SUNDERLAND BUSINESS SCHOOL Module PGBM64 Management Accounting and Control Individual assignment Hand in Week: W/c 12 May 2014 General Information 1. Weighting – 100% of the marks for this module 2. This is an individual assignment of about 3,000 words (plus or minus 5%), excluding appendices, reference list and bibliography. The word count MUST be shown on the front of the assignment. 3. There are a number of parts to this assignment. Each part is equally weighted. All parts are discreet from one another. 4. All of the learning outcomes for the module are being assessed in this assignment. The learning outcomes are shown in the section entitled “Marking Guide”, which is further on in this document. 5. The University’s policy on cheating collusion and plagiarism will be applied to this piece of work. 6. The hand in date is: May TBC 2014 Requirements: Part a. You have been asked to advise two entirely different businesses about the benefits and problems associated with what is termed the “traditional approach to budgeting and budgetary control”. One of the businesses operates in a very stable and static market place, where there is little change in either products or demand year on year, whereas the other business operates in a very dynamic, rapidly changing, innovative environment. If your findings suggest that the traditional approach is inappropriate for one or both of the businesses, please suggest and discuss some alternative approaches. The “traditional approach” typically involves the following processes: Development of assumptions and plans about the factors influencing next year’s budget in advance of the budget year starting; Approval of the budget before the commencement of the budget year; Once the budget year has started, there are monthly comparison reports which compares budget and actual performance on both a monthly and cumulative basis; Action being taken (where necessary) to correct large variances or differences. Part b. Many organisations use transfer pricing when transferring products between different divisions of the same organisation. You are required to discuss in detail the advantages and disadvantages of each of the following four methods: 1) Market based transfer prices; 2) Full cost transfer prices; 3) Cost-plus a mark-up transfer prices; and 4) Negotiated transfer prices. Guidance: Students are encouraged to be inquisitive and innovative in their approach as to what should be included in this report. The following may be of some use in providing guidance as to what could possibly be included, although this is in no way meant to be prescriptive. The aim of the assignment is to help you understand how key areas of strategic management accounting are applied in practice. This will include investigating topics from throughout the course linked to the above issues. Some of the principles, concepts ad models will be more relevant to your chosen approach than others and so it is likely that different students will formulate different approaches to the problems.