Accounting & Finance : GAA6000

FACULTY OF BUSINESS AND MANAGEMENT STUDIES
UNDERGRADUATE BUSINESS PROGRAMME
ACADEMIC YEAR2020-2021, 1st Semester
January – 2021
WRIT 2

Programme Title: Accounting & Finance
Module Title: Advanced Performance Management
Module Code:GAA6000
Assessment Method: Assignment
Level: 6	Block: 1
Module Credits: 20	Weighting: 70%
Due Date:Enter a date.	Word Count: 2,800
Examiner(s):Abdul Samad Khan

Version: 1
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Module Descriptor

Module Title	Module Number	JACS Subject Code(s) and % of each subject	ASC Category(ies)
Advanced Performance Management	GAA6000	N40 JACS N340	7

Level (3 to 8)	Credits	ECTS Credit	Module Value (1=20 credits)	% Taught in Welsh	Module Type
6	20	10	1.0	0%	Taught

Teaching Period (Term/Semester)	Pre-requisites
Semester 1

Module Leader	School(s)	Campus
Mr. Abdul Samad	Gulf College	Mabaila, Oman

Assessment Methods
Assessment Code and Method	Duration/Length of Assessment Method	Weighting of Assessment	Threshold	Approximate Date of Submission
WRIT1 – Coursework	1,200 words equivalent	30%	N/A	Mid-module
EXAM1 – Examination	2hrs 30 mins plus 15 minutes reading time	70%	N/A	End of module

Aim(s)

The module is designed to build on the finance related knowledge and skills acquired by students in their earlier studies, particularly those acquired via study of the Management Accounting and Performance Management modules. It will also provide a strategic understanding of performance measurement techniques and practice. The assessment in this module enables students to secure exemption from the ACCA paper F5.

Learning Outcomes

On successful completion of the module, a student should be able to:  Demonstrate a working understanding of more specialised management accounting techniques;

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 Solve decision making problems involving scarce resources, pricing and make versus buy;
 Compute and interpret cost & sales variances for a range of complex situations;

	Measure organisational & divisional performance using a range of financial and non-financial measures;

Indicative Content

 Budgetary control/standard costing: revised budgets; flexing budgets. Planning & operational variances. Materials mix & yield variances. Sales variances. Interpretation of variances-trend, materiality etc.  Performance measurement: financial analysis (accounting ratios, including multivariate analysis) & non-financial approaches eg critical success factors, balanced scorecard. Performance measurement in NFP’s, public sector.  Performance measurement in divisionalised organisations: use of ROI (return on investment) & RI (residual income); pricing of transfers of goods/services between divisions. costing, Kaizen costing/target costing.

 Relevant costs for decision making: ABC/contribution margin analysis. Incorporating risk &
uncertainty into decision making. Application to specific situations. Quantitative techniques,
including learning curve theory, linear programming and probability analysis.
 Developments in management accounting: Zero based & activity based budgeting, quality
Required Reading

Learning and Teaching Delivery Methods
Method	Rationale	Type of Contact (scheduled/ guided independent study/placement)	Total hours
Lectures	To enable core knowledge and understanding content to be delivered to the whole module cohort	Scheduled	24
Seminars / Tutorials / Workshops	To allow exploration of all aspects of module content (knowledge, understanding, skills & other attributes) in an interactive group setting	Scheduled	24
Independent Study	To enable students to independently develop their understanding of the module concepts and to complete formative & summative assessment activity	Independent Study	152
Total	200

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Textbook
 Horngren, Datar&Rajan (2012) Cost Accounting: A Managerial Emphasis (14th edition), Prentice
Hall.
Articles
 ACCA & CIMA articles posted on Blackboard

Recommended Reading

Textbooks  ACCA Study Text F5 Performance Management: BPP Publishing (latest edition)  ACCA Complete Text F5 Performance Management: Kaplan Publishing UK (latest edition)  Drury, C. (2012)Management & Cost Accounting (8th edition), Cengage Learning EMEA. Academic journals  Advances in Management Accounting (Emerald)  Management Accounting Research (Elsevier)

Access to Specialist Requirements

Web based learning & self assessment packages

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Gulf College – Faculty of Business and Management Studies – In academic
Affiliation with CARDIFF SCHOOL OF MANAGEMENT

A. 	Written work A signed declaration that the work is your own (apart from otherwise referenced acknowledgements) must be included after the reference page of your assignment Each page must be numbered. Where appropriate, a contents page, a list of tables/figures and a list of abbreviations should precede your work. All referencing must adhere to School/Institutional requirements. A word count must be stated at the end of your work. Appendices should be kept to the minimum and be of direct relevance to the content of your work. All tables and figures must be correctly numbered and labelled.
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B. 	Other types of coursework/assignments Where coursework involves oral presentations, discussions, poster presentations, etc., specific instructions will be provided by your module leader/team.

———————————————————————————————————————————————
Rewrite below part just after the References of your assignment.
WORK DECLARATION
I,[Name of Student],hereby declare that the uploaded Assignment through Turnitin is my own work. I
affirm that this has been researched and completed in accordance with the college rules and
regulations on plagiarism.
I acknowledge the advice given by the module tutors on proper referencing to avoid plagiarism and
the rules on the academic unfair practice.
I acknowledge that I read and understand the plagiarism guide written at the end of this assessment.
Any academic misconduct will be handled according to the rules and regulations of the university.
[Name of Student]
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General instructions
Assignment must be submitted online through Turnitin before due date. An acknowledgement will be
given to you by your teacher upon presentation of the finance clearance. This is your receipt, keep
it.
The only circumstance in which assignments can be uploaded late via Turnitin is if a Mitigating
Circumstances (MC) form is submitted at the same time. In these circumstances work may be
submitted within five (5) working days. Make sure to secure MC form and submit the same to the
concerned staff.
Write the number of words used, excluding references, at the end of your assignment. Provide the
list of sources you used at the last page of your assignment with proper label ‘References’. You may
include diagrams, figures etc. without word penalty. The number of words will be + or – 10% of the
total words allowed.
A work declaration must be included just after the reference page of your assignment. This ensures
that you prepare your work in good faith. Any form of collusion and/or academic unfair practice will
be dealt with according to the pertinent rules and regulations of the partner university. Please
carefully read the plagiarism guide.
Assessment Details
This Assignment comprises 70% of the total assessments marks. It will develop the following skills:
1. Research skills. Students are able to search for relevant literature and studies to support the
assignment theories and concepts.
2. Decision making and problem solving using accounting and mathematical technics.
3. Critical thinking and evaluating the different scenarios given in the assignment and apply
solutions.
In addition, the assessment will test the following learning outcomes:
1. Demonstrate a working understanding of more specialised management accounting
techniques.
2. Solve decision making problems involving scarce resources, pricing and make versus buy.
3. Compute and interpret cost & sales variances for a range of complex situations.
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Assessment Tasks
Task 1 (700 words equivalent)
A budget is a financial plan for a defined period, often one year. It may also include planned sales
volumes and revenues, resource quantities, costs and expenses, assets, liabilities, and cash flows.
Companies, governments, families, and other organizations use it to express strategic plans of
activities or events in measurable terms.
The business organisations prepare the budgets as per their business operation requirement.
Critically evaluate the various classifications of budgets prepared by the business entities.
Within your discussion, please discuss the:
a. Introduction on the importance of budget
b. Different classifications of budgets
Task 2 (1200 words equivalent)
Turki Construction Ltd considers tendering a contract which would take three months to complete.
It is felt that tenders over OMR 80,000 are extremely unlikely to be successful. The company is in a
specialised, highly competitive market and new contracts are difficult to win and keep. If the contract
is taken, Turki Construction Ltd still expects to complete its other current contracts. The management
accountant submitted the cost estimates below:
OMR
Direct materials

Type A (already in stock) Type B (firm order placed) Type C (not yet ordered, shown at current purchase price) Direct labour Other costs: Variable overheads Depreciation of equipment (straight-line basis) Supervisors’ salaries (Two supervisors @ OMR 4,000 each per month) (Two supervisors @ OMR 4,000 each per month) General fixed overheads	8,000 6,000 5,000 30,000
3,000 3,750 24,000
12,000

TOTAL COSTS 91,750
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Additional information with respect to the above cost is given below:
1. Type A material, originally cost OMR 8,000, is already in stock. The material is not in common
use and would realise about OMR 6,000 if sold. If Material A is not used in this contract, all
materials could be used later in the year as substitute to a material that currently costs 30%
less than A’s original price.
2. Type B material is in regular use by the company. The order for Type B material was placed
twelve days ago and cannot be cancelled anymore. Due to a world-wide shortage which is
expected to continue for the foreseeable future, Material B’s price has increased by 50% since
the order was placed. Material B could be sold at this new higher price (after deducting 15%
selling costs) to a competitor who urgently needs this material. Alternatively, it can be used
on other contracts later in the year.
3. A team of semi-skilled staff would be recruited locally specifically for the duration of this
contract. The wages of these semi-skilled staff will amount to a total of OMR 17,000. Skilled
staff would also need to be reallocated to this contract from within the company. They have
already worked for the company and are currently being paid although there is very little work
for them to do. The estimated wages for these workers for the period of the contract are OMR
10,000. On top of this re-allocation of skilled staff, it is estimated that a further OMR 3,000 of
overtime will also need to be incurred by specialist employees who are currently fully
employed on other jobs within the company.
4. The management accountant has calculated variable overheads for the contract using the
company’s standard policy of 10% of direct labour cost. However, the project manager has
estimated that, due to the unique nature of this work, the actual variable overhead arising as
a result of the contract is likely to be about OMR 4,750.
5. The equipment to be used on the contract cost OMR 180,000 when it was purchased in May
2011. It was planned to keep it for ten years after which its scrap value was expected to be
OMR 30,000. The depreciation charge in the cost estimate is based on this data. At present,
the equipment is worth OMR 45,000. If used on the contract its current value is likely to
decline to approximately OMR 40,000. Turki Construction Ltd has no further use for the
equipment and if the contract is not accepted they would sell it now.
6. The new contract is so specialised that one of the two supervisors need to be recruited from
a competitor. She is expected to be paid a premium salary of OMR 5,000 per month. The
second supervisor, who is currently paid OMR 4,000 per month, can be temporarily
transferred from another department. However, he will only transfer to the project if he is
incentivised through a one-off bonus payment of OMR 800. His current role will be filled by a
temporary upgrading of an existing worker with an estimated additional cost of OMR 400 per
month.
7. The management accountant allowed fixed overheads for the contract using the company’s
pre-determined policy of 40% of direct labour cost. The general fixed overhead absorption
rate is calculated based on budgeted rent, rates, insurance, general expenses and similar fixed
costs. However, it is anticipated that this additional contract would cause general expenses
to increase by OMR 750 per month for the duration of the contract.
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Required:
a) Using a relevant/opportunity cost approach, prepare a revised cost estimate for the contract in
the light of the above information.
b) For each item of cost referred to in the question, clearly explain your reasoning behind its inclusion
in (or omission from) your estimate in a) above.
c) On the basis of your estimate in (a) above, state whether the company should tender this contract.
d) What is transfer pricing and what is the risk and benefits of transfer pricing for enterprises?
Task 3 (900 words equivalent)
The budgeted sales for the Venicci Company for the most recent period were as follows:
Product Quantity Contribution per unit (£)

X Y Z	90,000 (60%) 45,000 (30%) 15,000 (10%) 150,000
Actual sales quantities were:
Product	Quantity

X	68,000
Y	45,000
Z	22,000
135,000

The budgeted sales volume represented a 25% share of the expected market size.
Actual industry sales were 482,000 units i.e. the company’s actual market share was 135/482*100 =
28% (to the nearest %).
Required: Calculate the following and to explain nature of the variance and whether it is favourable
or unfavourable:
a. Sales volume variance
b. Sales quantity variance
c. Sales mix variance
d. Market size variance
e. Market share variance
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GAA6000 – Advanced Performance Management
AY:2020-2021/ 1st Semester
Marking Scheme

Task No.	Description	Marks Allocated
1.	a. Introduction on the importance of budget (5 Marks) b. Different classifications of budget (15 Marks)	20
2.	a. Calculate the cost estimated based on the relevant costing principle (15 marks) b. Clearly explain your reasoning behind its inclusion in (or omission from) your estimate in a) above (20 marks) c. Discussing the result with recommendation as relevant costing principle for decision making. (5 marks) d. Transfer Pricing Meaning (2 marks), Risk and Benefits (8 marks)	50
3.	a. Sales volume variance (6 marks) b. Sales quantity variance (6 marks) c. Sales mix variance (6 marks) d. Market size variance (6 marks) e. Market share variance (6 marks) All calculation consist with formula and working along with explain nature of the variance and whether it is favourable or unfavourable	30
Total	100

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Plagiarism
1. Plagiarism, which can be defined as using without acknowledgement another person’s words or ideas
and submitting them for assessment as though it were one’s own work, for instance by copying,
translating from one language to another or unacknowledged paraphrasing. Further examples of
plagiarism are given below:
Use of any quotation(s) from the published or unpublished work of other persons, whether published
in textbooks, articles, the Web, or in any other format, which quotations have not been clearly
identified as such by being placed in quotation marks and acknowledged.
Use of another person’s words or ideas that have been slightly changed or paraphrased to make it
look differentfrom the original.
Summarising another person’s ideas, judgments, diagrams, figures, or computer programmes without
reference to that person in the text and the source in a bibliography or reference list.
Use of services of essay banks and/or any other agencies.
Use of unacknowledged material downloaded from the Internet.
Re-use of one’s own material except as authorised by the department.
2. Collusion, which can be defined as when work that has been undertaken by or with others is submitted
and passed off as solely as the work of one person. This also applies where the work of one candidate
is submitted in the name of another. Where this is done with the knowledge of the originator both
parties can be considered to be at fault.
3. Fabrication of data, making false claims to have carried out experiments, observations, interviews or
other forms of data collection and analysis, or acting dishonestly in any other way.
Plagiarism Detection Software (PDS)
As part of its commitment to quality and the maintenance of academic standards, the University reserves the
right to use Plagiarism Detection Software (PDS), including Turnitin. Such software makes no judgment as to
whether a piece of work has been plagiarised; it simply highlights sections of text that have been found in
other sources.
The use of plagiarism detection software fulfills two functions. The first is to enhance student learning (i.e. as
a developmental tool); the second is to guard against and identify unfair practice in assessment.
Further information and guidance can be found in the University’s policy on the Use of Plagiarism Detection
Software.