Acc3602 [NATIONAL UNIVERSITY OF SINGAPORE, Semester 1 (20102011) Examination ACC3602 MANAGERIAL PLANNING AND CONTROL November 209 - Time Allowed 2 Hoars INSTRUCTIONS TO CANDIDATES 1, This examination paper contains FOUR (4) questions and comprises FOUR (4) Printed pages. 2 Answer ALL questions inthe answer booklets provides. 3. Students are allowed to use University approved calculators. 4. This isa Closed Book Examination,QUESTION 1 25 marks) Galvor Company is a case discussed in lass. (1) Why was contol at Galvar much looser before it was purchased by UE? (12 rats) (2) Why sid UE equi thst Galvor management meet monty budget igus fr net income, inventory and receivables? Is this kind of conl necessary? Is there teatr way? (3 mas) QUESTION 2 25 marks) (Cold Storage is one of many supermarket chains in Singapore, The following self escribed marketing philosophy is found on its website: “Established in 1903, Cold Storage was the child ofthe Industrial Revolution and Pax Britania, when Singapore was the “Clapham Junction ofthe Eastern Seas”. Together With electcity nd refrigeration, it allowed European agents of change - the colonial civil servants, merchants, miners, planer, traders -o acclimatise to living in the tropics. It can thus be sai that if there were no Cold Storage the modern history of Singapore would ‘probably be quit differen. Init early days the Companys primary concern was to have a ‘quick and profitable turnover of its imported meat and range of products. Later, Cold ‘Storage shifted from counterservce to self service, introducing the supermarket 10 Singapore Thea the Company pioneered the concep of multiple retailing, captalising on bulk buying and economies of scale. Aways, the strategy iso bring Cold Storage to be ‘where consumes are ‘As the islands oldest established supermarket operator with over 100 years of experience in Singapore, Cold Storage the market leader in Singapore, constantly intcoduced new store conceps thet set clear industry standards twas The Trt supermarket in Singapare to receive the CASE TRUST mark introduced by CASE in 1998 to distinguish companies that receive a high degre of consumer confidence. ‘Cold Storage was the fist supermarket in Singupore to receive MUIS cetifiation for its supermarket operations in Causeway Poi, In 1998, forthe ist time in Singapore’ history, a supermarket realer was abe o provide Mustims the assurance of all parehases,ACC3602 In recognising the importance of freshness guaranteed, Cold Storage stated the Fresh Food Distribution Cenire in Singapore back in 1999, x composite mult-temperature ‘warehousing for fresh and frozen food distribution. Cold Storage was te first supermarket retailer in Singapore to put a fully integrated system in place to ensure cold chain strbetion system from supply chain to store level to ensure the safe handling of| perishable items - from paddock to palate - every step of the way.” Required: (4) Given the intoduction and what you know about Col Storage, what isthe brand's ‘competitive advantage? (10 marks) (2) Given its competitive advantage, what differences are we likely to observe in control system design between Cold Storage and its competitors, suchas Sheng. ‘Song and Gians? (15 mseks) QUESTIONS @5 marks) FFunndy i. leading maker of consumer electronics, with headquarters located in ‘Singapore. It as factories and marketing units aroand the world. Total sales and proft in 2009 reached SGDS1.3 billion and 90 million respectively. These represent growth of 20% and 15% respectively from 2008. Funndy has many unit located in China, some being exporters, and others importers! ‘marketing units, Among these are three major units: Fuinddy-G, is located in Guin, makes eletroni prodets based on Fund's proprietary technology, and sll its entire ‘output fo buyers throughout China. Funndy-S,loceted in Shenaheng, makes consumer lectronis locally, and exports its entire output to Singapore. Funndy-B, located in Beijing, imports consumer electronics from the Singapore plant fr sales to customers in Beijing areas. Funndy managers are required to meet budget numbers in local curencies and Singapore dollars. Bach ofthe thee ui ina had an identical profit budget to meet for the year 2001-The budget was prepared under the assumption thal each SGD was worth S CNY (Chinese Yuan). The budget in millions) i as follows: eny sc Sales 250 50 coos 15030 Overhead §— 25S Profit BS ‘Overhead consists of salaries for locel staff and expenditures incured locally4 ACe3602 Actual average exchange rate in 2009 was 45 CNY for one SGD. Actual performances of ‘he thee units in Chine are stated in both CNY and SGD as pe the actual average exchange rate of 45 Funndy-G Funndy-S Funndy-B cxy scp | cy sop cxy sop Sales 250 555 | 275 eld 255 367 cocs 10333 | 160 355 175 389 Overhead a 35__| 215 ol 2s 5 Profit 33165 | 875 194 55 we 2009. Assuming both China and Singapore had an inflation rate of 1% in 2009, Please write report on the performances ofthe managers ofthe thee Funndy units i China, relative to the common, Dudget. QUESTION 4 25 marks) (®) Explain why the financial crisis that peaked a! the bankruptcy of Lehman Brother in September, 2008 was largely due to executive compensation practices in the US, ‘as many have argued. (8 marks) ©) Why éo poor practices in executive compensation have pethaps greater effects on banking induscies than oer industies? (8 marks) ©) Sage hangs comension poly pve since inthe fae. © marks)