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BUACC 2613 Management Accounting 1 Semester 1, 2012 Assignment Contribution to overall assessment: 25% Due date: This assignment has two equally weighted parts: Part 1 – Technical Part 2 – Essay (...

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BUACC 2613
Management Accounting 1
Semester 1, 2012
Assignment
Contribution to overall assessment: 25%
Due date:
  • This assignment has two equally weighted parts:
  • Part 1 – Technical
  • Part 2 – Essay ( 1500 – 1800 word)
  • The assessment criteria are on p. 5.

Please note: your work must comply with the University’s General Guide for the Presentation of Academic Work. http://www.ballarat.edu.au/current-students/publications,-policies-and-forms/general-guide-for-the-presentation-of-academic-work
This is a group-assignment. Each group needs to have 2 to 3 members in it. Please organise yourselves into groups. Please make sure that names and ID numbers of all members are stated on the cover sheet of your submission.
As this is a group assignment, each member of a group is awarded the same mark. Working in groups has its pros and cons. I am sure that you will hold constructive and energetic group discussions on the issues at hand. In case of any disagreements, you will be able to resolve them in a democratic and rational way. There will be times when you may have to agree to disagree with each other. Invariably different group members bring different skills to a project; it is up to you to make the best of it. I believe one can learn a lot by discussing the issues with one’s colleagues.
If you happen to find your group members are “not pulling their weight” or there are problems with any member’s commitment, then 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 me and we will try to sort out the problems together. Do this as soon as possible and certainly before the due date.
Please adapt this to suit your group, particularly the last two paragraphs.
PART 1:
George Ltd manufactures two types of coils used in electric motors. The two types are: C20 and D40. They both require plastic and metal. Information for the two products for the month of April is given in the following tables:
Input prices
Direct materials
Plastic $4 per kilogram
Metal $3 per kilogram
Direct manufacturing labour $10 per direct manufacturing labour hour

Input quantities per unit of output
C20 D40
Direct materials
Plastic 4 kilograms 6 kilograms
Metal 0.5 kilograms 1 kilogram
Direct manufacturing labour-hours (DMLH) 3 hours 5 hours
Machine-hours (MH) 10 MH 18MH

Inventory information, direct materials
Plastic Metal
Beginning inventory 250 kilograms 60 kilograms
Target ending inventory 380 kilograms 55 kilograms
Cost of beginning inventory $950 $180

The company accounts for direct materials using a FIFO cost flow assumption.
Sales and inventory information, finished goods
C20 D40
Expected sales in units 500 300
Selling price $160 $250
Target ending inventory in units 35 15
Beginning inventory in units 15 30
Beginning inventory in dollars $1500 $5580

The company uses:
  • a FIFO cost flow assumption for finished goods inventory.
  • an activity-based costing system and classifies overhead into three activity pools: Set-up, Processing and Inspection. Activity rates for these activities are $100 per set-up hour. $5 per machine-hour and $16 per inspection-hour, respectively.

Other information is as follows:
Cost driver information
Plastic Metal
Number of units per batch 20 15
Set-up time per batch 1.5 hours 1.75 hours
Inspection time per batch 0.5 hour 0.6 hour

Non-manufacturing fixed costs for March equal $36,000 of which half are salaries. Salaries are expected to increase by 5% in April. The only variable non-manufacturing cost is sales commission equal to 1$ of sales revenue.
Required:
Prepare the following for April:
  1. Sales budget
  2. Production budget in units
  3. Direct material usage budget and direct material purchases budget
  4. Manufacturing overhead cost budgets for each of the three activities
  5. Budgeted income statement (ignore income taxes)
PART 2
Go to: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=321520
http://www.bbrt.org/beyond-budgeting/bb-problem.html
Critically review the above. Do you agree, partly agree or disagree with the issues raised in the above? Discuss your reason (s) for doing so. You need to support your viewpoint with carefully chosen and authoritative evidence.
  • BUACC2613 - Management Accounting 1
  • Semester 1, 2012
  • Group Assignment
Names: Student Numbers:
Bases of assessment HD P F
Technical component – accuracy in calculations.
Essay: evidence of research
Essay: a demonstration of critical evaluation of the issues.
Essay format: As per The General Guide for the Presentation of Academic Work
Expression - clarity, style (formal and academic), coherence in writing, grammar, punctuation, spellings and sentence structure.
Expression of your view (and not a catalogue of quotes/ others’ ideas)
A logical flow of argument at both the paragraph level and the overall text level.
Use of supporting arguments.
Use of literature to support the argument.
Referencing procedure (within the text, and at the end of the text).
Appropriately styled and punctuated bibliography.
Overall Presentation – including cover page, line spacing, page numbering.
GRADE:
Answered Same Day Dec 21, 2021

Solution

Robert answered on Dec 21 2021
127 Votes
Solution:
Part 1: Technical
(A): Statement showing sales budget :-( FIFO Method)
Sales Budget (For the Month of April)

Product C20 Product D40
Particular Qty
Price per
unit
Sale in
value Qty
Price per
unit
Sale in
value
Sales from opening stock 15kg $100 $1,500 30kg $186 $5,580
Sales from cu
ent year
production 485kg $160 $77,600 270kg $250 $67,500
Total sales 500kg $79,100 300kg

$73,080
(B): Statement showing production budget in units:-
Production Budget (For the Month of April)
Particular Product C20 (Units) ProductD40 (Unit)
Sales during the month 500 300
Add: Closing Stock 35 15
Less: Opening stock 15 30
Production during the month 520 285
(C) 1: Statement showing direct material usage budget:-
Direct Material Usages Budget (Qty & Value)
Plastic Metal
Particular Qty Price/kg Sale in value Qty Price/kg Sale in value
Usage from opening stock (as
given)
250 $3.8 $950 60 $3 $180
Usage from cu
ent year
purchase(note2)
3540 $4 $14,160 485 $3 $1,455
Total usage 3790kg $15,110 545kg $1,635
Note: 1 Calculation of total usage of material:-
Particular Product C20 Product D40
Qty produced(a) 520units 285units
Requirement of plastic/unit(b) 4kg 6kg
Total usage of plastic(c=a*b) 2080kg 1710kg
Total usage of plastic 3790kg
Requirement of metal/unit(d) 0.5kg 1kg
Total usage of metal(e=a*d) 260kg 285kg
Total usage of metal 545kg

Note: 2 Calculation of usage of material on the basis of FIFO method:-
Particular Plastic Metal
Total usage 3790kg 545kg
Less: Opening stock 250kg 60kg
Balance from purchase 3540kg 485kg
(C) 2: Calculation total purchase of material during the month of APRIL:-
Direct Material Purchase Budget
Particular Plastic Metal
Total usage during the month 3790kg 545kg
Add Closing stock 380kg 55kg
Less Opening stock 250kg 60kg
Total purchase during the month 3920kg 540kg
Purchase price per kg $4 $3
Total purchase cost $15,680 $1,620
(D): Statement showing manufacturing overhead budget for each activities:-
(1): Statement showing set up cost:-
Overhead Budget : Set Up Cost
Particular Product C20 Product D40
No of unit produced 520 285
No. of units per batch 20 15
No. of batches 26 19
Set up time per batch 1.5hour 1.75hour
Total time taken in set up 39hour 33.25hour
Rate per hour $100 $100
Total set up cost $3900 $3325
(2): Statement showing processing cost:-
Overhead Budget : Processing Cost
Particular Product C20 Product D40
No of unit produced 520 285
No. of machine hour per unit 10 18
Total machine hour 5200 5130
Rate per hour $5 $5
Total processing cost $26000 $25650
(3): Statement showing inspection cost:-
Overhead Budget : Inspection Cost
Particular Product C20 Product D40
No of unit produced 520 285
No. of units per batch 20 15
No. of batches 26 19
Inspection time per batch 0.5hour 0.6hour
Total time taken in set up 13hour 11.4hour
Rate per hour $16 $16
Total set up cost $208 $182.4
(E): Budgeted income statement:-
BUDGETED INCOME STATEMENT
Particular Amount
Total Sales(a) $152,180
Raw material consumed(b) $16,745
Direct labor...
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