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see file attachedMicrosoft Word - FA_Financial Planning and Control_20160224.docx Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	1	of	14	 	 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	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	2	of	14	 The	final	assessment	for	this	competency	is	to	complete	a	series	of	comprehensive	financial	accounting	problems	that	address	 budgeting,	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?	 	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	3	of	14	 	 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	corresponding	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	corresponding	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?	 	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	4	of	14	 	 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	corresponding	“+UPLOAD	STUDENT	FILE”	 button	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.		 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	5	of	14	 Final	Assessment	Rubric	 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	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	6	of	14	 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.	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	7	of	14	 Balanced	Score	Card	 	 Provides	a	limited	 description	of	each	of	 the	four	areas	of	a	 balanced	scorecard,	an	 inadequate	definition	 of	a	KPI,	and	real	world	 examples	of	KPIs	that	 do	not	align	to	each	 balanced	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	 relevant	real	world	 examples	of	KPIs	for	 each	balanced	score	 card	area.	 Provides	an	accurate	 description	of	each	of	 the	four	areas	of	a	 balanced	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	 real	world	examples	 of	KPIs	for	each	 balanced	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%	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	8	of	14	 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	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	9	of	14	 	 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	currently	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	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	10	of	14	 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:	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	11	of	14	 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	 batch	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.	 	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	12	of	14	 (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.	 	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	13	of	14	 (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.	 	 b.	 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?	 Financial	Planning	and	Control	Final	Assessment:	Outline	&	Rubric	 	 Page	14	of	14	 	 Problem	#13:	Balanced	Scorecard	 a. List	the	four	areas	of	a	balanced	scorecard.	Describe	each	area	clearly	and	concisely.		 b. Define	a	KPI		 c. Pick	a	real	world	company	and	give	an	example	of	a	KPI	for	each	balanced	scorecard	area	for	that	company.

Sumit · Accepted Answer

Problem 13:
(a). The four areas of a balance scorecard are as under:
(i). The Financial Perspective: The main objective of any company is to earn money; hence the Balance scorecard helps to measure the financial performance of the company using the financial measures such as Operating Income, Return on Assets, Sales Growth, etc.
(ii). Customer: The balance scorecard helps to determine whether the company is able to achieve customer expectations. The customer satisfaction is measured using Market Share, Customer satisfaction, etc.
(iii). Internal Processes:

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