Final: 28-8-2015
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(COL MBA/MPA Program)
ACCOUNTING AND FINANCE (5566)
CHECKLIST
SEMESTER: AUTUMN 2015
This packet comprises the following material:1.
2.
3.
4.
Text Books
Assignment No. 1, 2
Assignment Forms (two sets)
Course outlines
In this packet, if you find anything missing out of the above mentioned material, please
contact at the address given below:
Mailing Officer
Services Block No. 28
Allama Iqbal Open University
H-8, Islamabad
Phone: 9057611-12
Wishing you all the best
Salman A. Qureshi
(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(COL MBA/MPA Program)
WARNING
1.
2.
PLAGIARISM OR HIRING OF GHOST WRITER(S) FOR SOLVING
THE ASSIGNMENT(S) WILL DEBAR THE STUDENT FROM AWARD
OF DEGREE/CERTIFICATE, IF FOUND AT ANY STAGE.
SUBMITTING ASSIGNMENTS BORROWED OR STOLEN FROM
OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN
“AIOU PLAGIARISM POLICY”.
Course: Accounting and Finance (5566)
Level: COL MBA/MPA
Semester: Autumn 2015
Instructions
(a) All written assignment must be well organized, presented in an easy-to-read format and
neat. Moreover, pay particularly close attention to grammar, spelling, punctuation and
understandability. Communication is extremely important in this course.
(b) Documentation is likewise very important. Un-supported statements or opinions
are worth less to the reader, who desires to verify your finding. Complete and
specific documentation is mandatory. Also, your references should be to primary
sources, except in rare unusual situation.
(c) Quoting should be kept to an absolute minimum.
Guidelines for Doing Assignments
We expect you to answer each question as per instructions in the assignment. You will
find it useful to keep the following points in mind:
1)
Planning: Read the assignments carefully, go through the Units on which they are
based. Make some points regarding each question and then rearrange them in a
logical order.
2)
Organization: Be a little selective and analytical before drawing up a rough
outline of your answer. Give adequate attention to question’s introduction and
conclusion.
Make sure that:
a)
The answer is logical and coherent,
b)
It has clear connections between sentences and paragraphs,
c)
The presentation is correct in your own expression and style.
3)
Presentation: Once you are satisfied with your answer, you can write down the
final version for submission. It is mandatory to write all assignments neatly. If you
so desire, you may underlining the points you wish to emphasize. Make sure that
the answer is within the stipulated word limit.
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ASSIGNMENT No. 1
Total Marks: 100
Pass Marks: 40
Q.1
a.
Explain the difference between management accounting and financial
accounting. Also describe the purpose of management accounting with
relevant examples from Pakistani organization.
Explain the role of different parties of corporate governance in managing
an organisation.
(10)
Q.2
Sapphire Ltd. intends to sell its own label wine for $20 a bottle. It expects
labor and materials will cost about $12 a bottle. Fixed costs should be
$20,000 a month.
a. Calculate the contribution margin per unit.
b. Calculate the sales quantity and revenue required each month in order for
Sapphire to break even.
c. If fixed costs were to decrease by 10 per cent, calculate the new breakeven point and revenue.
d. Sapphire’s accountant has advised that cost-volume-profit calculations
are useful, but not entirely accurate. Do you agree? Give brief reasons for
your answer.
(20)
Q.3
a. Evaluate decisions involving relevant and non-relevant costs. Explain the
qualitative characteristics that need to be considered when assessing
alternatives.
b. The management of Mews Ltd. is considering dropping product E2.
Data from the company’s accounting system appear below:
(20)
b.
(10)
All fixed expenses of the company are fully allocated to products in the
company’s accounting system. Further investigation has revealed that
$86,000 of the fixed manufacturing expenses and $67,000 of the fixed selling
and administrative expenses are avoidable if product E2 is discontinued.
a. What is the net operating income earned by product E2 according to the
company’s accounting system? Show your calculations.
b. What would be the effect on the company’s overall net operating income of
dropping product E2? Should the product be dropped? Show your work!
Q.4
Domin Corporation bases its budgets on the activity measure of customers
served. During April, the company planned to serve 31,000 customers, but
actually served 35,000 customers. Revenue is $4.80 per customer served. Wages
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(20)
and salaries are $33,000 per month plus $1.60 per customer served. Supplies are
$1.00 per customer served. Insurance is $12,200 per month. Miscellaneous
expenses are $7,400 per month plus $0.20 per customer served.
Required:
Prepare a report showing the company’s activity variances for April. Indicate
in each case whether the variance is favorable (F) or unfavorable (U).
Q.5
A sales budget is given below for one of the products manufactured by Key
Limited:
(20)
The inventory of finished goods at the end of each month must equal 20 per
cent of the next month’s sales. On December 31, the finished goods inventory
totaled 4,000 units. Each unit of product requires three specialized electrical
switches.
Since the production of these specialized switches by Key’s suppliers is
sometimes irregular, the company has a policy of maintaining an ending
inventory at the end of each month equal to 30 per cent of the next month’s
production needs. This requirement had been met on January 1st of the
current year.
Required:
Prepare a budget showing the quantity of switches to be purchased each
month for January, February and March and in total for the quarter.
ASSIGNMENT No. 2
Total Marks: 100
Pass Marks: 40
Instructions:
1.
This assignment is a research-oriented activity. You are required to develop a term
2.
3.
paper and submit to the tutor for evaluation prior to the final examination. The last
date of this assignment will be notified separately by our directorate of regional
services and the same will be communicated to you directly as well as through
approved study centers assigned to you.
You will have to participate in the activity fully, actively, and practically to be
eligible to sit in the final examination of the course.
For the preparation of this assignment, you should first thoroughly review the
conceptual framework of the topic and develop a scholarly material of the same
giving references, quotations, and extracts of various scholars and experts. Then
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4.
5.
6.
visit any business/commercial organization and study the relevant practical aspects
there. Combining the theoretical and practical aspects, develop a comprehensive
paper consisting of at least 20 to 25 typed pages to be submitted to your tutor.
a)
Introduction to the topic
b)
Important sub-topics
c)
Practical study of the organization with respect to the topic
d)
Review of theoretical and practical situations, merits, de-merits deficiencies or
strengths of the organization with respect to the topic under study.
e)
Conclusion and recommendation
f)
Annex, if any
Prepare a copy of this assignment and submit to your tutor for your evaluation.
You should add any illustrative material/data/tables/analysis for effective submission.
If you fail to submit this assignment in the class, then you will not be able to sit in
the final examination conducted by AIOU.
A number of topics given below are the general aspects of the course and you are
required to select one of the topics according to the last digit of your roll number. For
example, if the roll number is N-9337241, you will select topic number 1, and if the
roll number is O-3427185 then you will select topic number 5 (the last digit).
List of Topics
1.
Applications of standard costing for service organization in Pakistan
2.
Cost benefit analysis of a construction firm
3.
Cost of Capital
4.
Demutualization of Stock Exchanges in Pakistan, Its Advantages & Disadvantages
5.
Financial decision in Non-Banking Finance Corporation.
6.
How service organizations meet their working capital requirements?
7.
Remedial Measures for Reducing Agency Conflict
8.
Role of central bank in the monetary policy
9.
Role of Financial Intermediaries in Financial System
10. Types of budgets and its application in Pakistan
ACCOUNTING AND FINANCE (5566)
Course Outline
Module 1
Unit 1
1.1 Managing the organization
1.2 Purpose and definition of management accounting
1.3 Management functions
1.4 Corporate governance and responsibility
1.5 Business ethics
Unit 2
2.1 Costing systems
2.2Costing concepts and terminology
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2.3 Absorption costing
2.4 Variable costing
2.5 Comparison between absorption and variable costing
Unit 3
3.1 Activity-based costing
3.2 Conceptual overview of activity-based costing
3.3 The ABC terminology
3.4 Identifying activities
3.5 Identifying cost drivers
3.6 Advantages and disadvantages of activity-based costing
3.7 ABC example
Module 2
Unit 4
4.1 Cost-volume-profit analysis
Unit 5
5.1 Relevant costs for decision-making
Module 3
Unit 6
6.1 Budgeting
6.2 Purposes of budgets
6.3 Master budget
6.4 Sales budget
6.5 Operations budget
6.6 Cash budget
6.7 Income statement budget
6.8 Flexible budgets
Unit 7
7.1 Standard costs
7.2 Standard costs explained
7.3 Application of standard costs
7.4 Variance analysis
Module 4
Unit 8
8.1 Segment reporting and decentralization
Unit 9
9.1 Transfer pricing
Unit 10
10.1 Balanced scorecard
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Module 5
Unit 11
11.1 Finance, financial markets and managers
11.2 Finance and financial management
11.3 Types of financial institutions
11.4 How financial markets operate
11.5 Financial markets classes
11.6 The role of the financial manager
11.7 Agency theory — an overview
Unit 12
12.1 Regulation of Markets
12.2 Statutory regulation
12.3 Central or reserve banks
12.4 Stock exchanges
Unit 13
13.1 Financial mathematics
13.2 Time value of money
13.3 Simple interest
13.4 Compound interest
13.5 Present value and future value tables
13.6 Present values
13.7 Future values
Module 6
Unit 14
14.1 Understanding risk and return
Unit 15
15.1 Bonds and shares
Module 7
Unit 16
16.1 Cost of capital
Unit 17
17.1 Capital investment
Unit 18
18.1 Short-term and long-term finance
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