Management and cost accounting has been the basic toolbox in business administration for decades. Today it is an integral part of all curricula in business education and no student can afford not to be familiar with its basic concepts and instruments. At the same time, business in general, and management accounting in particular, is becoming more and more international.
Case Study- Fosters Construction Ltd full details will be attached in personalized order Requirements: Please present your analysis in the form of a report answering all questions. Please elaborate on each question carefully and make your result clear. Back up your answer with appropriate data.
Explain any assumptions you make. What adjustment to SCs suggested RRR would be needed in order to match the discount rate with the cashflows used? How might you consider these uncertain variables in better assessing the proposal?
The company has been operating for 24 years and is well established in the marketplace. However, despite a national rate of 4 per cent per annum over the last few years which is expected to continuea general economic downturn has seen FCLs nominal revenue reduce at a rate of about 3 per cent per annum.
The companys main activity is the construction of large industrial buildings. It also provides maintenance services, mainly for those buildings which it has constructed. FCL has a large investment in construction machinery, and has always kept up with the latest technology in the industry.
The company has concentrated on developing a Colin drury management and cost accounting case studies image as an innovative, technologically advanced construction firm, and many of the managers of FCL consider that this corporate image has been a major factor in securing large, competitive contracts in the past.
FCL is subject to corporation tax at 35 per cent, payable twelve months after year end, and a system of 25 per cent writing down allowance on capital assets. The summary sheet in Exhibit 1 is taken from the firms capital investment procedures manual, and outlines the formal process for capital investment decision-making within FCL.
The new asset would replace an existing crane which is ten years old, and which requires major maintenance in order to meet required safety standards.
The CSM has indicated in the January budget-setting around that the firm would need to spend money maintaining the old crane, but had not at that stage been aware of any replacement options. It had previously been expected that the existing crane would see out its remaining useful life, to be replaced by a more modern crane the Auto-Lift II, or AL II.
The AL II is technologically more advanced than the firms existing crane, and is able to lift much larger loads. Purchase price payable on 31 March the last day of FCLs financial year for taxation purposes.
The site accountants and the CSM had agreed that no further information was necessary, as the CI proposal qualified as a replacement of existing asset Class I investment.
The director of CI has called a meeting of concerned parties to discuss the CI application. The total amount of available funds for CI expenditure is determined by the directors, based on what they consider the company can afford.
Managers must present their proposed CI requirements under the following three headings: The information normally required with such as submission includes: However, proposed Class 3 projects may dispense with items iv and vand those in Class 1 may dispense with items iiiv and v.
CI proposals will be assessed with regard to the net present value NPV and payback period PP of the proposed project, although Class I projects will be considered as cost minimization exercises, since there is already an accepted need to continue with current operations and assets, and Class 3 projects are not required to meet financial criteria.
A project supervisor is then assigned, and this person is responsible for the implementation and reporting of the CI project. Sonya is new to this position, and is familiarizing herself with the technical nature of the firms operations. She has an undergraduate economics degree and is considered competent, if perhaps a little over-ambitions.
However, many longer-serving organizational members doubt Sonyas ability to make good decisions regarding investment in an industry about which she currently knows little. For this reason, her appointment to the position of Director of CI was controversial. Julian has worked in the construction industry for 15 years, progressing through the ranks to become CSM two years ago.
He is considered to be competent in his job, but is perceived as uncompromising and confrontational. Julian has no time for the head office bosses, and his outspoken manner at meetings has often met with disapproval from the CEO. Franc came to FCL seven years ago when the construction industry was in a boom period.
Received much accolade for record sales levels when he first joined the firm as Contracts Director, and so has continued to implement the policies which had met with success in the past.
Franc is now perceived as conservative, and often resists movement towards new areas of business operations.
He has a construction background, and sometimes feels uncomfortable with his new managerial role as CEO.
Henry has an engineering degree and has worked in the trade for eight years, joining FCL three years ago.
Henry is often called to give advise on the technical and operating implications of capital asset purchases, as well as their probable maintenance costs.
Henry keeps up-to-date on innovation and new technology in the construction industry, and in his opinion is well respected. However, Henry has is the past been frustrated in several attempts to introduce advanced technology into FCLs construction equipment, and blames this on the conservative approach of Franc Silvero.
The was a considerable debate, and the following excerpt reflects the main comments raised by the participants.MANG Management Accounting 3. Module Overview. The relevance of organisational context will be explored and case studies will be used to highlight contextual issues. Module Details Semester: Semester 2 CATS points: 15 Colin Drury ().
Management and Cost Accounting. DOWNLOAD MANAGEMENT COST ACCOUNTING COLIN DRURY 7TH EDITION JOHN HUGHES London Graduate School of Business Studies and JANINE NAHAPIET Oxford Centre for Management Studies Abstract The paper seeks to contrast the roles Additionally, the day will feature case study Institute Agenda - The OPEN MIND Management .
The book is intended primarily for accounting students who are pursuing a one or two semester basic introductory cost and management accounting course. It covers the basic topics needed on an introductory course in management accounting.
Case Studies available from the website Colin Drury No preview available - Cost and /5(2). Colin Drury, Management and Cost Accounting - Global Ltd more on the operational side, and he has realised that he needs someone with the relevant expertise to provide such information.
Management and Cost Accounting: 5. Colin Drury. After studying this chapter, you should be able to: explain the meaning of each of the key terms listed at the end of this chapter; describe the. This international best-seller provides a clear and accessible introduction to cost and management accounting.
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