Management Accounting Principles and Concepts – Accounting & Finance Assignment Help

Assignment Task

Task 

IMPORTANT INFORMATION
Assessment 2 covers material from weeks 1 to 8 inclusive and relates to the following learning outcomes:
1. Demonstrate the ability to measure and interpret accounting data.
2. Apply appropriate management accounting principles and concepts to solve practical management problems.
3. Critically evaluate the relevance and applicability of traditional management accounting techniques to the management of modern organisations in both the manufacturing and service sectors.
4. Discuss contemporary issues, including sustainability in management accounting and likely future developments.

Part A – Group Work and Self & Peer Review Evaluation
One of the goals of Assessment 2 is that students can work effectively in small teams. This will be achieved through Part A of Assessment 2. You will work with a small group of other students to achieve a common goal, and you will be required to think about how that process worked and what you can learn from the experience. For Part A of this assessment, each student will be randomly assigned to a specific group by course teaching staff. You will not be allowed to choose your own group for teamwork; this is to replicate the business situation where you must work collaboratively with other people because of job responsibilities, not because they are your friends.

In the current climate we find ourselves in, please practice social distancing and use any or all the following methods of communicating and collaborating with each other:

• Each group will be given a private discussion forum on Stream.
• Using Zoom. This will allow you to still physically, see and speak to each other. One team member will create a free Zoom account and share the link with the group members. Follow this link to create a free account.
• Other methods, e.g., Facebook, that does not involve meeting in person and allows all members to be able to contribute.

Your team is responsible for identifying and allocating its own tasks, setting its own deadlines, and arranging and managing its own meetings. Postings to the forum may have attachments, which is a simple way of sharing documents among team members. It is strongly recommended to keep all the information gathered by the team in a place, preferably in the forum for course teaching staff’s inspection if necessary (e.g., to facilitate the resolution of disputes). Your team is self-governing: course teaching staff will not assign roles to the team members, but they can access the group forums. However, the course teaching staff will not participate in group forums unless we become aware of problems. You must work out for yourselves who will contribute in what way to the overall goals, and how you will work together. No student has the power to give orders to any other student, and so the goal must be achieved by cooperation and persuasion. (Again, this is deliberately analogous to many business situations.)

Examples of roles that you may wish to assign:
• Arrange/schedule meetings.
• Ensure that decisions are recorded, and that the information base is accessible.
• Document the activities to be undertaken, who is responsible for them, and the dates for completing them.
• Monitor progress against the plan and ensure that variances are brought to the group’s attention in time for corrective action.
• Research and assemble the information required on the set topic.
• Facilitate the resolution of disputes.

Often, in a group situation different expectation, attitudes, knowledge, and cultures influences are expected, as a result, cooperation, negotiation, persuasion and even compromise are needed and used to achieve a common goal. This may require you to be mindful of your group members’ expectations and circumstances. Communication plays a key role in coordinating group activities and planning around various expectations. This would involve setting targets with dates and actions, setting out a plan of how to complete this group assessment during the first meeting and the deadline for completing the group assessment, assigning a person to monitor the progress against the plan and a person to facilitate and resolve disputes and conflicts. If your group has an action plan as such, this should motivate each of you to complete the group work on time or even before the deadline.
Each student is required to complete and submit a Self & Peer Review form, where you rate yourself and team members in terms of contribution to the assessment. This is a private submission that only the teaching staff will have access to. It is used to evaluate if all team members fully contributed to the assessment.

Part B – Individual Submission
Part B of the assessment must be your own work and will require you to INDIVIDUALLY apply your knowledge to the scenarios as provided in each question. It is strongly recommended that you read both the instructions and the assessment details thoroughly, before attempting this assessment. You should also study the relevant material in the text and make sure you understand the concepts covered by practising the weekly review questions.
Please note that discussion on STREAM or in study groups is fine but comparing or suggesting answers as opposed to concepts may lead to marks being deducted to the extent of receiving zero marks if answers are identical.

Part A: Group Submission
Case Study: Jack’s Dog Sanctuary
Jack’s Dog Sanctuary performs three services: housing and finding homes for stray and unwanted dogs, providing health care and neutering services for the dogs, and dog training services. One facility is dedicated to housing dogs waiting to be adopted. A second facility houses veterinarian services. A third facility houses the director, administration staff, and several dog trainers. This facility also has several large meeting rooms that are frequently used for classes conducted by the dog trainers. The trainers work with all the sanctuary dogs to ensure that they are relatively easy to manage. They also provide dog obedience classes for families who adopt dogs.

Estimated annual costs and services are as follows:
                                                                                             $
Director and administration staff salaries                           60,000
Housing service’s employees’ salaries                              100,000
Veterinarians and technicians’ salaries                             150,000
Dog trainers’ salaries                                                         40,000
Food and supplies                                                             125,000
Building-related costs                                                        200,000

On average, 75 dogs per day are housed at the facility, or about 27,375 (75 × 365) dog days in total. In addition, the trainers offer about 125 classes for about 30 weeks throughout the year. On average, 10 families attend each class. Last year the veterinarian clinic experienced 5,000 dog visits.
One of the administration staff, Joan, just graduated from an accounting program and would like to set up an ABC system for the sanctuary so that the director can better understand the cost for each of the sanctuary’s services. She gathered the following information:

Square metres for each facility:
Housing service                                                                      5,000 m2
Director and training                                                               3,000 m2
Veterinarian clinic                                                                   2,000 m2
Percentage of trainer time used in classes                            50%
Portion of Supplies used for veterinarian services                 $75,000 

Required:
As a group:

• Identify three cost pools and assign costs to them, considering the three cost objects of interest. Explain your choice for each cost pool identified and how the costs are assigned to each of the cost objects. (Hint: Take the services provided into account when identifying a cost object. Assign the costs based on its traceability to the cost object).
• Your group analysis should not exceed two pages (A4) in length and must include an explanation of your choices. You may use tables to show the cost assignment.
• References are NOT required.
• Only one group member needs to submit a file.
• Please note that if you use an Apple computer to complete the group analysis, please save the file in a format that will be recognised by Microsoft Word or a Pdf format before submitting it.
• Submit your group analysis on Stream in the appropriate submission point on or before 11pm, 8 May 2022 as a .docx, .doc, or .pdf file. Name your group assignment “A2_Group#” (The # being your group number).

Individually:

• Complete and upload the Self & Peer Review form in the appropriate submission point on or before 11pm, 8 May 2022 as a .docx, .doc, or .pdf file:
• ? You rate yourself and team members in terms of contribution to the assessment. 
• This is a private submission that only the teaching staff will have access to. It is used to evaluate if all team members fully contributed to the assessment.
• Name your Self & Peer Review form “A2_Review_Surname_#” (The # being your student ID number).
• Please note that the Self & Peer Review Form does NOT need to be shared with your group members.

Part B: Individual Submission
• Part B requires all students to submit their own individual work.
• Complete Part B in the provided Microsoft Excel workbook.
• Due on or before 11 pm, 15 May 2022.

Question 1: Service Costing & ABC 
Part A
African Adventure Ltd offers a series of holiday packages aimed at families, seniors, and corporate groups. The financial controller is preparing for the annual board meeting and is concerned about the loss the business sustained in the past year. He has examined the profits for each of the three departments of the business and it seems that the corporate department is the source of the problem.
The financial controller looked at the three packages offered by the corporate department to establish which are profitable or not profitable. The sales and direct cost of each package for the last year are as follows:

Required: Refer to Part A Case Study– Jack’s Dog Sanctuary. Complete the following:
(i) Determine an activity driver for each cost pool your group identified in Part A. Explain your choice. 
(ii) Using the activity drivers, you identified in part (i) calculate the direct cost per unit of activity driver for each pool and explain what the cost per unit of activity driver for each pool means. Show ALL your workings.

Question 2: Cost Allocation & Inventory 
Part A
(i) Discuss the costs and benefits to be taken into consideration when managers choose between applying predetermined overhead rates or actual overhead rates.
(ii) Explain why management accountants allocate indirect cost to responsibility centres.

Part B
Martin Manufacturer Ltd started its operations on 1 January 2021, and the planned production for the year was 50,000 units. This production level was achieved, but only 46,250 units were sold at $90 each.

Other relevant data are as follows:                                           $
Direct material used                                                                  600,000
Direct labour cost incurred                                                        300,000
Fixed manufacturing overhead (actual and planned)                375,000
Variable manufacturing (actual and planned)                           180,000
Fixed selling and administrative expenses                               450,000
Variable selling and administrative expenses                           $1.40 per unit

Required: Show all your workings.
(i) Calculate the product cost per unit under variable and absorption costing. 
(ii) Prepare an income statement for Martin Manufacturer Ltd for the year ending 31 December 2021 using variable costing. 
(iii) Prepare an income statement for Martin Manufacturer Ltd for the year ending 31 December 2021 using absorption costing. 
(iv) Reconcile the difference in the profit reported in (ii) and (iii). 

Question 3: CVP Analysis & Sustainability 
Part A
Diving Wear Ltd makes neoprene wetsuits.

The company’s projected income statement for the coming year is as follows:
Sales (65,000 units)                                  $15,600,000
Less: Variable costs                                  8,736,000
Contribution margin                                   6,864,000
Less: Fixed costs (incl. advertising)          4,011,744
Operating income                                      $2,852,256

Required: Show all your workings.
(i) Calculate the contribution margin per unit and the break-even point in units and dollars. (For units round your answer up to the next whole unit and for $ to the nearest dollar).(3 marks)
(ii) Calculate the margin of safety in dollars. (Round to the nearest dollar). 
(iii) How many units must be sold to earn an after-tax profit of $1,255,162? Assume a tax rate of 40%. (Round your answer up to the next whole unit). 
(iv) Suppose actual sales revenue exceed the estimated amount on the projected income statement by $612,000. Without preparing a new income statement, determine the amount by which the profits are underestimated. 
(v) The company’s management has decided to increase the advertising budget by $140,000 and reduce the average selling price to $200. These actions will increase sales revenues by $1 million. Will this improve the company’s financial situation? Prepare a new income statement to support your answer 

Part B
(i) Discuss the following statement. Include the core elements of sustainability in your discussion. ‘The concept of sustainability development applies to national economies but has nothing to do with individual businesses.’ 
(i) An increasing number of companies are reporting their sustainability performance. Explain why organisations report their sustainability performance, particular when in many countries such reporting is voluntary. Does the increase in the number of companies reporting their sustainability performance necessarily means that these are more sustainable in their outlook and performance? Discuss.

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