SMA exercise queries and replies
Below I provide my comments of claification on some Strategic Management Accounting exercises and answers:
Briefly, to come up with an updated total investment base, opening total investment balance + new investment in the period (but no need to deduct depreciation for the new investment for the period because the idea is to calculate a new opening balance, NOT an ending balance for the period.)
Another query: "SMA HK Seminars 2012-13 F.5 a) item 2 計Transacion C p33 ROCE2 (1.65/6.2m=26.67) , why using 6.2m ? not need to reduce the scrap equipment ? but ROCE 1 reduce the 2m scrap equipment?"
My reply
In this case, my answer based on my interpretation of the question is different from the marking scheme. I provide my feedback here to facilitate students' learning and exam revision. Pls do not create a fuss by passing my feedback to other Lecturer for double-checking of answer, etc...
Another query:
Question: Why ROI is not operating profit/ total asset (as total investment)?
Answer: because there are a number of basis to caculate total investment (e.g. total asset - current liabilities is also acceptable; pls also refer to the textbook on this point).
See if you could accept the answer from the examiner is also appropriate to you. If the exam paper does not clearly specify a particular basis to calculate total investment, then there can be more than one way to calculate the answer. However, some answer may be better than others... it is important to justify your reasoning with your chosen method of calculation in this case.
Another query: "I am confused on the exercise of throughput accounting as attached. In page 2, it shows the maximum process time Z = 12 hours x 60 mins, I do not understand what 12 hours comes from? " Comments below:
Another query: "
I saw the ACCA's past exam paper. I want to ask a question.
ACCA June 2012 - Question 5 part (d)
Calculation of opening net assets after investment, why it does not deduct the amount of depreciation?":
Reply:
Briefly, to come up with an updated total investment base, opening total investment balance + new investment in the period (but no need to deduct depreciation for the new investment for the period because the idea is to calculate a new opening balance, NOT an ending balance for the period.)
Another query: "SMA HK Seminars 2012-13 F.5 a) item 2 計Transacion C p33 ROCE2 (1.65/6.2m=26.67) , why using 6.2m ? not need to reduce the scrap equipment ? but ROCE 1 reduce the 2m scrap equipment?"
My reply
In this case, my answer based on my interpretation of the question is different from the marking scheme. I provide my feedback here to facilitate students' learning and exam revision. Pls do not create a fuss by passing my feedback to other Lecturer for double-checking of answer, etc...
Another query:
Question: Why ROI is not operating profit/ total asset (as total investment)?
Answer: because there are a number of basis to caculate total investment (e.g. total asset - current liabilities is also acceptable; pls also refer to the textbook on this point).
See if you could accept the answer from the examiner is also appropriate to you. If the exam paper does not clearly specify a particular basis to calculate total investment, then there can be more than one way to calculate the answer. However, some answer may be better than others... it is important to justify your reasoning with your chosen method of calculation in this case.
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