ACC00714 MANAGERIAL ACCOUNTING</o:p> MAJOR ASSIGNMENT </o:p> (Session 2 2018)</o:p> </o:p> This assignment is worth 30 marks</o:p> </o:p> See MySCU for more details...

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ACC00714 MANAGERIAL ACCOUNTING

MAJOR ASSIGNMENT

(Session 2 2018)

This assignment is worth 30 marks

See MySCU for more details about the time and submission requirements

On The Beach manufactures swimwear and accessories for men and women. They operate out of rented premises in Currumbin Creek Road where the factory is split into a manufacturing and storage area and a retail space.

The business produces 4 products:

· One-piece swimsuits for women

· Board shorts for men

· Beach Towels

· Beach Bags

You, as the management accountant for the firm, have been asked to prepare a range of budgets for the 2019 year. The following information has been gathered:

Sales

One-piece

Board shorts

Towels

Beach Bags

January 2019

1,800

1,600

200

400

February 2019

1,400

1,100

180

300

March 2019

1,300

1,160

160

260

April 2019

1,000

1,000

120

140

May 2019

400

600

60

80

June 2019

400

500

40

40

July 2019

400

500

40

40

August 2019

600

400

40

80

September 2019

1,300

1,160

160

260

October 2019

1,200

1,100

180

300

November 2019

1,200

1,100

180

300

December 2019

1,500

1,200

200

400

January 2020

1,600

1,400

220

440

February 2020

1,600

1,400

200

400

One-piece swimsuits

Board short

Towel

Beach Bag

Selling Price

$100

$80

$50

$45

Product

One-piece swimsuits

Board short

Towel

Beach Bag

Direct Materials & Direct Labour per unit

Fabric

$20.75

$31.25

$26.25

$25

Elastic/Trim

$13.50

$3.00

$5.25

$1.5

Direct Labour (sewing time/machine hours)

1 hour

0.75 hours

0.4 hours

0.6 hours

Other Cost information:

Production Related Costs

Operating Costs

Direct Labour

$28/hour

Indirect Labour

$1/unit

Indirect Materials

$2/unit

Utilities

$450/month

$50/month

Insurance

$2,200/year

$6,000/year

Factory Supervisor’s Salary

$54,000/year

Administration Staff Wages

$2,500/month

General Office Expenses

$1,500/month

Rent

$5,600/month

$1,400/month

Repairs and Maintenance

See below

Inventory: At the end of each month the business plans to have 50% of the following month’s sales units in stock as finished goods and 75% of the direct materials required for the next month’s production.

Cash Collections: 20% of sales are through the retail outlet at the factory. These customers pay for their purchases at the time of sale. The remainder of sales are to businesses that resell On The Beach products. Credit is extended to all business customers. It is estimated 60% of these sales are collected in the month of sale and the remaining 40% are collected in the following month.

Cash Payments: All purchases, other than the purchase of direct materials, are paid at the time the expense is incurred. It is estimated 30% of accounts payable will be paid in the month the direct materials are purchased and the remaining 70% will be paid in the following month.

The interest rate payable on the loan is 8% per annum. Interest is paid monthly. The loan is on an interest only basis and the principle can be repaid at any time.

Depreciation of plant and equipment totals $10,000 for the year. Depreciation is recorded monthly.

Repairs and maintenance related to manufacturing plant and equipment is estimated to be $2,500 each quarter payable in March, June, September, and December.

Variable manufacturing overhead is allocated based on machine hours. Fixed manufacturing overhead is allocated based on units of production. Ignore GST and Income Tax. Round amounts other than unit costs to nearest dollar value.

The opening Balance Sheet is provided below:

On The Beach

Balance Sheet

As at 31 December 2018

Assets

Current Assets

Cash

42,250

Accounts Receivable

123,650

Finished Goods Inventory

99,150

Materials Inventory

114,375

Total Current Assets

$379,425

Non-current Assets

Equipment

85,000

Less: Accumulated Depreciation

( 8,000)

Total Non-Current Assets

$77,000

Total Assets

$456,425

Liabilities & Shareholder Equity

Current Liabilities

Accounts Payable

92,500

Total Current Liabilities

$92,500

Long-Term Liabilities

Bank Loan

185,000

Total Long-Term Liabilities

$185,000

Total Liabilities

$277,500

Shareholders’ Equity

Share Capital

150,000

Retained Earnings

28,925

Total Shareholder Equity

$178,925

Total Liabilities & Shareholders’ Equity

$456,425

Required:

1. Using the Excel template provided, prepare the following budgets for the twelve-month period from January 2019 to December 2019. The first worksheet should contain your raw data and assumptions and all future worksheets should be linked to this data. Use a different worksheet for each budget. Show all calculations and use Excel functions where possible. While you should use examples in your text as a guide, the key to using spreadsheets is that they are structured so that others can use them and follow the flow of information without difficulty.

a. Monthly Sales Revenue and Cash Collection Budget

b. Production Budget in Units

c. Direct Materials and Cash Purchases Budget

d. Direct Labour Budget

e. Manufacturing Overhead Budget (break into variable and fixed components)

f. Monthly Operating Cost Budget

g. Ending Inventory budget for Finished Goods

h. Cost of Sales Budget

i. Budgeted Income Statement for the year ended 31 December 2019

j. Monthly Cash Budget

Your budget spreadsheet must be submitted in Excel Format (not as an appendix in your WORD document).

2. Write a report (Maximum 1,500 words) for your manager to present to the upcoming Board meeting. The report should include:

· an overview of the expected results for the 2019 year;

· an analysis of the Contribution Margin for each product and recommendations regarding the products On The Beach manufacture and sell;

· recommendations regarding the cash position of the business; and

· an analysis of current market conditions and future predictions that you believe should be considered when following year’s 2020 budget is prepared. You should use broader industry data and trends from sources such as IBISWorld and the Australian Bureau of Statistics to support your recommendations.

· Use visual aids such as tables and graphs to enhance your report presentation.

The report should be submitted as a WORD (not PDF) document.

Please use the templates provided to prepare the:

(1) Budget schedules (excel); and

(2) Board Report (word)


Assessment Criteria

Poor

Unsatisfactory

Satisfactory

Good

Excellent

Spreadsheet layout and presentation (2.5 Marks)

Spreadsheet Layout including Raw Assumptions & Data, appropriate tabs correctly named for each section of the budget and use of Excel tools in spreadsheet.

Insufficient data. Spreadsheet has not been separated into worksheets. Inappropriate layout.

Poor use of Excel tools.

0 Marks

Use of Worksheets but layout is difficult to follow. Worksheets have not been named.

Limited use of Excel tools.

Inconsistencies throughout.

1 Mark

Use of appropriately named Worksheets. Reasonable use of Excel tools but application is inconsistent.

Reasonable layout.

1.5 Marks

Use of appropriately named Worksheets.

Consistent use of Excel tools.

Layout appropriate but lacks consistency in some areas.

2 Marks

Use of appropriately named Worksheets. Very good use of a range of Excel tools. All worksheets are linked resulting in a consistent flow of data between worksheets.

2.5 Marks

Preparation of Budgets (12.5 Marks)

For each Budget:

Appropriate layout (monthly) broken into product categories; Clear Headings; Accurate calculations for monthly totals and annual totals.

Budgets are mostly inaccurate and incomplete. An understanding of the application of the course content in a business context has not been demonstrated.

0-2.5 Marks

Some Budgets are accurate but there are inconsistencies in the data or basic calculations are incorrect. Assignment instructions have not been followed and key items have been left out.

3-6 Marks

Most budgets are accurate but there are inconsistencies in the data or basic calculations. Key items have been included and a reasonable understanding of the application of course content has been demonstrated.

6.5-9 Marks

All budgets have been prepared and are mostly accurate - minor errors arising from careless mistakes and lack of attention to detail. A very good understanding of the application of course content has been demonstrated.

XXXXXXXXXXMarks

All budgets have been accurately prepared. An excellent understanding of course content has been demonstrated and executed.

XXXXXXXXXXMarks

Report for the Board (15 Marks)

The report must be professionally presented and cover all issues raised in the assignment instructions. A business report format must be used along with visual aids such as tables and graphs.

Presentation is unprofessional with numerous spelling and grammatical errors and it does not cover the key requirements set out in the assignment instructions.

Inadequate analysis.

Not presented in the format of a business report.

Very limited use of visual aids.

0-3.25 Marks

Presentation is reasonable but the key issues have not been adequately addressed. Spelling and grammatical errors make the report unpresentable requiring the report to be rewritten before it could be presented. Opinions expressed lack insight, are unsupported (inadequate referencing) or referenced external sources lack relevance. Not all aspects of a business report format have been utilised. Limited use of visual aids.

3.5-7 Marks

Presentation is reasonable and the key issues have been addressed but more insight into the business could be demonstrated. Opinions expressed are unsupported (inadequate referencing) or referenced external sources lack relevance. Some minor spelling and grammatical errors. Most components of a business report format have been incorporated. Reasonable use of visual aids.

7.5-11 Marks

Good, well written presentation and all issues have been covered. Demonstrates a solid insight into the business and recommendations are appropriate. Relevant external sources (at least 2) have been used to support recommendations and these have been appropriately referenced. All components of a business report format have been incorporated. Good use of visual aids.

XXXXXXXXXX75Marks

Excellent presentation with no spelling or grammatical errors.

Demonstrates excellent insight into the business operations and external issues that may affect the business.

Extensive use of relevant external resources to support recommendations. Appropriate referencing. All components of a business report format have been incorporated. Excellent use of visual aids.

13-15 Marks


Answered Same DayAug 23, 2020ACC00714Southern Cross University

Solution

Aarti J answered on Aug 26 2020
51 Votes
SOUTHERN CROSS UNIVERSITY
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    Unit Code:
    
    Tutor’s name:
    
    Assignment No.:
    
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ary. I understand the penalties that apply for plagiarism and agree to be bound by these rules. The work I am submitting electronically is entirely my own work.
    Signed:
(please type your name)
    
    Date:
    
On The Beach
2019 Budget Report
    Date of Board Meeting
    
    Name of Report
    
    Author(s)
    
    Approved by:
    
1. Overview of Expected Results
On the beach sells four different products which includes one piece swimsuits, board shorts, towels and beach bags. The company has highest sales of one piece swimsuits. The company reports the highest sales in the month of January, Fe
uary, March and December. The company has low sales in the month of May, June, and July. The board shorts, towels and beach bags also has the highest sales in the month of January. The company has the highest sales in the month of January which is $336000. The company has the credit sales of 80%, out of which 60% in collected in the same month and the remaining in the next month whereas the cash sales of the company is 20%.
The company has the variable cost per unit of $3.00 and the fixed overhead cost of $5.34 per unit.
The cost of sales of the company is $1882246 whereas the total sales of the company was $2358600 and the net income of the company is $390154.
The company has the ending cash balance of $467800. Overall, the company has shown a positive results across the year.
2. Product Analysis
Contribution margin is the selling price of the product less the variable costs. The contribution margin of One-piece suimsuit is...
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