You have just been hired as an accountant by Marina Sport Technologies Pty. Ltd. Marina Sport Technologies was setup by Daniel Bryant, an engineer by training, in 2006 and has established a reputation for producing high quality and relatively inexpensive inflatable stand up paddle boards (more commonly known as iSUPs).
When you arrived at work for the first time, you were shown into the office of Daniel Bryant. “Well,” he said. “I have heard quite a few good things about you, so let’s get you straight into the job. We have been in operation for close to 13 years now and I have never seen the need for an accountant. However, here you are, not only an accountant, but a management accountant, to boot. I need to know exactly what is a management accountant and how you can contribute to my company. I don’t mean to put you in a spot right now, so you can include that in the report that you will be sending me on a few other issues as well.”
“The guys here have been telling me that you are the best candidate for the job, so there are several issues I need you to address. Firstly, Alistair Cook, my purchasing manager has informed me that one of our suppliers, namely Thejo Rubbers, is going into liquidation. They have excess stock of H-valves, which we use quite a bit of. However, my concern is how Alistair found out about Thejo going into liquidation. There’s nothing reported in the news as yet and no one else seems to know anything about it. I have heard that Alistair is seeing someone from Thejo, but I cannot confirm that. Is there anything wrong if we decide to proceed with the purchase of H-valves? We do not really need the stock right now, and we do not have spare cash lying around, but if the price is really good due to their liquidation, then it might make sense for us to buy them now. Can you work out whether there is any issue with this proposal from Alistair?”
“Another issue we have is with our cash flow. We are really tight on cash as it stands, because a lot of it is tied up in the stock of iSUPs. Joseph Yarran, our production manager, is suggesting to us that we could potentially cut back on our maintenance schedules. We normally conduct quarterly maintenance on the equipment that we have, however, Joseph is recommending that we do it once a year as the machines are working fine and operating way below capacity anyway. I know that this is not in compliance with our maintenance schedule, but it will improve our cash position. Can you also work out whether there is anything wrong with us doing it as Joseph suggested?”
“Finally, we have major issue that needs to be addressed. Gemma Nyoman, our software manager, is requesting to attend a users’ conference in Phuket. Normally she attends quite a few of these a year as she is responsible for identifying the right software for us. “
“We are currently in process of replacing our CAD-CAM* software and we have received bids from six different software firms. Gemma is reviewing these bids and will ultimately make a decision on which bid to proceed with.”
“Horizon 1-2-3 is an aggressive software developer. Every six months, Horizon has a three-day users’ conference in South East Asia. Each conference has substantial time allowed for ‘rest and recreation’. Horizon has offered Gemma an all-expenses-paid visit to the upcoming conference in Phuket, Thailand. Gemma believes it will be very useful to talk to other users of Horizon software, to determine its user friendliness and capabilities. She is especially looking forward to the visit because she has close relatives in the Phuket area.” “Now normally, I would just let her go on the conference. However, I have received an anonymous letter arguing that Horizon is receiving unfair, favourable treatment in our software decisionmaking process. The letter specifically mentions Gemma’s upcoming “all-expenses-paid package to Phuket during Australia’s cold winter”.”
“I have spoken to Gemma about this and she feels deeply offended. She says she has made no decision yet, and she believes that she is very capable of making a software choice on the merits of each product. And I do believe her. However, this letter is very troubling. Can you shed some light on this issue? Should I still allow Gemma to go to this conference? What are the pros and cons of allowing Gemma to go?”
“Can you get me all of these in a report within three days? I really do not want to read a thesis, so keep it succinct and concise, no more than 10 pages. Thanks mate.”
ScholarMatic: Explanation & Answer
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