BUSN7031 Group Assignemnt 2020 S1 PDF

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The Australian National University Research School of Accounting

BUSN7031 Management Accounting & Cost Analysis Group Assignment (25%)

Due Date: All assignments must be submitted via Turnitin by 4pm Thursday 14 May 2020

BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

INTRODUCTION This Group Assignment must be submitted in teams of either THREE or FOUR members. The final submission will be assessed on its merits irrespective of the number of members in a team. Individual assignments will NOT be accepted unless there are exceptional circumstances and prior approval. All requests for completing the assignment as an individual MUST be sent, with reasons, to the course coordinator email, [email protected], by 24 April 2020.

OBJECTIVES The primary objectives of the assignment are to examine your ability to: (a) inquire and examine an assigned topic area, (b) draft a coherent and concise analysis of the selected topic, (c) increase your exposure and familiarise yourself with the processes associated with the preparation of internal financial reports, (d) develop your skills in dealing with semi-structured problems, (e) consolidate your knowledge and skills acquired through the course, and (f) work effectively and efficiently as an individual and as a member of a team. Consequently, you should be able to analyse complex issues, to formulate well-reasoned and coherent arguments and to reach well-considered conclusions. Also, you should be able to present these conclusions via a written format appropriate for the real-life business environment, and be able to perform the necessary processes to prepare internal reports for decision-making purposes. This satisfies the accounting program knowledge learning outcome of exercising judgement under supervision to solve reunite accounting problems in straightforward context using social, ethical, economic, regulatory and global perspectives.

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

ASSESSMENT This assignment contains two sections and please complete both sections. Section 1

40 marks

Section 2

50 marks

Overall format and presentation

10 marks

TOTAL

100 marks

NOTE: All submissions are assessed on a team basis, i.e., all members of the team will receive the same score. SUBMISSION This group assignment is due no later than 4 p.m. on the due date. ALL assignments must be submitted via Turnitin by 4.00 pm on the due date. A group assignment cover sheet should be attached to the assignment. Do not email your assignment to your tutor or lecturer; assignments delivered in this manner may be deemed non-submissions. Non-submission of an assignment will preclude you from qualifying for further assessments. POLICY ON EXTENSIONS All requests for assignment extensions must be made in advance of the due date to the course coordinator. Significant reasons must exist for an extension and supporting medical evidence may need to be provided. LATE ASSIGNMENT Late assignments without an extension are penalised at the rate of 5% of the possible marks available per working day or part thereof. Late submission is not accepted after the tenth working day after the due date. Late assignments are to be submitted via Turnitin with a note on the cover sheet to stipulate the due date and actual date of submission.

Due Date 4pm Thursday 14 May 2020

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

GENERAL INSTRUCTIONS •

This assignment can be completed in teams of either 3 or 4 students. It is expected that each team will manage the tasks required for the assignment in a way that ensures all members contribute fully and effectively to the completion of the assignment. All members of the team will receive the same score.

•

Only ONE assignment is required to be submitted per team via Turnitin.

•

Please remember to retain the original computer file (including the completed cover page) for your own reference and as insurance in the event that a copy of your assignment is requested.

FORMAT AND PRESENTATION Marks will be awarded for the presentation of the assignment, and for the clarity of content you present. You should ensure that your assignment is well-presented and is as clear and concise as possible. Presentation includes formatting and layout considerations, which assist in conveying information to the reader in a manner that is easy to follow. Ensure that you appropriately cross-reference your work. Also, if you draw on information from other sources, ensure that you apply an appropriate referencing style consistently. Your assignment must be word-processed, using the Times New Roman font size 12 (or equivalent). The line spacing must be a line and a half and there must be a minimum page margin 2.5 cm on all sides. Round figures to 2 decimal points where necessary. Please use the Group Assignment Cover Sheet (available from Wattle) when submitting your assignment. QUERIES All the necessary information you require to complete this assignment is provided in this document. Please do not directly approach individual staff with queries about the assignment. Should it be necessary to ask a question about the assignment, you should email your question to the course convenor.

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

SECTION 1

[40 Marks]

Please solve the following three questions. Question 1

[15 Marks]

1. Brilliant Accents Company manufactures and sells three styles of kitchen taps: brass, chrome and white. Production takes 25, 25 and 10 machine hours to manufacture 1,000unit batches of brass, chrome and white taps, respectively. The following additional data apply:

Projected sales in units PER UNIT data: Selling price Direct materials Direct labour Overhead cost based on direct labour hours (traditional system) Hours per 1000-unit batch: Direct labour hours Machine hours Set-up hours Inspection hours

BRASS 30,000

CHROME WHITE 50,000 40,000

$40 $8 $15 $12

$20 $4 $3 $3

$30 $8 $9 $9

40 25 1 30

10 25 0.5 20

30 10 1 20

Total Direct labour hours are estimated as 2,900 hours. Total Machine hours are estimated as 2,400 hours. Total overhead costs and activity levels for the year are estimated as follows: Activity

Overhead costs

Activity levels

Set-ups

$465,500

95 set-up hours

Inspections

$405,000

2,700 inspection hours

$870,500

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

Required: a. Using the traditional system, determine the operating profit per unit for each style of tap. [2 Marks] b. Determine the activity-cost-driver rate for set-up costs and inspection costs. [2 Marks] c. Using the activity-based costing (ABC) system, for each style of tap:

[8 Marks]

i. compute the estimated overhead costs per unit ii. compute the estimated operating profit per unit. d. Explain the differences between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why? [3 Marks]

Question 2

[15 Marks]

1. Gabba Catering currently sells hot dogs. During a typical month, the stand reports a profit of $9,000 with sales of $50,000, fixed costs of $21,000, and variable costs of $0.64 per hot dog. Next year, the company plans to start selling nachos for $3 per unit. Nachos will have a variable cost of $0.72 per unit and new equipment and personnel to produce nachos will increase monthly fixed costs by $8,808. Initial sales of nachos should total 5,000 units. Most of the nacho sales are anticipated to come from current hot dog purchasers, therefore, monthly sales of hot dogs are expected to decline to $20,000. After the first year of nacho sales, the company CEO believes that hot dog sales will increase to $33,750 a month and nacho sales will increase to 7,500 units a month. Gabba Catering faces a tax rate of 30%. Required: a.

Determine the monthly break-even sales in dollars before adding nachos. [1 Mark]

b.

Determine the monthly break-even sales in units during the first year of nachos sales, assuming a constant sales mix of 1 hotdog and 2 units of nachos. [2 Marks]

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BUSN7031 Management Accounting & Cost Analysis

c.

Group Assignment S1 2020

What are the monthly break-even sales in units if Gabba Catering’s tax rate is reduced to 25%, assuming a constant sales mix of 1 hotdog and 2 units of nachos? [2 Marks]

d.

How many units of each product would be sold if Gabba Catering’s desired an aftertax net profit of $33,444, facing a tax rate of 25%, assuming Gabba Catering sells three units of hotdog for each two units it sells of nachos.

[2 Marks]

2. Auto Tyres has been in the tyre business for four years. It rents a building but owns all of its equipment. All regular employees are paid a fixed salary. During the busy season (AprilJune), temporary help is hired and paid by hour. Utilities and other operating charges remain fairly constant during each month except those in the busy season. Selling prices per tyre average $75 except during the busy season when discounts run above average because a large number of customers buy tyres at this time. A 15% discount is given when two tyres are purchased at one time. During the busy months, selling prices per tyre average $60. The CEO of Auto Tyres is somewhat displeased with the company’s management accounting system because the cost behaviour patterns displayed by the monthly breakeven charts are inconsistent; the busy months’ charts are different from the other months of the year. The CEO is never sure if the company has a satisfactory margin of safety or if it is just above the break-even point. Required: a.

What is wrong with the accountant’s computations?

[5 Marks]

b.

How can the information be presented in a better format for the CEO? [3 Marks]

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

Question 3

[10 Marks]

Gosford Manufacturing Company had the following account balances for the year ending 31 December 2019: Work-in-process inventory (1 January 2019)

$140,400

Work-in-process inventory (31 December 2019)

$171,000

Finished goods inventory (1 January 2019)

$540,000

Finished goods inventory (31 December 2019)

$510,000

Direct materials used

$378,000

Indirect materials used

$84,000

Direct manufacturing labour

$480,000

Indirect manufacturing labour

$186,000

Plant supervisory salaries

$28,800

Salespersons’ company vehicle costs

$12,000

Depreciation of manufacturing equipment

$264,000

Depreciation of office equipment

$123,600

Miscellaneous plant overhead

$135,000

Plant utilities

$92,400

General office expenses

$305,400

Marketing distribution costs

$30,000

Required: a. Prepare a cost of goods manufactured schedule for 2019.

[5 Marks]

b. Revenues for 2019 were 2 million. Prepare the income statement for 2019.

[5 Marks]

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

SECTION 2

[50 Marks]

(1) The Enterprise Resource Planning (ERP) system implementation is challenging because it results in significant changes to existing business processes and deployment of new technologies to support the new business processes (Morris and Venkatesh 2010). One of the key reasons for implementation failures is organizations’ inability to understand and manage employees’ perceptions of changes during the implementation. Please read the research paper Morris and Venkatesh (2010) about the impacts of ERP system implementation on employees’ job satisfaction. Requirement: •

[25 Marks]

Please write a maximum two-page analytical report, excluding references, to discuss how ERP systems change employees’ perceptions of their jobs.

•

The analytical report should include at least the key findings and arguments of Morris and Venkatesh (2010).

•

When writing this analytical report, please use Morris and Venkatesh (2010) as a starting point, and you are encouraged to search and use other ERP-related research papers to help you write this analytical report. Please use in text citations wherever necessary and include a reference list.

(2) Please review relevant literature and write a maximum two-page analytical report, excluding references, to discuss critical factors for successful implementation of ERP systems. Please use in text citations wherever necessary and include a reference list. [25 Marks]

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BUSN7031 Management Accounting & Cost Analysis

Group Assignment S1 2020

ASSESSMENT CRITERIA Your assignment will be assessed based upon the following criteria: -

compliance with relevant management accounting principles and internal accounting practices.

-

depth and breadth of coverage, critical elements and structure (e.g., level of analysis, level of research, relevance of discussion), and language and conventions for a business alike report (e.g., consistency with a professional presentation). See Grade Related Descriptors below. Note: A well written, structured, and organised assignment will receive low assessments if it is not relevant to the given problem and circumstances.

The criteria listed above are not mutually exclusive but are complementary in the overall assessment of the assignment. Grade Related Descriptors Grades

Depth and Breadth of Coverage

Critical Elements

Structure, Language and Conventions

High Distinction 80% 100%

All aspects of the issue(s) were covered in a thorough way.

The assignment shows All aspects of the great depth of thought, assignment conform excellent development of to a high professional discussion, logical analysis standard. and insight into the subject.

Distinction 70% - 79%

Most aspects of the issue(s) were addressed in great depth.

Most aspects of the assignment conform to a high professional standard.

Credit Pass 60% - 69%

Most aspects of the issue(s) were addressed adequately.

The assignment shows some evidence of supported by logical discussion and insight into the subject. The assignment shows evidence of elementary analysis and the development of discussion.

Pass 50% - 59%

Key aspects of the issue(s) were addressed adequately.

The assignment demonstrates basic understanding of the topic.

The assignment displays basic report structure.

Fail < 50%

Responses were superficial and / or inadequately addressed the issue(s).

The assignment demonstrates limited understanding of the topic.

The assignment is not of a professional standard.

Most aspects of the assignment conform to an acceptable professional standard.

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