BM056-3.

5-3 MAT

Page 1 of 2

ANSWER ALL QUESTIONS

QUESTION 1
A firm of solicitors is using budgetary control during 2010. The senior partner estimated the
demand for the year for each of the firms four divisions: Civil, Criminal, Corporate, and
property. A separate partner is responsible for each division.
Each divisional partner then prepared a cost budget based on the senior partners demand
estimate for the division. These budgets were then submitted to the senior partner for his
approval. He then amended them as he thought appropriate before issuing each divisional partner
with the final budget for the division. He did not discuss these amendments with the respective
divisional partners. Actual performance is then measured against the final budgets for each
month and each divisional partners performance is appraised by asking the divisional partner to
explain the reasons for any variances that occur.
The Corporate partner has been asked to explain why her staff costs exceeded the budgeted costs
for last month while the chargeable time was less than budgeted. Her reply is below:
My own original estimate of staff costs was higher than the final budgeted costs shown on my
divisional performance report. In my own cost budget I allowed for time to be spent developing
new services for the firms corporate clients and improving the clients access to their own case
files. This would improve the quality of our services to clients and therefore increase client
satisfaction. The trouble with our present system is that it focuses on financial performance and
ignores the other performance indicators found in modern performance management systems.
REQUIRED:
(a)
Discuss the present budgeting system and its likely effect on divisional partner
motivation.
(15 marks)
(b)
Explain two non-financial performance indicators (other than client satisfaction and
service quality) that could be used by the firm.
(10 marks)
(Total: 25 marks)
QUESTION 2
Discuss the potential benefits to the company of using an activity - based costing system, in the
areas of planning, control and decision making.
(Total: 15 marks)
(Overall total: 40 marks)

APU Level 3

Asia Pacific University of Technology & Innovation

201412

BM056-3.5-3 MAT

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MARK ALLOCATION
Written presentation
Assessment Criteria

Weight

Marks

Clarity about the purpose of the assignment

10%

10

Format clear writing in an appropriate style, with proper formatting and 10%
paragraphing

10

Language appropriate application of grammar and sentence structure

20%

20

Analysis critical analysis and discussion with proper use of concept and 50%
principles

50

Conclusion a conclusion which draws application from the foregoing and 10%
summaries the main purpose of the discussion

10

Total

100

100%

Grade

Description of performance level

80% - 100%

There were mature and interesting points based on your research and
reading. Each point supported with valid explanation. Shows
understanding of subject matter. Adequate reference given. No
grammatical errors or spelling mistakes.

60% - 79%

There were sufficient points raised with valid explanation provided. There
is adequate understanding of subject matter. Minor grammatical errors
and spelling mistakes.

40% - 59%

No clear understanding of research subject. Insufficient points given and

explanations are unclear or not helpful in clarifying points. Not enough
reference given. Major grammatical and spelling mistakes.

Below 40%

You did not display any understanding of the subject matter. Points are
off-topic and do not tie back to research. No understanding of theories
and concepts taught. Not enough reference given. Numerous grammatical
and spelling mistakes.

APU Level 3

Asia Pacific University of Technology & Innovation

201412