Page 1 of 5 BUACC 5933 COST AND MANAGEMENT ACCOUNTING Semester 1, 2020 GROUP ASSIGNMENT DUE DATE AND TIME: XXXXXXXXXXWeek 10, Sunday 31st May at 5:00 PM XXXXXXXXXXOnline group submission through...

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BUACC 5933
Semester 1, 2020

DUE DATE AND TIME: XXXXXXXXXXWeek 10, Sunday 31st May at 5:00 PM
XXXXXXXXXXOnline group submission through Moodle)
PERCENTAGE OF FINAL GRADE: 25% (25 marks) of your total marks for this unit.
Assignment Description / Requirements
• This is a group assignment. Each group must be completed in a group of 2 to 3
members. It is the students’ responsibility to form/ join a group and to ensure that the
group dynamics work. Please make sure that names and ID numbers of all group
members are stated on the cover sheet of your submission.
• The assignment has three parts. The assignment requires development of a model
using a spreadsheet and a word document. Both excel spreadsheet and word
document have to be submitted to the assignment folder.
• Students must fully reference the source(s) of all materials, even if you have re-
expressed the ideas, facts or descriptions; acknowledge all direct quotations; and not
submit their work that has been researched and written by another person. Plagiarism
is heavily penalised.
• Please monitor Moodle regularly for any further instructions or announcements.
Submission Instruction:
This assignment is to be submitted online only. (You are not required to submit a hard copy)
The completed assignment must be submitted into the allocated area, Assignment Dropbox,
on Moodle on or before the due date. Only one submission per group is required. i.e. only
one student submits on behalf of all other group members.
When you are required to submit an assignment through your Moodle Unit site, you will
eceive an email to your Federation email address confirming that it has been submitted. Once
submitted you cannot take your assignment back but you can submit another version. The
most recent version submitted will be marked.
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You must keep a backup copy of every assignment you submit, until the marked assignment
has been returned to you. In the unlikely event that one of your assignments is misplaced, you
will need to submit your backup copy.
Any work you submit may be checked by electronic or other means for the purposes of
detecting collusion and/or plagiarism.
Marking, Dispute Resolution and Free Riders:
The marking will be done for the group as a whole not on individual basis. Each group
member is awarded the same mark.
Working in groups has its pros and cons. It is beneficial that you can learn a lot by discussing
the issues with your fellow students. Invariably different group members
ing different skills
to a project; it is up to you to make the best of it. If you find your group members are “not
pulling their weight” or there are problems with any member’s commitment, please try to
esolve those issues amongst yourselves. Open and honest communication always helps.
If you are unable to resolve these issues, you are most welcome to see your lecturer and tutor.
We will try to sort out the problems together. Do this as soon as possible and certainly before
the due date. In case of any dispute among the group members or if there are any free riders
identified in the group, members should report to your lecturer in writing.
Assessment Feedback:
Students who submit their work by the due date will receive their marks and feedback on
Moodle within 15 working days of the assignment submission due date.
• There is a discussion area on Moodle titled ‘Assignment discussion Forum’. This area is
for you to discuss the assignment. It is an area for students to help each other.
• The assignment is to comply with the University’s General Guide to Writing and Study
Skills, General Guide to Referencing, and Assignment Layout and Appearance
Guidelines, via the links below:
• Penalties for late submission: The marking penalties will apply if you submit an
assessment task after the due date without an approved extension: 5% will be deducted
from available marks for each calendar day up to five days, and work that is submitted
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more than five days after the due date will not be marked. Requests for extension of time
must be made with the lecturer concerned and based on Special Consideration guidelines.
For further information on Discretionary Assessment Extensions and Special
Consideration, including access to the policy, procedures or associated forms, see
• Plagiarism and collusion are forms of cheating and are considered a serious academic
misconduct, and severe penalties are associated with them. Please refer to the university
policy for more information.
• Turnitin: Students are strongly recommended to check originality through Turnitin, prior
to submitting the final assessment. For more information about Turnitin and how to check
for originality, refer to the following useful links:
This assignment has three parts.
Part A:
Button Pty Ltd manufactures two types of children’s beds. The two products are Serta and
Tempur. Button company, who cu
ently use a conventional costing system, applies
manufacturing overhead to all units at the rate of $90 per machine hour. Production
information is as follows:
Serta Tempur
Direct material cost $40 $65
Direct labour cost $35 $35
Budget volume (units) 15,000 30,000
The management accountant at Button company has determined that the firm’s overhead can
e classified into three main activities: manufacturing machine setups, machine processing
and product shipping. Information on the three cost drivers respectively is as follows:
Serta Tempur Total
Machine hours 25,000 45,000 70,000
Outgoing shipments XXXXXXXXXX
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Button Ltd has total overhead of $6,300,000 and has been categorised as follows:
Manufacturing setups $1,344,000
Machine processing $3,556,000
Product shipping $1,400,000
1. Calculate the unit manufacturing cost of the Serta and the Tempu beds using the
company’s cu
ent overhead costing procedures.
2. Calculate the unit manufacturing cost of the Serta and the Tempu using activity-based
costing. Show your calculations using a simple Excel spreadsheet.
3. Is the cost of the Tempu bed distorted by the use of machine hours to allocate total
manufacturing overhead to production, and, if so by how much per unit?
4. Assume that the cu
ent selling price of the Tempu bed is $280 and the marketing
director has proposed to offer a $30 discount to increase sales. Is the discount
advisable? Advise management. Show supporting calculations.
5. ‘Conventional costing will always distort product costs.’ Discuss the validity of this
XXXXXXXXXX = 30 marks)
Part B:
Adam Smith, the owner of Button Pty Ltd, has explored the possibility of finding a cheaper
supplier for the raw material required for the production of the Serta and the Tempu beds. He
has an offer from a supplier which will reduce his raw material cost significantly and therefore
lead to higher profits. There have been some reports that the material under consideration is
of a poorer quality and has led to some minor accidents when sleeping the beds. The supplier
has pointed out that these accidents have been fairly minor and the cost of refunding the
clients and giving them some compensation for their injuries will still be cheaper overall for
Adam and therefore result in higher profitability for Button Pty Ltd.
Advise Adam on what decision he should take with regards to the supplier and raw material.
Support your answer with any cases or guidelines you consider relevant.
(500-600words) (10 marks)
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Part C:
You are required to prepare a proposal on the potential benefits and costs of implementing an
Activity Based Costing (ABC) system to determine customer profitability for a grocery
wholesaler, Santana Corporation. The company cu
ently use a conventional costing system.
The clients of Santana Corporation vary in size and therefore the smaller supermarket
operators will tend to place many smaller orders, whereas the larger supermarkets will place
larger orders but less often.
1. Advise Santana Corporation on suggested activities and activity drivers, explaining to
management why you consider these appropriate.
2. Using at least two academic research articles to support your background research,
advise the management of Santana Corporation on the potential benefits and costs
associated with implementing an Activity Based Costing system.
Total of 50 marks will be scaled to a mark of 25%.
- End of Document –
Answered Same DayMay 21, 2021BUACC5933


Akash answered on May 28 2021
54 Votes
BUACC 5933
Table of Contents
Part A    3
1.    3
2.    3
3.    3
4.    3
5.    4
Part B    4
Part C    5
1.    5
2    7
References    9
Part A
    Conventional Costing System
    Serta ($)
    Tempur ($)
    Direct Material Cost
    Direct Labour Cost
    Fixed Overhead
    Machine Hours
     Manufacturing cost per unit
    Activity Based Costing
    Manufacturing Setups
    Machine Processing
    Machine Hours
    Product Shipping
    Total Fixed Overhead
    Budgeted Units
    Per unit Fixed Cost
    Add:- Direct Material Cost
    Add:- Direct Labour Cost
    Total Per Unit Cost of Material
The cost of Tempur bed has decreased by $24 with the use of Activity based.
The discount is advisable since after giving the discount, the firm is able to earn a profit of $ 40 per unit using activity based costing.    
Conventional costing method does not allocate the fixed overheads properly as the activity based costing methods allocate it. According to Shea, Waldrup, Xu and Williamson (2018), in case of conventional costing method, the overhead are allocated based on machine or similar parameters rather than using different parameters for allocation of different type of cost. This results in a distorted picture and is not advisable for decision-making.
Part B
The owner of the company is getting an offer for cheaper quality raw material from one of the dealers. This will although reduce per unit cost of the products considerably but the same has many setbacks. Firstly, the company is required to make payments for the injuries cause due to
eaking or damaging of the bed while sleeping but it will have severe repercussions on the goodwill and reputation of the company. In the long term, no customers are going to buy the products, which may lead to decrease in future business. Besides that, the federal government does even not permit products, which may have a negative effect on the health of an individual.
As per Australian Consumer law, every products is require to meet certain quality benchmarks and if the same is
eached the government has the right to take action against the company (Hoozee & Hansen, 2018). Further, the company is also require to provide necessary guarantees with respect to its products. However, in the instant case, if the company fails to meet the benchmark than its products will not be allowed to be sold in the market, which will be a huge setback for the company.
In short, it can be said that although, per unit cost of the bed will be significantly low as compared to the cu
ent per unit cost. However, the company will have to suffer other problems, huge compensation, repairing costs, loss of reputation, loss of goodwill and even market credibility. On...

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