1 ACCT2112 Group Assignment S1 2024

Download as docx, pdf, or txt
Download as docx, pdf, or txt
You are on page 1of 6

ACCT2112 Management Accounting

Group Assignment Semester 1 2024


(20% of Overall Unit Score)

This assignment consists of TWO parts: Part A is preparation of a Master Budget and
Part B is a case study on activity-based costing. Students MUST answer both parts of the
assignment and present them in ONE Word document (converted to a PDF document for
submission). Each part must start on a new page.
Please include a cover sheet with Unit Code and Unit Name, lecturer’s and tutor’s name,
group members’ names and student numbers.

Part A (50 marks)


TYIS Furniture is a company that makes two types of dining tables: Standard and Family-
Luxe. There are two types of direct materials: Pine and Mahogany woods. Direct
manufacturing labour is hired on an hourly basis, no overtime is worked. The business
identified two types of overhead cost pools: manufacturing operations overhead and machine
setup overhead. The cost driver for manufacturing operations overhead is direct
manufacturing labour-hours and setup labour-hours for machine setup overhead costs.
Nonmanufacturing costs consist of product design, marketing, and distribution costs.

The following budget data are available for the period 1 January 2024 to 31 December 2024:

Direct Materials Rate


 Pine $11 per square metre (m2)
 Mahogany $15 per square metre (m2)
Direct Manufacturing Labour Rate $28 per hour

Quantity of Material/Labour for One Unit of the Product


Standard Table Family-Luxe Table
2
Pine 15 m 16 m2
Mahogany 9 m2 12 m2
Direct Manufacturing Labour 5 hours 7 hours

1
Products
Standard Table Family-Luxe Table
Expected Sales for the year ending 31 72,000 23,000
December 2024 (in units)
Selling Price $ 1,100 $ 1,350
Target ending inventory in units 13,000 750
Beginning inventory in units 2,500 370
Beginning inventory in dollars $ 525,000 $ 348,000

Direct Materials Inventory


Pine Mahogany
2
Beginning inventory 78,000 m 50,000 m2
Target ending inventory 85,000 m2 22,000 m2

Manufacturing Overhead Costs


Manufacturing Operations Overhead Costs
Variable Manufacturing Operations Overhead Costs (per direct manufacturing labour hour)
 Supplies $ 5.75
 Indirect manufacturing labour 6.10
 Power (support department costs) 6.75
 Maintenance (support department costs)
3.25
Total unit variable manufacturing operations overhead cost
$ 21.85
Fixed Manufacturing Operations Overhead Costs
 Depreciation $ 1,380,000
 Supervision 445,000
 Power (support department costs) 675,000
 Maintenance (support department costs) 450,000
Total fixed manufacturing operations overhead cost $ 2,950,000

2
Machine Setup Overhead Costs
Variable Machine Setup Overhead Costs (per setup labour hour)
 Supplies $ 23
 Indirect manufacturing labour 51
 Power (support department) 12
Total unit variable machine setup overhead cost $ 86
Fixed Machine Setup Overhead Costs
 Depreciation $ 520,000
 Supervision 990,800
 Power (Support department cost) 23,800
Total fixed machine setup overhead cost $ 1,534,600
0.2 hour of setup labour-hour is allocated to make one unit of Standard Table and 0.3 hour of setup labour-hour
is allocated for Family-Luxe Table.

Non-Manufacturing Costs
Product Design Cost (fixed) $ 1,567,000
Marketing Costs
 Fixed marketing cost $ 1,120,000
 Variable marketing cost equals 5.5% of revenues (to be
computed)
Distribution Costs
 Fixed distribution cost $ 1,680,000
 Variable distribution cost is $2 per cubic metre of table sold
and shipped (to be computed)
 Standard Table 20 cubic metres of table sold and shipped.
 Family-Luxe Table 25 cubic metres of table sold and shipped.

3
Based on the above information provided by the various department managers, prepare the
following budgets for year ending 31 December 2024: (50 marks)
a. Sales/Revenue Budget (3 marks)
b. Production Budget in units (3 marks)
c. Direct Material Usage Budget in quantity and dollars (6 points)
d. Direct Material Purchases Budget in quantity and dollars (6 points)
e. Direct Manufacturing Labour Cost Budget (4 points)
f. Manufacturing Overhead Costs Budgets (8 points)
g. Budgeted Unit Cost of Ending Finished Goods Inventory (6 points)
h. Ending Inventory Budget (of Direct Materials and Finished Goods) (4 points)
i. Non-manufacturing Overhead Cost Budget (4 points)
j. Cost of Goods Sold Budget (3 points)
k. Budgeted Income Statement. (3 points)

End of Part A

4
Part B (35 marks)

WinDecor Company produces two types of window frames, Simple and Fancy. The
company’s simple costing system (traditional method) has two direct costs: direct material
cost and direct manufacturing labour cost. The company, based on simple costing system,
allocates indirect cost on the basis of machine hours. Information relating to WinDecor’s
production for 2023 are as follows:

Simple Fancy
Unit sold 4,200.00 unit 2,000.00 unit
Selling price $ 350.00 $ 550.00
Direct materials cost per unit $ 55.00 $ 95.00
Direct manufacturing labour cost per hour $ 35.00 $ 35.00
Direct manufacturing labour-hours per unit 2.00 labour-hour 3.50 labour-hour
Productions runs 50.00 95.00
Material moves 80.00 170.00
Machine setups 55.00 165.00
Machine -hours 6,500.00 hours 5,500.00 hours
number of inspections 300.00 200.00
The owners of WinDecor have heard of other companies in the industry that are now using an
activity-based costing (ABC) system and are curious how an ABC system would affect their
product costing decisions. They hire a management accounting consultant to help them
establish an ABC system. The consultant identifies five activities as generating indirect costs:
production scheduling, material handling, machine setup, assembly and inspection. The
following data are collected by the consultant that relates to the indirect cost activities and
their related activity cost drivers:

Direct manufacturing labor cost per hour $ 35.00 $ 35.00


Direct manufacturing labor-hours per unit 2.00 labor-hour 3.50 labor-hour
Productions runs 50.00 95.00
Material moves 80.00 170.00
Machine setups 55.00 165.00
Machine -hours 6,500.00 hours 5,500.00 hours
number of inspections 300.00 200.00

Based on the information provided for the year 2023:


a. Compute the cost of one unit of the Simple window frame and one unit of the Fancy
window frame using the simple costing system. (10 marks)
b. Compute the cost of Simple window frame and Fancy window frame using an activity-
based costing system (18 marks)
c. Suppose you are the management accounting consultant for WinDecor, discuss whether
you would recommend activity-based costing system to WinDecor. Explain.
(7 marks)
End of Part B

5
Assignment Presentation details are as follows.
For this group assignment, all aspects of the assignment (i.e., calculations, tables and discussions for
both parts) are to be presented in a single WORD DOCUMENT (converted to PDF for
submission). A maximum of TWO submissions are allowed and the latest will be marked. NO
EMAIL SUBMISSIONS!!!
Please upload your PDF REPORT onto LMS by 5pm, Monday 06 May 2024.

Presentation:
1. All budget schedules must be tabulated. Any one budget schedule must not run over the
page (penalty applies if a budget table runs over 2 pages).
2. Budgets are to be presented as whole numbers (that is, no decimals).
3. ALL workings and formula must be clearly shown (marks are awarded for workings). (The
workings must be shown under each budget schedule/table and noted in the schedule.)
4. Part B MUST start on a new page (in the same word document as Part A).
5. Any reference to journal articles or books must have in-text citation and shown in the
“References” section.
6. Marks are awarded for overall presentation of the assignment, including presentation of the
budget schedules, consistency of schedules in terms of headers, font size and spacing, and
spelling and grammatical accuracy.

Marking schedule:
 Part A: 50 marks
 Part B: 35 marks
● Presentation of Report: 15 marks
Total 100 marks

PLEASE REMEMBER TO COMPLETE SPARKPLUS to indicate your assessment of your


group members’ contribution towards this Group Assignment. SPARKPLUS is available in our
LMS site and will be open between Monday 06 May 2024 and Monday 13 May 2024. Details
about SPARKPLUS is available in LMS.

Please note that students who do not complete the task in SPARKPLUS will receive the lower of 0.5
RPF (50% of the group score) or the SPARK-adjusted score.

End of Assignment Instructions

All the Best!!!

You might also like