Recent Question/Assignment

HOLMES INSTITUTE
FACULTY OF
HIGHER EDUCATION
Assessment Details and Submission Guidelines
Trimester T1 2019
Unit Code HA2011
Unit Title Management Accounting
Assessment Type Assignment
Assessment Title Group Assignment
Purpose of the assessment (with ULO
Mapping) Students are required to demonstrate their ability to apply their knowledge of cost concepts to various costing systems and to justify costing system choices. Additionally, students are to critically evaluate and use accounting information to specific cases, for decision-making and achievement of business goals (ULO 1, 6 and
7)
Weight 30% of the total assessments
Total Marks 30
Word limit Not more than 3000 words. Please use “word count” and include in assignment.
Due Date Week 10 Sunday at 11.59 p.m.
Submission Guidelines • All work must be submitted on Blackboard by the due date along with a completed Assignment Cover Page.
• The assignment must be in MS Word format, no spacing, 12-pt Arial font and 2 cm margins on all four sides of your page with appropriate section headings and page numbers.
• Reference sources must be cited in the text of the report, and listed appropriately at the end in a reference list using Harvard referencing style.
• It is the responsibility of the student who is submitting the work, to ensure that the work is in fact her/his own work. Incorporating another’s work or ideas into one’s own work without appropriate acknowledgement is an academic offence. Students should submit all assignments for plagiarism checking on Blackboard before final submission in the subject. For further details, please refer to the Unit Outline and Student Handbook.
HA2011 MANAGEMENT ACCOUNTING ASSIGNMENT
Individual Assignment Specifications
Purpose:
This assignment aims at developing your understanding of cost concepts, and demonstrate your ability to apply your knowledge of cost concepts to various costing systems and to justify costing system choices. Additionally, you are to critically evaluate and use accounting information to specific cases, for decisionmaking and achievement of business goals.
Instructions with Question 1 of the assignment.
This assignment is to be completed by a group of 2 - 4 students, as determined by your lecturer.
Each group is to choose one company from the top 100 ASX Company listing (available in Black Board) to answer Question 1 of the assignment. Register your group’s company name with your Lecturer, no later than Week 6. Company names will be approved by your Lecturer on a first-come-first-serve basis. No group can choose the same company within the same class.
Assignment Structure should be as the following:
Question 1 [10 marks]
a) Explain the value chain concept and discuss two (2) ways the value chain concept benefits organisations.
[3 marks]
b) Based on the organisation that you have selected, evaluate the organisation using the value chain concept. This explanation should include:
i. An identification of the company’s mission and objectives.
ii. A description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company.
iii. Draw the value chain model for the company. i.e. Tailor the model to your company’s operations, identifying its value-adding processes and support departments.
iv. Choose any 2 value-adding processes of your company from the diagram in (iii), and for each, explain the process. Give some specific examples on what value it contributes to the company’s products/services, leading to business decisions for improving customer and shareholder value.
v. Finally, comment on the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept.
[7 marks]
Question 2 [11 marks]
Prime Personal Trainers is a personal training service in Belgium for people who want to work out at home. Prime offers two different types of services: Setup and Continuous Improvement. Setup services consist of several home visits by a personal trainer who specialises in determining the proper equipment for each client and helping the client set up a home gym. Continuous Improvement services provide daily, weekly, or biweekly home visits by trainers.
Prime’s accountant wants to create a job costing system for Setup services. She decides to use direct labour cost as the allocation base for variable overhead costs, and direct labour hours for fixed overhead cost. To estimate normal capacity, she calculates the average direct labour cost over the last several years. She estimates overhead by updating last year’s overhead cost with expected increases in rent, supervisor’s salaries, and so on.
Following are her estimates for the current period:
Direct labour hours (based on 250 normal hours per month) 3000
Direct labour cost $ 75 000
Variable overhead (primarily fringe benefits) 150 000
Fixed overhead (office related costs) 120 000
Inventories consist of exercise equipment and supplies that are used by Prime for new clients. The following information summarises operations during the month of October.
A number of new jobs were begun in October, but only two jobs were completed: Job 20 and Job 22.
Account balances on October 1:
Equipment and supplies (raw materials) $ 5 000
Client contracts in process (Job 20) 3 500
Client contracts in process (Job 22) 1 500
Purchases of equipment and supplies:
Equipment $ 54 000
Supplies 500
Total $ 54 500
Equipment and supplies requisitioned for clients:
Job 20 $ 1 000
Job 21 500
Job 22 4 000
Job 23 5 000
Other jobs 40 000
Indirect supplies 500
Total $ 51 000
HA2011 MANAGEMENT ACCOUNTING

Direct labour hours and cost:
Hours Cost
Job 20 10 $ 250
Job 21 18 450
Job 22 15 375
Job 23 6 150
Other clients 180 4 500
Total 229 $ 5 725
Labour costs:
Direct labour wages $ 5 725
Indirect labour wages (160 hours) 1 920
Manager’s salary 6 250
Total $ 13 895
Office costs:
Rent $ 1 000
Utilities 100
Insurance and taxes 900
Miscellaneous 1 000
Total $ 3 000
REQUIRED:
a) What are the estimated allocation rates for fixed and variable overhead for the current period? [3 marks]
b) What is the total overhead cost allocated to Job 20 in October? [1.5 marks]
c) What is the total cost of Job 20? [2 marks]
d) Calculate the amounts of fixed and variable overhead allocated to jobs in October.
[3 marks]
e) Why would the accountant choose to use two cost pools instead of one? Will this method make a difference in client bills when the job includes more equipment and less labour than
other jobs? Explain. [1.5 marks]
SHOW YOUR WORKING
Question 3 [9 marks]
Malekula Council owns and operates an animal shelter that performs three services: housing and finding homes for stray and unwanted animals, providing health care and veterinarian services for the animals, and pet training services. One facility is dedicated to housing animals waiting to be adopted. A second facility houses veterinarian services. A third facility houses the director, his staff, and several dog trainers. This facility also has several large meeting rooms that are frequently used for classes given by the animal trainers. The trainers work with all of the animals to ensure that they are relatively easy to manage. They also provide dog obedience classes for adopting families. Estimated annual costs for the animal shelter and its services are as follows:
Director and staff salaries $ 60 000
Animal shelter employees’ salaries 100 000
Veterinarians and technicians 150 000
Animal trainers 40 000
Food and supplies 125 000
Building-related costs 200 000
On average, 75 animals per day are housed at the facility, or about 27 375 (75 × 365) animal days in total. The number of animals housed during the year totalled 4500. In addition, the trainers offer about 125 classes during about 30 weeks throughout the year. On average, 10 families attend each class. Last year the veterinarian clinic experienced 5000 animal visits.
One of the director’s staff members just graduated from an accounting program and would like to set up an ABC system for the shelter so that the director can better understand the cost for each of the shelter’s services.
He gathers the following information:
Square footage for each facility:
Animal shelter 5000 square feet
Director and training 3000 square feet
Veterinarian clinic 2000 square feet Percentage of trainer time used in classes 50%
Supplies used for veterinarian services $75 000
REQUIRED:
a) Identify cost pools and assign costs to them, considering the three cost objects of interest.
[3 marks]
b) Determine a cost driver for each cost pool and explain your choice.
[3 marks]
c) Calculate the allocation rates for each cost pool and cost driver. Interpret the allocation rate
for each cost pool (i.e., explain what it means). [3 marks]
SHOW YOUR WORKING
Marking Criteria
Marking Criteria Weighting
Question 1
a) Explain the value chain concept and discuss two (2) ways the value chain concept benefits organisations. 3%
b) Based on the organisation that you have selected, evaluate the organisation using the value chain concept. This explanation should include:
i. An identification of the company’s mission and objectives.
1%
b) ii. A description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. 1%
b) iii. Draw the value chain model for the company. i.e. Tailor the model to your company’s operations, identifying its value-adding processes and support departments. 2%
b) iv. Choose any 2 value-adding processes of your company from the diagram in (iii), and for each, explain the process. Give some specific examples on what value it contributes to the company’s products/services, leading to business decisions for improving customer and shareholder value. 2%
b) v. Finally, comment on the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. 1%
Question 2
a) What are the estimated allocation rates for fixed and variable overhead for the current period? 3%
b) What is the total overhead cost allocated to Job 20 in October?
1.5%
c) What is the total cost of Job 20? 2%
d) Calculate the amounts of fixed and variable overhead allocated to jobs in
October. 3%
e) Why would the accountant choose to use two cost pools instead of one? Will this method make a difference in client bills when the job includes more equipment and less labour than other jobs? Explain.
1.5%
Question 3
a) Identify cost pools and assign costs to them, considering the three cost objects of interest. 3%
b) Determine a cost driver for each cost pool and explain your choice.
3%
c) Calculate the allocation rates for each cost pool and cost driver. Interpret the allocation rate for each cost pool (i.e., explain what it means). 3%
Overall Presentation 3%
TOTAL Weight 30%
Marking Rubric
Excellent Very Good Good Satisfactory Unsatisfactory
Question 1
a) Explain the value chain concept and discuss two (2) ways the value chain concept benefits organisations.
(3 marks) (3 marks) Demonstrate an excellent explanation of the value chain concept and discussion of two (2) ways the value chain concept benefits organisations. (2 mark) Demonstrate a very good explanation of the value chain concept and discussion of two (2) ways the value chain concept benefits organisations. (1.8 mark) Demonstrate a good explanation of the value chain concept and discussion of two (2) ways the value chain concept benefits organisations. (1.5 mark) Demonstrate an adequate explanation of the value chain concept and discussion of two (2) ways the value chain concept benefits organisations. (0 - 1 mark) Unable to explain the value chain concept and discussion of two (2) ways the value chain concept benefits organisations.
b) Evaluate the organisation using the value chain concept. This explanation should include:
i. An identification of the company’s mission and
objectives. (1 mark)
(1 mark) Clear, concise, compelling
identification of company’s mission and objectives. (0.8 mark) A very good identification of company’s mission and objectives. (0.6 mark) A good identification of company’s mission and objectives. (0.4 mark) An adequate
identification of company’s mission and objectives. (0 – 0.2 mark)
Unable to identify company’s mission and objectives.
b) ii. A description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. (1 mark) (1 mark) Present an excellent description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. (0.8 mark) Present a very good description
of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. (0.6 mark) Present a good description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. (0.4 mark) Present an adequate description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company. (0 – 0.2 mark) Unable to present a description of the competitive strategy (i.e. cost leadership, differentiation or focus) of the company.
b) iii. Draw the value chain model for the company. i.e. Tailor the model to your company’s operations,
identifying its value-adding processes and support
departments (2 marks)
(2 marks) Present an excellent diagram of the value chain model for the company. (1.6 marks) Present a very good diagram of the value chain model for the company. (1.2marks) Present a good diagram of the value chain model for the company. (0.8 mark) Present an adequate diagram of the value chain model for the company. (0 – 0.4 mark) Unable to present a proper diagram of the value chain model for the company.
b) iv. Choose any 2 value-adding processes of your company from the
diagram in (iii), and for each, explain the process. Give some specific examples on what value it contributes to the company’s products/services, leading to business decisions for improving customer and shareholder value. (2 marks) (2 marks) Present an excellent explanation of 2 value-adding processes of the company with examples on what value it contributes to the company’s products/ services.
(1.6 marks) Present a very good explanation of 2 value-adding processes of the company with
examples on what
value it
contributes to the company’s products/ services. (1.2 marks) Present a good explanation of 2 value-adding processes of the company with
examples on what
value it
contributes to the company’s products/ services. (0.8 mark) Present a reasonable explanation of 2 value-adding processes of the company with examples on what
value it
contributes to the company’s products/ services. (0 – 0.4 mark) Unable to present a proper explanation of 2 value-adding processes of the company with examples on what value it contributes to the company’s products/ services.
b) v. Finally,
comment on the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. (1 mark) (1 mark) Clear, concise, compelling discussion of the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. (0.8 mark) A very good discussion of the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. (0.6 mark) A good discussion of the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. (0.4 mark) An adequate discussion of the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept. (0 - 0.2 mark) Unable to present a proper discussion of the relevance and usefulness of the information that you find in relation to your theoretical knowledge of the value chain concept.
Question 2
a) What are the estimated allocation rates for fixed and variable overhead for the current period? (3 marks) (3 marks) Present an
excellent calculation
(showing working) of the estimated allocation rates for fixed and variable overhead for the current period. (2 mark) Present a very good calculation (showing working) of the estimated allocation rates for fixed and variable overhead for the current period. (1.8 mark) Present a good calculation (showing working) of the estimated allocation rates for fixed and variable overhead for the current period. (1.5 mark) Present an adequate calculation (showing working) of the estimated allocation rates for fixed and variable overhead for the current period. (0 - 1 mark) Unable to present proper calculation of the estimated allocation rates for fixed and variable overhead for the current period.
b) What is the total overhead cost allocated to Job 20 in October?
(1.5 marks)
(1.5 marks) Present an excellent calculation (showing working) of the total overhead cost allocated to Job 20 in October.
(1.2 marks) Present a very good calculation (showing working) of the total overhead cost allocated to Job 20 in October.
(0.9 mark) Present a good calculation (showing working) of the total overhead cost allocated to Job 20 in October.
(0.6 mark) Present an adequate calculation (showing working) of the total overhead cost allocated to Job 20 in October.
(0 – 0.3 mark) Unable to present
a proper calculation
(showing working)
of the total overhead cost allocated to Job 20 in October.
c) What is the total cost of Job 20?
(2 marks)
(2 marks) Present an excellent calculation (showing working) of the total cost of Job 20. (1.6 marks) Present a very good calculation (showing working) of the total cost of Job 20. (1.2 marks) Present a good calculation (showing working) of the total cost of Job 20. (0.8 mark) Present an adequate
calculation (showing working) of the total cost of Job 20. (0 – 0.4 mark) Unable to present a proper calculation (showing working) of the total cost of Job 20.
d) Calculate the amounts of fixed and variable overhead allocated to jobs in October. (3 marks) (3 marks)
Present an excellent Calculation (showing working) of the amounts of fixed and variable overhead allocated to jobs in October.
(2 mark) Present a very good calculation (showing working) of the amounts of fixed and variable overhead allocated to jobs in October.
(1.8 mark) Present a good calculation (showing working) of the amounts of fixed and variable overhead allocated to jobs in
October. (1.5 mark) Present an adequate calculation (showing working) of the amounts of fixed and variable overhead
allocated to jobs in October.
(0 - 1 mark) Unable to present
a proper calculation
(showing working) of the amounts of fixed and variable overhead allocated to jobs in October.

e) Why would the accountant choose to use two cost pools instead of one? Will this method make a
difference in client bills when the job includes more equipment and less labour than other jobs? Explain. (1.5 marks) (1.5 marks) Clear, concise, compelling explanation as to why the accountant would choose to use two cost pools instead of one; and if this method will make a difference in client bills when the job includes more equipment and less labour than other jobs.
(1.2 marks) A very good explanation as to why the accountant would choose to use two cost pools instead of one; and if this method will make a difference in client bills when the job includes more equipment and less labour than other jobs.
(0.9 mark) A good explanation as to why the accountant would choose to use two cost pools instead of one; and if this method will
make a difference
in client bills
when the job includes more equipment and less labour than other jobs. (0.6 mark) An adequate explanation as to why the accountant would choose to use two cost pools instead of one; and if this method will make a difference in client bills when the job includes more equipment and less labour than other jobs. (0 – 0.3 mark) Unable to present a proper explanation as to why the accountant would choose to use two cost pools instead of one; and if this method will make a difference in client bills when the job includes more equipment and less labour than other jobs.
Question 3
a) Identify cost pools and assign costs to them, considering the three cost objects of interest.
(3 marks)
(3 marks) Present clear, concise, compelling identification of cost pools and assigned costs to them, considering the three cost objects of interest. (2 mark) Present a very good
identification of cost pools and assigned costs to them, considering the three cost objects of interest. (1.8 mark)
Present a good identification of cost pools and assigned costs to them, considering the three cost objects of interest. (1.5 mark) Present an adequate identification of cost pools and assigned costs to them, considering the three cost objects of interest. (0 - 1 mark) Unable to present a proper identification of cost pools and assigned costs to them, considering the three cost objects of interest.
b) Determine a cost driver for each cost pool and explain your choice.
(3 marks)
(3 marks) Present an excellent explanation of a cost driver for each cost pool.
.
(2 mark) Present a very good explanation of a cost driver for each cost pool.
(1.8 mark) Present a good explanation of a cost driver for each cost pool.
(1.5 mark) Present an adequate explanation of a cost driver for each cost pool.
(0 - 1 mark) Unable to present a proper explanation of a cost driver for each cost pool.
Page
c) Calculate the allocation rates for each cost pool and cost driver. Interpret the allocation rate for each cost pool (i.e., explain what it means). (3 marks)
(3 marks) Present an excellent calculation (showing working) of the allocation rates for each cost pool and cost driver, and interpretation. (2 mark) Present a very good calculation (showing working) of the allocation rates for each cost pool and cost driver, and interpretation.
(1.8 mark) Present a good calculation (showing working) of the allocation rates for each cost pool and cost driver, and interpretation. (1.5 mark) Present an adequate calculation (showing working) of the allocation rates for each cost pool and cost driver, and
interpretation (0 - 1 mark) Unable to present
a proper calculation
(showing working) of the allocation rates for each cost pool and cost driver, and interpretation
Overall
Presentation marks
(3 marks)
(3 marks)
Include all elements and is very well presented. Writing flows clearly and sections are linked very effectively. Referencing is exemplary. English is used very effectively and error-free. (2 mark)
Include all elements and is well presented. Writing flows clearly and sections are linked effectively. Referencing is of a high standard. English is used effectively with very few errors present. (1.8 mark) Include all elements and is generally presented appropriately. Writing mostly flows well and sections are linked.
Referencing is in accordance with guidelines. English is used effectively with few errors present. (1.5 mark) Include most elements and is adequately presented. Writing sometimes does not flow clearly leaving the paper
to seem disjointed in areas.
Referencing is somewhat in accordance with guidelines. Basic English is used with some errors present. (0 - 1 mark) Lack key elements and is poorly presented. Writing does not flow clearly leaving the paper to seem disjointed.
Referencing is not in accordance with relevant guidelines. Basic English is used with errors present.
Total Marks (30) /30

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