Question 1 – What points need to be considered before preparing a budget? Question 2 – Some companies, such as Volvo, no longer prepare budgets. What are the main advantages and disadvantages of using...

Question 1 – What points need to be considered before preparing a budget?
Question 2 – Some companies, such as Volvo, no longer prepare budgets. What are the main advantages and disadvantages of using a budget?
Question 3– The financial controller of BBQ Essentials requests estimates sales, production and other operating data from the various administrative units every month.
Selection information concerning sales and production for May is summarised as follows:
Required
3.1Prepare a sales budget for May.
3.2Prepare a production budget for May.
XXXXXXXXXX3Prepare a direct materials purchases budget for May.
3.4Prepare a direct labour cost budget for May
Question 4 – Visit the Woolworths Limited website (www.woolworths.com.au) and download the company’s most recent annual report. Locate within the Director’s Statutory Report the report of the Remuneration Committee which provides comprehensive disclosures about the remuneration paid to key management personnel (KMP).
4.1What is Woolworths’ remuneration strategy and what are the goals the strategy is designed to achieve?
4.2What are the principles embodied in Woolworths’ remuneration framework?
4.3How will Woolworths apply these remuneration principles in terms of the use of external data, the setting of targets and the awarding of incentives to KMP?
4.4What is the structure of the remuneration package offered to KMP?
4.5Focusing on the at-risk short-and long-term rewards offered by Woolworths to KMP, identify, review and comment on the components of the incentives, the weightings allocated to each component and the performance measures (or hurdles) used to determine whether an incentive will be awarded.
4.6Review the performance measures Woolworths uses for the awarding of short-term annual cash incentive for the KMP identified in the Remuneration Report.
4.6.1 What are those financial and non-financial measures?
4.6.2 How would you assess the balance between financial and non-financial measures?
4.6.3 Why would the financial and non-financial measures for individual KMP be different in terms of applicability and weighting?
Question 5 – Indicate, for each of the following independent casers, whether they are best structured as cost, profit or investment centres:
5.1 Kellee is head of the marketing and public relations department at Satellite University. The department receives funding from the central administration for teaching and research. The department is allocated funds based on projected expenditures. Kellee is responsible for 10 academic staff and 2 general staff.
5.2 Leigh is head of the school of business located on the campus at Planet University. The school enrols only full-fee-paying students and is responsible for all operating costs and a share of the university’s overheads. The university provides a building and teaching venues. Leigh is responsible for 30 academic staff and 10 general staff.
5.3 Troy is head of the division of business at Universe University. The division is located in its own building in the city as part of a strategic move by the university. The division enrols only full-fee-paying students and it also conducts short courses for businesses in the CBD. The division is responsible for all capital and operating costs.
Question 6 – You are a director of a credit union and you have been appointed to the remuneration subcommittee. One of your first tasks is to consider a bonus for the general manager. You believe that a bonus should be paid based on performance. The credit union has 10,000 members and total assets of $50 million, with $40 million in loans to members. It operates four
anch locations and a head office and employs a total of 30 people. You are familiar with using KPIs such as return on assets as a measure of performance. However, the board of directors has a policy of not aiming to maximise profit as the credit union exists for the benefit of its members. Therefore, you consider it to be inappropriate to use return on assets as a measure of the performance of the general manager.
Required
What other financial and non-financial measures of performance could be used to assess the performance of the general manager?
Question 7 – List three performance measures that would be appropriate for the following centres:
7.1 An academic department in a university established as a cost centre.
7.2 A
anch of a bank established as profit centre.
7.3 A division of a large steel company established as an investment centre.