MGT504-Introduction to Accounting Report Writing – Accounting Assignment Help

Assignment Task

Task

Task 1.

To assist management with their decision-making, explain the purpose of each of the following;

• The difference between fixed costs and variable costs.
• Concepts of contribution
• Margin of safety
• Break-even
• Cash budgets

Task 2: CVP.

Sky Apartments has an average price per room of $220 and has the following annual costs:

1. How much is the contribution margin per room?
2. Calculate the number of rooms that must be sold annually for Sky Apartments to break even.
3. How many rooms must be sold annually for the owners of Sky Apartments to make a profit before tax of $127,000?
4. Calculate the annual profit (or loss) before tax, if 4,000 rooms are sold.

Task 3: Costing and CV.

Aotearoa Caterers makes meals for local sports groups and Councils.

Manufacturing overheads are assigned to meals using direct labour hours as a cost driver.

At the end of 2020, you receive the following summary from the company:

Total meals manufactured                                     60,000 meals
Total direct labour hours                                    21,600 hours
Direct labour wages cost                                    $18.00 per hour

1. Calculate the total overhead cost pool.
 

2. Calculate:

a) the amount of overhead to be applied per direct labour hour worked.

b) the number of direct labour hours per meal.
 

3. Calculate the direct cost of each meal.
4. Calculate the variable cost of each meals.
5. In November, 6200 meals were sold. Calculate the total profit for November on the meals sales.

Task 4: Budgeting.

Christopher’s Cow Farm had sales of $125,000 and $105,000 in July and August and has projected sales of $175,000, $195,000 an $210,000 for September, October and November of this year respectively. The following data represents the firm’s historical and forecast cash behaviour.

1. From the above data prepare a cash budget for September, October, and November. Use the template provided.

Task 5: Flexed Budget and Variance Analysis.

Sprinkle Dive Tours Ltd originally budgeted for 3,000 dive passengers to participate in diving tours over the summer period (December – February). The actual number of dive passengers was 2,850.

• Steven Sprinkle owns three (3) boats which are depreciated on a straight-line basis.
• Scuba equipment has to be safety checked and refilled on a per passenger basis.
• Staff costs vary according to the number of passengers per trip.
• Administrative costs over the cost of renting boat sheds and office facilities.

1. Prepare a flexed budget report (including variances) for Sprinkle Dive Tours Ltd.

2. Steven would like to know how they performed over the summer period. Interpret your flexed budget report for the owner, Harrison.

3. Why does a report based on a flexible budget provide a better way of evaluating performance?

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