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Module 1
Assignment 1
July 15, 2009

Topic: Performance Management
Welcome to Module 1 of the Strategic Leadership Program (SLP)! If you have not already done so, read the Program Manual located in the Reference Material Section of the SLP home page. It provides you with important introductory information about the SLP.

Module 1 focuses on performance management, performance measurement, risk management and governance, and financial reporting. Many of these task-related functions assist in a variety of decision-making scenarios. A number of organizational concerns in these topic areas would be centred on the following: 1. Preparing reports on a product or geographic segment to determine where the organization generates cash and profits;

2. Determining the effectiveness of costing systems for their appropriateness for an organization;
3. Introducing the main concepts of strategy to facilitate an understanding of the big picture;
4. Constructing and analyzing a cash flow statement to determine cash needs; 5. Looking at different short-term investment strategies as a means to effectively utilize excess cash;
6. Examining the effectiveness of internal control systems within an organization; 7. Reporting results using GAAP or a disclosed basis of accounting; and 8. Analyzing a company’s various product lines.

Management accountants are often called upon to provide the analysis required for pricing decisions, such as cost-volume-profit, product costing, expected value, break even, contribution margin, and sensitivity analyses. Proper and accurate analysis is critical if management is to make well-informed decisions.

Assignment 1 covers the topics of both short-term and long-term pricing decisions. The pricing decision is a critical one for organizations; however, before any pricing decision can be made, it is important that the factors influencing product and service pricing are completely understood. Consideration has to be given to both internal and external factors.

CMA Canada


Learning Outcomes
By the end of the assignment, candidates will be able to analyze the results of a market study and cost analysis, and recommend a pricing strategy for a not-for-profit organization.
Due Date
Please refer to the Schedule accessed from the left-hand menu of the home page. Required Readings
1. “Cost Accounting: A Managerial Emphasis,” 4th Canadian Edition. Authors: Horngren, Foster, Datar, Teall and Gowing (posted in the Online Library). a) Chapter 11 – Decision Making and Relevant Information

b) Chapter 12 – Pricing Decisions, Product Profitability Decisions, and Cost Management
2. “Business Report Guidelines,” located in the Reference Material section of the SLP website.
3. “Format Specifications for Assignments and Board Report,” located in the Reference Material section of the SLP website.
4. “Steps for Approaching Business Strategy,” located in the Reference Material section of the SLP website.
Candidates are encouraged to review the “Problems for Self Study” and “Decision Points” in the textbook chapters to ensure an understanding of the concepts presented. Assignment
Complete the following assignment, which will be submitted to markers for assessment and feedback.
M1A1 – Fairview National Planetarium – Pricing Decisions Required:
Read the Fairview National Planetarium (FNP) case in Appendix A. As Linda Fournier, CMA, the newly hired controller, prepare a report to FNP’s board of trustees that addresses issues 1 and 2. For this assignment, ignore issues 3, 4 and 5 (e.g. do not consider the computer-related costs in addressing the admission pricing policies) – these issues will be covered during the Interactive Session. Be sure to clearly identify any uncertainties encountered and explain assumptions made.

The report should follow the characteristics of an effective short business report provided in the Business Report Guidelines. The report should be in the form of a memorandum addressed...
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