[antoniorasco]

– Measures defined for the performance dimensions: quality, innovation, flexibility and utilisation. These 4 help improve financial position and competitiveness

– Standards of performance defined for the measures above. To know what our targets are

– Rewards defined: They must be linked to the above standards as otherwise there will be no motivation to meet targets

[antoniorasco]

Total overheads = 2400k
Direct materials o/h = 2400k x 30% = 720k

Total direct material cost = 450k + 150k + 1200k = 1800k

Direct materials o/h per product:
– Fountain = 720k x 450k / 1800k = 180k
– Per unit = 180k / 2000 = 90

Labour follows the same logic.

[antoniorasco]

IRR assumes that flows are reinvested at IRR, which is not realistic.

MIRR assumes that flows are reinvested at cost of capital, which is more realistic

IRR can produce different results when interpolating with different values

MIRR gives just 1 result.

Formula, give in the exam is:

[(PV return phase / PV Inv phase)]^1/n]x(1+i) – 1

[antoniorasco]

Process to improve performance by doing the following:

– Forget how things were done previously
– Fundamental rethinking and radical redesign of the processes

Aim is to achieve drmativ improvement

[antoniorasco]

Negative feedback: If actual performance is worse than planned performance, actions are taken to be in line with planned performance.

For example, if travel expenses are higher than planned, ess travel would be allowed in future to ensure actual expenditure is in line with plan

Positive feedback: Deviation from plan encouraged as it benefits the company

Example: if travel expenditure being higher than plan is helping grow the business in a proportion higher than the travel overspenditure, the plan would be revised to reflect the fact that deviation from planned travel is encouraged

[antoniorasco]

Hi

I believe that this is overtrading.

Overtraded companies enter a negative cycle, where increase in interest expenses negatively impact net profit, which leads to lesser working capital and hence to increased borrowings.
This leads to more interest expense and the cycles continues. Overtraded companies eventually face liquidity problems and/or running out of working capital.

Other problems facing overtrading companies:

– Limited business knowledge
– Having large amount of unpaid debtors.
– Overstock or slow movement of inventory

[antoniorasco]

I had the motivation. Arranged something. Had people’s agreement and I waited for 1 hour the day we agreed to meet.

For clarification, I am not leading anymore. If somebody else wants to lead, please let us know.

I think that posting our questions here is more effective than trying to organize meetings that nobody turns up to.

[antoniorasco]

Fountain
– o/h material current
Total = 2400k x 30% x 450k / 1800k = 180k
Per unit = 180k / 2000 = 90
– o/h labour current
Total = 2400k x 70% x 300k / 1600k = 315k
Per unit = 315k / 2000 = 157.5
Goblin
– o/h material current
Total = 2400k x 30% x 150k / 1800k = 60k
Per unit = 60k / 4000 = 15
– o/h labour current
Total = 2400k x 70% x 100k / 1600k = 105k
Per unit = 105k / 4000 = 26.25

[antoniorasco]

Another way:

Year 1: 1800k x 0.25 x 0.25 = 113
Year 2: 1800k x 0.75 x 0.25 x 0.25 = 84
Year 3: 1800k x 0.75x 0.75 x 0.25 x 0.25 = 63
Year 4: 1800k x 0.75x 0.75 x 0.75 x 0.25 x 0.25 = 47
Year 5: Total (1800-100) x 0.25 less tax saved to date (113+84+63+47) = 107 to repay

[antoniorasco]

Thanks Ansi

I also sent individual emails about the session but nobody turned up.

[antoniorasco]

Nobody was in the chatroom at 1930 yesterday.

[antoniorasco]

Just go to chat, enter your username and password and join the P5 room

[antoniorasco]

Hi guys

We are meeting tomorrow at 19.30 UK time in the chatroom.

The structure of the session is:

Questions on the following chapters that cover section A of syllabus:

– Introduction to strategic management accounting
– Appraisal of alternative approaches to budgeting for control
– Changes in business structure and management accounting
– Effect of IT on modern management accounting

The content related to this chapters can be found in BPP course notes, text and OT.

What I suggest is you read before the session. I propose to do the following during the session:

– Discuss any questions we have about these chapters
– Do an exam question: the BPP exam questions related to this area go from question 1 to 18. I think question 1 on strategic analysis is a good one but if you want to do a different one, just shout

Talk tomorrow

[antoniorasco]

Go to the BPP page. There is a link there to see the syllabus changes.

Also, if you go to acca site and download the P5 syllabus, the changes are detailed at the bottom.

Cheers

[antoniorasco]

My email is antoniorasco@hotmail.com

I am based in UK. What times can u usualy meet in the chatroom?

We can do an action plan and practice together in the chatroom.

Cheers

[antoniorasco]

Hi

https://www.bpp.com/courses/examination-courses/accounting–finance/acca-2011/modules/2011-syllabus-update/in-and-out-f4-p7/p5.aspx

Check that link.

Do u know if people meet here for P5 study sessions? This paper is driving me crazy!

[antoniorasco]

The expectation theory could help here. The reward will be less or more effective depending on 2 factors:

– How valued the reward is by the employee
– What is the effort required to obtain the reward

For example, I like chocolates, but I wouldn’t swim to France for a chocolate bar. But I would probably swim to France for 3 million pounds, …..

[antoniorasco]

Hi

900 is difficult for me, Are the sessions being saved anywhere?

Thanks,

[Author]

Posts