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Microsoft Word - ACT205_assign_S121 Page 1 of 6 Asia Pacific College of Business and Law ACT205 Accounting for Managers Semester 1, 2021 Submission Requirements. UNIT CODE: ACT205 UNIT NAME: ACCOUNTING FOR MANAGERS Assignment Information Semester 1 2021 Assessment 45% The assignment is to be submitted before 23.59pm Monday 7th June 2021 in Week 14 The assignment must be lodged online via the ACT205 Learnline Assignment Lodgement link on the ACT205 Learnline site Assignment should be typed. Only word docs and/or Excel converted to pdf will be acceptable. Handwritten answers will be rejected. DO NOT LODGE BY FAX nor EMAIL nor at LECTURER'S OFFICE KEEP A COPY The assignment must be lodged on or before the due date indicated in the assignment details. The assignment must conform to the requirements set out in this assignment Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs. Failure to use an acceptable file naming convention may result in your assignment lodgement being rejected. Assignment lodgements will be acknowledged automatically on the Learnline site, on submission. DO NOT submit an assignment front sheet. KEEP A COPY - Ensure you have a copy of the assignment lodged. If you have submitted assessment work electronically, please make sure you have a backup copy. Resubmission As a general rule resubmission of assessment items is NOT possible, however the Lecturer may ask for resubmission if it is deemed appropriate. Details for such resubmission will be made available by the Lecturer if and when the situation occurs. University Plagiarism policy Plagiarism is the unacknowledged use of material written or produced by others or a rework of your own material. All sources of information and ideas used in assignments must be referenced. This applies whether the information is from a book, journal article, the internet, or a previous essay you wrote or the assignment of a friend. Page 2 of 6 Asia Pacific College of Business and Law ACT205 Accounting for Managers Semester 1, 2021 Plagiarism policy is available at: http://learnline.cdu.edu.au/studyskills/studyskills/avoidingplagiarism.html and Student Breach of Academic Integrity Procedures http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf Assignments must be submitted by the due date. EXTENSIONS AND LATE LODGEMENTS LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE BUSINESS ADMINISTRATOR. Exceptions will only be made where assignments are late due to special circumstances that are supported by documentary evidence and may be subject to a penalty of 5% of assignment marks per day. Partially completed assignments will be accepted with appropriate loss of marks for the incomplete portion. Should students foresee potential difficulties with submission of assessment items, they should contact the lecturer immediately the difficulties come to notice, to discuss suitable arrangements etc. for the submission of those assessment times. An Application for Assignment Extension or Special Consideration should be completed and provided to
[email protected]. This application form, explanation and instructions is available on the ACT205 CDU Learnline course site or direct from http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx Please note that it is now College policy that all extension requests must be approved by the Business Administrator. The lecturer is no longer able to personally approve extension requests. Leaving a request for an extension, special assessment or special consideration until the last moment, based on grounds that students could have reasonably been able to foresee, may result in the application being rejected. Page 3 of 6 Asia Pacific College of Business and Law ACT205 Accounting for Managers Semester 1, 2021 Question One Jeremy is a manager employed by Fast Track Door Stop Pty Ltd. He is worried that the company’s cash position is not as strong as it should be as whenever he pays the trade accounts payables the business is short of cash. He has asked you to look at how long it takes to collect the accounts receivables and what the size of the average accounts receivables would be if the company was able improve the collection period so that it was less than the payment period for payables of 30 days. He thought that a collection period of 28 days would be reasonable. All sales are on credit terms. He also believes that the inventory stays too long in the company’s warehouse and that the cash flows would be improved if inventory could be turned around in a shorter period thereby lessening the stockholding costs and improving cash flow. He thinks that a target turnaround of 30 days should be achievable. The following data was extracted from the financial statements Fast Track Door Stop Pty Ltd Profit and Loss Account (Extract) for the year ended 30th June 2021 Net Sales $1,390,318 Cost of sales 851,666 Fast Track Door Stop Pty Ltd Statement of Financial Position (Extract) As at 30th June 2021 2020 Current assets Accounts receivable $191,800 $143,400 Inventory 119,400 76,600 Required Advise Jeremy about: a) The current collection period for accounts receivables and what the projected average accounts receivables would be if the collection period was reduced to 28 days. b) The benefits and risks associated with a reduced accounts receivable collection period. c) The methods that the credit control department can employ to improve the collection of accounts receivables. d) The time that the inventory currently stays in the warehouse and what the average inventory value would be if Jeremy’s target of 30 days was met. e) The benefits and risks associated with a reduced inventory holding period. Page 4 of 6 Asia Pacific College of Business and Law ACT205 Accounting for Managers Semester 1, 2021 (Total 8 marks) Question Two Nimh and Alan run a microbrewery in Darwin. They have estimated their cash receipts and payments for the quarter ending 30th September 2021. July August September Receipts Sales $132,000 $154,000 $188,000 Sale proceeds of old fermentation tanks 65,000 Payments Ingredients 34,000 39,100 47,900 Brewer’s wages 10,000 10,000 10,000 Salaries and retail staff wages 35,000 39,000 45,000 Replacement fermentation tanks 132,500 Rent and administration expenses 20,000 20,000 20,000 At the 30th June 2021 the business had a bank balance of $38,900. Required: a) Prepare a cash budget for July, August and September 2021 identifying the monthly total receipts, total payments and the anticipated closing bank balance at the end of each month. b) Nimh and Alan have been looking at the opportunity for expansion of their business. At the moment they are replacing the old equipment but are considering the purchase of additional fermentation tanks with a larger capacity in the future in three to four years’ time. They would like advice about leasing the replacement tanks instead of buying them outright in July and how this could affect their projected cash flow and the flexibility of their options. They have advised you that the monthly lease payments would be $11,500 per month. Prepare an amended cash budget to reflect a leasing agreement instead of an outright purchase of the replacement fermentation tanks. (Total 15 marks) Page 5 of 6 Asia Pacific College of Business and Law ACT205 Accounting for Managers Semester 1, 2021 Question Three Beautiful Pets Pty Ltd manufactures a range of pet shampoos which includes three products, Pampered Pooch dog shampoo, Cutie Kitty cat shampoo and Itchy Gone flea shampoo. Their projected sales and cost data for 2022 based on past practice are as follows: Pampered Pooch Cutie Kitty Itchy Gone Sales mix (400,000 units) 100,000 140,000 160,000 Selling price $32 $44 $28 Variable cost per unit 23 28 16 Total fixed costs $645,150 Required: a) Calculate the break-even point in total units and units per product for the 2022 projections. b) Calculate the before tax profit (loss) for 2022 based on these projections. c) A competitor has been increasing their market share and the management team at Beautiful Pets Pty Ltd are keen to change their focus and at the same time increase their profit before tax. They have suggested that they should concentrate on the product with the highest contribution margin and propose changing the sales mix to 20% Pampered Pooch, 50% Cutie Kitty and 30% Itchy Gone whilst maintaining the same total sales of 400,000 units. This initiative would increase fixed costs by $65,050. Advise management whether this proposal will increase profit before tax, any changes to the break-even point in total units and units per product, and any other observations that you