this is management accounting assignment
HOLMES INSTITUTE FACULTY OF HIGHER EDUCATION HA2011 MANAGEMENT ACCOUNTING ASSIGNMENT Assessment Details and Submission Guidelines Trimester T2 2020 Unit Code HA2011 Unit Title Management Accounting Assessment Type Assignment Assessment Title Group Assignment Purpose of the assessment (with ULO Mapping) Students are required to demonstrate their ability to apply their knowledge of management accounting concepts to plan and control business operations. Specifically, you are to critically evaluate the use of value chain concepts in a real company, for decision-making and achievement of business goals. You also will use budgets as a planning tool by preparing a master budget for a company. (ULO 1, 6 and 7) Weight 30% of the total assessments Total Marks 30 Word limit Not more than 2500 words. Please use the “word count” function and include the no. of words in the assignment. You should use the “spell check” and “grammar check” functions in Word. Due Date Week 12 Friday 9th October, 2020 at 11.59 p.m. Submission Guidelines • All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page. • The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers. • Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style. • It is the responsibility of the student who is submitting the work, to ensure that the work is in fact her/his own work. Incorporating another’s work or ideas into one’s own work without appropriate acknowledgement is an academic offence. Students should submit all assignments for plagiarism checking on Blackboard before final submission in the subject. For further details, please refer to the Unit Outline and Student Handbook. Page 2 of 11 HA2011 MANAGEMENT ACCOUNTING Assignment Specifications Purpose: This assignment aims at developing your understanding of management accounting concepts to plan and control business operations. Specifically, you are to critically evaluate the use of value chain concepts in a real company, for decision-making and achievement of business goals. You also will use budgets as a planning tool by preparing a master budget for a company. Instructions with Question 1 of the assignment. This assignment is to be completed by a group of 3 - 4 students. You are to self-enrol in to a group. Each group is to choose one company from the top 200 ASX Company listing (available in Black Board) to answer Question 1 of the assignment. Register your group’s company name with your Lecturer, by email no later than Week 11. Company names will be approved by your Lecturer on a first-come-first-served basis. No group can choose the same company. The Assignment Structure should be as the following: Question 1 [10 marks] a) Explain the value chain concept and discuss two (2) ways the value chain concept benefits organisations. [3 marks] b) Based on the organisation that you have selected, evaluate the organisation using the value chain concept. This explanation should include: i. An identification of the company’s mission and objectives. ii. A description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. iii. Draw the value chain model for the company. i.e. Tailor the model to your company’s operations, identifying its value-adding processes and support departments. iv. Choose any two (2) value-adding processes of your company from the diagram in (iii), and for each, explain the process. Give specific examples on what value this contributes to the company’s products/services, leading to business decisions for improving customer and shareholder value. v. Finally, comment on the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. [7 marks] Page 3 of 11 HA2011 MANAGEMENT ACCOUNTING Question 2 This question is not related to Question 1. [20 marks] Students are REQUIRED to use the budget templates (format) as illustrated in the Lecture Slides on BUDGETING Topic (Topic 7). The budgets are to be created in EXCEL. Any supplementary working done to support the amounts in the budgets should be provided. PREPARATION OF OPERATING AND FINANCIAL BUDGETS TAKULAH Company is preparing budgets for the third quarter ending Sept 30, 2019. Budgeted sales for the next five (5) months are: • July 22,000 units • Aug 50,000 units • Sept 32,000 units • Oct 26,000 units • Nov 15,000 units The selling price is $15 per unit. All sales are on account. TAKULAH’s collection pattern is 60% collected in the month of sale and remaining amount in the month following sale. The June 30 Accounts Receivable balance of $50,000 will be collected in full. The management at TAKULAH Company wants ending Finished Goods Inventory to be equal to 25% of the following month’s budgeted sales in units. At TAKULAH Company, five pounds of material are required per unit of product. Management wants materials on hand at the end of each month equal to 15% of the following month’s production. Material cost is $0.50 per pound. 30% of a month’s purchases is paid for in the month of purchase and the remainder is paid in the following month. The June 30 Accounts Payable balance is $20,000. At TAKULAH, each unit of product requires 0.06 hours (3.6 minutes) of direct labour. The company has a “no layoff” policy and in exchange for the “no layoff” policy, workers agree to a wage rate of $15 per hour regardless of the hours worked (no overtime pay). For the next three months, the direct labour workforce will be paid for a minimum of 2,000 hours per month. At TAKULAH, manufacturing overhead is applied to units of product on the basis of direct labour hours. The variable manufacturing overhead rate is $25 per direct labour hour. Fixed manufacturing overhead is $40,000 per month and includes $10,000 of non-cash costs. At TAKULAH, the selling and administrative expenses budget is divided into variable and fixed components. The variable selling and administrative expenses are $0.55 per unit sold. Fixed selling and administrative expenses are $60,000 per month. The fixed selling and administrative expenses include $15,000 in costs that are not cash outflows of the current month. Page 4 of 11 HA2011 MANAGEMENT ACCOUNTING The company: • Has a July 1 cash balance of $55,000 • Maintains a minimum cash balance of $35,000 • Borrows on the first day of the month and repays loans on the last day of the quarter • Maintains a 12% open line of credit for $95,000 • Pays a cash dividend of $45,000 in August • Cash purchases of equipment, $155,200 in July and $54,800 in September, respectively TAKULAH reported the following account balances prior to preparing its budgeted financial statements: • Land - $65,000 • Equipment - $180,000 • Ordinary shares - $195,000 • Retained earnings - $X* *This Retained earnings figure will be the amount needed to balance off your balance sheet on June 30th i.e. the closing balances on June 30th before you step into the third quarter. Required: With the information provided, assist TAKULAH Company in setting up their ‘Master Budget’. To do this, you will need to prepare the following budgets for the third quarter of the year: 1. Sales Budget 2. Production Budget 3. Direct Materials Budget 4. Direct Labour Budget 5. Manufacturing Overhead Budget 6. Ending Finished Goods Inventory Budget 7. Selling & Administration Expenses Budget 8. Expected Cash Collections 9. Expected Cash Disbursements for Materials 10. Cash Budget 11. Budgeted Income Statement 12. Budgeted Balance Sheet* (20 marks) *For the balance sheet as at Sept 30th, there will be a difference between the final totals. This is due to calculations based on rounded off units. To balance the totals, simply close off this difference to the Retained Earnings account. (NOTE - SHOW ALL OF YOUR WORKINGS) Page 5 of 11 HA2011 MANAGEMENT ACCOUNTING Additional Information: a) In Question 2, you are to use formulas and cell references when creating your budgets. Don’t add manually. b) You are to upload 2 files when submitting your assignment: • One WORD file for your answer to Question 1 • One EXCEL file for your answer to Question 2. Make sure your group number and names are to be included in the excel spreadsheet on page 1. Assignment Structure: The report should include the following components: a. Assignment cover page clearly stating your name and student number b. Abstract (one paragraph) c. Table of contents d. A brief introduction or overview of what the report is about. e. Body of the assignment with appropriate section headings f. Conclusion g. List of References. To ensure that all students participate equitably in the group assignment and that students are responsible for the academic integrity of all components of the assignment. You need to complete the following Group Assignment Task Allocation table, which identifies which student/students are responsible for the various sections of the assignment.