Financial reporting, planning and control

2,000 words (or equivalent calculations)Learning Outcomes
This assessment satisfies the following learning outcomes as specified in your module guide.

No. Learning Outcomes Assessment Criteria
1 Prepare financial statements based on past performance


Prepare the profit statements and balance sheets in acceptable format


2 Prepare and evaluate reports for use by management in decision making Prepare management reports, calculate variances, and apply management accounting techniques to a variety of problems
Module Title: FRPC
Role

You are to take the role of a trainee business manager working for VK Ltd. The management have commissioned you to prepare three short A4  reports for a client company. You should also provide a document showing full workings for each task.



Tasks

The tasks are open requests for help and guidance. Using the data provided, you should provide each company with a clear financial analysis making appropriate use of techniques and theory from the FRPC learning materials.

You are required to provide management with information in whatever form/style you consider to be the most suitable to answer the tasks. Concepts and theories must be explained in relation to the topics covered.

You should discuss your initial ideas with your class tutor.

Submit all tasks on paper and a copy via WebCT.




























Task 1 (30%)

Vernon Carew manufactures a special engineering product. They are concerned about the validity of their standard costing system and the level of actual costs. They have provided a table of data in Appendix 1.

Required:

Advise the directors.


Task 2 (30%):


Wisdom Ltd manufactures three products, E F and G. They have estimated the standard costs and budgeted sales. However there is a shortage of Grade X labour hours (50,000hrs) for the coming year but would rise to 62,500 hours in the next year. The sales/purchasing manager has become aware that it will be possible to purchase E, F and G from local suppliers for ?17.50, ?7.80 and ?23.35 respectively. Additional data is provided in Appendix 2.

Required:

Advise the directors of Wisdom Ltd



Task 3 (30%):

Brownwood Ltd is considering which of two mutually exclusive projects it should undertake. The finance director thinks that the project with the higher NPV should be chosen whereas the managing director thinks that the one with the higher IRR should be undertaken especially as both projects have the same initial outlay and length of life. Both directors are concerned about the sensitivity of each project. The company anticipates a cost of capital of 10% and the net after tax cash flows of the projects are as presented in Appendix 3.


Required:

Recommend, with reasons, which project you would undertake (if either). You should present a graph to support your solution.


Task 4 (10%):

Presentation, application of references and the use of appropriate terminology