Managerial Accounting | My Assignment Tutor

Page 1 of 4Australian National Institute of Management and CommerceMaster of Professional AccountingTACC607 Managerial AccountingTerm 1, 2021(29 March 2021 – 11 June 2021)Lecturer: Dr. Gerry LIGroup Assignment(Due on 4 June 2021 by 11:59 pm)Read carefully the following Case information before planning to write the ReportFantastic Sky Tours Pty Ltd is a small sightseeing tour company in Sydney that specialises inaerial tours of the New South Wales area. Until recently, the company had not had an accountingdepartment. Routine bookkeeping tasks, such as billing, had been handled by a person who hadlittle formal training in accounting. As the business began to grow, however, the owner recognisedthe need for more formal accounting procedures. Miranda Jenkins, a CPA, was recently hired asthe new management accountant, and she has the authority to hire an assistant.During her first week on the job, Miranda was given the performance report on the next page. Thereport was prepared by Robert Smith, the company’s manager of Aircraft Operations, who wasplanning to present it to the owner, David Lowry, the next morning.‘Look at these favourable variances for fuel and so forth,’ Robert pointed out as he showed thereport to Miranda. ‘My operations people are really doing a great job.’Later that day, Miranda looked at the performance report more carefully. She immediately realisedthat it was improperly prepared and would be misleading to the company’s owner.See next page: Performance Report prepared by the manager of Aircraft OperationsPage 2 of 4 Fantastic Sky Tours Pty LtdPerformance Report for the month of April 2021Formulaflexiblebudget(per air-km)Actual(32 000air-km)Staticbudget(35 000air-km)VariancePassenger revenue$3.50$112 000$122 500$10 500 ULess Variable costs:Fuel0.5017 00017 500500 FAircraft maintenance0.7523 50026 2502 750 FFlight crew salaries0.4013 10014 000900 FSelling and administration0.8024 90028 0003 100 FTotal variable expenses$2.45$ 78 500$ 85 750$ 7 250 FContribution margin$1.05$ 33 500$ 36 750$ 3 250 ULess Fixed costs:Depreciation on aircraft$2 900$ 2 900$ 2 900$ 0Landing fees9001 000900100 USupervisory salaries9 0008 6009 000400 FSelling and administrative11 00012 40011 0001 400 UTotal fixed expenses$23 800$ 24 900$ 23 800$ 1 100 UNet profit$ 8 600$ 12 950$ 4 350 U Page 3 of 4Assignment Tasks and Report RequirementsAssuming the role of Miranda Jenkins at Fantastic Sky Tours Pty Ltd, prepare a report to the ownerof the company providing explanations and revised reports in relation to the operating performancein April 2021, and address her ethical obligations arising from the response from the manager ofAircraft Operations. Your report should contain the following three parts:Part I1. Explain why the company’s April net profit was only about two-thirds of the expected level,despite several favourable variable expense variances shown in the above performance report.2. Explain why the original performance/variance report prepared by the manager of AircraftOperations is misleading.Part II1. Prepare flexible budgets for the company based on the following activity levels:(a) 32 000 air-kilometres.(b) 35 000 air-kilometres.(c) 38 000 air-kilometres.2. Prepare a revised performance report showing the proper variances for April, based on theflexible budget that you prepared above.Part IIIMiranda Jenkins presented her revised performance report to Robert Smith, along with theexplanation why the original performance report was misleading. Robert did not take it well. Hecomplained of Miranda’s ‘interference’ and pointed out that the company had been doing just finewithout her. ‘I am taking my report to the owner tomorrow,’ Robert insisted. ‘Yours just makes uslook bad.’What are Miranda’s ethical obligations as a CPA in this matter? What should she do?Page 4 of 4Format and Submission of the Group Assignment Report1. Each group should consist of 3 to 4 members.2. The assignment report format, contents and structure should be decided by your group, but itmust include the three major parts listed on the previous page. The report should be presented ina professional and quality manner.3. Apart from the flexible budgets and revised performance report required, the report must alsodiscuss the relevant qualitative issues of static/flexible budgeting and variance analysis under thestandard costing system in organisations.4. Relevant headings/sub-headings/sections in the report should be designed appropriately to coverthe relevant issues in the Case. Credit will be given for identification and organisation of therelevant issues discussed in the report.5. The entire report should contain a cover page, a table of contents, an introduction, the main reportbody, a conclusion, and the references.6. The number of references should be between 5 and 10 (maximum one page) for any materials(academic, business, professional) referenced and cited to support your arguments / concepts /examples addressed in the report. 10% of the assessment is allocated to proper research effortson relevant topics.7. The cover page of the report must follow the format provided by IMC, and each member of thegroup must submit the Peer and Self-Assessment of Teamwork on individual basis.8. The report is to be submitted (by one member in your group) on Moodle link through Turnitinchecking for plagiarism on or before 4 June 2021 by 11:59 pm.9. Report body length: Approximately 1,800 words (excluding the flexible budgets andperformance report with variance analysis) containing proper page numbers with the followingsettings:• Font style/size: Times New Roman “12”• Line spacing: 1.5 lines (except tables with numbers using single line spacing)• Margins: Top (2.5 cm), Bottom (1.5 cm), Left (2.5 cm), Right (2.0 cm)• Paper size: A4


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