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Page 1 of 5 MAA 262 – Management accounting Trimester 1, 2018 Assessment –Individual Assignment Part 1 DUE DATE AND TIME: Week 5, Sunday 15th April at 11:59 PM (online group submission via CloudDeakin) PERCENTAGE OF FINAL GRADE: 10% (10 marks) of your total marks for the unit. Learning Outcome Details Unit Learning Outcome (ULO) Graduate Learning Outcome (GLO) ULO 3: Prepare and explain alternate product costing using job costing, variable and absorption costing, and activity based costing systems. Prepare an analysis; demonstrate the use of Excel in the analysis, and word Microsoft programs to prepare the assignment. ULO 6: Demonstrate a student-oriented approach to learning and teamwork and collaboration skills. GLO 2 & 5: Problem solving and communication. Assessment Feedback: Students who submit their work by the due date will receive their marks and feedback on CloudDeakin within 15 working days of the assignment submission due date. Description / Requirements You will need to have completed topics 1-4, to complete this part of your assignment. The assignment must be completed individually. 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. Please monitor CloudDeakin regularly for any further instructions or announcements. Deakin's Bachelor of Commerce and MBA are internationally EPAS accredite d . Deakin Business School is accredited by AACS B . https://www.efmd.org/index.php/accreditation-main/epas https://www.efmd.org/index.php/accreditation-main/epas https://www.efmd.org/index.php/accreditation-main/epas http://www.aacsb.edu/ http://www.aacsb.edu/ http://www.aacsb.edu/ Page 2 of 5 Submission Instructions 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 on CloudDeakin under the drop-box folder on or before the due date. Once submitted, you cannot retract your assignment but you can submit another version. Only the most recent version submitted will be marked. 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. When you are required to submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment Dropbox folder after uploading it, and check for, and keep, the email receipt for the submission. Notes • There is a discussion area on Cloud Deakin titled ‘Assignment discussion’. This area is for you to discuss the assignment. It is an area for students to help each other. • Penalties for late submission: The following 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 day up to five days, and work that is submitted more than five days after the due date will not be marked. 'Day' means working day for paper submissions and calendar day for electronic submissions. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date. • The final examination is the only hurdle requirement for this unit. If you choose not to submit this assignment, you will score zero for this assignment. • 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 MAA 262 unit guide for your responsibilities with regard to plagiarism and other academic offences. Page 3 of 5 • For more information about academic misconduct, special consideration, extensions, and assessment feedback, please refer to the document Your rights and responsibilities as a student in this Unit in CloudDeakin unit site. Assignment Part 1 Question 1 On the 1st of July 2016 Cam Rollins set up his own company, Twister Pty Ltd, to manufacture and distribute his own range of gym equipment. Cam recently graduated with a degree in exercise and sports science and believed he had a very good plan for his own designed exercise equipment. Cam also had some business experience so he knew how important it was to keep accurate accounting records from which to prepare his reports. At the end of his first year of operations, 30th June 2017, Cam prepared the following income statement which he has submitted to you for checking: $ $ Sales 585,000 Less operating expenses Purchases of raw materials 260,000 Purchases of factory supplies 13,000 Wages for factory staff directly involved in making the gym equipment 97,500 Wages for other factory staff 13,000 Administrative wages 13,000 Sale staff salaries 28,600 Advertising 6,500 Administrative expenses 10,400 Factory cleaning costs 6,500 Rent 32,500 Electricity 5,850 Factory equipment – purchase cost 182,000 Page 4 of 5 Office equipment – purchase cost 13,000 Sales manager vehicle – purchase cost 19,500 Production manager’s salary 52,000 Total operating expenses 759 850 Net Loss (174 850) After reviewing his company’s first year income statement, Cam was disappointed with the result. With his high level of expenses, the cash position was also in deficit. Cam has an appointment with the bank manager to go through is financial reports and to discuss whether his bank overdraft facility should be extended. Additional Information: • The non-current assets of Twister Pty Ltd are expected to have an estimated useful life of five years with no salvage value. • The factory occupies 70% of the rented facility, the administration area 10% and the sales department 20%. • Cam Rollins spends half of his time in the role of Production Manager and the remaining time equally across the sales and administration departments as manager. • Gas and electricity are essentially all consumed by the factory. • As at 30th June Twister had the following inventories: Raw Materials $ 26,000 Work in Progress 52,000 Finished goods 72,000 Required: a) Prepare a report for Cam Rollins outlining the errors he has made and the what the correct treatment should have been. (showing in a table may be appropriate) b) Prepare a Cost of Goods Manufactured Statement and a corrected Income Statement for the year. You must use Excel to prepare these statements. c) Based on your review of Twister Pty Ltd, recommend whether the bank should extend the bank overdraft facility to Twister Pty Ltd. Give supporting reasons for your decision and what additional reports/information the bank may request to assist in its decision. Ensure all references resulting from any research you undertake for this section are fully cited. (up to 500 words) (10+20+10 = 40 marks) Page 5 of 5 Question 2 Cam Rollins has explored the possibility of finding a cheaper supplier for the raw material required for the production of his gym equipment. 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 using the gym equipment. 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 Cam and therefore result in higher profitability for Twister Pty Ltd. Advise Cam 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) (40+10 = 50 marks) Total of 50 marks will scaled to a percentage out of 10.