Portfolio

    MCS 301 – Portfolio Questions, Semester 1, 2014 Page 1 of 3
    Management Control Systems 301
    Semester 1, 2014
    Portfolio questions
    Question One
    F.T. Electronics Company manufactures GPS devices for the fishing industry. In recent months,
    demand for the company’s products has fallen and, as a result, the firm’s production has been
    reduced significantly. Many unskilled workers have been temporarily laid off. However, top
    management has made a decision not to lay off any highly skilled employees, such as inspectors and
    machinery operators. Management was concerned that these highly skilled employees would easily
    find new jobs elsewhere and not return when production returned to normal levels.
    To occupy the skilled employees during the production cutback, they have been reassigned
    temporarily to the Service Department. Here they are performing general service tasks, such as
    servicing equipment, repairing any equipment, and providing support to customers who have any
    questions on how to use the equipment. The skilled employees continued to receive their normal
    wages, which average $26 per hour. However, the normal wages for Service Department employees
    average $15 per hour.

    The supervisor of the Service Department recently received the February performance report which
    indicated that his department’s labour cost exceeded the budget by $28,659. The department’s
    actual labour cost was approximately 90% over the budget. The department supervisor complained
    to the controller.
    Required:
    As the controller, would you make any modification in F.T. Electronics’ responsibility‐accounting
    system? If so, what are the changes you would make (who should be held responsible for the
    budget)? Explain your answer.
    (Word limit for answer to Question One: 250 words)
    (Total: 5 marks)
    Question Two
    Identify two of the most successful companies or organizations today, in your opinion. Explain why
    they are so successful (your answer should consider business strategy and core competencies).
    (Word limit for answer to Question Two: 250 words)
    (Total: 4 marks)
    MCS 301 – Portfolio Questions, Semester 1, 2014 Page 2 of 3
    Question Three
    Colin Currant started Surecut Mowing Services a number of years ago to provide mowing services to
    both local businesses and households. Over the years, Colin expanded the business and started
    providing landscape and reticulation services.
    Surecut maintains a pool of skilled workers who are contracted to perform the landscaping and
    reticulation services because these services do not occur on a regular basis. Many of Surecut’s fulltime
    employees have been with the firm for a number of years. Five zone managers are each
    responsible for providing recurring mowing services. In addition, the zone manager sells and
    schedules non‐mowing jobs for the company’s central pool of skilled employees. Informal meetings
    are held periodically to discuss Surecut’s performance, personnel allocations and scheduling
    problems. Surecut’s budgeting and planning have been done by Colin, who also manages variations
    from budgets.
    Colin recently decided to retire and sold the business to Commercial Mowing Services which
    provides similar services in a number of metropolitan locations that surround Surecut’s business
    area. When they heard the news of the sale, several of Surecut’s long‐term employees appeared
    resentful of the change in ownership and did not know what to expect.
    Commercial Mowing Services’ senior management met with Surecut’s managers and announced
    that Victor Briggs would become president of Surecut and that Surecut would continue to operate as
    a separate subsidiary of Commercial Mowing Services. Furthermore, in accordance with
    Commercial’s management philosophy, a responsibility accounting system is to be implemented at
    Surecut. Also, in line with other Commercial subsidiaries, a participatory budgeting process is being
    considered. However, no decision will be made until an evaluation of Surecut’s existing policies,
    operational culture and management is completed. In view of the significant change in management
    philosophy, Commercial has taken considerable time in explaining how each system operates and
    assuring Surecut’s managers that they are expected and encouraged to participate in both the
    planning and implementation of any of the systems that are to be adopted.
    Required:
    For the participatory budgeting system initiative being considered for Surecut Mowing Services:
    1) Identify two behavioural advantages that could arise. (2 marks)
    2) Identify two potential problems that could arise. (2 marks)
    3) Discuss the likelihood that the new approach will contribute to the alignment of
    organizational and personal goals. (4 marks)
    (Word limit for answer to Question Three: 300 words)
    (Total: 8 marks)

    MCS 301 – Portfolio Questions, Semester 1, 2014 Page 3 of 3
    Question Four
    The each of the following independent situations, state whether the company is following a low cost
    or a differentiated product strategy and explain your answer.
    a) Jamphones is about to decide whether to launch production and sale of a mobile phone with
    standard features.
    b) Prestige Computers is trying to decide whether to produce and sell a new home computer
    software package that includes the ability to interface with a sewing machine and a vacuum
    cleaner. There is no such software currently on the market.
    c) Arvadam Pharmaceuticals has been asked to provide a ‘store brand’ roll on sunscreen that
    will be sold at discount retail stores.
    d) Tim’s Delicatessen is entertaining the idea of developing a special line of gourmet pasta
    sauce made with sundried tomatoes, mushrooms and truffle oil.
    (Word limit for answer to Question Four: 200 words)
    (For each part, one mark for identifying the strategy and one mark for explanation. Total: 8 marks)

                                                                                                                                      Order Now