Task back to top Your assignment consists of different question styles including discussion questions, reports, exercises, problem questions and spreadsheet questions. It assesseslearning outcomesas...

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Your assignment consists of different question styles including discussion questions, reports, exercises, problem questions and spreadsheet questions. It assesseslearning outcomesas listed in the assignment rationale below.


The purpose of this assignment is to continue to develop skills in costing systems with an emphasis on the role of control in managing the production of goods and services efficiently in the workplace. Each question builds on the knowledge gained through the first assignment to develop the concepts of management accounting control through costing. Each question uses realistic data and professional practices similar to that found in workplaces.


Question 1: Process Costing (20 marks in total)






Lake Surf Company uses an automated process to clean and polish its merchandise items. For March 2017, the company conducted the following activities:











































































































Units


















Beginning work in process inventory



3,000 Items








[Direct material - 100%]














[Conversion costs - 25%]














Units placed in production






12,000 units








Unites Completed






9,000 units








Ending work in process inventory






5,000 units








[Direct material - 100%]














[Conversion costs - 60%]






























Costs


















Cost of beginning work in process














Direct materials






$ 2,100








Conversion costs






$ 485



















$ 2,585



Direct material costs, current









$ 9,000



Conversion costs, current













$ 10,045







Required:


Using the weighted average method, determine the following:


1a. the number of equivalent units


1b. cost per equivalent unit


1c. ending work in process inventory


1d. cost of normal and abnormal spoilage


1e. cost of goods completed and transferred out during March, 2017






Question 2: Budget (20 marks in total)






Lulu Company has the following budgeted sales for the next six-month period:


































Month



Unit Sales



January




48,000



February




84,000



March




60,000



April




72,000



May




48,000



June




80,000







There were 69,000 units of finished goods in inventory at the beginning of January. Plans are to have an inventory of finished products that equals 100% of the following month sales plus 25% of the second month sales. Two kilograms of raw materials are required for each unit produced. From January, each kilogram of material costs $20 (up from $18 in December last year). Inventory levels for materials are equal to 40% of the needs for the next month. Lulu Company uses a FIFO inventory method for both raw material and finished goods.






Required:


2a. Prepare a production budgets in units for January and February


2b. Prepare a materials usage budget in kilograms and dollars for January


2c. Prepare a materials purchases budget in kilograms and dollars for January


2d. List and explain some benefits to an organisation of preparing an operating budget, use the textbook and other relevant sources to support your answer






Question 3: Variance Analysis (20 marks in total)






The following standard cost data relate to the operation of Dragon Company for 2016. The standard cost per unit is based on the normal annual production of 15,000 units.







































Standard cost per unit



Direct materials



4kg @ $5.00 per kg








$ 20.00



Direct labour



2hrs @ $12.50 per hr








$ 25.00



Variable overhead



2hrs @ $3.00 per hr








$ 6.00



Fixed overhead



2 labour hrs @ $5.00 per hr








$ 10.00



Total













$ 61.00







Actual production in 2016 was 10,000 units. The following data was obtained from Dragon Company’s records:














































Direct material purchases









45,000



Kilograms



Cost of direct materials purchases








$ 202,500








Actual direct labour hours









25,000



Hours



Actual direct labour costs








$ 325,000








Actual variable overhead costs








$ 100,000








Actual fixed overhead








$ 125,000












Required:


3a. Calculate and show flexible budget variance for each cost item.
3b.Calculate the following variances and indicate whether they are favourable or unfavourable.


i.Direct material price variance


ii.Direct material efficiency variance


iii.Direct labour price variance


iv.Direct labour efficiency variance


v.Variable manufacturing overhead spending variance


vi.Variable manufacturing overhead efficiency variance


vii.Fixed manufacturing overhead spending variance


viii.Fixed manufacturing overhead efficiency variance






Question 4: Relevant Costs and Decision Making (20 marks in total)






Gordon Manufacturing is approached by a new customer to fulfill a 4,000 unit, one-time-only special order for a product similar to the one offered to existing customers. At present, the company has excess operating capacity. The following data apply to sales to existing customers:














































Variable Costs:








Direct materials



$ 100



Direct labour



$ 50



Manufacturing support



$ 90



Marketing costs



$ 35



Fixed Costs:








Manufacturing support



$ 115



Marketing costs



$ 40



Targeted selling price



$ 500







Required:


4a. For Gordon Manufacturing, what is the total relevant cost of making this special order?


4b. If the new customer is offering $350 per unit sold, should the company accept the special offer? Explain.


4c. Suppose the company is already operating at capacity when the special order is received. What would be the relevant cost of accepting the special order?


4d. List and explain any TWO potential problems that should be avoided when conducting a relevant cost analysis. Use the textbook and other relevant sources to support your answer.






Question 5: Balanced Scorecard (20 marks in total)


The Balanced Scorecard can be described as a tool that “translates an organisation’s mission and strategy into a set of performance measures that provide the framework for implementing its strategy” (Horgren et al., 2014, p.585). Drawing on the textbook and no less than Ten (10) academic references, provide your description of the Balanced Scorecard, in particular its relationship to planning, performance targets, strategy, prediction, motivation, cybernetic effects and control (No more than 800 words).






Rationale



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This assessment task will assess the following learning outcome/s:



  • be able to discuss and critique the historical and ethical development of management accounting.

  • be able to apply cognitive skills in the design and operation of costing systems.

  • be able to critically evaluate the design and operation of performance management systems.

  • be able to explain the role of management accounting in organisational contexts and the implications for management accounting of different paradigms.

  • be able to apply analytical and synthetical skills in report writing, and use quantitative techniques and computer software including using the Internet as a professional source.

  • be able to create and implement computerised decision models.

  • be able to critique how managers make decisions.


This assignment assesses your achievement of learning outcomes including:



  • the application of cognitive skills in the design and operation of costing systems;

  • the design and operation of performance management systems;

  • the role of management accounting in organisational contexts:

  • the implications for management accounting of different paradigms;

  • the application of analytical and synthetical skills in report writing;

  • quantitative techniques and computer software;

  • using the Internet as a professional source;

  • the history of management accounting

  • the creation and implementation of computerised decision models; and

  • to critique how managers make decisions.


In particular, this assignment is designed to assess your application of knowledge, understanding and skills in certain topics including cost flows in management accounting, spreadsheet construction, job and process costing, variance analysis, joint costing and budgeting.


For spreadsheet problems, good answers will comply with the spreadsheet requirements including the separation of data entry and report/solution areas, pasted normal and formula view with row and column headings and the use of the IF function where appropriate.
Review the examples in the Spreadsheet Advice PDF provided online in Interact2 Resources.


Marking criteria and standards



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Your assignments will be marked as a whole with recognition being given to application of knowledge, quality thinking and application of skills. For some questions, students have a chance to demonstrate some creativity, or provide their own examples or give evidence of wider reading or structure a computer spreadsheet model in an innovative manner. We also need to avoid the snowballing effects of cumulative errors - that is, an error early in a practical question which carries through. Thus, a marking system is used with deductions for errors and omissions. Full marks are possible for well structured, complete, quality answers.


Any assignments with evidence of plagiarism may be referred to the university's academic misconduct processes and will receive a grade of zero. See www.csu.edu.au/faculty/business/studentresources/plagiarism


The marking criteria for your assignments will be based on the content of the subject as identified by thelearning objectivesas outlined above and at the beginning of each of the various topics as outlined at the beginning of each Interact2 topic. Good spreadsheet answers will comply with the assignment requirements.


Example criteria used in marking essays/discussion questions/case studies/business reports
Note that business reports are normally more structured than essays. Find guidance on business report writing structures on the Internet. Here is one example:www.business.unsw.edu.au/Students-Site/Documents/Writingareport.pdf


Criteria


Relevance of the answer. Are the important issues raised in the question identified? Did the student answer the questions?
Critical capacity. Has reference material been carefully analysed or critically accepted?
Structure of the answer. Is the answer well-structured and the argument logically developed?
Writing style. Is the style concise and lucid or confused, making it difficult for the reader to get the point?
Scope of reading. Does the answer indicate a satisfactory coverage of literature relevant to the questions?


Answers should:



  • be well planned with arguments flowing logically;

  • use correct sentence structure, punctuation and spelling;

  • present original ideas where appropriate;

  • and present a justified conclusion and acknowledge all sources.


Note:
Normal distribution curves for grades are not utilised in this subject.


You can discuss your work with each other prior to submission using the discussion forum. However, please do not post complete versions of answers to the discussion forum. Do not leave assignments until the last minute.

Answered Same DaySep 26, 2020ACC512Charles Sturt University

Answer To: Task back to top Your assignment consists of different question styles including discussion...

Aarti J answered on Sep 28 2020
134 Votes
Management accounting
Course Name
Course Date
Student’s Name
RUNNING HEAD: BALANCED SCORE CARD    1
Answer 1
    
    
    Physical units
    Direct materials
    Conversion
    1a
    Work in process, beginning
    3000
    
    
    
    Started during period
    12000
    
    
    
    To account for
    15000
    
    
    
    
    
    
    
    
    Units completed
    
    
    
    
    Work in process, beg
inning
    3000
    
    2250
    
    Started and completed
    7000
    7000
    7000
    
    Work in process, Ending
    5000
    5000
    3000
    
    Equivalent units
    15000
    12000
    12250
    
    
    
    
    
    
    
    Total
    Direct materials
    Conversion
    1b
    Work in process, beginning
    2585
    2100
    485
    
    Costs added during period
    19045
    9000
    10045
    
    Total costs to account for
    21630
    11100
    10530
    
    Divide by equivalent units
    
    12000
    12250
    
    Equivalent unit costs
    1.785
    0.925
    0.860
    
    
    
    
    
    1c
    Work in process Ending
    
    
    
    
    Transferred in
    4625
    
    
    
    Conversion
    2579
    
    
    
    Ending costs
    
    7204
    
    
    
    
    
    
    1d
    Cost of normal or abnormal wastage is
    1184
    
    
    
    
    
    
    
    1e
    Work in process, beginning
    
    
    
    
    Completion of beginning
    
    
    
    
    Direct materials
    2100
    
    
    
    Conversion
    485
    
    
    
    Total beginning inventory
    
    2585
    
    
    Started and completed
    
    12492
    15077
Answer 2:
    
    Production budget
    
    
    
    
    
    Jan
    Feb
    
    
    
    2a
    Sales
    48000
    84000
    
    
    
    
    Add: Ending inventory
    99000
    84000
    
    
    
    
    
    147000
    168000
    
    
    
    
    Less: Beginning inventory
    69000
    99000
    
    
    
    
    Production
    78000
    69000
    
    
    
    
    
    
    
    
    
    
    2b
    Material usage
    Jan
    
    
    
    
    
    Production
    78000
    
    
    
    
    
    Material used
    2
    
    
    
    
    
    Total materials used
    156000
    
    
    
    
    
    Cost per kg
    20
    
    
    
    
    
    Total material cost
    3120000
    
    
    
    
    
    
    
    
    
    
    
    2c
    Production
    78000
    
    
    
    
    
    Material used
    2
    
    
    
    
    
    Total materials used
    156000
    
    
    
    
    
    Add: Ending inventory
    55200
    
    
    
    
    
    
    211200
    
    
    
    
    
    Less: Beginning inventory
    62400
    
    
    
    
    
    Total purchases
    148800
    
    
    
    
    
    Cost per unit
    20
    
    
    
    
    
    
    
    
    
    
    
    2d
    The operating budget helps in analyzing the requirements of the materials as well as production, it also helps in knowing different operating expenses that the company is likely to incur
    
    
    
    
    
    
Answer 3:
    Standard Production
    
    1500 Units
    Actual Units
    
    1000
    
    
    
    Part A
    
    
    Direct Material
    
    
    Actual Units
    
    202500
    Standard Cost(20*10000)
    
    200000
    
    
    
    Variance
    
    2500 unfav
    Direct Labour
    
    
    Actual costs
    
    325000
    Standard Labour cost
    
    250000
    
    
    
    Variance
    
    75000 unfav
    Variable overhead
    
    
    Actual variable OH
    
    100000
    Standard Variable OH (6*10000)
    
    60000
    
    
    
    Variance
    
    40000 unfav
    Fixed Overhead
    
    
    Actual Fix OH
    
    125000
    Standard fixed OH (10*10000)
    
    100000
    
    
    
    Variance
    
    25000 unfav
Part b:
    Direct material price variance
    =
    (AP-SP)*AQ
    =
    (5-(202500/(45000))*45000
    =
    22500
    Fav
    
    
    
    
    
    
    Direct material usage variance
    =
    (AQ-SQ)*SP
    =
    (45000-40000)*5
    =
    25000
    Unfav
    
    
    
    
    
    
    Labor rate variance
    
    =
    (AR-SR)*AH
    =
    (13-12.5)*25000
    =
    12500
    Unfav
    
    
    
    
    
    
    Labor efficinecy variance
    =
    (AH - SH)*SR
    =
    (25000-20000)*12.5
    =
    62500
    Unfav
    
    
    
    Variable manufacturing overhead spending variance
    =
    (Actual hours...
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