ACC512 202030 Additional Assessment
ACC512-Management Accounting for Costs and Control
Additional Assessment Task
Due Date: 06-Sep-2020
Submission method options: Email directly to kgumbleton@csu.edu.au
IMPORTANT: Your Assessment must be submitted via email directly to kgumbleton@csu.edu.au. The
subject line for your email must read: ACC512 202030 Additional Assessment #your student name and
number#. You may submit your assessment at any stage prior to this date, however, failure to submit to
this email address by the due date will result in a failing grade for ACC512.
TASK
Assessment conditions: This is an individual assessment task (not a group assessment task).
Background
To provide workplace context to this assignment you are to assume that you have been
appointed to a graduate management accounting position within a hypothetical manufacturing
company. Jupiter Australasia Ltd. is an extremely successful multinational company. In Australia
andNewZealand Jupitermanufacture a range of FastMoving Consumer Goods (FMCGs) including
several well known pet food brands, confectionery brands, and consumerfoodbrands.
You have been appointed to a Management Accounting role within Jupiter Australasia Ltd.
commencing in their Albury Wodonga pet food factory. As part of your role you will be
expectedto providemanagement accounting advice tomanagement and productionteams
around strategic and operational issues across a number of Jupiter Australasia Ltd.
operationaldivisions.
Question 1 Manufacturing Statement and Profit and Loss (20 marks)
Jupiter Australasia Ltd hasrecently acquired the Kiewa Milk Co in north-east Victoria and you have
been seconded there as part of yourmanagement accounting graduate role. The CEOof Kiewa
Milk Co has mentioned the term ‘production constraint’ to you on a number of occasions and
you are unsure what she is referring to. You decide to conduct your own research (which goes
beyond the text) to find out what a ‘constraint’ is in a manufacturing environment.
Required:
Discuss the notion of production capacity in a manufacturing environment. Your answer
should discussthe different meanings oftheoretical capacity and practical capacity asthey are
applied inmanufacturing firms.
Describe some of the constraints which may impact on the productive capacity of a
manufacturing company. In your answer also address the ‘relevant range’ concept as it is applied
inmanagement accounting andasitrelatesto capacity constraints(300-450words).
Please ensure that you properly reference allsources(including websites) and avoid simply
cutting andpasting.
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
Question 2 ComprehensiveManufacturingBudget (40 marks)
This question builds on prior studies and relates to learning material and objectives from Topics
1, 2, 3 and 4. Attached is an example of a ‘Sale Production Budget – Schedule of Manufacturing
Costs’ which may assist you in approaching this question.
You have been asked to prepare a 5 year budget forecast for the Kiewa Milk Dried Infant Formula
canned product. The recently purchased Kiewa Milk Co utilises a traditional manufacturing cost
flowinventory and accounting system.
Unitsales ofthis product have been rapidly increasing overthe pastthree years with year on year
growth of more than 20% per annum partly driven by Chinese Daigou shoppers who are satisfying
the demand amongst the increasingly wealthy Chinese upper and middle classfor high quality
dairy products afterseveralscandalsinvolving Chinese-made produce. The Kiewa Milk Co has
also been able to increase its per unit price of its infant formula by more than double the rate
of inflation for each of the last three years. The marketing department are confidentthatthese
per annumincreases will hold forthe nextfive years.
The Strategic Planning Committee ofJupiter Australasia Ltd are finalising plansforthe new division
andhaveaskedyoutoprepareacomprehensive5yearbudgetfortheDriedInfant Formulaproduct
line.
As at June 30th, 2020 the following financial and trading data was provided:
2020 Financial Year data
Sales (Units) 27.65 million
Price (average 2020 price per unit received) $2.300
Prime Costs (per unit)
Ingredients & Canning $0.725
Direct Labour $0.040
Other Variable Manufacturing Costs (per unit) $1.250
Annual Fixed Manufacturing Overhead $5,000,000
Inventory on Hand (at valuation):
Ingredients & Packaging (335,000 equivalent units) $235,625
Finished Goods (325,000 units) $727,500
All variable manufacturing costsincluding direct labour and ingredient costs are expected to
increase annually atthe rateofinflation. Allmanufacturing costs are variable and are assumed to
vary directly with production (other than fixed manufacturing overhead). The current inflation
rateof 2.0% is expected to hold overthe 5 year budget period.
TheDried Infant Formula factorymaintainstargetsafety stock ofrawmaterialsinventory and tin
can inventory amounting to the equivalent of one (1) week of the current year’s budgeted unit
production. Finished goods inventory levels are kept at the equivalent of one (1) week of the
current year’s budgeted unit sales. The Dried Infant Formula division does not utilise a Work in
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
Processinventoryaccount.
The Dried Infant Formula factory has been operating out of its site in the small town of
Tangambalanga in the Kiewa Valley for almost 100 years and has undergone numerous
upgrades. Themanufacturing facility is currently operating at almost 80% ofits estimated total
practical manufacturing capacity of 35 million cans of baby formula per year.
Required:
(a) Five Year Budget (25 marks)
For the 5 year budget period prepare:
i. Sales, Production and Purchases budget
ii. Budgeted schedule of Cost of Goods Manufactured (COGM)
iii. Budgeted schedule of Cost of Goods Sold (COGS) andGross Profit calculation
Please note that marks will be awarded based both on the accuracy of your answer and on
your spreadsheet design and formula use. The solution should incorporate the use of the IF,
ROUND and ‘Absolute Referencing’ functions in Excel. Use the IF formula to constrain unit
sales to the production constraint. All 5 years of each budget should be shown side by side (1
column per year) for ease of comparison by management. All of the budgets should be
presented on one worksheet together, working down the page commencing with the Sales,
then Production budgets, COGM, through to Cost of Goods Sold and Gross Profit calculation.
You should be able to drag the formula across for the whole of the budget if the first years
are properly constructed with a data input section and using absolute referencing. This
makes the process much quicker and easier.
(b) The Jupiter Australasia Strategic Management Committee has developed plansto have the
factory completely overhauled in the next year(2021) which will double the capacity of the
factory. The cost of the upgrade will be incurred as an additional $4 million Fixed Overhead
manufacturingcostper annum.
Using the flexibility ofthe excelmodel developed in part(i) calculate the impact on sales and
gross profitifthe option of upgrading themanufacturing facility is exercised and the
practical production capacity of the factory is increased by 100% and an extra
manufacturing cost of $2 million is incurred each year from 2022. (Submit results as a
separate worksheet). (5 marks)
(c) Given your findings from part (i) and (ii) above, write a report for the Strategic
Management Committee of Jupiter Australasia recommending whether to take up the option
to upgrade the production facility. In your report consider all of the strategic and financial
implications to the firm of reaching its production constraint and any implications or
opportunities arising from upgrading the facility and having extra productive capacity. Your
grade will depend on the accuracy and depth of your essay writers analysis, and your capacity to identify
strategic issues which management should consider when making their decision (approx. 300
words). (10 marks)
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
Question 3 Activity Based Costing (ABC) (20 marks)
This question builds on prior studies and relates to learning material and objectives from
Topic 6.
JupiterAustralasia Ltdowns VictoryMowers amanufacturer of gardening equipment which is sold
domestically within Australia and to an increasing export market. Victory Mowers
manufactures two different models of lawnmowers: the cheaper ‘Lawnmaster’ and the
environmentally-friendlyandmore expensive ‘GreenMachine’.Adispute has arisenbetween
seniormanagement atVictoryMowersoverthe strategicdirection ofthe company.The CEOof
Victory, a former marketing executive, wishes to focus more strongly on developing the
environmentally friendly ‘Green Machine’ as he believes it has a higher gross margin and is
more profitable than the ‘Lawnmaster’. The ‘Green Machine’ is sold as a premium product
through specialist mower dealers while the mass produced ‘Lawnmaster’ is sold as a basic
model through the Bunnings Hardware chain. In contrast to her CEO the divisional
management accountant has argued thatthe standard costing systemis notsuited to these
products andmay producemisleading results.
The Strategic Management Committee of Jupiter Australasia Ltd has asked for an analysis
of the costing system to provide advice regarding the two models. Currently, Victory
Mowers operates a standard costing systemwhere identifiable direct costs are charged to
each product and manufacturing overheads are allocated using direct labour hours (DLH)
as the sole cost driver.
The following data is provided for the 2020 financial year:
2020 Sales and Cost estimates Lawnmaster Green Machine
Forecast Sales (Units) 200,000 25,000
Selling price per unit($) $200 $300
Prime Costs per unit $100 $150
DLH per Unit 2.5 2.5
The activity costs budgeted for overhead forthe 2020 financial year and related activity cost
driverswereasfollow:
OH Activity OH Cost Cost Driver
Amount of Cost Driver
Lawnmaster Green Machine
Set Ups $493,750 Number of Set ups 25 50
Laser Cutter $1,100,000 Machine Hours 30,000 10,000
Machining $2,100,000 Machine Hours 50,000 15,000
Assembly $1,250,000 Labour Hours 50,000 25,000
Packing $1,800,000 Number of Orders 1000 500
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
Required:
(a) Using the currentstandard costingmethod of applying overhead using directlabour
hours developa spreadsheetto calculate for eachmodelthe expected:
i. Gross Profit perunit,
ii. GrossProfitmargin($GP/$Sales),
iii. TotalGross Profit perModel,and
iv. Total Firm Gross Profit.
(8 marks)
(b) Using the overhead activity and cost data provided conduct the same analysis utilising
Activity Based Costing (ABC)techniquesto allocate activity-based costs and again calculate for
eachmodeltheexpected:
i. Gross Profit perunit,
ii. GrossProfitmargin($GP/$Sales),
iii. TotalGross Profit perModel,and
iv. Total Firm Gross Profit.
(8 marks)
(c) What advice would you give the Strategic Planning Committee and the management of
VictoryMowersregardingtheappropriatecostingsystemandthecomparableprofitabilityof the
two products? Provide an analysis explaining the reasons for the different outcomes achieved
between using Standard Costing overhead allocation andABC overhead allocation. (150-200
words) ( 4 marks)
Question 4. Standard Costing and Variance Analysis (20 marks)
This question builds on prior studies and relates to learning material and objectives from Topic 5.
Whilstundertaking yourrecentanalysisof costingatVictoryMowers younoticedsome anomalies
in the variance reporting on the standard costing system.
Budgeted costs for the ‘Lawnmaster’ mower for the previous month were as follows:
Standard Amount per
output unit
Standard Price
per input unit
Direct Material (Pressed steel lineal metres) 50cm (per unit) $70 (per metre)
Direct Labour 2.5 hrs (per unit) $30 (per hr)
The firm produced 11,000 units during the last month and actual direct labour hours worked
amounted to 28,200 hours at a cost to the firm of $851,000. Manufacturing of 11,000 mowers
during the month consumed 6,500 linear metres of pressed steel which was purchased for
$390,000.
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
Required:
For the Victory Mowers previous month of operations:
(a) Calculate (7.5marks)
i. theDirectMaterialPrice(Rate)variance;
ii. theDirectMaterialQuantity (Usage/Efficiency) variance; and
iii. the TotalDirectMaterial variance.
(b) Calculate (7.5 marks)
i. the Direct Labour Price (Rate) variance;
ii. the Direct Labour Efficiency variance, and
iii. the Total Direct Labour variance.
(c) Describe how there may be a variance interaction (trade-off) effect when a favourable
DirectMaterialPrice varianceisrecordedatthesame timeas anunfavourableDirectMaterial
Quantity (Usage) variance and an unfavourable Direct Labour Efficiency variance.Howshould
such variances be investigated? (5 marks)
MARKING CRITERIA AND STANDARDS
(https://www.business.unsw.edu.au/Students-Site/Documents/Writingareport.pdf)
You must submit workings showing how you have obtained your answers, including whether you have applied appropriate techniques to
analyse and solve problems. Indicative examples of the types of Excel formulae needed and model formats will also be provided, however
you are required to develop your own spreadsheets.
PLEASE NOTE: Although the marking criteria shows requirements for HD, D, C and P, your final grade for this subject will be either a pass (PS) or fail (FL).
Marking Criteria High Distinction Distinction Credit Pass
Ability to identify
accounting problem(s) or
issue(s) and apply the
appropriate accounting
technique
Apply appropriate
accounting technique
to identified issue with
no quantitative errors
and excellent
presentation and
formatting
Identify type of accounting
problem and apply
appropriate accounting
technique with very few (if
any) errors and good
presentation and
formatting
Identify type of
accounting problem
and apply appropriate
accounting technique
with few minor errors
Identify type of
accounting problem and
apply appropriate
accounting technique
with some calculation
errors
Ability to use Excel to solve
management accounting
problems.
This includes the ability to
use appropriate Excel (or
similar) analysis tools and
functions, construct
appropriate spreadsheet
formulae and to effectively
and appropriately print and
present your material and
results; ability to present
your answers effectively,
appropriately, and neatly,
using computers
Use of appropriate
formulae with no errors.
Correct use of data input
sections where
appropriate. Excellent
design allowing intuitive
and easy comprehension
of key data. High
standard of formatting
enhancing the logical
presentation of the data
output enhancing
comprehension by report
end users
Consistent use of
appropriate formulae with
very few (if any) minor
errors. Correct use of
data input sections
where appropriate. Well
designed and logical data
output presentation.
Good formatting
allowing easy and
effective comprehension
by report end users
Consistent use of
appropriate formulae
with few errors.
Correct use of data
input sections where
appropriate.
Logical data output
presentation and
formatting allowing
easy and effective
comprehension by
reportend users
Use of appropriate
formulae with some
errors. Use of data
input sections where
appropriate.
Basic data output
presentation and
formatting allowing
effective
comprehension by
report end users.
Marking Criteria High Distinction Distinction Credit Pass
Ability to correctly interpret
the results of your analyses
and to clearly convey your
understanding of the results
to the end user
demonstrated ability to
apply your knowledge of
management accounting
business situations in a
strategic manner;
demonstrated understanding
of the theoretical issues
underpinning management
accounting.
References and sources
acknowledged and
professionally presented;
ability to present your
answers effectively,
appropriately and neatly,
using computers.
Correctly identify
underlying accounting
issue and all of the
potential implications of
accounting data/ results.
Identify key areas of
concern for management
adopting a strategic
‘whole of business’
approach including well
thought out and justified
recommendations. Output
is well researched,
logically argued, and well
written in amannerthat
very effectively conveys
the key outcomes and
recommendations to the
end user. All references
and sources
acknowledged and
professionally presented.
Correctly identify
underlying accounting
issue and all of the
potential implications of
accounting data/ results
and identify and report
key areas of concern for
with effective strategic
recommendations for
management. Well
researched and well
written argument with
references and sources
acknowledged and output
professionally presented
Correctly identify
underlying
accounting issue and
major implications of
accounting
data/results and
identify and report
key areas of concern
for management in a
concise manner. Well
written with a logical
argument and with
references and
sources
acknowledged and
professionally
presented
Identify underlying
accounting issue and
implications of
accounting data/results
andidentify and report
issuesthat should be of
concernto management.
Written in professional
language with references
and sources
acknowledged and
professionally presented
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
PRESENTATION
Your additional assessmenttask should be submitted as a Microsoft Word document
and an Excel file. Do not submit as a PDF document. Paste the spreadsheet solution in
the word file, including column headings and row numbers. Yourword filemust provide
a complete answerto everyquestion.Useportraitorientationwhereverpossible, as this
is a more professional way to present your work.
i. The first page should contain your name,student number,subject code, word count and
due date. Please use 12 point font and avoid the use of fancy templates with added
colour or graphics.
ii. Linesshould be double spaced.
iii. The assessment tasksshould be within +/- 10% ofthe word limit. The word count is taken
fromthe first word to the last word and includes quotes.Quotesmust comprise lessthan
10% ofthe total word count.
iv. Proof-read your work so thatitisfree ofspelling, grammar and punctuationmistakes. Use
language thatis appropriate to academic and professionaltasks. Ensure you use respectful
and appropriate terminology. For assistance, see Learning Skills:
http://www.csu.edu.au/division/studserv/learning
v. Your reference list should contain all source documents that you refer to, quote or paraphrase
from. It must conform to the APA referencing
style: http://student.csu.edu.au/library/integrity/referencing-at-csu
REQUIREMENTS
This assignmentrequiresaMicrosoftWorddocument aswell asaMicrosoft Excel
spreadsheetsolution and both ofthesemust be submitted.
1. You must submit both a Word file AND an Excel file. Failure to submit both ofthe files by
the due date constitutes non-submission and late penalties will apply.
2. Your spreadsheet solutions must be cut and pasted into the Word document. This Word
documentis what will bemarked and returned to you. Rememberthatin the business
world the professional presentation of information is fundamental and accordingly marks
will be deducted for poor presentation. An electronic version of your source spreadsheet
isrequired to enable markersto open the file and test your efficient use of spreadsheet
formula by, for example, changing values of input variables. Marks will be awarded onthe
basis of correctness of answers, appropriate use ofspreadsheet modelling, effective
worksheet design, and level of professional presentation.
3. A reference list is mandatory for this assessment item. It isimportant that you are aware of
how to reference properly and a reference list must be provided, properly formatted
using hanging indent. Please note that it is a submission requirement that you include a
reference list and assignments which do not include a properly formatted reference list
will incur up to a 5 mark penalty. Review the rulesregarding plagiarism and if you are not
sure contact yourlecturer orstudentlearningskillsadvisorforadvice.Thereisnoexcusefor
presentingthe workofothersasyourown;thisincludescuttingandpastingmaterialfrom
the web without properly referencing the source. In this subject there has historically
been large numbers of students caught either plagiarising or failing to reference
properly.
appropriately,
and neatly,
using
computers.
Charles Sturt University Subject Outline
ACC512 202030 Additional Assessment
The CSU Library site provides an on-line guide to APA style referencing. This is the referencing
style adopted by the School of Accounting and Finance. The guide can be downloaded as a PDF
underthe Research and Teaching tab on the library home page
(http://www.csu.edu.au/division/studserv/my-studies/learning/pdfs/apa.pdf).
Spreadsheet requirements
Yourspreadsheetmusthave a separateworksheet(tab)for each questionanswered. For each
question the worksheetshould have a data entry section where all (ormost) ofthe question data
is entered, followed by a model orresultssection. The resultssection should be mainly formula
driven.
NB There should be as little as possible data entry in the model/results section of the spreadsheet.
Most, if not all, data should be imported into the model from the data entry section. A number
of Excelresources will be provided through the subjectInteractsite essay writers to assist you complete this
assignment howeverthere is no substitute for getting in and trying it out. An excelresource file
specific to the assignment is provided on the subject Interactsite and you shouldreviewthe
variousformulae demonstratedonthatfile.
Please contact your subject coordinator if you need further guidance on particularissues
surrounding Excel.
Your reference list should contain all source documents that you refer to, quote or paraphrase
from. It must conform to the APA referencing style: http://student.csu.edu.au/library/
integrity/referencing-at-csu

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