Arab Open University
BE310: TMA – 2
nd Semester 2012 2013
Cut Off Date: 27
th of April 2013
About TMA:
The TMA covers the cost accounting concepts and practices in the businesses. It is marked out of 100 and is worth 20% of the overall assessment component. It is intended to assess students’ understanding of some of the learning points within chapters
1 to 5. This TMA requires you to apply the course concepts. The TMA is intended to:
- Assess students’ understanding of key learning points within chapters 1 to 5.
- Increase the students’ knowledge about the reality of the cost and management accounting as a profession.
- Develop students’ communication skills, such as memo writing, essay writing, analysis and presentation of material.
- Develop the ability to understand and interact with the nature of the managerial accounting tools in reality.
- Develop basic ICT skills such as using the internet.
The TMA:
The TMA requires you to:
- Review various study chapters of ‘Cost Accounting’ Book and apply some of the concepts within it.
- Conduct a simple information search using the internet.
- Present your findings in not more than 1,200 words. The word count excludes headings, references, title page, and diagrams.
- You should use a Microsoft Office Word and Times New Roman Font of 14 points.
- You should read and follow the instructions below carefully. Each part of the process will carry marks for the assignment.
Criteria for Grade Distribution:
| Criteria | Content | Referencing | Structure and Presentation of ideas | Total marks |
| Financial Reporting on the Internet (Analog Devices Inc.) |
||||
| Marks | 95 | 3 | 2 | 100 |
The TMA Questions
Financial Reporting on the Internet
(Analog Devices Inc.)
The internet is a good place to get information that is useful in your study of accounting. For example, you can find information about current events, professional accounting organizations, and specific companies that may support your study.
From the year 1965 to its milestone 40th anniversary year of 2005,
Analog Devices has experienced a rich history of transitions and significant achievements. Follow ADI’s path to success – starting with its humble beginnings in the basement of a Cambridge, Massachusetts, apartment building – through the decades as it evolved into one of the world’s most prominent semiconductor industry franchises. Analog Devices is a world leader in the design, manufacture and marketing of a broad portfolio of high performance analog, mixed signal and digital signal processing integrated circuits (ICs) used in virtually all types of electronic equipment.
Access the Analog Devices Inc. web page at: www.analog.com. From Analog’s home page, choose “Investors Relations”, and then “Financial Information”, followed by clicking on “Annual Reports” to download 2012 annual report on Form 10 K (PDF).
Instructions:
Use the annual report to answer the following questions:
- Is Analog’s 2012 Annual Report primarily a financial accounting document or a managerial accounting document? What evidence from the annual report supports your conclusion?
[8 Marks]
- Why effective cost accounting is critical to Analog Devices success.
[8 Marks]
- Write a report in no more than 500 words about Analog Devices Inc. This report should cover the following points:
- Is it a service, merchandising, or manufacturing company? How can you tell? What is its primary product or service?
- SMG&A.
- Gross margin for each activity during the most three recent years (2012, 2011, and 2010).
- Cost reduction efforts during 2012.
[Marks: 4 marks for each point = 16]
- What is the amount of CoGS for the most three recent years (2012, 2011, and 2010)? What kinds of costs are included in the Cost of Sales account?
[6 Marks]
- What categories of inventory Analog Devices shows on the balance sheet for the most two recent years (2012 and 2011)? Support your answer by suitable figures from the Analog Devices’ annual report.
[6 Marks]
- Using the income statement (Consolidated Statements of Income, p. 43 of the 2012 annual report) and inventory information from the Consolidated Balance Sheets and notes, calculate the cost of finished goods manufactured for 2012 annual year.
[8 Marks]
- “Value chain refers to the sequence of business functions in which customer usefulness is added to products or services of a company”. Provide evidence from the annual report of Analog Devices concerns about the value chain.
[12 Marks]
- Recast the “Consolidated Statements of Income” in the contribution margin format using amounts from the 2012 year (Ignore tax). For this computation assume that 25% of cost of sales and operating expenses are fixed.
[10 Marks]
- Briefly discuss the potential shortcoming of using direct labor hours or direct labor dollars as a primary cost driver in Analog Devices Inc.
[7 Marks]
- Describe how activity based costing (ABC) can improve overhead allocations in Analog Devices Inc. that produce a diverse line of products.
[6 Marks]
- Identify four cost drivers that Analog Devices Inc. might consider in allocating overhead using the activity based costing (ABC) of overhead allocation.
[8 Marks]
[Total Marks: 95 + 5 for general presentation and references]
In your answer, you should explain each point or inquire separately. Use the following headings (below) to make up the different sections of your answer:
| PT3 form (Cover) | Available on LMS |
| Contents | Title and contents page |
| TMA | Financial Reporting on the Internet (The case of Analog Devices Inc.) |
| Reference list | Recorded according to the Harvard style Available on LMS |
|
Attachments:
BE310 TMA 2….doc