Recent Question/Assignment

BUACC 5933
Semester 1, 2020
DUE DATE AND TIME: Week 10, Sunday 31st May at 5:00 PM
(Online 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 reexpressed 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 receive 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.
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 bring 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 resolve 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 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 currently 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 be 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
Setups 100 60 160
Machine hours 25,000 45,000 70,000
Outgoing shipments 250 150 400
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 current 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 current 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 statement.
(6 + 10 + 4 + 6 + 4 = 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)
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 currently 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.
(700-800 words) (4 + 6 = 10 marks)
Total of 50 marks will be scaled to a mark of 25%.
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