PowerPoint Slides 1-4

Question 1

Name 4 things management information is used for:

Answer 1

Planning, Controlling, Decision Making & Scorekeeping

Question 2

Name the 3 levels of information in order(highest to lowest):

Answer 2

Strategic, Tactical & Operational

Question 3

Name 5 different business objectives:

Answer 3

Grow, Look after employees, Look after the environment, Make sales to beat competitors and Make profits.

Question 4

Define planning:

Answer 4

Deciding where the business needs to be in the future

Question 5

Define controlling:

Answer 5

Is the business on track to get there

Question 6

Define decision making:

Answer 6

What does the business need to do to get there

Question 7

Define scorekeeping:

Answer 7

Are we recording what we are spending and receiving

Question 8

Name the 6 processes (in order) involved in the planning, decision making and controlling process:

Answer 8

Set objectives, Identify alternatives, Make decision, Implement decision, Compare actual & plan, Revise objectives or take control action.

Question 9

List 8 Qualities of good information:

Answer 9

Accurate
Complete
Comparable
Understandable
Relevant
Authoritative
Timely
Economic

Question 10

What is efficiency?

Answer 10

Doings things well, doing things right & measured by ratios.

Question 11

What is effectiveness?

Answer 11

Doing the right things, achieving objectives & may be non-financial.

Question 12

List 4 reasons why we now rely on technology:

Answer 12

Quicker processing, more accurate, more complex calculations can be done and a greater volume of data can be stored.

Question 13

List 5 reasons why we need to understand costs:

Answer 13

Value our inventories of finished goods
Set a price that covers costs
Decide how to control costs
Forecast future costs
Decide which products or departments are profitable

Question 14

List 7 labour costs:

Answer 14

Salaries
Wages 
Bonuses
Overtime and shift premiums
Holiday pay
Idle time
Pension contributions

Question 15

Why record labour costs?

Answer 15

Ensure each unit gets a fair labour cost

Ensure that we pay the correct amounts to

• Employees
• HMRC
• Pension companies
• Charities, loan companies, insurance etc

Question 16

List 4 potential advantages of individual/labour incentive schemes:

Answer 16

Lower unit cost (fixed & variable costs as well as labour costs)
Better motivated workforce (better paid & more in control of payment level)
Greater efficiency
Greater productivity

Question 17

List 4 potential disadvantages of individual/labour incentive schemes:

Answer 17

Quality may suffer
Quality control costs may suffer
Potential behavioural problems as a single standard is unlikely to suit different workers
Uncertainty over labour costs

Question 18

Management Accountants will provide managers with information which will enable them to..

Answer 18

..increase the value of the firm by acquiring, allocating and utilising resources as efficiently as possible.

Question 19

List 7 differences between management and financial accountants.

Answer 19

Report to managers of business
Internal to organisation
Future orientated
Can be done for parts of business
Not required by Law
Not governed by accounting standards
Information is more flexible

Question 20

How do you work out unit production costs?

Answer 20

Production costs / sales

Question 21

How do you work out unit fixed costs?

Answer 21

Fixed costs / sales

Question 22

How do you work out average unit costs?

Answer 22

Unit production costs + unit fixed costs

Question 23

What is production overhead?

Answer 23

All costs that are involved in production but can’t be traced to products.