ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(COL MBA/MPA Program)
ACCOUNTING AND FINANCE (5566)
CHECK LIST
SEMESTER: AUTUMN 2017
This packet comprises the following material:-
1. Textbooks
2. Assignment No. 1, 2
3. Assignment Forms (two sets)
4. 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
Wishing you all the best
Salman A. Qureshi
(Course Coordinator)
ALLAMA IQBAL OPEN UNIVERSITY, ISLAMABAD
(COL MBA/MPA Program)
WARNING
1. 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.
2. SUBMITTING ASSIGNMENT(S) BORROWED OR STOLEN FROM OTHER(S) AS ONE’S OWN WILL BE PENALIZED AS DEFINED IN “AIOU PLAGIARISM POLICY”.
Course: Accounting and Finance (5566) Semester: Autumn, 2017
Level: COL MBA/MPA
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 worthless 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.
ASSIGNMENT No. 1
Total Marks: 100
Pass Marks: 40
Q. 1 / (a) Understand the role of management accounting and how this fits with the goals of the organization? (10)(b) Explain how management accounting can add to corporate governance. (10)
Q. 2 / Lee Company, which has only one product, has provided the following data concerning its most recent month of operations: (20)
Selling price $95
Units in beginning inventory 100
Units produced 6,200
Units sold 5,900
Units in ending inventory 400
Variable costs per unit:
Direct materials $42
Direct labour $28
Variable manufacturing overhead $1
Variable selling and administrative $5
Fixed costs:
Fixed manufacturing overhead $62,000
Fixed selling and administrative $35,400
The company produces the same number of units every month, although the sales in units vary from month to month. The company’s variable costs per unit and total fixed costs have been constant from month to month.
Required:
a. What is the unit product cost for the month under variable costing?
b. What is the unit product cost for the month under absorption costing?
c. Prepare an income statement for the month using the contribution format and the variable costing method.
d. Prepare an income statement for the month using the absorption costing method.
e. Reconcile the variable costing and absorption costing net incomes for the month.
Q. 3 / 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. (20)
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 break-even 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.
Q. 4 / Bowling Limited bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $8.30 per unit. The budgeted fixed selling and administrative expense is $93,870 per month, which includes depreciation of $16,380. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 6,300 units are planned to be sold in July. (20)
Required:
Prepare the selling and administrative expense budget and the related cash budget for July.
Q. 5 / a. Describe situations that arise that lead to less profits overall for an organisation. (10)
b. Explain the effects of different country tax rates on transfer pricing decisions. (10)
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 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.
2. You will have to participate in the activity fully, actively, and practically to be eligible to sit in the final examination of the course.
3. 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 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
4. Prepare a copy of this assignment and submit to your tutor for your evaluation.
5. You should add any illustrative material/data/tables/analysis for effective submission.
6. 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
0. Four perspectives of the balanced scorecard
1. Rights, characteristics, and features of both common and preferred shares.
2. Risk and return and how these are applied in decision-making.
3. Role of stock exchanges in economic development
4. Short-term and long-term finance
5. Types of budgets and its application in Pakistan
6. Types of financial institutions
7. Types of financial institutions
8. Working capital requirements of manufacturing organization
9. The capital asset pricing model and its application in stock evaluation
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
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
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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