ACCT19060 Term 2 2019 Assessment task 2: Part B Assignment Due date: Monday of Week 8 [11:45pm [AEST] 9 September 2019] ASSESSMENT Weighting: 15% 2 Objectives This assessment item relates to learning...

ACCT19060 Term 2 2019

Assessment task 2: Part B Assignment

Objectives

This assessment item relates to learning outcome 2.

Details and instructions

This is the second part of assessment task 2. Similar to Part A, you can choose to do Part B as an individual or you can do it in a pair (thus maximum 2 students). For administration purposes, you must notify the Unit Coordinator (UC) via email if you intend to work in a pair by 4pm on Monday 26 August. Please provide the following information in the notification email: both student names, student ID numbers and the campus both are enrolled at. The UC will then grant you permission to work in a pair. Please do not work in a pair unless you have received permission to do so. If you fail to email the UC by this due time and date, you will not be allowed to work in a pair. If you choose to work in a pair without the UC's permission, you will share the mark 50/50 with the student you paired with (thus you will only receive 50% of the mark). Retain a copy of your assignment for your records.

Academic Learning Centre

To ensure you understand the questions, instructions and expectations, it is highly recommended to seek help and guidance from the Academic Learning Centre (ALC). The ALC can help you with your writing skills and check your narrative answers for grammatical correctness and that your arguments and explanations are clear and logical. The ALC will also help you to ensure that you have actually answered the questions.

Formatting

Please be mindful that assignments are marked in digital format. To assist with making the marking process efficient, effective and not time-consuming, you must comply with the following formatting requirements:

· Font: Times New Roman, 12 point, 1.5 line spacing

· Document type: Your answer for all questions must be in
Word
format. This will allow the marker to use track-changes to indicate where you received marks. Please do
not
submit a
pdf document as this will not be marked. Also, please
do not submit an excel file for your figures and calculations or copy and paste a table from an excel spreadsheet for any calculations into your Word document.
Use the
“insert table” function within Word and type all figures into the table. Show all calculations below the table. Ensure the marker will be able to use the track-changes function in Word to indicate in your table where you received or lost marks for your figures.

· Page: Portrait orientation

· Footer: Your full name(s) and student ID(s), page number and number of pages (e.g. Cat Bird s0123456, page 1 of 3)

· Marking criteria sheet: Ensure you type in your name(s) and student ID(s). Ensure the marking criteria sheet is the
first page
of your submitted assignment.

· File saving convention: Include your student name(s) in the name of the file when you save the document, and ensure that you include the appropriate .doc or .docx at the end. For example, save your file as: Cat Bird.docx

Please note that 3 marks are allocated for complying with the above requirements, including attaching the marking criteria sheet as the first page of your submission.

Plagiarism

Work submitted by a student that is the work of another person with no referencing or acknowledgement, is considered to be plagiarism. Turnitin will compare the similarities of your assignment when you submit it on Moodle. If the turnitin score is high, your assignment will be investigated for possible plagiarism. Such investigation may take a considerable amount of time and hence your assignment will not be returned within the expected timeframe. Furthermore, if there is evidence of plagiarism, a Plagiarism Incident Report (PIR) will be lodged. You will then receive notification from the University with details of the necessary course of action.

You can check the turnitin score of your assignment when submitting it. Please note: if you choose to redo and resubmit your assignment in the hope of reducing the turnitin score, it will take 24 hours before turnitin will give you another score. Also, be aware that the turnitin scores keep on changing as and when more students submit their assignments. Consequently, as similarities between assignments increase, the turnitin score of your assignment that the UC will get in Moodle may be different as to the score you received initially. It is therefore possible that your assignment may be investigated for plagiarism even though you may believe that your turnitin score is low. To avoid any concern, anxiety and stress about the turnitin score,
do your own work.

Submission requirements

You must submit your assignment electronically through the secure upload facility in the Moodle system.
Please ensure that the marking criteria sheet (page 5 of this document) is the first page of your assignment and that you completed the required information.

If you do the assignment in a pair, only upload the file once in one student’s Moodle account.
The marked assignment will be returned to that student’s account. Therefore, please contact the student who uploaded the pair file to get a copy of the marked assignment.

Be mindful that there is a 5% penalty per day for late submission. You will be penalised immediately with a full day’s penalty if you submit your assignment after the due time, even though you may only be a few hours late. The penalty is not proportioned to the number of hours you submit your assignment late.

Assignment Question 15% Weighting

Part B – Short-run decision making: Relevant costing 45 Marks

Question 1: Keep or buy 10 Marks

Lee Tokoroa purchased a 2008 Ducati motorcycle for $17 800. Since purchasing the motorcycle, he has spent the following amounts on parts and labour:

Unfortunately, the turbo charged engine has some technical issues and would require the following repairs:

Lee did a search on the internet and found a 2010 Ducati motorcycle in an excellent condition for $18400. He advertised the 2008 Ducati motorcycle and learned that he will only be able to sell it for $12 800. If he buys the 2010 Ducati motorcycle, he will pay cash but can only do so once he sold the 2008 Ducati motorcycle.

Lee is distressed because he has already spent $25 400 on the 2008 Ducati motorcycle. He is deciding whether to restore the 2008 Ducati motorcycle or to buy the 2010 Ducati motorcycle.

Required:

(a)
Assume that Lee will be equally happy with the 2008 or the 2010 Ducati motorcycle. Should Lee buy the 2010 model or should he restore the 2008 model. Justify your answer and show your calculations to support your decision.
(7 marks)

(b)
Explain which costs are irrelevant to Lee’s decision-making. Justify your argument.
(3 marks)

Question 2: Special order decision 12 Marks

Jamala Company produces air conditioners and has a production capacity of 300 000 units per year. Because of a downturn in the market, the company expects to produce only 180 000 air conditioners for the next year. The company has the following unit cost:

The company also has fixed selling costs totalling $500 000 per year and variable selling costs of $50 per unit sold. The air conditioners normally sell for $1 200 each.

At the beginning of the year, a customer from a geographic region outside the area which Jamala normally serves offered to buy 100 000 air conditioners for $700 each. The customer also offered to pay all transportation costs. Since there would be no sales commissions involved, this order would not have any variable selling costs.

Required:

(a)
Based on a quantitative analysis, should Jamala accept the order? Discuss which costs are irrelevant.
(7 marks)

(b)
What qualitative factors might affect the decision? Assume that no other orders are expected beyond the regular business and the special order.
(5 marks)

Question 3: Make or buy 20 Marks

Better Pooch Veterinary Services operates in a large regional area. Currently, it has its own laboratory to produce plastic implants for cruciate ligament injuries in dogs. There are two types of implants: Small and Large. The unit costs to produce the implants are as follow:

Details of fixed overhead is as follows:

Overhead is applied on the basis of direct labour hours. These rates were computed by using 5 500 direct labour hours.

A laboratory in a metropolitan area has offered to supply Better Pooch all the implants it needs. Its price is $125 for Small implants and $150 for Large implants. However, the offer is conditional on supplying both types of implants – it will not supply just one type for the price indicated. If the offer is accepted, the equipment used by Better Pooch laboratory would be scrapped as it is old and has no market value. The laboratory will also be closed. Better Pooch uses 2 000 Small and 600 Large implants per year.

Required:

(a) Advise Better Pooch whether they should continue to make their own implants, or if they should purchase them from the external supplier. Show the dollar effect if the implants are purchased from the external supplier to support your argument. State which costs are irrelevant and why.
(13 marks)

(b) Define what is meant by ‘qualitative factors’ and discuss at least four (4) qualitative factors that Better Pooch has to consider in making a decision. You will receive 0.5 mark for mentioning a factor and 1 further mark for discussing and elaborating on the factor. You will not receive any marks for discussing quantitative factors.
(7 marks)

Marking criteria sheet

Additional comments from marker