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Financial Planning and Control Final Assessment: Outline & Ru
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Final Assessment Outline
Competency Name: Financial Planning and Control
Competency Statement: Demonstrate knowledge and application of the 3 key steps of financial
planning – 1 forecasting the firm’s short-term and long-term financial needs;
2 developing budgets to meet those needs, and 3 establishing financial
controls to see if the company is achieving its goal.
Final Assessment Title: Financial Planning and Control Accounting Problems
Program Learning Outcomes: N/A
Institutional Learning Outcomes: N/A
Competency Objectives
1. Develop a forecast of short- and long-term financing needs and pro forma financial statements.
2. Prepare a budget and use variance analysis to evaluate performance.
3. Demonstrate knowledge of standard costing and variances.
4. Perform profitability and cost analyses of businesses and business segments.
5. Construct a balanced scorecard for strategic planning and control purposes considering both quantitative and qualitative
data.
Purpose of This Assessment
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The final assessment for this competency is to complete a series of comprehensive financial accounting problems that address
udgeting, forecasting, standard costing, variance analysis, profitability, and cost analysis using a balance scorecard.
Items Required for Submission
A comprehensive solution set to a selection of managerial accounting problems that involve:
• Preparing Forecasting/Proforma Statements
• Preparing Capital Budgets
• Generating Operating Budgets
• Demonstrating a knowledge of standard costing and variances
• Performing profitability and cost analyses of businesses and business segments
• Constructing a balanced scorecard for strategic planning and control purposes, considering both quantitative and
qualitative data
Step 1: Preparation
In order to prepare for this assignment, it is important to carefully review the entire scenario for each problem found in
Appendix A. When reviewing each problem, the following questions should be considered:
1. What possible tasks are required?
2. What you will need to complete the problem?
3. What formulas will you need?
4. What resources from this competency might you reference to successfully complete this problem?
5. Think about possible plans of action for what steps you will take—what strategies will you use to tackle each
problem?
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Step 2: Perform Calculations & Explain Methods
For each problem (found in Appendix A):
1. Use your plan of action to solve each problem, clearly outlining the procedures used, providing a concise explanation of
each step, labeling relevant formulas, and showing worked out calculations and complete solutions. You may use an
Excel spreadsheet or a calculator to help you perform the necessary calculations, but all co
esponding work must be
shown completely.
2. Answer all questions posed in the problem; if applicable, analyze and evaluate your results and provide a contextual
explanation of the solutions you obtained.
3. Review your calculations and solutions and make sure that an external viewer would be able to follow your
methodology and make sense of your calculations and co
esponding explanations. Make certain that you have
completed all steps of each problem.
Step 3: Complete Checklist for Submission
Before you submit, check to see if you believe you have met the criteria noted below.
Did you….
ü Answer all parts of each question completely and accurately?
ü Provide clear and accurate steps, calculations, and solutions?
ü Include an insightful analysis and evaluation of results where relevant?
ü Provide a comprehensive and accurate description of each of the four areas of a balanced scorecard, an accurate and
clear definition of a key performance indicator (KPI), and meaningful real world examples of KPIs for each balanced
score card area?
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Step 4: Submit Your Work
• Your completed final assessment documents should be submitted through the Final Assessment page of your competency.
• Please note, for files smaller than 10MB (i.e., most Word documents), use the co
esponding “+UPLOAD STUDENT FILE”
utton to upload your final assessment assignments. For larger files of any type (i.e., voice-over PowerPoint files, videos, or
image-heavy documents), please use the optional TEXT EDITOR to provide a URL where your grader can download your
file.
• How you create a download URL is up to you, but various free online providers, including Google Drive, Box.com, or
Dropbox, offer this service. Please make sure that the URL you provide can be accessed by anyone with the link. For
further instructions on how to create public links for uploaded files, consult the support pages for your chosen provider.
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Final Assessment Ru
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Criterion EMERGING – 1 DEVELOPING - 2 PROFICIENT – 3 EXEMPLARY – 4
Forecasting / Pro
forma Statements
Does not answer all
parts of each question
completely and
provides a weak
analysis and
evaluation of results
where applicable.
Partially answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
Mostly answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
Answers all parts of
each question
completely and
accurately, showing
and explaining all
steps, calculations,
and solutions clearly
and insightfully
analyzing and
evaluating results
where applicable.
Capital Budgets Does not answer all
parts of each question
completely and
provides a weak
analysis and
evaluation of results
where applicable.
Partially answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
Mostly answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
Answers all parts of
each question
completely and
accurately, showing
and explaining all
steps, calculations,
and solutions clearly
and insightfully
analyzing and
evaluating results
where applicable.
Operating Budgets Does not answer all
parts of each question
completely and
provides a weak
Partially answers all
parts of each question
completely and
accurately, showing
Mostly answers all
parts of each question
completely and
accurately, showing
Answers all parts of
each question
completely and
accurately, showing
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analysis and
evaluation of results
where applicable.
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
and explaining all
steps, calculations,
and solutions clearly
and insightfully
analyzing and
evaluating results
where applicable.
Standard Costing and
Variances
Does not answer all
parts of each question
completely and
provides a weak
analysis and
evaluation of results
where applicable.
Partially answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly, and
insightfully analyzing
and evaluating results
where applicable.
Mostly answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly, and
insightfully analyzing
and evaluating results
where applicable.
Answers all parts of
each question
completely and
accurately, showing
and explaining all
steps, calculations,
and solutions clearly,
and insightfully
analyzing and
evaluating results
where applicable.
Profitability and Cost
Analysis
Does not answer all
parts of each question
completely and
provides a weak
analysis and
evaluation of results
where applicable.
Partially answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations, and
solutions clearly and
insightfully analyzing
and evaluating results
where applicable.
Mostly answers all
parts of each question
completely and
accurately, showing
and explaining all
steps, calculations and
solutions clearly, and
insightfully analyzing
and evaluating results
where applicable.
Answers all parts of
each question
completely and
accurately, showing
and explaining all
steps, calculations,
and solutions clearly
and insightfully
analyzing and
evaluating results
where applicable.
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Balanced Score Card
Provides a limited
description of each of
the four areas of a
alanced scorecard, an
inadequate definition
of a KPI, and real world
examples of KPIs that
do not align to each
alanced score card
area.
Provides a mostly
accurate description of
each of the four areas
of a balanced
scorecard, a somewhat
accurate definition of a
KPI, and somewhat
elevant real world
examples of KPIs for
each balanced score
card area.
Provides an accurate
description of each of
the four areas of a
alanced scorecard, an
accurate definition of a
KPI, and relevant real
world examples of
KPIs for each balanced
score card area.
Provides a
comprehensive and
accurate description
of each of the four
areas of a balanced
scorecard, an accurate
and clear definition of
a KPI, and meaningful
eal world examples
of KPIs for each
alanced score card
area.
Appendix A: Managerial Accounting Problems
Problem #1: Proforma Statements
Prepare a common size income statement given the following information:
Revenues = $100,000
COGS = $43,000
SG&A = $22,000
Depreciation = $10,000
Interest Owed = $5,000
Tax Rate = 40%
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Problem #2: Proforma Statements
Prepare a pro forma income statement from the data and common size income statement from #1, assuming that the sales will
grow by 5% and all expenses but interest and taxes will scale with sales.
Problem #3: Capital Budgets
Rambus Inc. would like to purchase a production machine for $325,000. The machine is expected to have a life of three years,
and a salvage value of $50,000. Annual maintenance costs will total $12,500. Annual savings are predicted to be $112,500. The
company's required rate of return is 12%.
Required:
Ignoring the time value of money, calculate the net cash inflow or outflow resulting from this investment opportunity.
Problem #4: Capital Budgets
Rambus Inc. would like to purchase a production machine for $325,000. The machine is expected to have a life of three years,
and a salvage value of $50,000. Annual maintenance costs will total $12,500. Annual savings are predicted to be $112,500. The
company's required rate of return is 12%.
Factors: Present Value of $1
(r = 12%)
Year 0 1.0000
Year 1 0.8929
Year 2 0.7972
Year 3 0.7118
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Required:
(1) Using the Present Value Factors for $1, calculate the net present value of this investment (ignoring taxes).
(2) Based on your answer in requirement 1, should Rambus purchase the production machine?
Problem #5: Capital Budgets
Lockwood Company would like to purchase a production machine for $900,000. The machine is expected to have a life of five
years, and a salvage value of $100,000. Annual maintenance costs will total $40,000. Annual savings are predicted to be
$350,000. The company only accepts projects that have a payback period of less than three years.
Required:
(1) Calculate the payback period for this project rounded to the nearest month. Show your work.
(2) Should the company accept this proposal? Explain.
Problem #6: Operating Budgets
Cathy’s Cookies produces cookies for resale at local grocery stores. The company is cu
ently in the process of establishing a
master budget on a quarterly basis for this coming fiscal year, which ends December 31. Prior year quarterly sales were as
follows (1 unit = 1 batch):
First quarter: 8,000 units
Second quarter: 9,600 units
Third quarter: 12,000
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units
Fourth quarter: 10,400
units
Unit sales are expected to increase 20%, and each unit is expected to sell for $5. Management prefers to maintain ending
finished goods inventory equal to 15% of next quarter's sales. Assume finished goods inventory at the end of the fourth
quarter budget period is estimated to be 2,000 units.
Required:
(1) Prepare a sales budget for Cathy’s Cookies.
(2) Prepare a production budget for Cathy’s Cookies.
(3) What can you interpret about Cathy’s Cookies Sales Budget? Trends?
Problem #7: Operating Budgets
Marker Products, Inc. sells all of its products on credit. The company expects to collect 65%of sales in the quarter of sale and
35% the quarter following the sale. Accounts receivable at the end of last year totaled $3,000,000, all of which will be collected
in the first quarter of the coming year. Marker's sales budget shows the following projected sales revenues:
Quarter 1: $8,800,000
Quarter 2: $11,000,000
Quarter 3: $11,440,000
Quarter 4: $10,560,000
Required:
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Prepare a budget for cash collections from sales for each of the four quarters.
Problem #8: Standard Costing and Variances
Jake’s Cheese Company produces gourmet cheese for resale at local grocery stores. The master budget indicates that the
company expects to use 3.0 pounds of direct materials for each unit produced at a cost of $8.00 per pound (one unit = one
atch of cheese). Each unit produced will require 0.50 direct labor hours at a cost of $10.00 per hour. Variable manufacturing
overhead is applied based on direct labor hours at a rate of $5.00 per hour. Last year's sales were expected to total 50,000
units. Jake just received last year's actual results showing sales of 45,000 units.
Required:
(1) Calculate the standard cost per unit for direct materials, direct labor, and variable manufacturing overhead.
(2) Prepare a flexible budget based on actual sales for direct materials, direct labor, and variable manufacturing overhead.
Problem #9: Standard Costing & Variances
Jake’s Cheese Company produces gourmet cheese for resale at local grocery stores. Jake’s expected to use 3.0 pounds of direct
materials to produce one unit (batch) of product at a cost of $8 per pound. Actual results are in for last year, which indicates
45,000 batches of cheese were sold. The company purchased 160,000 pounds of materials at $7.50 per pound, and used
145,000 pounds in production.
Required:
(1) Calculate the materials price variance.
(2) Calculate the materials quantity variance.
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(3) Suggest several possible reasons for the materials price and quantity variances calculated in requirements (1) and (2).
Problem #10: Standard Costing & Variances
Jake’s Cheese Company produces gourmet cheese for resale at local grocery stores. Jake’s expected to use 0.50 direct labor
hours to produce one unit (batch) of product at a cost of $10 per hour. Actual results are in for last year, which indicates
45,000 batches of cheese were sold. The company's direct labor workforce worked 27,500 hours at $9 per hour.
Required:
(1) Calculate the labor rate variance.
(2) Calculate the labor efficiency variance.
(3) Suggest several possible reasons for the labor rate and efficiency variances.
Problem #11: Standard Costing & Variances
Jake’s cheese Company produces gourmet cheese for resale at local grocery stores. Jake’s expected to use 0.50 direct labor
hours to produce one unit (batch) of product, and the variable overhead rate is $5.00 per hour. Actual results are in for last
year, which indicates 45,000 batches of cheese were produced and sold. The company's direct labor workforce worked 27,500
hours, and variable overhead costs totaled $144,000.
Required:
(1) Calculate the variable overhead spending variance.
(2) Calculate the variable overhead efficiency variance.
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(3) Suggest several possible reasons for the variable overhead spending and efficiency variances.
Problem #12: Profitability & Cost Analysis
Car Deals Inc. has two divisions: New Cars and Used Cars. The following segmented financial information is for the most recent
fiscal year:
New Cars
Division
Used Cars
Division
Sales $9,000,000 $18,000,000
Cost of goods sold 3,300,000 8,700,000
Allocated overhead 1,050,000 2,550,000
Selling and administrative expenses 585,000 630,000
The New Cars division had average operating assets totaling $17,400,000 for the year, and the Used Cars division had average
operating assets of $22,800,000. Assume the cost of capital rate is 15%, and the company's tax rate is 40%.
Required:
a. Prepare a segmented income statement, including the profit margin ratio for each division at the bottom of the segmented
income statement.
. Calculate return on investment (ROI) for each division.
c. Calculate residual income for each division.
d. Summarize the answers to parts a, b, and c. What does this information tell you about each division?
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Problem #13: Balanced Scorecard
a. List the four areas of a balanced scorecard. Describe each area clearly and concisely.
. Define a KPI
c. Pick a real world company and give an example of a KPI for each balanced scorecard area for that company.