F5 Mar 2016 Section B Questions (possible answers)

Dear John:

Thanks for your wonderful lectures which I hope helped me to pass F5 Mar 16. Previously , you posted your possible answers for exam sittings within a very short after the actual exams. Again, thanks for these efforts as they give some confidence to those who believe that they had passed. Are planning to post the answers this time and when if you are? If you did pls let us know where on site to look for them ?

I can give my comments and answers to the questions of F5 Mar 16 .

Question 1 Section B (10 marks) .

(a) Clearly, I made a mistake . I used y=a+xb to find the total cost and then subtract the total costs from revenue of each option. High low method was used for calculation of the variable cost per unit. I came up with $5.5 /unit of variable cost. Batch #3 was most priftable with $ 19, 000. Of course I should have used the tabular method (I realised when I had looked at question at home ) but honestly I did not remember how to use the tabular method during the actual exam.

(b) there was a clear hint from the examinar that algebraic method is no of use for part (a). But I had only to say that fixed costs are different for each option of the sale (they must be the same for whatever level of sale was) not constant . I contradicted my self saying that algebraic menthod could not be used but actually it was applied by me in (a). Do you think that they will me give 2 marks for the whole question ?

Question 2 Section B (10 marks) .

No written part just calculation of the total life cycle costs for 2 years. I guess that I made a mistake – I added up the contribution lost to the total costs. I suppose that the lost contribution should not be either added to the costs or to actual revenue because it was not actual cost incurred just a revenue foregone. There was a lawyer fee of $20,000 included in the patent cost ($200,000 as far as I remember) but I $200,000 as it is without subtracting $ 20, 000 . Am I wrong ? Apart from these two bits a nice and straightforward question , almost a gift.

If I made mistakes on these two pieces would they give me 6-7 marks ?

Question 3 Section B (10 marks) .
good ROI calculation and wonderful discussions why ROI is not perfect measure (not absolute measure, easy to manipulate and may lead to goal incongruence). Hope to get 8 out of 10.

Question 4 Section B ( 15 marks)
(a) I only correctly put two perspectives: financial and customer missing out other two. I mentioned innovation as the 3rd but it from other model . For financial I explained what financial perspective means – how do the shareholders see us ? For customers it was also – how do the customers percieve us ? In innovation there was a new installed water pipe mentioned by me .

(b)

Goal for financial perspective : increase the shareholders’ wealth.
Measure: increase of the share of market from 20% to 25% and increase the revenue by 5%.

Goal customer perspective: Reduce the number of complaints of the helpline service.
Measure: Custmer survey showing the improvance for helpline service.

Goal For innovation ( I re-phraised in part (b)) as operational perspective (invented new one !) I put reduced number of the water supply interraptions as a result of the installation of a new water pipe.
Measure : Reduced number of the repair operational cost as the result of the reduced number of water interruptions.

I hope for 8 marks as a fair reward for this question even I srewed up with one of the balanced scorecards. (innovation or operational).

Q2

Question 5 section B. (15 marks)
In one of the lectures you said that variances can be calculated in different ways even leading to the different results due to the menthod choosen . I did it in a way you did not teach. Surprisingly, the examiner asked for basic labour variance in (a) .
My proforma for this :

Labour efficiency variance
Std Qty (actual output) * Std Price- Actual Qty*Std Price

Labor rate variance
Actual Qty*Std Price-Act Qty*Act Price

Labour planning efficiency variance (basically, replaced actaul with revised std)
Std Qty(act output) *Std price- Rev Std Qty*Std Price

Labour planning rate variance
Rev Std Qty(act output) *Std price- Rev Std Qty * Rev Std Price

Labour operational variance (relaced std with rev. std)

To me the learning proforma was easy. I came up with total basic labor variance = planning+operational variance. I expect the examiner will have the different results.

Will he give me the marks for the different results ? My total labour variance was favourable.

(b) Since the operational variances based on which the performance mngr is supposed to be eveluated is positive the prod mngr has performed well. Just 4 sentences with the reference to fav operational efficiency and operational numbers. Any marks for that?

John
I realise that you do not have personally evaluate me but if I made 50% on MCQS is there any chance that I passed.

Thanks for your help from the students using your free resource.