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BUACC3714 – Advanced Management Accounting
Semester 2, 2020
Group Assignment
This assignment is worth 25% of your total mark.
Submission is due at 11:50pm on October 4th 2020.
Part A: Assignment General Information
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 using the grouping
facility in Moodle 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 four questions. 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 submission link. Only one
submission is required for each group.
• Students must fully reference the source(s) of all materials, even if you have re-
expressed 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)
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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.
Please do not attempt to submit multiple versions of your assignment work as this will cause
high similarity in Turnitin report and may affect your final score.
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 Turtnitin for the purposes of detecting collusion
and/or plagiarism.
Marking Ru
ic, Dispute Resolution and Free Riders:
Marking Ru
ic is available in Moodle as a formal guidelines for the expected outcomes of
the assignment requirements below.
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
ing 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
esolve 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.
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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.
Notes:
• There is a discussion forum on Moodle titled ‘Q&A Forum for Group Assignment’. This
forum is for you to discuss any assignment-related issues. It is also an area for students
to help each other.
• To search and read academic journal articles, you are strongly recommended to use the
University li
ary’s website: https:
federation.edu.au/li
ary. You may like to key in some
key words relating to your research interests in the QuickSearch’s search box.
• 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:
https:
federation.edu.au/ data/assets/pdf_file/0018/190044/General-Guide-to-Writing-
and-Study-Skills.pdf
https:
federation.edu.au/ data/assets/pdf_file/0020/313328/FedUni-General-Guide-to-
Referencing-2016ed.pdf
https:
federation.edu.au/ data/assets/pdf_file/0017/190043/General-Guide-to-Layout-
and-Appearance.pdf
• 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
http:
federation.edu.au/cu
ent-students/essential-info/administration/special-
https:
federation.edu.au/li
ary
https:
federation.edu.au/__data/assets/pdf_file/0018/190044/General-Guide-to-Writing-and-Study-Skills.pdf
https:
federation.edu.au/__data/assets/pdf_file/0018/190044/General-Guide-to-Writing-and-Study-Skills.pdf
https:
federation.edu.au/__data/assets/pdf_file/0020/313328/FedUni-General-Guide-to-Referencing-2016ed.pdf
https:
federation.edu.au/__data/assets/pdf_file/0020/313328/FedUni-General-Guide-to-Referencing-2016ed.pdf
https:
federation.edu.au/__data/assets/pdf_file/0017/190043/General-Guide-to-Layout-and-Appearance.pdf
https:
federation.edu.au/__data/assets/pdf_file/0017/190043/General-Guide-to-Layout-and-Appearance.pdf
http:
federation.edu.au/cu
ent-students/essential-info/administration/special-consideration
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consideration
• 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.
https:
federation.edu.au/cu
ent-students/assistance-support-and-services/student-
support-services/student-advisory-service/misconduct/accused-of-plagiarism-or-
misconduct
• 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:
https:
fedflix.federation.edu.au/media/Uploading+to+Turnitin/0_irjuaw8p/ XXXXXXXXXX
https:
federation.edu.au/cu
ent-students/learning-and-study/online-help-
with/plagiarism
https:
moodle.federation.edu.au/course/view.php?id=64539
http:
federation.edu.au/cu
ent-students/essential-info/administration/special-consideration
https:
federation.edu.au/cu
ent-students/assistance-support-and-services/student-support-services/student-advisory-service/misconduct/accused-of-plagiarism-or-misconduct
https:
federation.edu.au/cu
ent-students/assistance-support-and-services/student-support-services/student-advisory-service/misconduct/accused-of-plagiarism-or-misconduct
https:
federation.edu.au/cu
ent-students/assistance-support-and-services/student-support-services/student-advisory-service/misconduct/accused-of-plagiarism-or-misconduct
https:
fedflix.federation.edu.au/media/Uploading%2Bto%2BTurnitin/0_irjuaw8p/ XXXXXXXXXX
https:
fedflix.federation.edu.au/media/Uploading%2Bto%2BTurnitin/0_irjuaw8p/ XXXXXXXXXX
https:
federation.edu.au/cu
ent-students/learning-and-study/online-help-with/plagiarism
https:
federation.edu.au/cu
ent-students/learning-and-study/online-help-with/plagiarism
https:
federation.edu.au/cu
ent-students/learning-and-study/online-help-with/plagiarism
https:
moodle.federation.edu.au/course/view.php?id=64539
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Part B: Assignment Requirements
Question 1
Martini Ltd is organised into three divisions: Metro, Regional and Rural. Data for these
divisions for the 2020 financial year end were as follows:
Metro Regional Rural
Production and sales in units 52,500 36,000 35,000
Average selling price per unit $28 $24 $22
Average variable manufacturing cost per unit $12 $10 $8
Average variable selling cost per unit $5 $3.5 $3
Fixed expenses controlled by division managers $325,000 $250,000 $220,000
Fixed expenses allocated to the divisions $200,000 $180,000 $140,000
Common fixed expenses: $160,000
Required:
a. Prepare a profit statement that highlights the performance of the three divisions and the
performance of three divisional managers.
. Explain why it is important to distinguish between the performance of division
managers and the performance of divisions.
(20 + 5 = 25 marks)
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Question 2
Armando Corporation consists of two manufacturing divisions: Crater Division and Dollar
Division. The Crater Division manufactures and transfers partially processed components to
the Dollar Division at a predetermined transfer price. It could also sell these components to
outside buyers at $480 per unit in a perfectly competitive market.
The standard cost per unit in each division is as follows:
Crater Division Dollar Division
Direct material $75 $160
Direct labour $80 $110
Manufacturing overhead $550* $360**
*Manufacturing overhead is 60% variable and 40% fixed.
**Manufacturing overhead is 45% variable and 55% fixed.
The Dollar Division can sell the finished product to outsiders at $1,220 per unit.
Required:
a. What transfer price would you recommend if there was no outside market for the
partially processed component and Crater Division had spare capacity?
Does it matter if Crater Division is identified as a cost centre or a profit centre? Explain
your answer.
. Assume that the head office has intervened to dictate the transfer price at standard
absorption cost plus a 10% mark up. The Dollar Division has been approached with a
special order for 500 components at $1,020 each. From the perspective of Armando
Corporation as a whole, should the special order be accepted or rejected? Explain and
show the supporting calculations.
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c. Advise whether is desirable for the head office to dictate the transfer price? Explain
your answer.
XXXXXXXXXX = 25 marks)
Question 3
Essendon Pty Limited manufactures guidance systems for rockets that are used to launch
commercial satellites. The company’s Software Business Division reported the following data
for the last year:
Sales revenue $2,000,000
Sales returns $110,000
Cost of goods sold $1,200,000
Operating expenses $550,000
Total assets at year-beginning $1,900,000
Total assets at year-end $1,990,000
Total cu
ent liabilities at year-beginning $55,000
Total cu
ent liabilities at year-end $61,000
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The company’s required rate of return is 8.75 percent. Additional information:
• The total assets at year-end include a piece of vacant land valued at $320,000. It is
identified as a non-productive asset by the corporate management.
• The divisional manager manages all cu
ent liabilities.
• The use of average balances is recommended.
In an attempt to improve its return on investment (ROI), Essendon company is planning to:
• speed-up the collection of all account receivables by $70,000.
• write-off and discard $57,000 of obsolete inventory.
• sponsor a competition for teams of local universities’ students to design and build
small satellite with budget up to $120,000
Required:
a. Calculate the Software Business Division’s return on investment (ROI) and residual
income (RI). Discuss the results from your calculations.
Note: Textbook Chapter 13 “Learning objective 13.5-Measuring Profit and Invested
capital” will be a good guide to define profit and invested capital in the ROI and RI
calculations.
. Explain should the above plans be adopted in order to improve its ROI for Software
Business Division?
c. If profit and sales remain the same in the coming year, but the investment turnover
increases to 0.92, calculate the new ROI?
XXXXXXXXXX = 25 marks)
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Question 4
Corporate social responsibility (CSR) and sustainability are key issues in the cu
ent business
environment. According to Martin and Steele (2010 p.13)*, “The two principal professional
associations in Australia – CPA Australia (the CPA) and the Institute of Chartered
Accountants in Australia (the Institute) have indicated their awareness of the significance of
issues of sustainability reporting and development of appropriate skill sets in word and in
deed. The commitment of both organisations to sustainability principles has been shown by
their adoption of, and support for, sustainability-focused reporting approaches and by their
opting to take up membership of the Accounting for Sustainability Forum.”
Required: