decision making techniques

Advise on the selection of a camp meeting venue using relevant costing.

Straight-to-Heaven Church is planning its annual camp meeting in December 2017. The church has four branches, and the annual camp meeting is the first major program after all the head pastors attended a leadership conference on the theme “Blending faith and Science in Church Decision Making.”

The General Overseer of the church wishes to apply the scientific principles learned at the conference in deciding between two major venues for the 2017 annual camp meeting. Hitherto, the General Overseer or his wife would veto where annual camp meetings are held. The following information is relevant for the decision:

  1. Seven pastors will facilitate the camp meeting. ‘Food 4 All’ restaurant will be assigned the responsibility of providing food for the pastors. They have indicated that a meal for a pastor would cost GH¢5. This cost is expected to increase by one-half if a pastor attends the camp with his wife. All pastors will be fed three times daily, but only three pastors plan to attend the conference with their wives. Church members will take care of their own feeding, but all camp expenses of pastors will be borne by church members.
  2. Water to be served at the camp meeting: 100 bags of sachet water at GH¢2 each and 25 boxes of 750ml bottled water at GH¢13 per box.
  3. The church plans to either have the conference at Ahayede (A) or Bonebon (B) camp sites. Accommodation cost per head per day at Ahayede is GH¢2 for the first 400 participants and GH¢1.5 for any additional participant. Bonebon will not charge any fee, but the church will have to show appreciation, which will be in the neighborhood of GH¢2,000 after the camp.
  4. Ahayede Campsite will require the payment of electricity and water bills of GH¢300 and GH¢500, respectively.
  5. It is expected that 96 liters of fuel at GH¢3.12 per liter will be needed at Bonebon campsite.
  6. Transportation cost for chairs and canopies will be GH¢400 if the camp is undertaken at Ahayede and GH¢300 if the camp is sited at Bonebon. Each church member’s transportation cost will be GH¢3 if Ahayede is chosen as the venue, but this figure is expected to double if the camp is taken to Bonebon.
  7. Pastors’ appreciation: Apart from the General Pastor, who will receive GH¢500, each pastor will receive GH¢300 as appreciation support.
  8. The church plans that 700 church members and pastors will take part in the annual camp meeting if it is undertaken at Bonebon, while 500 members will attend the camp if it is held at Ahayede, even though the two camp sites can each take 1,000 people. The camp will last for 5 days.

Required:

i) Using relevant costing, advise management of the church on the site they should hold the annual camp meeting.

(8 marks)

ii) Suggest TWO qualitative factors that should be considered in deciding on the venue. (4 marks)

iii) Explain the term “sunk costs” and identify THREE examples of sunk costs. (3 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2017 – L2 – Q4a – Relevant cost and revenue, Decision making techniques"

  • 5 Marks

MA – May 2017 – L2 – Q2a – Decision making techniques

Identify and explain three external and two internal sources from where a company can collect data for adding a new product.

One of the key stages of decision making in organizations is the collection of data on alternative courses of action.

Required:

State and explain THREE external and TWO internal sources from where data can be collected by a company seeking to add a new product to its production line.

(5 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2017 – L2 – Q2a – Decision making techniques"

  • 3 Marks

MA – May 2017 – L2 – Q1b – Other aspects of performance measurement

Explain three qualities of management accounting information in terms of their importance for decision making.

While managers can use different leadership styles, they all share the task of utilizing information to make decisions that achieve organizational goals. Accounting information for decision making will differ in terms of its details depending on the user.

Required:

Explain THREE qualities of Management Accounting information. (3 marks)

Answer:

The qualities of Management Accounting information include:

  1. Relevance:
    Information should be timely and bear on the decision-making process by possessing predictive or confirmatory (feedback) value.
  2. Faithful Representation:
    Information must be truthful, complete, neutral, and free from error.
  3. Comparability:
    Even though different companies may use different accounting methods, there is still sufficient basis for valid comparison.

Additional points from the original answer but not required since only three qualities were asked:

  • Consistency:
    Deviations in measured outcomes from period to period should be the result of deviations in underlying performance (not accounting quirks).
  • Verifiability:
    Different knowledgeable and independent observers reach similar conclusions.
  • Timeliness:
    Information should be available in sufficient time to be capable of influencing decisions.
  • Understandability:
    Information should be clear and concise to those with reasonable business knowledge.

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2017 – L2 – Q1b – Other aspects of performance measurement"

  • 8 Marks

MA – May 2016 – L2 – Q5c – Decision Making Techniques, Other Aspects of Performance Measurement

Explain contract manufacturing, its recent popularity, and factors ensuring its effectiveness.

Contract manufacturing has grown in popularity in recent years because of its usefulness to companies.

Required:

i) Explain contract manufacturing.
(2 marks)

ii) Outline THREE main reasons for the recent surge in contract manufacturing.
(3 marks)

iii) Explain TWO factors that will ensure effective contract manufacturing.
(3 marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2016 – L2 – Q5c – Decision Making Techniques, Other Aspects of Performance Measurement"

  • 10 Marks

MA – May 2016 – L2 – Q5b – Decision Making Techniques, Relevant Cost and Revenue, Divisional Performance

Decision Making Techniques, Relevant Cost and Revenue, Divisional Performance

Unity Company Ltd is preparing for next season’s operations. The company has provided the following information relating to its three products:

TO GE DA
Selling Price GH¢18.5 GH¢16.2 GH¢12.6
Material Cost (@ GH¢1.75 per kg) GH¢8.75 GH¢10.5 GH¢3.5
Labour Cost (@ GH¢2.2 per labour hour) GH¢7.7 GH¢4.4 GH¢7.7
Annual Demand 2,150 units 3,235 units 1,556 units

The company can only make available a total of 18,560 hours in the short run.

Required:

i) Provide the optimal production plan for Unity Ltd for the ensuing period.
(5 marks)

ii) What is the total incremental benefit of producing DA instead of GE, assuming available resources can only meet the demand for DA?
(3 marks)

iii) Indicate the shadow price of the production plan and state the basic assumption under which this price will apply.
(2 marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2016 – L2 – Q5b – Decision Making Techniques, Relevant Cost and Revenue, Divisional Performance"

  • 5 Marks

MA – May 2016 – L2 – Q4c – Relevant cost and revenue

Determine the cost per unit under different day rate schemes and assess the advisability of introducing a high day rate scheme.

HK Manufacturing Company is considering introducing a high day rate incentive scheme. An experiment with one of its average workers showed that an employee is likely to produce 1,500 units in a 40-hour week if she was paid GH¢25 per hour, but 1,800 units if she was paid GH¢31.25 per hour.

Assume that production overhead is added to cost at the rate of GH¢25 per direct labour hour.

Required:

i) Determine the cost per unit of output under both the low day rate scheme and high day rate scheme.
(3 marks)

ii) Is it advisable to introduce the high day rate scheme?
(2 marks)

 

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2016 – L2 – Q4c – Relevant cost and revenue"

  • 13 Marks

MA – May 2016 – L2 – Q2b – Cost-Volume-Profit (CVP) Analysis, Relevant Cost and Revenue

Calculate break-even points, operating leverage, and expected income for two rent options for a bakery.

Anima Ventures wants to start a new bakery at Bodwease in Ashanti Region. She plans to rent a storeroom for her operations under the following terms and conditions:

Option 1 Option 2
Fixed Rent Charge GH¢5,000 GH¢3,000
Variable Rent – 10% of selling price of each loaf

The following data are also relevant for her business:

  • Selling Price: GH¢5.00
  • Material Cost (Flour): GH¢0.80
  • Material Cost (Margarine): GH¢0.70
  • Labour Cost: GH¢0.50

Required:

i) Determine the break-even point in units under each option.
(2 marks)

ii) Calculate the degree of operating leverage (DOL) for the two options if 10,000 loaves of bread are to be sold in the current year.
(4 marks)

iii) What would be the expected operating income if sales increase by 25% next year?
(4 marks)

iv) Which of the two options would you recommend to Anima Ventures and why?
(3 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – May 2016 – L2 – Q2b – Cost-Volume-Profit (CVP) Analysis, Relevant Cost and Revenue"

  • 4 Marks

MA – Nov 2015 – L2 – Q1b – Standard costing and variance analysis

Evaluate four purposes of standard costing.

Evaluate FOUR (4) purposes of standard costing. (4 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – Nov 2015 – L2 – Q1b – Standard costing and variance analysis"

  • 3 Marks

MA – Nov 2016 – L2 – Q3b – Relevant cost and revenue

Explain the concept of relevant costs and their importance in decision-making processes.

The use of relevant information is key to managerial success. Describe relevant costs to your newly appointed Managing Director who will be negotiating a new contract. (3 marks)

Login or create a free account to see answers

Login
Register

Find Related Questions by Tags, levels, etc.

Report an error
Report an error

You're reporting an error for "MA – Nov 2016 – L2 – Q3b – Relevant cost and revenue"

Elevate your professional expertise across key business domains with our comprehensive training programs

Our offerings

Contact Info

  • +233203701923
    +233543919232
  • info@knowsia.com

Customer

Get In Touch

Follow us on our social media and get daily updates.

Facebook-f Twitter Linkedin-in Envelope
Oops!

This feature is only available in selected plans.

Click here to view all plans

Click on the login button below to login if you’re already subscribed to a plan or click on the upgrade button below to upgrade your current plan.

Login
Upgrade Plan

If you’re not subscribed to a plan, click on the button below to choose a plan

Subscribe to a plan