案例
Questions
Thyme Engine Products (Thyme) manufactures（制造）jet aircraft engines（引擎）for the commercial aircraft（商用飞机）market. This is a worldwide business although Thyme’s production and development are all based in the country of Beeland. Thyme is a listed company and its stated overall objective is to be ‘a world-class jet engine manufacturer trusted by our customers to deliver excellent products’. Its promise to its shareholders is that it will maximise their returns.

The strategy to achieve this is to use world-class engineering to design engines and high quality production and customer service in order to drive profitable growth.
Thyme’s share price has recently suffered（变差）as a result of the failure of a new engine design which led to large cash losses and a difficulty in obtaining new financing. There has also been a bribery scandal（贿赂丑闻）involving a senior manager and one of its key customers. As a result, a new chief executive officer (CEO) has been employed and she has begun a major review of systems at Thyme.

The first area which the CEO wants to examine is the information given to the board for strategic decision-making in both the planning and controlling of the business. The government of Beeland has been encouraging information sharing between businesses and has recently sponsored awards for management accounting. The winner of the engineering sector has produced a sample dashboard template (with dummy（虚拟的）figures) for an annual review and this is given in Appendix 1.

The CEO realised that the winner had a very similar overall objective and strategies to Thyme and wants to know what it is about this dashboard that helped it win the award. She does not want a new dashboard for Thyme at this stage but there may be some useful, specific comments to make about the contents of the dashboard given Thyme’s recent problems.

The CEO has also recently been reading about integrated reporting and in the light of this review of the dashboard, the CEO has also asked for your views on how integrated reporting might impact on the type of information prepared by the company’s management accountants.

As high quality engineering products lie at the heart of Thyme’s competitive advantage, there has been a total quality management (TQM) approach to the management of all resources and relationships throughout the business.
Thyme currently has a project under consideration to develop a new simple jet engine which would compete in the crowded market（拥挤市场）for small corporate jets. In order to compete in this market, it is believed that a target costing approach to this new engine would be beneficial. The CEO wants you to calculate the target cost gap for the new engine using the data in Appendix 2. Next, she wants to know how the use of target costing would fit within the existing TQM approach for this new engine.

The new engine project has further raised the profile（印象）of quality as a broad issue at Thyme and the CEO wants your advice on the costs associated with quality. She needs to know the cost of each of the four categories of quality costs. She has gathered data in Appendix 3 for this exercise.
She is happy that she has identified that prevention costs are complete but is worried that some of the possible costs for the other three categories are missing and needs suggestions of cost areas to be examined to identify these missing items. Finally, she needs advice on the relative importance to Thyme of each of the four categories.

Required:
Write a report to the CEO of Thyme to:
(i) Evaluatewhy the dashboard in Appendix 1 was award winning, as requested by the CEO.
(ii) Explainbroadly the role of the management accountant in providing information for integrated reporting.
(iii) Calculatethe target cost gap for the new engine (using the data in Appendix 2) and assess how the use of this target cost will fit within the TQM approach.
(iv) Categoriesand calculate the costs of quality at Thyme (given in Appendix 3). Suggest cost areas to be examined as required by the CEO, and evaluate the relative importance of each category to Thyme.

Evaluate
Actual meaning: Determine the scenario in the light of the arguments for and against
Key tips: Mention evidence/case/point/issue to support evaluation.
Explain
Actual meaning: Make an idea clear. Show logically how a concept is developed. Give the reason for an event
Key tips: Don’t just provide a list of points, add in some explanation of the points you’re discussing.

Recommend
Actual meaning: Advise the appropriate actions to pursue in terms the recipient will understand
Key tips: Give advice or counsel.
Calculate
Actual meaning: To ascertain by computation, to make an estimate of; evaluate, to perform a mathematical process
Key tips: Provide description along with numerical calculations.

Commentary:
The revenue growth of the business remains strong above the average growth for the sector of 1·5%.
EVA is positive and growing indicating increased shareholder wealth.
Healthy and continuing growth in market share reflects an increased number of class-leading products and improvements in ‘right on time’ service to customers.
There have been no major new business risks arising during the period while market volume growth continues as expected.

Appendix 2
New jet engine
$’000/engine
Competitor price 2,500
Rawmaterials200
Subcomponents bought in 600
Skilledlabour 625
Generallabour 125
Production overheads 275
Planned profit margin 15%
Notes:
1. Design and development has cost $120m and the engine is expected to sell approximately 1,200 units over its lifetime.
2. Sales and marketing costs are expected to be approximately 20% of the selling price.
3. The planned selling price is expected to match the competitor’s price with the brand reputation of Thyme providing the competitive edge.

Appendix 3
Quality costs identified in current year
$m
Repairs and replacements under customer warranties 223
Customer relationship management – complaint handling 56
Performance testing of final assembly 110
Performance testing of subcomponents from suppliers 28
Costs of re-inspection after repairs arising from final assembly testing95
Training in quality control 11
Maintenance of inspection equipment 36
Notes:
1. The company spent $92m in the year buying higher quality raw materials to use in manufacture.
2. The company’s revenue was $11,500m in the current year.