Subject: MANAGEMENT ACCOUNTING

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MA – Mar 2025 – L2 – Q5 – Decision making techniques

Determine whether Moree Engineers LTD should make or buy extra seating assemblies for scooters, considering costs and opportunity costs.

Question

a) i)
Moree Engineers LTD (MEL) makes electrically-driven disability scooters aimed at elderly and/or disabled customers. At present, wheels and tyres are bought from external suppliers but all other parts are manufactured in-house. The scooters have a strong reputation due mainly to innovative designs, special power units that can be recharged at home and seats that enable easy access for a wide range of disabilities. MEL also sells power units to other firms.
Current monthly costs are as follows:

	Seating Department	Power Unit Department
Costs	GH¢	GH¢
Direct Materials	9,300	4,140
Direct Labour	12,600	9,450
Apportioned overheads	26,700	17,200
	48,600	30,790
Production level	60 units	90 units

The power unit department currently produces 90 units a month, 60 units are used in MEL’s own scooters while 30 units are sold externally at GH¢376 each.
A contract has been won to supply an additional 10 scooters per month. However, the directors are considering how best to meet the additional demand.
Sufficient capacity exists for the company to increase its monthly production to 70 scooters, except that making an extra 10 seating assemblies would require reallocation of labour and other resources from the power unit to the seating department. This would cut power unit output by 20 units per month.
The alternative course would be to buy 10 seating assemblies from an outside supplier and fit the 10 power units from the present production of 90 units. The cheapest quote for seating assemblies is GH¢610 per assembly.

Required:
Based on the figures given, show whether Moree Engineers LTD should make or buy the extra seats.

a) ii) Discuss FOUR other factors that should be considered before a final decision is taken to make or to buy the extra seats.

b) i). Bambo LTD produces three medical products namely, gloves, bandages and syringes. The budgeted sales in the coming year for the three products is GH¢4,530,000. The company accordingly projected GH¢750,000 post-tax profit on the three products for the period.
Detailed budgeted Cost and sales data for the coming year are as follows:

	Gloves	Bandages	Syringes
Sales Volume (%)	40%	25%	35%
Variable cost to Sales ratio	60%	67.5%	54.5%

The fixed cost for Bambo LTD amounted to GH¢1,330,000.
Other information:
Corporate tax rate is 25%

Required:
Calculate margin of safety in percentage (%) terms.

b) ii) Calculate post-tax revenue to achieve the projected profit.

Answer

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Tags: CVP Analysis, Multi-product, Post-tax revenue, Profit Calculation, Tax adjustment
Level: Level 2

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAR 2025

MA – Mar 2025 – L2 – Q4 – Capital Budgeting

Evaluate two projects using benefit-cost ratio for GKIA with given financial data and 20% required rate of return.

Question

a). GKIA, an Early Childhood Development Centre (ECDC) under Ghana’s Ministry of Health (MOH) has obtained funding from the Global Fund (GF) to implement targeted programmes in line with the vision of the GF. In GF’s recent grant releases, GKIA received an amount of GH¢2 million and has the option of spending the amount on any project provided it falls within any of the thematic areas specified by the GF.
Accordingly, GKIA is considering spending the funds on either of two projects. The first option involves the construction, equipping and full furnishing of a 30-bed paediatric unit for the Centre. The second option involves the refurbishment of all existing leisure and recreational facilities that the Centre currently operates. Both options qualify for funding under the thematic areas of the GF.
The information in the table below presents financial details of both options that GKIA is considering.

	Option A: Paediatric Unit		Option B: Leisure and recreational facilities
Initial capital outlay	GH¢2 million		GH¢2 million
Year	Costs (GH¢)	Benefits (GH¢)	Costs (GH¢)	Benefits (GH¢)
1	175,000	150,000	150,000	1,000,000
2	218,750	225,000	187,500	1,050,000
3	262,500	562,500	225,000	997,500
4	301,875	1,687,500	258,750	847,875
5	332,062.50	5,906,250	271,687.50	975,056.25

The required rate of return on any investment project undertaken by GKIA is 20%.

Required:
As the Management Accountant of GKIA, you are required to evaluate the acceptability of each project on the basis of benefit-cost ratio.

b). The term Value for Money (VFM) is synonymous with spending in the public sector, where it is expected that little resources should be used to generate the best possible output/outcome for the public good.

Required:
Explain the ‘three Es’ that public sector management accountants will need to take into consideration when making public spending decisions.

c). In the application of the controllability principle, identify the cost centre manager who is responsible for any adverse impact of labour on production. (provide three reasons to justify your answer).

Answer

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Tags: Controllability Principle, Labour Efficiency, Production Manager, Variance Analysis
Level: Level 2

Topic: Other Aspects of Performance Measurement
Series: MAR 2025

MA – Mar 2025 – L2 – Q3 – Standard costing and variance analysis

Calculate sales volume variance for four distribution areas using a contribution income statement for Azumah Enterprise.

Question

a) The data below relates to Azumah Enterprise for the month of August. The data relates to activities for his four areas of distribution in Accra.

Distribution Area	Selling Price Per Unit (GHc)	Standard Variable Cost Price Per Unit (GHc)
Awoshie (A)	120	80
Banana-Inn (B)	100	60
Cantonments (C)	80	45
Dansoman (D)	45	25

Sales Units	Budgeted	Actuals
Awoshie (A)	65,000	48,000
Banana-Inn (B)	45,000	55,000
Cantonments (C)	35,000	28,000
Dansoman (D)	25,000	28,000

Required:
Estimate the sales volume variance for each distribution area and in total for the month using a contribution income statement.

b) There are many models of evaluation available to a Management Accountant. Benchmarking is one of such models.

Required:

Under what circumstances would benchmarking be an effective model of evaluating performance?

c) IFAC describes Environmental Management Accounting as “The management of environmental and economic performance via management accounting systems and practices that focus on both physical information on the flow of energy, water, materials, and wastes, as well as monetary information on related costs, earnings and savings.” The above quotation shows the increasing relevance of Environmental Management Accounting.

Required:

Discuss with examples FOUR categories of environmental costs.

Answer

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Tags: Cost Categories, Cost Management, Environmental costs, Management Accounting, Sustainability
Level: Level 2

Topic: Environmental Management Accounting
Series: MAR 2025

MA – Mar 2025 – L2 – Q2 – Budgetary control

Explain eight stages in the budgeting process for a manufacturing organization.

Question

a) The preparation of budgets is a lengthy process which requires great care if the ultimate master budget is to be useful for the purposes of management control within an organisation. Required: Explain EIGHT stages involved in the budgeting process in a manufacturing organisation

b) Budgeting serves a number of useful purposes. They include planning annual operations, coordinating the activities of the various parts of the organisation, communicating plans to various responsibility centre managers among others. Notwithstanding these useful purposes, budgeting has been criticised for several reasons. Required: Identify FIVE criticisms of budgeting.

c) Despite the benefits of minimised inventory cost, waste elimination and quick turnaround time for customers, a lean production model is beset with inherent limitations. Required: Explain FOUR limitations to the efficient implementation of a lean production model in an organization.

Answer

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Tags: Inventory Management, Lean Production, Limitations, Production Efficiency
Level: Level 2

Topic: Models of evaluation Quality
Series: MAR 2025

MA – Mar 2025 – L2 – Q1 – Performance analysis

Analyze VAL's 2024 performance in financial, internal efficiency, and external effectiveness using provided data.

Question

========== Question Title: MA – Mar 2025 – L2 – Q1 – Performance analysis
Level: LEVEL 2
Professional Bodies: ICAG
Programs: PROFESSIONAL PROGRAM
Subjects: Management Accounting
Topics: Performance analysis, Financial performance, Internal efficiency, External effectiveness
Series: MARCH 2025
Total Marks: 20
Question Tags: Performance analysis, Financial performance, Internal efficiency, External effectiveness, Revenue calculation, Profitability, Customer satisfaction, Operational efficiency
Question Short Summary: Analyze VAL’s 2024 performance in financial, internal efficiency, and external effectiveness using provided data.

——————————————————————— Question:
QUESTION ONE
Vovome Advisory Limited (VAL) began trading three years ago, on 1 January 2022. It specialises in the provision of expert advice to clients in accountancy, taxation and regulatory compliance. It has a team of professional advisers, each specialising in one of these three areas of advice.
VAL has a target for delivering its services to clients promptly. From the time the client asks for advice, VAL undertakes to provide a formal report to the client within 10 working days.
The following information relates to the financial year ended 31 December 2024:
i) The professional advisers are budgeted to work 220 days each year. They charge GH₵1,400 per day to new clients and GH₵1,200 to established clients.
ii) As a marketing measure intended to win new business, the advisers also give consultations to potential clients on a ‘no fee’ basis. These consultations, which are budgeted to take one day each, are accounted for as business development costs in the marketing budget.
iii) The professional advisers are also required to attend some ‘workshops’ with new clients who are having difficulties with implementing the advice that they have been given by VAL. These workshops, which are also given on a ‘no fee’ basis, are budgeted to last two days.
iv) VAL also has a help desk to provide client support. It responds to telephone and e-mail enquiries from all new and established clients.
v) The team of professional advisers is exactly 50. It is a policy of VAL to limit the team to 50, regardless of the volume of demand for its services.
vi) All professional advisers are paid a salary of GH₵100,000 per year. In addition, they are entitled to share equally in an annual bonus. The bonus is 50% of the amount by which fee income generated exceeds budget minus the revenue forgone as a result of having to give workshops for clients. This revenue forgone is assessed at a notional daily rate of GH₵1,200 per adviser/day.
vii) Operating expenses of the business, excluding salaries of the advisers, were GH₵3,100,000 in 2024. The budget for these expenses was GH₵2,800,000.

Other information:

	Budget 2024	Actual 2024
Professional advisers, by category
Accounting	15	10
Tax	20	20
Compliance	15	20

Enquiries about seeking new advice
New clients	2,600	2,200
Established clients	4,000	3,700

Number of chargeable client days
New clients	2,600	2,750
Established clients	5,100	5,500
Average client days per job	4	4

Mix of chargeable client days
Accounting	1,155	1,650
Tax	1,540	3,300
Compliance	1,155	3,300

The following are actual results for each of the three years 2022-2024

	2022	2023	2024
Number of clients	160	248	347
Number of complaints from clients	50	75	95
Number of accounts in dispute	10	7	5
Support desk: Percentage of calls resolved	86%	94%	97%
Percentage of jobs completed within 10 days	90%	95%	98%
Average time to complete a job (days)	12.6	10.7	9.5
Chargeable client days	7,200	7,750	8,250
Number of consultations (business development)	50	100	150
Number of workshops given	110	135	165
Revenue (GH₵000)	8,920	9,740	?
Net profit (GH₵000)	1,740	1,940	?

Required:
Using the information provided, analyse and discuss the performance of VAL for the year ended 31 December 2024, under the following headings:
a) Financial performance and competitiveness;
b) Internal efficiency; and
c) External effectiveness.

Answer

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Tags: Customer Satisfaction, External effectiveness, Financial Performance, Internal efficiency, Operational Efficiency, Performance Analysis, Profitability, Revenue calculation
Level: Level 2

Topic: External effectiveness
Series: MAR 2025

MA – Nov 2024 – L2 – Q5b – Profit Maximization and Batch Selection

Determination of the optimal number of printer batches to import and sell to maximize profit.

Question

Awuah deals in online business, importing and selling printers. The cost of each set of printers varies depending on the number purchased, although printers can only be purchased in batches of 1,000 units. Awuah also has to pay import taxes which vary according to the quantity purchased. Awuah has already carried out some market research and identified that sales quantities are expected to vary depending on the price charged.

The following data has been established for the first month:

Number of Batches Imported and Sold	Average Cost per Unit (Including Import Taxes) (GH¢)	Total Fixed Costs per Month (GH¢)	Expected Selling Price per Unit (GH¢)
1	10.00	10,000	20
2	8.80	10,000	18
3	7.80	12,000	16
4	6.40	12,000	13

Required:

Determine the number of batches of printers Awuah should import and sell to maximize profit.

Answer

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Tags: Batch Selection, CVP Analysis, Fixed and Variable Costs, Profit Maximization
Level: Level 2

Topic: Cost-Volume-Profit (CVP) Analysis
Series: Nov 2024

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

Determination of the optimum production plan considering scarce resources.

Question

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.

Answer

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Tags: Contribution analysis, Decision Making, Limiting Factor, Optimum production, Profit Maximization
Level: Level 2

Topic: Decision making techniques
Series: Nov 2024

MA – Nov 2024 – L2 – Q4b – Standard Costing and Variance Investigation

Explanation of the use of standard costing in decision-making and key factors to consider before investigating variances.

Question

Standard costing has been employed by organizations as a control technique to analyze the deviation of results from those that are expected.

Required:

i) Explain TWO ways managers have effectively deployed standard costing as a tool in decision-making analysis.

ii) Explain THREE key factors a manager should consider before deciding to institute an investigation into reported variances.

Answer

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Tags: Cost Control, Performance Evaluation, Standard Costing, Variance Analysis
Level: Level 2

Topic: Standard Costing and Variance Analysis
Series: Nov 2024

MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

Question

The Faith Specialist Hospital (FSH) is a special government health facility under the Ghana Health Service (GHS) that provides specialized medical scans for complex health conditions. Management of FSH is planning to install an ultra-modern imaging machine that will improve the quality and accuracy of scans. The new installation will require an additional capital investment of GH¢420,000. The GHS policy on capital projects is that all new projects should achieve an internal rate of return of at least 30%.

Forecast demand for the services of this new machine over its five-year useful life are as follows:

Year	Number of Scans
1	1,250
2	2,700
3	3,500
4	1,400
5	675

Projected charge per scan: GH¢650
Variable costs per scan:

Consumables: GH¢330
Labour and overheads: GH¢176

Operating fixed costs per year: GH¢264,000 (includes depreciation on a straight-line basis)

Apart from the financial forecasts above, it is also envisaged that the project will produce non-financial benefits in several forms. Although it is hard to place a precise value on this, expert opinion suggests that this could approximate GH¢70,000 per annum.

Required:

i) Using cost-benefit analysis (CBA) computations, evaluate if the project should be undertaken.

ii) Enumerate TWO limitations of evaluating projects in the public sector.

Answer

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Tags: Capital Budgeting, Cost-benefit analysis, Investment Appraisal, IRR, Public Sector
Level: Level 2

Topic: Introduction to capital budgeting
Series: Nov 2024

MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector

Assessment of ABC's applicability in the service sector and identification of four units in healthcare where it can be applied.

Question

In their effort to build equitable, resilient, and sustainable systems for health, both The Global Fund and Gavi have approached you on the implementation of ABC systems to improve their customer profitability analysis.

Required:

Assess the applicability of Activity-Based Costing (ABC) in the services sector. In explaining your answer, identify four units in the healthcare sector where ABC systems are applicable and specify an appropriate cost driver for each.

Answer

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Tags: Activity-Based Costing, Cost Control, Cost Drivers, Healthcare, Service Sector
Level: Level 2

Topic: Activity-based costing
Series: Nov 2024

MA – Mar 2025 – L2 – Q5 – Decision making techniques

Determine whether Moree Engineers LTD should make or buy extra seating assemblies for scooters, considering costs and opportunity costs.

Question

	Seating Department	Power Unit Department
Costs	GH¢	GH¢
Direct Materials	9,300	4,140
Direct Labour	12,600	9,450
Apportioned overheads	26,700	17,200
	48,600	30,790
Production level	60 units	90 units

Required:
Based on the figures given, show whether Moree Engineers LTD should make or buy the extra seats.

a) ii) Discuss FOUR other factors that should be considered before a final decision is taken to make or to buy the extra seats.

	Gloves	Bandages	Syringes
Sales Volume (%)	40%	25%	35%
Variable cost to Sales ratio	60%	67.5%	54.5%

The fixed cost for Bambo LTD amounted to GH¢1,330,000.
Other information:
Corporate tax rate is 25%

Required:
Calculate margin of safety in percentage (%) terms.

b) ii) Calculate post-tax revenue to achieve the projected profit.

Answer

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Tags: CVP Analysis, Multi-product, Post-tax revenue, Profit Calculation, Tax adjustment
Level: Level 2

Topic: Cost-Volume-Profit (CVP) Analysis
Series: MAR 2025

MA – Mar 2025 – L2 – Q4 – Capital Budgeting

Evaluate two projects using benefit-cost ratio for GKIA with given financial data and 20% required rate of return.

Question

	Option A: Paediatric Unit		Option B: Leisure and recreational facilities
Initial capital outlay	GH¢2 million		GH¢2 million
Year	Costs (GH¢)	Benefits (GH¢)	Costs (GH¢)	Benefits (GH¢)
1	175,000	150,000	150,000	1,000,000
2	218,750	225,000	187,500	1,050,000
3	262,500	562,500	225,000	997,500
4	301,875	1,687,500	258,750	847,875
5	332,062.50	5,906,250	271,687.50	975,056.25

The required rate of return on any investment project undertaken by GKIA is 20%.

Required:
As the Management Accountant of GKIA, you are required to evaluate the acceptability of each project on the basis of benefit-cost ratio.

Required:
Explain the ‘three Es’ that public sector management accountants will need to take into consideration when making public spending decisions.

Answer

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Tags: Controllability Principle, Labour Efficiency, Production Manager, Variance Analysis
Level: Level 2

Topic: Other Aspects of Performance Measurement
Series: MAR 2025

MA – Mar 2025 – L2 – Q3 – Standard costing and variance analysis

Calculate sales volume variance for four distribution areas using a contribution income statement for Azumah Enterprise.

Question

a) The data below relates to Azumah Enterprise for the month of August. The data relates to activities for his four areas of distribution in Accra.

Distribution Area	Selling Price Per Unit (GHc)	Standard Variable Cost Price Per Unit (GHc)
Awoshie (A)	120	80
Banana-Inn (B)	100	60
Cantonments (C)	80	45
Dansoman (D)	45	25

Sales Units	Budgeted	Actuals
Awoshie (A)	65,000	48,000
Banana-Inn (B)	45,000	55,000
Cantonments (C)	35,000	28,000
Dansoman (D)	25,000	28,000

Required:
Estimate the sales volume variance for each distribution area and in total for the month using a contribution income statement.

b) There are many models of evaluation available to a Management Accountant. Benchmarking is one of such models.

Required:

Under what circumstances would benchmarking be an effective model of evaluating performance?

Required:

Discuss with examples FOUR categories of environmental costs.

Answer

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Tags: Cost Categories, Cost Management, Environmental costs, Management Accounting, Sustainability
Level: Level 2

Topic: Environmental Management Accounting
Series: MAR 2025

MA – Mar 2025 – L2 – Q2 – Budgetary control

Explain eight stages in the budgeting process for a manufacturing organization.

Question

Answer

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Tags: Inventory Management, Lean Production, Limitations, Production Efficiency
Level: Level 2

Topic: Models of evaluation Quality
Series: MAR 2025

MA – Mar 2025 – L2 – Q1 – Performance analysis

Analyze VAL's 2024 performance in financial, internal efficiency, and external effectiveness using provided data.

Question

Other information:

	Budget 2024	Actual 2024
Professional advisers, by category
Accounting	15	10
Tax	20	20
Compliance	15	20

Enquiries about seeking new advice
New clients	2,600	2,200
Established clients	4,000	3,700

Number of chargeable client days
New clients	2,600	2,750
Established clients	5,100	5,500
Average client days per job	4	4

Mix of chargeable client days
Accounting	1,155	1,650
Tax	1,540	3,300
Compliance	1,155	3,300

The following are actual results for each of the three years 2022-2024

	2022	2023	2024
Number of clients	160	248	347
Number of complaints from clients	50	75	95
Number of accounts in dispute	10	7	5
Support desk: Percentage of calls resolved	86%	94%	97%
Percentage of jobs completed within 10 days	90%	95%	98%
Average time to complete a job (days)	12.6	10.7	9.5
Chargeable client days	7,200	7,750	8,250
Number of consultations (business development)	50	100	150
Number of workshops given	110	135	165
Revenue (GH₵000)	8,920	9,740	?
Net profit (GH₵000)	1,740	1,940	?

Answer

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Tags: Customer Satisfaction, External effectiveness, Financial Performance, Internal efficiency, Operational Efficiency, Performance Analysis, Profitability, Revenue calculation
Level: Level 2

Topic: External effectiveness
Series: MAR 2025

MA – Nov 2024 – L2 – Q5b – Profit Maximization and Batch Selection

Determination of the optimal number of printer batches to import and sell to maximize profit.

Question

The following data has been established for the first month:

Number of Batches Imported and Sold	Average Cost per Unit (Including Import Taxes) (GH¢)	Total Fixed Costs per Month (GH¢)	Expected Selling Price per Unit (GH¢)
1	10.00	10,000	20
2	8.80	10,000	18
3	7.80	12,000	16
4	6.40	12,000	13

Required:

Determine the number of batches of printers Awuah should import and sell to maximize profit.

Answer

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Tags: Batch Selection, CVP Analysis, Fixed and Variable Costs, Profit Maximization
Level: Level 2

Topic: Cost-Volume-Profit (CVP) Analysis
Series: Nov 2024

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

Determination of the optimum production plan considering scarce resources.

Question

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

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:

Answer

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Tags: Contribution analysis, Decision Making, Limiting Factor, Optimum production, Profit Maximization
Level: Level 2

Topic: Decision making techniques
Series: Nov 2024

MA – Nov 2024 – L2 – Q4b – Standard Costing and Variance Investigation

Explanation of the use of standard costing in decision-making and key factors to consider before investigating variances.

Question

Standard costing has been employed by organizations as a control technique to analyze the deviation of results from those that are expected.

Required:

i) Explain TWO ways managers have effectively deployed standard costing as a tool in decision-making analysis.

ii) Explain THREE key factors a manager should consider before deciding to institute an investigation into reported variances.

Answer

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Tags: Cost Control, Performance Evaluation, Standard Costing, Variance Analysis
Level: Level 2

Topic: Standard Costing and Variance Analysis
Series: Nov 2024

MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

Question

Forecast demand for the services of this new machine over its five-year useful life are as follows:

Year	Number of Scans
1	1,250
2	2,700
3	3,500
4	1,400
5	675

Projected charge per scan: GH¢650
Variable costs per scan:

Consumables: GH¢330
Labour and overheads: GH¢176

Operating fixed costs per year: GH¢264,000 (includes depreciation on a straight-line basis)

Required:

i) Using cost-benefit analysis (CBA) computations, evaluate if the project should be undertaken.

ii) Enumerate TWO limitations of evaluating projects in the public sector.

Answer

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Tags: Capital Budgeting, Cost-benefit analysis, Investment Appraisal, IRR, Public Sector
Level: Level 2

Topic: Introduction to capital budgeting
Series: Nov 2024

MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector

Assessment of ABC's applicability in the service sector and identification of four units in healthcare where it can be applied.

Question

Required:

Answer

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Tags: Activity-Based Costing, Cost Control, Cost Drivers, Healthcare, Service Sector
Level: Level 2

Topic: Activity-based costing
Series: Nov 2024

Subject: MANAGEMENT ACCOUNTING

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MA – Mar 2025 – L2 – Q5 – Decision making techniques

Determine whether Moree Engineers LTD should make or buy extra seating assemblies for scooters, considering costs and opportunity costs.

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MA – Mar 2025 – L2 – Q4 – Capital Budgeting

Evaluate two projects using benefit-cost ratio for GKIA with given financial data and 20% required rate of return.

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MA – Mar 2025 – L2 – Q3 – Standard costing and variance analysis

Calculate sales volume variance for four distribution areas using a contribution income statement for Azumah Enterprise.

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MA – Mar 2025 – L2 – Q2 – Budgetary control

Explain eight stages in the budgeting process for a manufacturing organization.

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MA – Mar 2025 – L2 – Q1 – Performance analysis

Analyze VAL's 2024 performance in financial, internal efficiency, and external effectiveness using provided data.

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MA – Nov 2024 – L2 – Q5b – Profit Maximization and Batch Selection

Determination of the optimal number of printer batches to import and sell to maximize profit.

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

Determination of the optimum production plan considering scarce resources.

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

MA – Nov 2024 – L2 – Q4b – Standard Costing and Variance Investigation

Explanation of the use of standard costing in decision-making and key factors to consider before investigating variances.

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MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

You're reporting an error for "MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment"

MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector

Assessment of ABC's applicability in the service sector and identification of four units in healthcare where it can be applied.

You're reporting an error for "MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector"

MA – Mar 2025 – L2 – Q5 – Decision making techniques

Determine whether Moree Engineers LTD should make or buy extra seating assemblies for scooters, considering costs and opportunity costs.

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MA – Mar 2025 – L2 – Q4 – Capital Budgeting

Evaluate two projects using benefit-cost ratio for GKIA with given financial data and 20% required rate of return.

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MA – Mar 2025 – L2 – Q3 – Standard costing and variance analysis

Calculate sales volume variance for four distribution areas using a contribution income statement for Azumah Enterprise.

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MA – Mar 2025 – L2 – Q2 – Budgetary control

Explain eight stages in the budgeting process for a manufacturing organization.

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MA – Mar 2025 – L2 – Q1 – Performance analysis

Analyze VAL's 2024 performance in financial, internal efficiency, and external effectiveness using provided data.

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MA – Nov 2024 – L2 – Q5b – Profit Maximization and Batch Selection

Determination of the optimal number of printer batches to import and sell to maximize profit.

You're reporting an error for "MA – Nov 2024 – L2 – Q5b – Profit Maximization and Batch Selection"

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

Determination of the optimum production plan considering scarce resources.

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

MA – Nov 2024 – L2 – Q4b – Standard Costing and Variance Investigation

Explanation of the use of standard costing in decision-making and key factors to consider before investigating variances.

You're reporting an error for "MA – Nov 2024 – L2 – Q4b – Standard Costing and Variance Investigation"

MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment

Evaluation of a healthcare capital investment project using cost-benefit analysis.

You're reporting an error for "MA – Nov 2024 – L2 – Q4a – Cost-Benefit Analysis (CBA) for Public Sector Investment"

MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector

Assessment of ABC's applicability in the service sector and identification of four units in healthcare where it can be applied.

You're reporting an error for "MA – Nov 2024 – L2 – Q3b – Activity-Based Costing (ABC) in the Service Sector"

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