(Answered) APC 309: Strategic Management Accounting




APC 309 Individual assignment: Pluto plc, Discounts & Balance Scorecard

General Information

 This is an individual assignment limited to 3,000 words (+or- 10%), excluding the reference list, bibliography and any appendices.

Assignment Requirements

You are required to answer two of the following three questions, each question is worth 50% of the marks:

Question 1

Pluto plc manufactures four products using the same machinery. The following details relate to its products:

  Product A

£ per unit

Product B

£ per unit

Product C

£ per unit

Product D

£ per unit

Selling price 30 34 48 45
Direct material 6 9 12 8
Direct labour 5 5 10 10
Variable overhead 3 3 6 6
Fixed overhead * 8 8 16 16
Profit 8 9 4 5
Labour hours 1 1 2 2
Machine hours 4 3 4 5
Units Units Units Units
Maximum demand per week 200 180 250 100

*Absorbed based on budgeted labour hours of 1000 per week.

There is a maximum of 2000 machine hours available per week.


  • Determine the production plan which will maximize the weekly profit of Pluto plc and prepare a profit statement showing the profit your plan will yield.

                                                                                                                                                 25 marks


  • The marketing director of Pluto plc is concerned at the company’s inability to meet the quantity demanded by its customers. One consideration to overcome this is to increase the number of hours worked using the existing machinery by working overtime. Such overtime would be paid at a premium of 50% above normal labour rates, and variable overhead costs would be expected to increase in proportion to labour costs.


Critically evaluate this strategy and state your findings (quantitative and qualitative) as to the expected increase in contribution (if any) and discuss any issues (in particular in regard to overtime working) that could arise and would need to be resolved.


                                                                                                                             25 marks   Total 50 marks

Question 2

Companies have found that offering discounts to customers in return for early payment can be counterproductive in terms of the resulting adverse effect on profitability. This is when the reduction in profitability outweighs any marginal improvements gained from the benefit of a reduction in the working capital requirement

  1. Given the above critically discuss the alternative measures to offering discounts to customers that could prove more effective in reducing the working capital requirement for a company with only minimal potential reductions in profitability.

25 marks


  1. Critically evaluate the methods that can be adopted to manage and achieve the efficient control of inventories and gain the resulting benefits for improving cash-flow (reducing the need for working capital) and ultimately profit in a business.

25 marks    Total 50 marks

Question 3

Critically evaluate the advantages and disadvantages of ‘the balanced scorecard’ and critically discuss the application of the four perspectives.

  • Critical evaluation of the advantages and disadvantages of ‘the balanced scorecard’.

                                                                                                                                      25 marks

(b)   Critical discussion on the application of the four perspectives.

                                                                                                 25 marks  

Total 50 marks

The report should include critical evaluation of the models and concepts proposed outlining their merits and limitations. You may incorporate logical assumptions with regard to the company and use numerical examples to illustrate the models and concepts that you propose to adopt.

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