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Practical Exam Mock

The document provides instructions for a management accounting report comparing budgeted and actual performance for a company over the past financial year. It includes: 1) Creating budgeted and actual income statements with monthly and annual figures for sales, costs and profits. 2) Including graphs comparing budgeted vs actual sales, costs and profits over 12 months. 3) Calculating variances for various budgeted and actual line items and explaining the implications. 4) Preparing budgeted and actual year-end statements of financial position. 5) Calculating and graphing various ratios to analyze profitability, liquidity, activity and risk for budgeted vs actual figures.

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62 views2 pages

Practical Exam Mock

The document provides instructions for a management accounting report comparing budgeted and actual performance for a company over the past financial year. It includes: 1) Creating budgeted and actual income statements with monthly and annual figures for sales, costs and profits. 2) Including graphs comparing budgeted vs actual sales, costs and profits over 12 months. 3) Calculating variances for various budgeted and actual line items and explaining the implications. 4) Preparing budgeted and actual year-end statements of financial position. 5) Calculating and graphing various ratios to analyze profitability, liquidity, activity and risk for budgeted vs actual figures.

Uploaded by

Fiveer Freelancer
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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Practical Mock Exam

It is the end of the financial year and you are required to produce a management accountant’s report to be given to
the company’s chief financial officer (CFO). The table below shows the budgeted and actual sales for the year.

Jul- Aug- Sep- Oct- Nov- Dec- Jan- Feb- Mar- Apr- May- Jun-
19 19 19 19 19 19 20 20 20 20 20 20
£'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000 £'000
Budgeted
200 220 242 266 293 322 354 390 429 472 519 571
Sales
Actual
198 189 250 280 330 390 500 700 400 100 10 5
Sales

Based on these sales create a set of costs for the company and write up a report using Microsoft Word showing both
the original budgeted results for the financial year and the actual results for the financial year. Insert graphs and
tables taken from Microsoft Excel where appropriate. Save the final version as a PDF and upload to Turnitin.

Include the following:

• Contents Page
• Report Summary: summarise main findings in report including how company has performed over the year
and how the company has performed relative to the budget. One paragraph, approximately 150 words.
• A budgeted Statement of Profit & Loss, shown monthly for a period of 12 months for the financial year,
including a 13th column showing the total for the year.
• An actual Statement of Profit & Loss, shown monthly for a period of 12 months, including a 13th column
showing the total for the year.
• Both actual and budgeted Statements of Profit & Loss should display the following headings (you do not
need to break categories down further than this):
o Sales
o Direct Materials (variable)
o Direct Labour (variable)
o Variable Overheads (variable or semi-variable)
o Fixed Overheads (fixed or stepped fix)
o Gross Profit
o Administration Costs (fixed, stepped fix, or semi-variable)
o Distribution Costs (fixed, stepped fix, or semi-variable)
o Selling Costs (fixed, stepped fix, or semi-variable)
o Operating Profit
o Finance Costs (fixed, stepped fix, or semi-variable)
o Profit Before Tax
o Tax (fixed – evenly spread across year)
o Profit After Tax
• A pie chart showing the relative size of each of the budgeted costs for the year. Provide a brief comment on
interpreting what the data from the graph means.
• A pie chart showing the relative size of each of the actual costs for the year. Provide a brief comment on
interpreting what the data from the graph means. Compare the 2 pie charts.
• The following graphs comparing the budgeted against the actual performance. Provide a brief comment on
interpreting what the data from the graphs means and what the implication is for the business:
o A line graph comparing 12 months of budgeted against actual sales
o A line graph comparing 12 months of budgeted against actual gross profit
o A line graph comparing 12 months of budgeted against actual operating costs
(administrative costs + selling costs + distribution costs)
o A line graph comparing 12 months of budgeted against actual operating profit
• The following cost variances. In the comments include an interpretation of what the variance result means
and the implication for the business:
o 3 sales variance calculations with brief comment
o 3 direct materials variance calculations with brief comment
o 3 direct labour variance calculations with brief comment
o 3 variable overhead variance calculations with brief comment
o 3 fixed overhead variance calculations with brief comment
• A budgeted Statement of Financial Position at year end and an actual Statement of Financial Position at year
end that includes the following items:
o Land & Buildings, Plant & Machinery, Cash, Receivables, Inventory, Prepayments, Accrued Income,
Share Capital, Retained Earnings, Long-term Bank Loan, Payables, Accruals, Deferred Income
• Also include the following headings:
o NON-CURRENT ASSETS, CURRENT ASSETS, TOTAL ASSETS, EQUITY, NON-CURRENT LIABILITIES,
CURRENT LIABILITIES, TOTAL EQUITY AND LIABILITIES
• The following performance ratios calculations:
o 4 profitability ratio calculations for both budgeted and actual years
o 2 liquidity ratio calculations for both year start and year end
o 3 activity ratio calculations for both budgeted and actual years
o 2 risk ratio calculations for both budgeted and actual years
• The following bar chart graphs and a brief comment stating what the variance result means and the
implication for the business:
o 4 profitability ratio charts showing both budgeted and actual figures
o 2 liquidity ratio charts for both year start and year end
o 3 activity ratio charts for both budgeted and actual years
o 2 risk ratio charts for both budgeted and actual years

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