Cost and management Accounting | My Assignment Tutor

QualificationUnit Number and TitlePearson BTEC International Level 3, Extended Diploma in BusinessUnit 13: Cost and management AccountingReg. No. Learner’s NameAssessor’s NameJulie MartinHand-out DateHand-in DateSubmitted On17th January 2021Part 1- 18th Feb 2021 Part 2- 1st Apr 2021 Assignment TypeSummative ReportAssignment TitleCost and Management Accounting techniques used in business Assessment and Grading CriteriaPassMeritDistinctionLearning aim A: Explore absorption and marginal costing techniques for decision makingA.D1 Make justified recommendations to improve the financial performance of the business in the given scenarios.A.P1 Categorize and explain different types of costs and costing methods in given scenarios. A.P2 Produce accurate absorption and marginal cost statements for given scenarios.A.M1 Assess the appropriateness of absorption and marginal costing techniques used for decision making in given scenarios.Learning aim B: Carry out standard costing and variance analysis statementsB.P3 Calculate sub- and overall variances in given scenarios using standard costing.B.M2 Analyse the reasons for the variances in given scenarios.Learning aim C: Explore budgets for financial planning and controlC.P4 Explain how budgeting is used in a selected business for financial planning and control. C.P5 Prepare accurate subsidiary and master budgets in a given scenario.C.M3 Assess the viability of the completed budgets in a given scenario.BC.D2 Evaluate the usefulness of costing and budgetary control systems to the business.Learning aim D: Undertake investment appraisal of long-term capital investmentD.P6 Apply investment appraisal methods to alternative capital investment proposals in given scenarios. D.P7 Explain how non-financial considerations affect capital investment proposals.D.M4 Analyse the results of the capital investment appraisal for decision making.D.D3 Evaluate the long-term capital investment proposal, taking into account both financial and non-financial considerations, and formulate a set of appropriate and relevant recommendations. Learner’s DeclarationI certify the work submitted for this assignment is my own and research sources are fully acknowledged.Learner’s Signature:Date:Acknowledged by:Assessor Signature: Julie MartinDate: 17-01-2021 QualificationUnit Number and TitlePearson BTEC International Level 3, Extended Diploma in BusinessUnit 13: Cost and Management AccountingReg. No. Learner’s NameAssessor’s NameJulie MartinHand-out DateHand-in DateSubmitted On17th January 2021Part 1- 18th Feb 2021 Part 2- 1st Apr 2021 Assignment TypeSummative ReportAssignment TitleCost and Management Accounting techniques used in business Unit in brief: Learners study cost and management accounting and its involvement with financial planning, controlling, monitoring and evaluation of business costs and revenues.Scenario:You have recently been appointed as a trainee in the Finance and Accounting department of a company. As a part of your internship, your team head has asked you to prepare reports to show your understanding and application of cost and management accounting techniques. He has given you tasks related to costing methods and management accounting decisions used widely in business organisations. You must prepare the required reports and case studies given and submit the report to your Team head as a part of your internship so that the company offers you a full time job in this department. Task 1. You must write a report explaining the difference between cost and management accounting. Categorize and explain the different types of cost. Explain the costing methods like absorption costing and marginal costing used by business in different decision-making situations like the ones provided below by calculating accurately the absorption and marginal cost statements. Further, assess appropriateness of these methods used for decision making in the given situations. Also give justified recommendations to improve the financial performance of the business in the given situations. Situation I: Aries Manufacturing Co. Ltd. provides the following budget information for its four departments for the coming year: Departments Machining Finishing Canteen Repairs Total Cost item AED’000 AED’000 AED’000 AED’000 AED’000 Allocated Overheads 2000 1000 200 300 3500 Factory rent1200 Machine Depreciation600 Staff Welfare420Related statistics and information for the coming year is given below. Departments Machining Finishing Canteen Repairs Total Floor area sq mt 1000 2000 800 200 4000 Machine value (AED’000) 3000 1500 200 300 5000 No. of employees 100 500 40 60 700Apportion the common overhead costs among the 4 departments and indicate the respective basis of apportionment. The two service departments. Canteen and repairs provide reciprocal services for each other and the two production departments. The machining department is machine intensive while finishing department is labour intensive. Other information is as given below to apportion the overheads for 2 service departments to the production departments: Departments Machining Finishing Canteen Repairs Total Canteen charged to 30% 50% – 20% 100% Repairs charged to 70% 20% 10% – 100% The budgeted level activities of the 2 production cost centers for the coming year are: Departments Machining Finishing Total Machine hours 500,000 50,000 550,000 Direct labour hours 20,000 600,000 620,000Calculate the appropriated budgeted overhead absorption rate (rounded to nearest ) for each production department for the coming year. The company is asked to quote a price for an order. The direct costs are as follows: Direct material AED 210,000 Direct Labour 200 hours in the machining department at Aed 40 per hour. 12,000 hours in the finishing department at AED 50 per hour. The order also requires 10000 machine hours’ work in the machining department and 12000 Labour hour works in finishing department as overheads. It is company policy to add a markup of 30% to the quotation price. Calculate selling price quoted for the order. Situation II Aries Company is faced with decision making for acceptance of special order from a US based customer. The operating statement of the company for that product is as follows:AED. Sales (80,000 units @ AED 15)12,00,000 Costs – variablematerials 240000labour 320000overheads 160000720000Fixed costs 320000Total costs10,40,000 Profit1,60,000Their plant capacity is 100000 units. The customer from USA is desirous of buying 20,000 units a net price of AED 10 each unit. Advice Aries company whether the offer should be accepted? Will your advice be different if the customer is a local one? Situation III Further Aries company want to take a decision whether to manufacture certain components or to buy them from supplier. The following cost data is available in respect of two of its components A and B.Component A Component BAED per unit AED per unit If manufactured.Variable cost 30 30 Fixed cost 25 2055 50 If purchased. 40 25(This provides evidence for Learning Aim A: A.P1, AP2, A.M1, A.D1)Task 2:Now that you have used different costing techniques and understood how to use them appropriately in given business scenario, the team head wants you to write a report on how to use standard costing and variance analysis in costing. Based on the given scenario calculate the sub and overall variances. Further analyze the reasons for these variances in the given situations for the company. P&G company produces many products for household use. Company sells products to storekeepers as well as to customers. Detergent-DX is one of the products of P&G. It is a cleaning product that is produced, packed in large boxes and then sold to customers and storekeepers. P&G uses a traditional a standard costing system to control costs and has established the following materials, labor and overhead standards to produce one box of Detergent-DX: Direct materials; 1.5 pounds @ AED12 per pound: AED18.00 Direct labor; 0.6 hours AED24 per hour: AED14.40 Variable manufacturing overhead; 0.6 hours @ AED5.00: AED3.00 During August 2020, company produced and sold 3,000 boxes of Detergent-DX. 8,000 pounds of direct materials were purchased @ AED11.50 per pound. Out of these 8,000 pounds, 6,000 pounds were used during August. There was no inventory at the beginning of August. 1600 direct labor hours were recorded during the month at a cost of AED40,000. The variable manufacturing overhead costs during August totaled AED7,200. Required: Compute materials price variance and materials quantity variance. (Assume that the materials price variance is computed at the time of purchase.) Compute direct labor rate variance and direct labor efficiency variance. Compute variable overhead spending variance and variable overhead efficiency variance.The following particulars are available in respect of the sales for two products of the company for month of August:Budgeted ActualQty Rate Amt Qty Rate Amt X 1000 2 2000 1800 2.50 4500 Y 3000 3 9000 4200 2.75 11550400011000 600016050You are required to calculate (a) Total Sales variance, (b) sales price variance, (c) Sales volume variance. (This provides evidence for Learning Aim B: B.P3 & B.M2)Task 3: The team head wants you to prepare a report on how budgeting is used in business for financial planning and control. In order to check your budgeting abilities, he has provided you with the following case study for Bibb Company. He wants you to prepare the different subsidiary budgets and the Master budget based on information provided below. He further wants you to assess the viability of the prepared budgets for the company. Further he wants you to provide a correct evaluation of the costing and budgetary control systems to the business you have learnt in Tasks 2 and 3. Bibb Company produces and sells a single product with standard costs as follows: Resource Standard input Cost per input Cost per unit Direct material 2 lbs. 4.00 8.00 Direct Labour 3 hours 6.00 18.00 Variable overhead 3 hours 9.00 27.00 Fixed overhead 3 hours 10.00 30.00 Total unit cost 3 hoursOverhead rates are based on 2,000 units per month or 6,000 standard direct labor hours, i.e., this is the master budget denominator activity level. Overhead is applied based on direct labor hours. Desired ending inventories of mat erials and finished goods are based on 5% of next period needs. Unit Sales are budgeted as follows: Jan Feb Mar Apr May 2000 2000 2100 1900 1800The budgeted sales price is AED160 per unit. All sales are budgeted as credit sales. Past experience indicates that 80% are collected during the month of sale, 18% are collected in the following month, and 2% are uncollectible. A 1% cash discount is allowed to customers who pay within the month the sale takes place. Required: A Partial Master Budget for March as follows. 1. Sales budget for March, including net sales dollars.2. Calculate collections for March.3. Production Budget, i.e., units to be produced for March.4. Direct Material quantity needed for production for March.5. Direct Material quantity to be purchased for March.6. Budgeted cost of direct material purchases for March.7. Budgeted cost of direct material used for March.8. Direct labor needed for production for March.9. Budgeted cost of direct labor used for March.10. Budgeted factory overhead costs for March.11. Budgeted cost of goods sold for March.12. Prepare a simple Budgeted Income Statement for March. Assume selling and administrative expenses are AED54,992. (This provides evidence for Learning Aim B & Learning Aim C: C P4, CP5, C.M3, BC. D2)Task 4: The team head has provided you with details of Sunbright LLC and asked you to apply the different investment appraisal methods to the two alternative capital investment proposals available to this company. You must provide explanation of the non-financial considerations that can affect these investment proposals. Discuss the analysis of the results based on your investment appraisal calculations for the company’s decision making. Further evaluate the financial and non-financial considerations for this investment proposal and formulate appropriate and relevant recommendations to the company for making a final investment appraisal decision. A business enterprise Sunbright manufacturing LLC can make either of two investments at the beginning of 2021. assuming required rate of return in 10% p.a. evaluate the investment proposals under: (a). Payback period (b). Average rate return (d). Net present value @ 10% discounted value. The forecast particulars are given below:Proposal A Proposal B Cost of Investment AED20,000 28,000 Life 4years 5 years Scrap Value Nil Nil Net Income (After depreciation and tax):End of 2021 AED500 Nil End of 2022 AED2000 AED3,400 End of 2023 AED3,500 AED3,400 End of 2024 AED2,500 AED3,400 End of 2025 Nil AED3,400 It is estimated that each of the alternative projects will require an additional working capital of AED2,000 which will be received back in full after the expiry of each project life. Depreciation is provided under the straight-line method. The present value of AED1 to be received at the end of each year, at 10% p.a. is given below: Year 1 2 3 4 5 P.V. .91 .83 .75 .68 .62(This provides evidence for Learning Aim D: D.P6, D.P7, D.M4, D.D3 ).Instructions An electronic copy of your assessment must be fully uploaded by the deadline date and time You must submit one single PDF or MS Office Word document. Any relevant images or screenshots must be included within the same MS Office Word or PDF document Clearly indicate the Grading and AC number you address Ensure that all work has been proof-read and checked prior to submission Ensure that the layout of your documents is in a professional format Font: Verdana Font Size: 14-Main heading, Bold and Underlined 12-Sub heading and Underlined 10-Body text Line Spacing: 1.0 and justified Check your work for plagiarism. The College has strict penalty for plagiarism and the assignment will be cancelled if the assignment is observed for this. Ensure that any file you upload is virus-free and not corrupted You must NOT submit a paper copy or email of this assessment to any member of staff Filing the reference checklist is compulsory Visits need to be arranged and made to the organizations. For meeting the respective managers, the college will provide a reference letter for the project and the manager of the organization is welcome to contact the administration at the college


Leave a Reply

Your email address will not be published. Required fields are marked *