AYB321 Strategic Management Accounting

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AYB321 Semester 1, 2011 Page 1 AYB321 Strategic Management Accounting Tutorial Solutions TUTORIAL 4 BUDGETING SYSTEMS Analytical Thinking, Critical Thinking and Problem Solving Questions: Scenario for all three analytical q uestion s : Big Byte Computing Co. (BBC) develops specialised software for the security industry. BBC has two ‘off the shelf’ software products , one that manages the storage and retrieval of surveillance video, and the other that manages alarm systems. They also provide a consulting service that assists businesses to customise and implement these software solutions. BBC has a product - based structure, with a business unit manager responsible for each of the three products, as follows: A high level description of BBC‘s annual financial planning and control process is as follows (BBC has a 30 June year end):  January: The senior executive team meets to review BBC’s current strategy, and produce a ‘strategic plan’ for the following five financial years. This strategic plan, including high level profit expectations, is communicated to the wider management team.  Early February: The three BU managers produce their budgeted income statements for the following financial year, and submit them to the budget committee (consisting of the Chief Executive Officer, Chief Finance Officer and the Executive Manager HR and Strategy ) .  The budget committee reviews the BU’s submissions, and communicates any changes required. CEO Manager: Surveillance Software Manager: Alarm System Software Manager: Consulting CFO EM: HRS
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