4QQMN904 Introduction to Management Accounting
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4QQMN904 Introduction to Management Accounting
Submission checklis:
1. File saved as [ModuleCode_CandidateNumber]
3. File format forsubmission (.docx, Word only)
b) Compare these methods in terms of (i) data requirements, (ii) reliability, and (iii) ease of use in managerial practice.
The following expense and revenue relationships pertain to a contemplated expansion program of 90 machines.
Fixed monthly expenses
Question 3
Lena’s ValueTech Ltd uses target costing to aid in the final decision to release new products to production. A new product is being evaluated. Market research estimates that the product’s unique features will generate total demand over the product’s life of 72,000 units at an average selling price of $420 per unit.
The target costing team includes members from market research, design, accounting, and production engineering. The team has also worked closely with key customers and suppliers.
A value analysis of the product using the existing process technology yields the following estimated total costs over the product life:3
Question 4
Elena Cruz, operations director of PrecisionWorks Ltd, has requested an analysis of the company’s manufacturing support costs. These costs include supervision, equipment maintenance, and production support activities. Elena would like to understand how much of the support cost is fixed and how much varies with production activity, measured by machine hours.
The following monthly data are the only information currently available:
b) Suppose that September data become available showing 2,050 machine hours and support costs of $28,000. Explain how and why your high–low estimates would change, and compute the revised estimates.
c) If Precision Works expects 1,650 machine hours next month, estimate total support costs using:
(i) The original high–low cost function
(ii) The regression cost function from 2.
Briefly comment on any difference.
Based on all your results, what advice would you give management about which cost estimate should be used for planning and control?
[24 marks]
Module Learning Outcomes Assessed
- Demonstrate understanding of cost behaviour and costing techniques by explaining and comparing alternative methods used to analyse and model costs in managerial decision-making.
- Apply quantitative management accounting tools to real-world business scenarios, including break even analysis, operating leverage, target costing, and cost estimation, and interpret the results to support planning and control.
- Evaluate managerial and strategic implications of accounting information by exercising critical judgement beyond numerical results, including assessing risk, cost structure, and non-financial considerations in decision-making.
- All four questions are compulsory.
- Total marks: 100.
- Maximum length: 5 A4 pages (excluding the front page);
- Font: Arial, size 12;
- Line spacing: 1.5;
- Margins: 2.54cm (1 inch) on all sides.
- If the submission exceeds the page limit, only the first 5 pages (excluding the front page) will be marked. Any material beyond this limit will not be read or assessed.
The report should present clear reasoning, calculations, and interpretation where required. Answers must be concise, well-structured, and supported by appropriate workings.
General Submission Requirements
Assessment submission instructions:
- File saved as [ModuleCode_CandidateNumber]
- Word count (1,000 words)
- File format for submission (.docx, Word only)
Formative feedback will be provided. Such feedback will help students identify their strengths and weaknesses and help develop revision plans for the assessment. Students are also expected to engage with other feedback provided during tutorials and office hours throughout the semester.
2026-03-31