HBR Luotang Power Questions
2
Questions: Luotang Power 1. Prepare a presentation for the HT Power Board of Directors to review the performance of the Luotang Project. Pay particular attenti on to questions that may be raised concerning the accuracy and meaning of the volume variance and comparison with the standard cost metrics provided to you. Focus your discussi on on changes in the input variables which d etermine re venue and expenses in this industry. 2. Assuming that the heat content of the coal was at the mid-point of the no-adjustment range in 2006, how much of the deterioration could be explained by Mr. Tan’s suspicion that they were being shipped lower-quali ty coal? You may assume that the adjustment mech anism relating to the moisture content of coal adequately protects the project company when high water content coal is delivered and the effects are generally linear. 3. What changes, if any, would you recommend be made in the management accounting performance system to improve the reporting and evaluation of Luotang Power Project?
Transcript of HBR Luotang Power Questions
7/27/2019 HBR Luotang Power Questions
http://slidepdf.com/reader/full/hbr-luotang-power-questions 1/1
Questions:
Luotang Power
1. Prepare a presentation for the HT Power Board of Directors to review the performance of the
Luotang Project. Pay particular attention to questions that may be raised concerning the accuracy
and meaning of the volume variance and comparison with the standard cost metrics provided to
you. Focus your discussion on changes in the input variables which determine revenue and
expenses in this industry.
2. Assuming that the heat content of the coal was at the mid-point of the no-adjustment range in
2006, how much of the deterioration could be explained by Mr. Tan’s suspicion that they were being
shipped lower-quality coal? You may assume that the adjustment mechanism relating to the
moisture content of coal adequately protects the project company when high water content coal is
delivered and the effects are generally linear.
3. What changes, if any, would you recommend be made in the management accounting performance
system to improve the reporting and evaluation of Luotang Power Project?
