CC203 Assignment B1 T1 2018 Questions.docx
Unit:ACC203 – Management Accounting Submission Date:7th April 2018 before 23.59 pm Weighting:The assignment is worth 40% of the total unit weight. Instructions: 1. Students are required to cover all stated requirements. 2. Your answer must be both uploaded to Moodle in word file and no hard copy needed. 3. You need to support your answers with appropriate Harvard style references where necessary. 4. Only include information in your appendixes that has been directly referred to in the body of your document. 5. Include a title/cover page containing the subject title and code and the name, student id numbers. 6. Please savethe document as ACC203_B1_T1_first name_Surename_Student Number Eg: ACC203AT2_John_Smith_20180000 1 You are required to finish each of these questions, total 40 marks. Please give the solutions in detail, show calculations and submit the solutions to Moodle using a single file, it can be Excel format, Word format or PDF format, no requirement on word limits, if use any references, please refer to Harvard style. Question 1: Designing a new management accounting system (10 Marks) You have just been appointed as the new management accountant to manage the transition of the existing Royal Adelaide Hospital to the proposed new site. The hospital has a number of separate departments responsible for direct patient care, such as Accident and Emergency, Intensive Care, Neurology, and Cardiology, as well as a number of support departments such as Radiology and Patient Records. You are a little uncertain as to what your role will be in this new hospital, as consultants have been engaged to design the new management accounting systems. You thought that as a management accountant you would be responsible for developing the new systems! Required: 1. Write a report to senior management explaining how you, as the management accountant, may contribute to the design and operation of the new management accounting systems for the new hospital. 2. Outline the types of management accounting information that you believe senior managers may require on a regular basis (say, weekly and monthly) to manage the operations of the new hospital. Consider both financial and non-financial information. 3. The new hospital plans to invest in the latest computer technology to run various aspects of the organisation, including the management information systems. Discuss the opportunities that this may present for the way in which you supply weekly and monthly reports to managers. Question 2: Schedules of cost of goods manufactured and sold; income statement (10 Marks) The following data refer to Flintoff Fashions for the current year: Sales revenue$570 000 Work in process inventory, 31 December18 000 Work in process inventory, 1 January24 000 Selling and administrative expenses90 000 Income tax expense54 000 Purchases of raw materials108 000 Raw material inventory, 31 December15 000 Raw material inventory, 1 January24 000 Direct labour120 000 Electricity: plant24 000 Depreciation: plant and equipment36 000 Finished goods inventory, 31 December30 000 Finished goods inventory, 1 January12 000 Indirect material6 000 Indirect labour9 000 Other manufacturing overhead48 000 Required: 1Prepare the schedule of cost of goods manufactured for Flintoff Fashions. 2Prepare the schedule of cost of goods sold for Flintoff Fashions. 3Prepare the income statement for Flintoff Fashions. 4Construct an Excel® spreadsheet to solve all the preceding requirements. Include formulas in your spreadsheet wherever possible. Show how both cost schedules and the income statement will change if: (a)raw material purchases amounted to $110 400. (b)indirect labour was $9600. Question 3: Job costing; department overhead cost allocation: tour operator (10 Marks) Asian Adventure Holidays offers a series of holiday packages aimed at families, seniors and corporate groups. The financial controller, Jack Tallis, is preparing for the annual board meeting and is concerned about the loss that the business sustained in the past year. He has examined the profits for each of the three departments of the business—family, seniors and corporate—and it seems that the corporate department is the source of the problem. Jack has asked you to assist him to look more closely at the three packages offered by the corporate department to see which holiday packages are yielding profits and which are not. The three packages are to Thailand, Malaysia and Indonesia. The sales and direct costs of each corporate package for last year are as follows: Bali Adventure Thailand Discovery Malaysian Orienteering Number of packages sold 10 20 10 Number of people per package 5 6 8 Revenue per person $18 000 $12 000 $14 000 Direct cost per package: Tour leader $5 000 $12 000 $9 000 Tour assistant 2 000 3 000 6 000 Air travel 28 000 30 000 32 000 Accommodation 15 000 26 000 24 000 Equipment hire 4 000 0 9 000 Meals 18 000 15 000 8 000 To calculate the profitability of each package, a proportion of the overhead costs of running the corporate department needs to be allocated to the three packages. Jack has suggested that these costs could be allocated to each package in proportion to actual sales revenue. For last year these overhead costs were as follows: Salaries $200 000 Phone 2 000 Depreciation on equipment 5 000 Utilities 2 000 Rent and property taxes 9 000 Other department costs 12 000 Total $230 000 Required: 1. Calculate the profit per package and the total profitability of each of the three corporate packages. 2. Compare the profitability of the three corporate packages. 3. Do you consider that the allocation of the corporate department overhead to packages using actual sales revenue is appropriate? Can you suggest a better method? 4. Suggest what actions the company could take in regard to the three corporate packages. Question 4: Cost of goods manufactured; overapplied or underapplied overhead; journal entries (10 Marks) Cool Cooking Tools Ltd, manufacturer of gourmet cooking utensils, uses job costing. Manufacturing overhead is applied to production at a predetermined overhead rate of 150 per cent of direct labour cost. Any overapplied or underapplied manufacturing overhead is closed to cost of goods sold at the end of each month. Additional information: Page 163 Job SR22, consisting of ceramic spoon rests, was the only job in process on 31 January, with accumulated costs as follows: Direct material$4000 Direct labour 2000 Applied manufacturing overhead 3000 Total$9000 Jobs BS67, TR29 and GT108 were started during February. Direct materials requisitions during February totalled $26 000. Direct labour cost of $20 000 was incurred during February. Manufacturing overhead incurred in February was $32 000. The only job still in process on 28 February was job number GT108, with costs of $2800 for direct material and $1800 for direct labour. Required: 1Calculate the cost of goods manufactured for February. 2Calculate the amount of overapplied or underapplied overhead to be closed to cost of goods sold on 28 February.