ACC512 Management Accounting for Costs & Control
ACC512 Management Accounting for Costs & Control Assessment
Your assignment consists of different question styles including discussion questions, reports, exercises, problem questions and spreadsheet questions. It assesseslearning outcomesas listed in the assignment rationale below.
The purpose of this assignment is to continue to develop skills in costing systems with an emphasis on the role of control in managing the production of goods and services efficiently in the workplace. Each question builds on the knowledge gained through the first assignment to develop the concepts of management accounting control through costing. Each question uses realistic data and professional practices similar to that found in workplaces.
Question 1: Process Costing (20 marks in total)
Lake Surf Company uses an automated process to clean and polish its merchandise items. For March 2017, the company conducted the following activities:
|Beginning work in process inventory||3,000 Items|
|[Direct material – 100%]|
|[Conversion costs – 25%]|
|Units placed in production||12,000 units|
|Unites Completed||9,000 units|
|Ending work in process inventory||5,000 units|
|[Direct material – 100%]|
|[Conversion costs – 60%]|
|Cost of beginning work in process|
|Direct materials||$ 2,100|
|Conversion costs||$ 485|
|Direct material costs, current||$ 9,000|
|Conversion costs, current||$ 10,045|
Using the weighted average method, determine the following:
1a. the number of equivalent units
1b. cost per equivalent unit
1c. ending work in process inventory
1d. cost of normal and abnormal spoilage
1e. cost of goods completed and transferred out during March, 2017
Question 2: Budget (20 marks in total)
Lulu Company has the following budgeted sales for the next six-month period:
There were 69,000 units of finished goods in inventory at the beginning of January. Plans are to have an inventory of finished products that equals 100% of the following month sales plus 25% of the second month sales. Two kilograms of raw materials are required for each unit produced. From January, each kilogram of material costs $20 (up from $18 in December last year). Inventory levels for materials are equal to 40% of the needs for the next month. Lulu Company uses a FIFO inventory method for both raw material and finished goods.
2a. Prepare a production budgets in units for January and February
2b. Prepare a materials usage budget in kilograms and dollars for January
2c. Prepare a materials purchases budget in kilograms and dollars for January
2d. List and explain some benefits to an organisation of preparing an operating budget, use the textbook and other relevant sources to support your answer
Question 3: Variance Analysis (20 marks in total)
The following standard cost data relate to the operation of Dragon Company for 2016. The standard cost per unit is based on the normal annual production of 15,000 units.
|Standard cost per unit|
|Direct materials||4kg @ $5.00 per kg||$ 20.00|
|Direct labour||2hrs @ $12.50 per hr||$ 25.00|
|Variable overhead||2hrs @ $3.00 per hr||$ 6.00|
|Fixed overhead||2 labour hrs @ $5.00 per hr||$ 10.00|
Actual production in 2016 was 10,000 units. The following data was obtained from Dragon Company’s records:
|Direct material purchases||45,000||Kilograms|
|Cost of direct materials purchases||$ 202,500|
|Actual direct labour hours||25,000||Hours|
|Actual direct labour costs||$ 325,000|
|Actual variable overhead costs||$ 100,000|
|Actual fixed overhead||$ 125,000|
3a. Calculate and show flexible budget variance for each cost item.
3b.Calculate the following variances and indicate whether they are favourable or unfavourable.
i.Direct material price variance
ii.Direct material efficiency variance
iii.Direct labour price variance
iv.Direct labour efficiency variance
v.Variable manufacturing overhead spending variance
vi.Variable manufacturing overhead efficiency variance
vii.Fixed manufacturing overhead spending variance
viii.Fixed manufacturing overhead efficiency variance
Question 4: Relevant Costs and Decision Making (20 marks in total)
Gordon Manufacturing is approached by a new customer to fulfill a 4,000 unit, one-time-only special order for a product similar to the one offered to existing customers. At present, the company has excess operating capacity. The following data apply to sales to existing customers:
|Direct materials||$ 100|
|Direct labour||$ 50|
|Manufacturing support||$ 90|
|Marketing costs||$ 35|
|Manufacturing support||$ 115|
|Marketing costs||$ 40|
|Targeted selling price||$ 500|
4a. For Gordon Manufacturing, what is the total relevant cost of making this special order?
4b. If the new customer is offering $350 per unit sold, should the company accept the special offer? Explain.
4c. Suppose the company is already operating at capacity when the special order is received. What would be the relevant cost of accepting the special order?
4d. List and explain any TWO potential problems that should be avoided when conducting a relevant cost analysis. Use the textbook and other relevant sources to support your answer.
Question 5: Balanced Scorecard (20 marks in total)
The Balanced Scorecard can be described as a tool that “translates an organisation’s mission and strategy into a set of performance measures that provide the framework for implementing its strategy” (Horgren et al., 2014, p.585). Drawing on the textbook and no less than Ten (10) academic references, provide your description of the Balanced Scorecard, in particular its relationship to planning, performance targets, strategy, prediction, motivation, cybernetic effects and control (No more than 800 words).
Related Article: Managerial Accounting Assignment Help
This assessment task will assess the following learning outcome/s:
- be able to discuss and critique the historical and ethical development of management accounting.
- be able to apply cognitive skills in the design and operation of costing systems.
- be able to critically evaluate the design and operation of performance management systems.
- be able to explain the role of management accounting in organisational contexts and the implications for management accounting of different paradigms.
- be able to apply analytical and synthetical skills in report writing, and use quantitative techniques and computer software including using the Internet as a professional source.
- be able to create and implement computerised decision models.
- be able to critique how managers make decisions.
This assignment assesses your achievement of learning outcomes including:
- the application of cognitive skills in the design and operation of costing systems;
- the design and operation of performance management systems;
- the role of management accounting in organisational contexts:
- the implications for management accounting of different paradigms;
- the application of analytical and synthetical skills in report writing;
- quantitative techniques and computer software;
- using the Internet as a professional source;
- the history of management accounting
- the creation and implementation of computerised decision models; and
- to critique how managers make decisions.
In particular, this assignment is designed to assess your application of knowledge, understanding and skills in certain topics including cost flows in management accounting, spreadsheet construction, job and process costing, variance analysis, joint costing and budgeting.
For spreadsheet problems, good answers will comply with the spreadsheet requirements including the separation of data entry and report/solution areas, pasted normal and formula view with row and column headings and the use of the IF function where appropriate.
Review the examples in the Spreadsheet Advice PDF provided online in Interact2 Resources.
Marking criteria and standards
Your assignments will be marked as a whole with recognition being given to application of knowledge, quality thinking and application of skills. For some questions, students have a chance to demonstrate some creativity, or provide their own examples or give evidence of wider reading or structure a computer spreadsheet model in an innovative manner. We also need to avoid the snowballing effects of cumulative errors – that is, an error early in a practical question which carries through. Thus, a marking system is used with deductions for errors and omissions. Full marks are possible for well structured, complete, quality answers.
Any assignments with evidence of plagiarism may be referred to the university’s academic misconduct processes and will receive a grade of zero. See www.csu.edu.au/faculty/business/studentresources/plagiarism
The marking criteria for your assignments will be based on the content of the subject as identified by thelearning objectivesas outlined above and at the beginning of each of the various topics as outlined at the beginning of each Interact2 topic. Good spreadsheet answers will comply with the assignment requirements.
Example criteria used in marking essays/discussion questions/case studies/business reports
Note that business reports are normally more structured than essays. Find guidance on business report writing structures on the Internet. Here is one example: www.business.unsw.edu.au/Students-Site/Documents/Writingareport.pdf
Relevance of the answer. Are the important issues raised in the question identified? Did the student answer the questions?
Critical capacity. Has reference material been carefully analysed or critically accepted?
Structure of the answer. Is the answer well-structured and the argument logically developed?
Writing style. Is the style concise and lucid or confused, making it difficult for the reader to get the point?
Scope of reading. Does the answer indicate a satisfactory coverage of literature relevant to the questions?
- be well planned with arguments flowing logically;
- use correct sentence structure, punctuation and spelling;
- present original ideas where appropriate;
- and present a justified conclusion and acknowledge all sources.
Normal distribution curves for grades are not utilised in this subject.
You can discuss your work with each other prior to submission using the discussion forum. However, please do not post complete versions of answers to the discussion forum. Do not leave assignments until the last minute.