NURIN HADIRA BINTI HASSAN

DBS150718667 / 10333561

SYAFIKA BINTI ZULKIFLI

DBS150718675 / 10333585

NUR HANANI BINTI ZAKARIA

DBS150718672 / 10333548

SITI NUR SHAHIRAH BINTI SALIM

DBS150718673 / 10333583

Course title

: Bachelor of Art in Accounting and Finance

Lecturer Name

: Syed Azlan Bin Al Jaffree

Module/Subject Title : B7AF104 (Cost Management)

Assignment Title

: Cost Management Assignment

Section

: 2.4

To

: Shopping Ltd

From

: Assistant Manager

Date

: 5th February 2016

Subject

: Analysis of Major Investment Decision of Shopping Ltd

TABLE OF CONTENTS
Executive Summary ..2
Question 1
a) All departments .10
b) Closure of the restaurant .11
Question 2
Financial and non-financial..3
Question 3
a) Role of management 4 - 5
b) Role of management information system in retail organization ..6
Question 4
Budgetary planning and control system 7 - 8
Conclusion ..9
Appendices 10 - 11
Bibliography .12
Individual contribution13

Executive Summary
Shopping

Limited

Company

has

four

retailing

departments

(Furnishings,

Kitchenware, Menswear and Toys and a Restaurant. Samantha and Albert does not agree
on many issues and often argues. Claude was promoted to manager of the restaurant.
However, Claude does have an explosive temper and has been known to lash out at his
two asisstants. There is no stock control system in operation in the Restaurant. The Kitchen
equipment is quite old and has not been regularly maintained. Deliveries are not checked or
counted in any way and items are placed on any shelves which are free. As a result, staff
often find it difficult to locate products and thus customers are often left waiting for long
periods. However, the most recent financial statements revealed a small loss for the
previous trading period.

Question 2
Financial consequences
Financial consequences of closing the Restaurant Department are financial performances of
each department and another one is effect of closing Restaurant on contribution of other
department.
The financial performances of each department will decrease because people rarely go to
their place so the financial performance will be affected. People will not buy their product
and their profit will decrease day by day if this situation keep going.
If the Shopping Limited decided to close the restaurant department, they get the profit but
the bad effect is the furniture also may loss. Mostly, when comes to the family outing, people
will choose to come to the places that provides restaurant because they do not have to go to
another places just to eat.

Non financial consequences

Non-financial consequences of closing the Restaurant Department are reputation, attitude of
their workers and another one is training of staff. Reputation of Shopping Limited will be
drawn because people will not go to their place and choose to buy products to another
place. Eventually, people will not remember their place as though their restaurant does not
exist. The company will get a bad name because of its reputation declines.
Besides, their chef in the restaurants Claude is a hot tempered person. He cannot control
his emotion in doing his job. He always lashes out at his two assistants. He will throw away
cooked dishes which do not meet his standards. He does not like being program by others.
So he does not qualify to works in this environment.

Question 3(a)
Lack of inventory control
The problem of Shopping Limited is their item are placed anywhere. It is difficult for
employees to locate item and it take longer period to search around the kitchen. Each item
must place in each category so that easier for employees to search the item they need. It
also affected their customer because they have to wait for a long period before the get the
food. It will increase the customers anger and they maybe do not want to go to this
restaurant anymore. If there is no data about inflow and outflow of inventory, they will have
no clue whether the item is already used or missing. Furthermore, customer also can enter
their kitchen so the possibility the items is missing is quite high.

Without a proper

management system in place, it will affect the companys profit.

No budgeting system
It takes a longer period to create a budget especially in a poorly organized environment.
When the company uses the manual system, they only consider financial outcomes.
Budgets are usually concern with the allocation of cash to specific activities. They do not
really expected with the outcome of business transactions which mean they do not deal with
more detail such as the quality of their product or services provided to customers. It is a part
of budget, but they do not take a look onto it. They just only look at their income. Besides,
when the manager revises the menu weekly, it will affect their budget because the price of
each item is not same. They cannot predict how much they can get their profit every week.

No benchmarking
Benchmarking is the process of comparing our business to the other same industries
processes and performance. Shopping Limited Company does not use this approach and
they just set the price by their own without make a search about competitors price. Most
customers will go to each restaurant and prefer the restaurant who gives affordable price
and the food that taste tasty.

No control system
Shopping Limited also has an issue in their controlling system. They have a poor
management. They do not alert with the kitchen equipment. It is quite old and not been
regularly maintained. This is a common knowledge and they should know when to service
the machine. They also do not alert about the safety of their worker. They already know that
their equipment always breaking down, but they still use it and will affect their staffs safety.

Question 3(b)

1.

Organizational Factors
Management Support
There is rigorous need of management cooperation in the design and implementation of
the Management Information System as such no any step can be moved forward without
the consent of management. Also, an innovative idea and planning is very important for
setting up of an effective Management Information System. Thus, the owners are
required to provide their essential views for the implementation of Management
Information System in Shopping Limited.

2.

Environment Factors
External pressure
The Management Information System in relation to the immense stress and pressure
experienced by non-profits seeking to balance their budget, market and deliver services
consistent with their mission, manage human resources, advocate for policy chances
and funding, and promote interagency collaboration and political coalitions.

3.

Technological Factors
Cost Effectiveness
Comparison of relative cost and relative effectiveness of alternative extension delivery
methods.
Perceived benefits
The information use is determined by which costs and benefits are decision-maker
expects from such use. The balance perceived costs and benefits can be called the
appeal of the Management Information System to the user. The benefits of information
use can be related to whether decision-makers perceived information to make and
information need.

Question 4

1.

The setting up of a budgetary planning

Strategic and long range plan

Management is responsible for the successful operation of the system. Management is

responsible for anticipating events, recognizing opportunities, organizing activities,
directing the course, and controlling a variety of factors - ensuring that they function
effectively and cohesively. A well-developed Strategic Plan can be essential to achieving
those aims.

Market research

Research guides your business's marketing plan and the four Ps of marketing: product,
price, place and promotion. This research gives you the information to determine the
essential details of each crucial variable. For example, a customer survey can reveal
how you can improve your product, and what price customers are willing to pay for it.
Sales research helps determine where to place your product -- geographically as well as
the merits of an online strategy. Demographic research details habits of your customers,
including where they get their information so you can make smart advertising buys to
promote your product.

2.

Control system
Production budget
It is expressed in quantitative terms and is being geared to the sales budget. The duties
of a production manager includes analysis of plant utilisation and work-in-progress
budget.

7
3.

Behavioural Problem

Budget system may cause animosity and poor enthusiasm.

Variances are regularly due to altered circumstances, poor forecasting.

Considerable difficulties in setting appropriate levels of attainment may arise.

This should not be relied upon as a substitute for good management.

8
Conclusion
According to this issues, the company have facemanay problem with their workers.
As example, on the restaurant department there were many conflits among their workers.
Firstly, Claude does have an explosive temper and has been known to last out at this two
assistants. As a manager of the restaurant, Claude should control his temper and must show
good attitude to his assitants. Next, there was no stock control system in operation in this
restaurant. Claude should ask their assistant to manage properly the stock to improve their
control system. As the result, this store should improve their ways in manage the flow of the
company. The workers should be train to improve their performance.

9
Appendices
Question 1(a)
Departments

Sales

Furnishing
(000)

Kitchenware
(000)

Restaurant
(000)

Menswear
(000)

Toys
(000)

560

980

410

430

680

255

63

25.5

27

197

400

680

325

229

560

(263)

(53)

(25)

(25.5)

(229.5)

392

690

325.5

230.5

527.5

(75)

(45)

(101)

(65)

(95)

(21)

(10)

(16.5)

(5)

(20)

(14)

(2)

Nil

(1)

(20)

110

57

117.5

71

135

Total
(000)
3060

(-) cost of goods sold

Opening stock
(+) Purchase
(-) Closing stock

Gross profit

(2165.5)
894.5

(-) Variable
Non-management
Wages
Departmental
Expenses
Sales promotion
Costs
Contribution
(-) fixed cost
Net profit

(490.5)
404

82.4

82.4

61.8

144.2

41.2

(412)
(8)

10
Question 1(b)
Departments

Sales

Furnishing
(000)

Kitchenware
(000)

Menswear
(000)

Toys
(000)

560

980

430

680

255

63

27

197

400

680

229

560

(263)

(53)

(25.5)

(229.5)

392

690

230.5

(75)

(45)

(65)

(95)

(21)

(10)

(5)

(20)

(14)

(2)

(1)

(20)

110

57

71

135

Total
(000)
2650

(-) cost of goods sold

Opening stock
(+) Purchase
(-) Closing stock

527.5

Gross profit

(1840)
810

(-) Variable
Non-management
wages
Departmental
expenses
Sales promotion
costs
Contribution
(-) fixed cost
Net profit

(373)
437

82.4

82.4

144.2

41.2

(412)
25

11
BIBLIOGRAPHY
http://www.chinaacc.com/upload/html/2013/07/01/lixingcun106368dc2e104e5cb44e7
ae117752882.pdf
https://www.pwc.com/sg/en/people-and-change/assets/fnf.pdf
https://globaljournals.org/GJMBR_Volume12/6-The-Roles-and-Responsibilities-ofManagement-Accountants-in.pdf
http://deepread.blogspot.my/2011/06/planning-designing-and-implementation.html
http://www.flexstudy.com/catalog/schpdf.cfm?coursenum=9531a
http://college.cengage.com/accounting/resources/students/readings/west.htm

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INDIVIDUAL CONTRIBUTION
My name is Syafika binti Zulkifli, matrix number DBS 150718675. We discuss all
question together and I choose to prepare excutive summary and prepare marginal costing
statement to show contribution for each department and the contributaionand profit of the
store. Then, I provide my ideas for finished this assignment.
My name is Nurin Hadira binti Hassan, matrix nurmber DBS 150718667. I choose
to prepare executive summary and prepare approach the setting up of budgetary planning
and control system for the company and what behavioural problems. I spent two weeks to
finish this question and I learn a lot from this assignment.
My name Nur Hanani binti Zakaria, matrix number DBS 150718672. I prepare to
the financial and non-financial consequences of closing the Restaurant Department. Also,
identify the problem which would need to address in her new role as Management
Accountant of Shopping Limited. When I prepared this assignment, I learn a lot from this
assigment.
My name Siti Nur Shahirah binti Salim, matrix number DBS 150718673. I also
prepare the financial and non-financial consequences of closing the Restaurant Department.
Besides that, I prepare to explain the main factors with influence the design and
implementation of a Management Information System for Shopping Ltd. After finish this
assignment, I learn to solution any problem this situation.

13