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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
(a) You are preparing for a job interview as a risk manager. This requires you to make a ten-minute presentation on the functions and determinants of the efficiency of a risk manager.
Required:
Present an outline of your 10-minute presentation. (10 Marks)
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Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
Find Related Questions by Tags, levels, etc.
(b) The public sector is the driver of the economies of many developing nations. Public Finance Management has become a focus of attention in these economies. Development partners have therefore drawn the attention of governments to the Nolan Committee’s report on Standards in Public Life.
Required:
Discuss SIX of these principles for public office holders and show how they can enhance performance in the public sector. (6 Marks)
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Find Related Questions by Tags, levels, etc.
Through functional classification of public expenditure, the economic effects of various government activities can be determined or measured, which would also be helpful for proper policy formulation.
Required:
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With continuing pressure to control costs and maintain efficiency, the time has come for all public sector organisations to embrace zero-based budgeting. There is no longer a place for incremental budgeting in any organisation, particularly those in public sector, where zero-based budgeting is far more suitable.
Required:
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Ogogo Local Government is one of the 26 Local Governments in Alimosho state of
Federal Republic of Wazobia. The Local Government has adopted Treasury Single
Accounting (Direct method) and prepares its accounts using IPSAS accrual basis.
There has been wide spread fraud since the retirement of the Treasurer of the
council about two years ago. However, there was no adequate information to
suggest that there was fraud or misappropriation of funds. The Chairman invited
you to his office as the new Treasurer and handed over some of the financial data
from treasury department to you as detailed below:
The trial balance for the year ended December 31, 2017 is as follows:
The following transactions took place in the Office of the Treasurer of the Local
Government for the year ended December 31, 2018.
i. Listed below are the revenue and expenditure items for the year ended December 31, 2018
(ii) Code 1 is used as prefix for revenue, 2 for recurrent expenditure and 4 for
capital expenditure
(iii) Preliminary investigations carried out revealed the following irregularities,
which occurred and were discovered within the year:
• Included in the payments for the expenses under primary health care department were various duplicated vouchers amounting to N7million;
• There were some falsifications in the bills for items bought for the provision of water under other charges. The total discrepancies amounted to N3million.
(iv) The following agreed revenue demand notices were sent to the indigenes of the Local Government during the year.
(v) Included in the payments under works and housing is the cost of motor
vehicles of N25 million while medical equipment costing N35 million was
included in primary health care department expenses.
(vi) Included in the payments under works and housing is the cost of land
including construction of access roads, certificate of occupancy etc, amounting
to N100 million. The land was acquired by the Local Government and sold to
local prospective land owners at a cost of N520,000 per plot. The land consists
of 200 standard plots for the construction of houses of their choice. Only 150
plots were fully subscribed and paid for during the year.
(vii) Included in the payments under finance department is the cost of office
stationery of N25 million while the value of office stationery based on stock
sheet as at December 31, 2018 was N6.5 million.
viii) Capital grant from the State Government was received on December 31, 2017
and utilised in 2018.
(ix) The capital expenditure paid during the year was for the acquisition of land for the new Local Government Health Centers.
(x) Some of the accounting policies for depreciation adopted by the Government include the following depreciation rates;
Note: All non-current assets were purchased at the beginning of the
year.
(xi) The following expenses were incurred but not settled as at end of the year.
You are required to prepare:
a. The journal entries to record the loss of fund (3 Marks)
b. The statements of financial performance for year ended December 31, 2018
(15 Marks)
c. The statement of financial position as at December, 31 2018 (17 Marks)
d. Identify FIVE external controls and FIVE problems of Local Government in
Nigeria (5 Marks)
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b. Benson Dinka is the management accountant of Dynamic Plc. Mr. Dinka
realises that the present performance reporting system does not highlight
quality costs. The reports contain the information below, but he wants this to
be reported in an appropriate format.
The following information is available in respect of the year ended August 31,
2018
1. Production data:
2. Cost data: Naira
3. Staff training costs amounted to N3,000,000 and product testing costs
were N980,000.
4. The marketing director has estimated that sales of 1,400 units were lost
as a result of bad publicity in trade journals. The average contribution
per heating system unit is estimated at N120,000.
Required:
Prepare a cost of quality report for Dynamic plc. that shows its costs of
quality (using appropriate headings) for the year ended August 31,
2018. (14 Marks)
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Find Related Questions by Tags, levels, etc.
Ezeabunafo Nigeria Limited, an aluminium company, has two divisions, A and B.
Division A manufactures a single uniform product, which is partly sold in the
external market and partly transferred to division B where it forms the major sub –
assembly for that division‟s product.
The unit cost for each division‟s product is as shown here under:
Past data shows that average of 10,000 units of its products are sold on the
external market each year by Division A at the standard price of N60.
In addition to the external sales, 5,000 units are transferred annually to Division B
at a transfer price of N58 per unit (as above). The transfer price is derived by
deducting variable selling and packaging expenses from the external price since
these expenses are not incurred for internal transfers.
Division B‟s manager disagrees with the basis used to set the transfer price. He
contends that the transfer price should be made at variable cost plus an agreed
(minimal) mark up. It is his view that under the present set-up, his division is
taking output that Division A would be unable to sell at the price of N60.
A study commissioned by the Marketing Director consequent on this disagreement
shows the following:
Division B‟s manager maintains that the study has buttressed his case and calls for
a transfer price of N24 which he points out, would give Division B a reasonable
contribution to its fixed overheads as well as enable B to earn a reasonable profit
which also leads to an enhanced company-wide output and profit performance.
Required:
a. Calculate the contribution at alternative selling prices shown in the study for Division A and identify the price that maximizes Division A’s profit. (6 Marks)
b. Calculate the contribution at alternative prices for Division B and determine if the current selling price of N180 maximizes the firm’s overall profit. (5 Marks)
c. Assuming a transfer price equal to Division A’s variable costs, calculate the contribution for Division B at alternative prices. (3 Marks)
d. Calculate the contribution per unit and comment on how the whole firm is affected under this situation. (3 Marks)
e. Evaluate the effect on company profits if Division B’s manager’s suggestion of a N24 transfer price is adopted. (3 Marks)
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Akoko plc. has recently developed a new product called “EKO” which has been in production for the past year. The plant producing “EKO” shuts down for routine inspection and maintenance every three months, and during the first year’s operation, the costs of shut-down have been as follows:
| Quarter | Shut-Down Cost (₦) |
|---|---|
| I | 36,000 |
| 2 | 28,800 |
| 3 | 27,000 |
| 4 | 25,200 |
The management accountant attempts to forecast maintenance costs for the coming year. On examining the data, it appears that these costs have steadily decreased, which may be due to maintenance engineers becoming more efficient or the plant settling down after initial operational issues. The learning curve might explain this trend.
Required:
a. Explain the concept of a learning curve. (4 Marks)
b. Estimate the rate of learning inherent in the data and explain its meaning. (4 Marks)
c. Using the learning rate determined, forecast the total cost of shut-down for routine maintenance during the coming year. (5 Marks)
d. Assume learning ceases at the end of the second year; forecast the total cost of shut-down for routine maintenance during the third year. (4 Marks)
e. State TWO specific reasons why this forecast may be inaccurate. (3 Marks)
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Rinc Nigeria Limited has two divisions, A and B. Division A specializes in the manufacture of a special part of a product while Division B completes the production and sells the final product. Division A also sells its components to third parties, and Division B can buy parts from external suppliers. Both divisions are profit centers.
The following are for the month of November:
Required:
a. Calculate the profit made by each division and the company as a whole for November. (10 Marks)
b. Calculate the ROI and RI of the divisions and the company. (5 Marks)
c. Discuss the advantages and disadvantages of ROI and RI as parameters for appraising divisional performance. (5 Marks)
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Lunda Limited manufactures a range of products, many of which have short product lifecycles. Research and development staff recently designed three new products which would be manufactured in a single production cell of the company’s factory. The combined monthly manufacturing overhead costs of the three products are summarized as follows:
| Activity | Costs (₦) |
|---|
| Production set-ups (10 per month) | 200,000 |
| Material movements (400 per month) | 1,800,000 |
| Repairs (4,000 per month) | 3,000,000 |
| Total manufacturing overheads per month | ₦5,000,000 |
The following information is available concerning the three new products:
The company’s target costing task group expressed the view that the new products
would not be profitable, given the likely market prices and the cost of
manufacturing the products using the proposed design. In response, the product
designers indicated that no design changes were possible in relation to Product A
or B, but that changes in the design of Product C would bring about the following
reductions in the amount of monthly activity involved in manufacturing that
product without compromising either the quality or quantity of output:
Calculate the reduction in the cost per unit of each of the three products
which would occur as a result of the design changes to Product C, in each of
the following circumstances:
• If manufacturing overheads are allocated to products using activitybased costing (ABC);
• If manufacturing overheads are allocated to products on a direct labour
hour basis. (10 Marks)
b. Discuss the view that an ABC system is essential for the implementation of
target costing. Use the case of Lunda Limited to illustrate your answer.
(5 Marks)
c. The following data relates to another product of Lunda
Comment on the trends in this data set. (5 Marks)
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A customer has just placed a special order for 25,000 units of Apet and the customer is willing to pay N12.00 per unit. Advise the management whether to accept or reject the order. Assume that for any shortfall in material A required to produce the order, it can be bought at a price of N2.00 per kg. (10 Marks)
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