UNIVERSIDADE NOVA DE LISBOA – FACULDADE DE ECONOMIA
CONTABILIDADE DE GESTÃO/MANAGEMENT ACCOUNTING
Fall semester 2011/2012 – Final Exam
DATE: January 12, 2012 LENGTH: 2.15h
SURNAME AND NAME: ____________________________________________
NUMBER: ______
Procedures:
o The questions of this exam must be answered in the following stapled
sheets, which must not be separated;
o You can use the back of the sheets (including this one) for rough draft.
QUESTION I
(3 marks)
In the last years, low cost airlines like Ryanair or Easyjet have experienced an increase
of the sales value in the European flights.
Based on this kind of companies and their strategies, suggest 2 indicators of each one of
the non-financial perspectives to include in their Balanced Scorecard.
Note: It will be valued an original (unique) responses that are based on the company’s
strategy.
Non- Financial perspectives Indicators
1.
2.
1.
2.
1.
2.
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QUESTION II
Multiple choice
(6 marks)
1. With the traditional costing systems, the goods manufactured in small batches
and small annual quantities could be
a. Undervalued.
b. Overvalue
c. Correctly valued.
d. Ignored.
e. The answer c) and d) are correct.
f. All the answers are wrong.
Your answer:
2. In a factory that manufactures several products and use the total full costing, the
wage of the general manufacturing manager could be classified as:
a. Direct cost.
b. Cost of the products
c. Variable cost.
d. Period cost.
e. The answer a) and b) are correct.
f. All the answers are wrong.
Your answer:
3. Assuming that the weighted average cost of capital remains the same, Residual
Income will decrease by
a. Increasing operating expenses.
b. Increasing revenues.
c. Decreasing of operational assets.
d. Investing in a project where operating income is greater than the cost of the
investment.
e. The answer c) and d) are correct.
Your answer:
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QUESTION III
(4 marks)
The ITALIAN Company produces cartridges for printers. Regarding the month of
December, the following information is available:
A. The P&L of the company using the variable costing system (in Euros):
Sales 750.000
Cost of goods sold (300.000)
Gross margin 450.000
Non-manufacturing variable costs (112.500)
Contribution margin 337.500
Under-recovery (160.000)
Non-manufacturing fixed costs (45.000)
Profit 132.500
B. Actual (real) production was 10.000 units.
C. The profit with total full costing is lower in 10.000€, when compared with full costing
based on practical capacity.
D. The unit selling price is 100 €.
E. The method for inventory valuation is LIFO.
Aims to:
1. The practical capacity production.
2. The safety margin and the explanation of its meaning.
3. Using the theory of the cost-volume-profit, and knowing that if the company
reduces the unit selling price allowing to sell all the actual production it increases
the profit by 12.500€; what is the value of the new selling price?
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QUESTION IV
(5 marks)
The GERMANY Company manufactures and sells a single product. For 2011, the
Company has prepared the following budgeted P&L Account:
Description Amounts in €
Sales 675.000
Variable costs:
Direct materials costs 247.500
Conversion costs 90.000
Contribution margin 337.500
The company expects to sell 600 Tons of the product in 2011.
It is expected that the company will use 18,75 Tons of direct materials to
produce 1 Ton of product.
The budgeted unit price/rate of the conversion costs is 25€ per Mh.
The actual P&L for the same period was as follows:
Description Amounts in €
Sales 787.500
Variable costs:
Direct materials costs 302.400
Conversion costs 103.740
Contribution margin 381.360
The company sold 700 Tons of the product in 2011.
The actual unit price of the direct material is 20€.
We also know that:
The conversion costs usage variance was favourable in 7.000€.
For the period under review, calculate:
1. The direct material price variance.
2. The actual quantities of Mh used.
3. The sales margin volume variance
4. Calculate the contribution margin in the flexible budget. Give one reason why
the actual contribution margin is lower than the «flexible» contribution margin.
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QUESTION V
(2 marks)
Division X of CERAMIC Company is a profit centre.
Nowadays the Division X spends all the production capacity manufacturing 6.400
pieces of white ceramic to be used as a direct material in other Division of the
Company: Division Y.
The Division X actual costs’ structure is as follows:
Variable costs………………………………………………………204.800€
Fixed costs…………………………………………………………..32.000€
Machine hours (Mh) available and used at 100%.......................1.600 Mh
Production of white ceramic……………………………………6.400 pieces
Division X can also manufacture 3 other products: Alfa, Beta and Gama.
Information:
Alfa Beta Gama
Unit contribution margin 240 € 180 € 140 €
Number of Mh required 10 5 4
The maximum units to be sold in the 80 100 250
external market
Assignment:
1. According to the perspective of the seller division, if the labor hours of Division X
are limited to 1.600 Mh, what is the minimum transfer price for each unit of white
ceramic to Division Y (The Division X has to sell internally all the 6.400 pieces)?
2. Imagine now, that both Divisions are cost centers. Once that the Division Y needs
6.400 pieces to produce the goods that allows the company to have the highest
profit, and knowing that it is only available in the market 3.200 pieces of white
ceramic at 40€/each; what is the mix of products that maximize the profit of the
company as a whole?
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