Topic: Management Control SystemOrder Description
Font: Times New Roman
size :12
spacing :1.5
first question : max 900 words
second question : max 750 words
Curtin University
School of Accounting
Management Control Systems
Portfolio
Due 12pm (noon) on Wednesday, 7 September 2016
Portfolios must be submitted through
TURNITIN Submission on FLECS-Blackboard site.
Portfolio requirements
The portfolio is to be completed individually. Answers are to be written in plain language, but must indicate a sound conceptual understanding of the key issues. It is to contain:
• A word processed document (please spell check and grammar check your document); and
• A completed Portfolio Cover Sheet attached to the front of the portfolio (available in the Assessments tab on Blackboard).
• Please answer the questions directly. You don’t need to write an essay for the portfolio, just answer the questions individually within the maximum word limit. All material in excess of the word count will not be marked.
• There is no need to provide extensive definitions; the focus is on how you apply the theories and concepts to the cases in the portfolio. You will need to reference for this portfolio and your reference list does not have to exceed a page. The referencing style for this unit is Chicago.
• The work you submit must be your own. Significant penalties are imposed where assessments are found to be plagiarised. The University policy on Academic Integrity can be found on this webpage: http://academicintegrity.curtin.edu.au/home/
• Students will be penalised by a deduction of ten percent per calendar day for a late assessment submission (eg a mark equivalent to 10% of the total allocated for the assessment will be deducted from the marked value for every day that the assessment is late). This means that an assessment worth 20 marks will have two marks deducted per calendar day late. Hence if it was handed in three calendar days late and given a mark of 16/20, the student would receive 10/20. An assessment more than seven calendar days overdue will not be marked and will receive a mark of 0.
• Extensions to the assignment due date will only be considered by the Unit Co-ordinator (Dr Yuni Yuningsih) and will be granted only in extreme circumstances. An application may be accepted up to five working days after the date or due date of the assessment task where the student is able to provide an acceptable explanation as to why he or she was not able to submit the application prior to the assessment date.
Question 1 (word limit: 900 words)
Docell Batteries Limited is a battery manufacturing company located in Ottawa, Canada. The company manufactures products mainly in three ranges: automotive batteries, UPS batteries, and Genset batteries. The company operates in a very price-competitive industry, so it has little control over the price of its products. It must meet the market price. To do so, the company has to keep production costs in check by operating as efficiently as possible. Tom Scott, the company’s president, has stated that to be successful, the company must provide a very high quality-product and meet its delivery commitment to customers on time. Docell Ltd. is organized as shown in the following diagram:
There is currently a disagreement between the company’s two vice presidents regarding the responsibility-accounting system. The vice president for manufacturing claims that the five plants should be cost centers. He recently expressed the following sentiment: “The plants should be cost centers because the plant managers do not control the sale of our products. Designating the plants as profit centers would result in holding the plant managers responsible for something they can’t control.” A contrary view is held by the vice president for sales. He recently made the following remarks: “the plants should be profit centers. The plant managers are in the best position to affect the company’s overall profit.”
Required:
1. Assuming that Docell’s overall goal is profitability, what are the company’s critical success factors? Explain your answer. (3 marks)
(A critical success factor is a variable that meets these two criteria: it is largely under the company’s control, and the company must succeed in this area in order to reach its overall goal of profitability)
2. Which responsibility-accounting arrangement (for manufacturing plants) is most consistent with achieving success of the company’s critical success factors? Explain your answer. (2 marks)
3. What responsibility-center designation is most appropriate for the company’s sales districts? Explain your answer. (1 mark)
4. Suppose that Docell often experiences rush orders from its customers. Which of the two proposed responsibility-accounting arrangements is best suited to making good decisions about accepting or rejecting rush orders? Specifically, should the plants be cost centers or profit centers? Explain your answer. (4 marks)
(Total mark: 10 marks)
Question Two (word limit: 750 words)
Generally, companies follow one of two broad strategies: offering a quality product at a low price, or offering a unique product or service priced higher than the competition. Assume you are opening a bakery across the street from your campus. How might that business be operated under each of the two broad strategies? Consider the following specific operational areas:
a. target customers (1 mark)
b. products offered (2 marks)
c. product pricing (1 mark)
d. location choice (2 marks)
e. advertising content (2 marks)
f. advertising media (2 marks)
(Total mark: 10 marks)
