6. The steps and cycles in the value chain are most closely associated with which balanced scorecard perspective?

a. Customer

b. Internal business process

c. Financial

d. Learning and growth

7. To reduce agency costs, organisations implement various systems and controls to monitor behaviour, including which of the following?

I         Publishing audited financial statements

II       Filing income tax returns

III      Tying financial rewards to reported results

a. I and II only

b. II and III only

c. I and III only

d. I, II and III

8. From a business owner’s perspective, which of the following is an agency cost?

a. Costs to provide appropriate incentive contracts for top management

b. General supplier price increases

c. Losses from poor economic conditions

d. Insufficient executive pay

9. It is more likely that the performance of a top executive will be measured at which of these levels?

a. Department

b. Product

c. Individual

d. Corporate

10. The process of measuring, monitoring and simultaneously controlling the economic, environmental and social dimensions of an entity is known as:

a. sustainability management.

b. sustainability accounting.

c. sustainability.

d. none of the options listed.

11. The most effective way for an entity to take into account the external environmental and the sustainability costs of its activities is:

a. to follow guidelines provided by external parties.

b. by voluntary disclosure.

c. for the government to issue fines and penalties for breaches.

d. for the entity to internalise the external costs.

12. Costs that an entity imposes upon others as a result of its operations but which the entity typically ignores are called:

a. contingent costs.

b. externalities.

c. all of the options listed.

d. none of the options listed.

TOTAL: 12 MARKS

Topic B: Lean manufacturing

Question 1: Cost of quality

At the beginning of 2021, Bing Company initiated a quality improvement programme. The programme was successful  in  reducing  some  quality-related  costs. To  help  assess  the  impact  of the  quality improvement programme, Bing’s managers collected the following data for this year and last year:

REQUIRED

(a)     Compute prevention costs, appraisal costs, internal failure costs, and external failure costs as a percentage of sales for 2020 and for 2021. (4 marks)

(b)     Explain what the computations in (a) tell you about the quality improvement programme. (1 mark)

(c)     What is the effect on profit of the quality improvements? (½ mark)

(d)     If quality costs can be reduced even further to 2.5 percent of 2021 sales, what is the impact on profit? (½ mark)

Question 2: JIT & TOC

Compare and contrast Just-in-time (JIT) manufacturing and the Theory of Constraints (TOC). (4 marks)

TOTAL: 10 MARKS

Topic C: Responsibility accounting and transfer pricing

Question 3

Responsibility accounting is the process of assigning authority and responsibility to

managers of sub-units in the organisation and then measuring and evaluating their

performance. Sub-units may include cost, revenue, profit and investment centres. When managers make choices about locating decision-making authority, they are also making choices about organisational structure.

REQUIRED

Discuss the differences between when decision-making authority is centralised versus

decentralised. Also discuss two advantages and two disadvantages of centralised and

decentralised organisations. (6 marks)

Question 4

A transfer price is the price used to record the revenues and costs of such transfers of goods and services between responsibility centres within an entity.

REQUIRED

Describe two methods used for setting transfer price policies in manufacturing and service organisations. (4 marks)

TOTAL: 10 MARKS

Topic D: Balanced scorecard and strategy maps

Question 5

Discuss the role of strategy maps in the balanced scorecard process. Include in this

discussion what the strategy map provides, what it illustrates, and what its focus should be. (6 marks)

Question 6

Explain what ‘financial measures’ and ‘non-financial measures’ are and give an example    of each. (4 marks)

TOTAL: 10 MARKS

Topic E: Rewards, incentives and risk management

Question 7

Reward systems and associated incentive payments for executives and senior managers are sometimes considered controversial in contemporary society. Moreover, the

management of risk is becoming an increasing area of concern for boards, executives and regulators. While incentive plans are important in the process of managing risk, other

internal controls are important tools in managerial control systems.

REQUIRED

What are the two extremes of reward systems? (2 marks)

Question 8

Describe extrinsic and intrinsic rewards and give an example of each. (4 marks)

Question 9

What is the objective of risk management? (2 marks)

Question 10

Describe strategic risks and operational risks. You may use examples in your descriptions. (2 marks)

TOTAL: 10 MARKS

Topic F: Sustainability management accounting

Question 11

Many organisations are increasingly outsourcing manufacturing activities to vendors in    countries having low labour costs such as China, India, Thailand, Indonesia and Mexico. Certain activists claim that this practice is socially irresponsible due to numerous factory  problems such as excessive work hours, poverty wages, toxic gas releases and

harassment of union organisers. Some people argue that it is difficult for organisations to adequately monitor working conditions at outsource locations.

REQUIRED

Discuss whether it is possible for you as a consumer to know the conditions under which    the products you purchase are produced. (3 marks)

Question 12

Identify and discuss three measures that an organisation could use to monitor worker

conditions in outsource factories. For each measure, describe how the organisation might  collect reliable data. (3 marks)

Question 13