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ACCG3030 Strategic Management Accounting
Sample Examination
The objective of the sample examination is to assist students in their preparation for the final
examination and to allow you to practice answering the examination online via ilearn. The
sample examination is similar in format to the final examination. However, questions and
topics in the final examination may be different, so students should revise all topics and
materials discussed in the lectures and tutorials including the solutions to the case studies i.e.
you need to revise all lecture notes, tutorial discussions, and the reading material that
supplements the lecture notes. Finally, please review the learning outcomes that are stated in
the unit guide in relation to the final examination.
Question 1 (8 marks)
There are four different frameworks that can be used to analyse the strategic position of a
company and/or product. Discuss each of these frameworks and describe the nature of the
different strategy classifications within these frameworks. (8 marks)
Question 2 (8 marks)
The traditional approach to product costing has long been criticised. Discuss three alternative
approaches that manufacturing companies can adopt that result in more accurate product
costing. In your discussion include the advantages and disadvantages of each alternative.
(8 marks)
Question 3 (7 marks)
(i) “Different controls for different strategies”. Explain this statement and discuss how
strategic planning is dependent upon the strategy adopted. (4 marks)
(ii) Use Porter’s theory of competition (low cost / product differentiation) strategies to
discuss how Australia Post competes. (3 marks)
Question 4 (8 marks)
(i) Discuss the differences in the three levels of activity-based management. (4 marks)
2
(ii) Choose two of the four types of ABC systems and discuss the nature and purposes of
the systems. (4 marks)
Question 5 (10 marks)
Engage Pty Ltd designs, manufactures and sells products for home entertainment including
video game consoles, VCRs and DVD players. While their DVD products are still very
profitable and experiencing rapid growth, the company is concerned that their DVD market
will soon reach maturity and decline shortly afterwards. To address this issue, the company
wishes to enter the newly developing market of read/write DVD players and believed the
following will occur:
• The product would require 12 months of research and development, commencing
in 20X0. Production would then commence in 20X1.
• The product would be further refined for 6 months after production commences
• By 20X5 sales are expected to fall as the product becomes outdated
The company conducted the following life cycle costing analysis.
(i) Make three recommendations as to what action Engage Pty Ltd should take to maximize
profit. (4 marks)
(ii) Describe the advantages and the disadvantages of life cycle costing (6 marks)
20X0 20X1 20X2 20X3 20X4 20X5 TOTAL
Sales 0 800 1400 2100 1600 900 6800
Expenses
R&D 800 200 0 0 0 0 1000
Production 0 1100 950 1300 800 500 4650
Marketing 150 400 100 100 100 0 850
Sales/logistics/support 0 130 110 150 90 70 550
Profit (950) (1030) 240 550 610 330 (250)
3
Question 6 (14 marks)
Company A calculates a sales mix variance, a sales volume variance and a sales price variance.
Company B only calculates a sales volume variance and a sales price variance.
Required:
(i) What is the main difference between the products that A and B produce that indicates
a sales mix variance should be calculated for A but not for B? Please explain your
answer. (3 marks)
(ii) The calculation of the sales volume variance informs an organization that there is a
difference between the actual and budgeted number of units sold. The sales volume
variance can be split into two other variances which provide organizations with a
greater insight into why there was a difference between actual and budgeted sales.
a. List these two variances and discuss their value to managers. (4 marks)
b. Discuss how the calculation of these two variances would differ for the two
companies. (3 marks)
(iii) Discuss four problems that can be encountered when conducting variance analysis.
(4 marks)
Question 7 (10 marks)
The following exhibit appeared in Weirton Steel Corporation’s 1990 annual report:
We are bound together in serving our stakeholders with the following objectives:
For the customer:
1. Have a total quality commitment to consistently meet the product, delivery and service
expectation of all customers.
2. Give customers increased value through processes that eliminate waste, minimise costs, and
enhance production efficiency.
For the employee
1. Reward teamwork, trust, honesty, openness, and candour.
2. Ensure a safe workplace.
3. Recognise that people are the corporation and provide them with training and information
that allows for continuous improvement.
4. As employee-owners, obligate ourselves to provide a high level of performance and be
accountable for our own actions.
5. Respect the dignity, rights, and contributions of others.
For the company
1. Continuously invest in new technology and equipment to ensure competitiveness and
enhance shareholder value.
2. Manage our financial and human resources for long term profitability.
For the community
1. Commit to environmental responsibility.
2. Fulfil our responsibility to enhance the quality of community life.
Required:
(i) How does the measurement system above differ from a balanced scorecard approach?
(5 marks)
(ii) Explain the advantages that the balanced scorecard approach offers over traditional
performance measurement systems. (5 marks)
