1 ACC5213 MANAGEMENT ACCOUNTING with a STRATEGIC PERSPECTIVE S2 2018 Weighting 30% Due Date 8 October 2018 This Assignment is designed to give students an opportunity to: 1. integrate traditional, contemporary and advanced theoretical and technical management accounting knowledge for planning, control and evaluation, as well as decisions making 2. critically apply traditional, contemporary and advanced theoretical and technical accounting knowledge and skills to solve emerging and/or advanced management accounting problems that require planning, control and evaluation, as well as decisions making from a strategic perspective 3. apply the information literacy, numeracy and computer skills required by accountants to access relevant data from research and business literature sources and use contemporary and advanced analytical techniques. Part A (80 Marks) Perpetual Clocks is a manufacturer of clocks. It makes two products: Homeware Clocks medium wall clocks made from Plastics. Custom Clocks large free-standing clocks made from Tasmanian oak The budgeted direct cost inputs for each product in 2018 are: Homeware line Custom line Plastic framing 4 square metres 0 Tasmanian oak framing 0 10 square metres Plastic links 8 0 Tasmanian oak links 0 8 Direct manufacturing labour 6 hours 10 hours 2 Unit data pertaining to the direct materials for March 2018 are: Actual beginning direct materials inventory (1 March 2018) Homeware line Custom line Plastic framing (square metres) 80 0 Tasmanian oak framing (square metres) 0 60 Plastic links 200 0 Tasmanian oak links 0 80 Target ending direct materials inventory (31 March 2018) Homeware line Custom line Plastic framing (square metres) 48 0 Tasmanian oak framing (square metres) 0 80 Plastic links 160 0 Tasmanian oak links 0 88 Unit cost data for direct cost inputs pertaining to February 2018 and March 2018 are: February (actual) $ March (budgeted) $ Plastic framing (per square metre) 288 320 Tasmanian oak framing (per square metre) 230 250 Plastic links (per link) 22 24 Tasmanian oak links (per link) 34 36 Manufacturing labour cost per hour 60 60 Manufacturing overhead (both variable and fixed) is allocated to each clock on the basis of budgeted direct manufacturing labour-hours per clock. The budgeted variable manufacturing overhead rate for March 2018 is $70 per direct manufacturing labour-hour. The budgeted fixed manufacturing overhead 3 for March 2018 is $85 000. Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods. Data relating to finished goods inventory for March 2018 are: Homeware line Custom line Beginning inventory in units 40 10 Beginning inventory in dollars (cost) $20 960 $9 700 Target ending inventory in units 60 30 Budgeted sales for March 2018 are 1,480 units of the Homeware line and 780 units of the Custom line. The budgeted selling prices per unit in March 2018 are $2,040 for the Homeware-line clock and $3,200 for the Custom-line desk. Assume the following in your answer: Work-in-process inventories are negligible and ignored. Direct materials inventory and finished goods inventory are costed using the FIFO method. Unit costs of direct materials purchased and finished goods are constant in March 2018. Required 1. Prepare the following budgets for March 2018: a. revenues budget b. production budget in units c. direct materials usage budget d. direct materials purchases budget e. direct manufacturing labour budget f. manufacturing overhead budget g. ending inventories budget (direct materials and finished goods) h. cost of goods sold budget. Part B A flexible budget is one that is allowed to adjust based on a change in the assumptions used to create the budget during managements planning process. A static budget, on the other hand, remains the same even if there are significant changes from the assumptions made during planning. Perpetual Clocks is considering adopting a flexible budgeting process. (a) Briefly describe the purpose of Perpetual Clocks using a flexible budget approach to its budgeting. (10 marks) (b) Briefly describe the advantages to Perpetual Clocks of using a flexible budget approach to its budgeting as opposed to using a static budgeting approach. (10 marks) (300 words) 4 General Requirements: 1. You are to submit your answer to Part A in an Excel spreadsheet, which utilizes multiple worksheets. Where appropriate you should cross reference data between worksheets. Your spreadsheets should also include formulae where appropriate. 2. You should be as concise and efficient in your writing in Part B as far as possible. Appropriate in-text referencing and a Bibliography should be provided. The Harvard (AGPS) style USQ Librarys referencing guide at Expected number of words (excluding references) 300 3. The font style for your answer to Part B should be set to Time New Roman size 12 with 1.5 line spacing, 2.5cm margin & A4 page layout. 4. The assignment should show the students name and student number on the assignment cover page. 5. Student name and student number should be included in the file name. 6. The policy statement on cheating and plagiarism is a cornerstone of academic integrity at USQ. All students are responsible for familiarizing themselves with the policy, seeking further advice if necessary and complying with it at all times. If you use any material, for example textbooks, journal articles etc. to support your answer, you are to use the Harvard Style of referencing in your answer for both in-text and bibliography referencing (students are expected to use at least 3 quality external materials and journal articles for Part B). 7. Part B of the assignment will be submitted via Turnitin. It is expected that student scores will be below 20% (students need to allow 24 hours to resubmit, so dont leave it to the last minute). 8. Extensions will only be granted for Compassionate and Compelling Circumstances (see policy) and will be for a maximum of five days. If you require an extension, you must apply for the extension prior to the due date. An Assignment submitted after the deadline without an approved extension of time will be penalised. The penalty for late submission without a preapproved extension will a reduction by 5% of the mark awarded for the Assignment, for each University Business Day or part Business Day that the Assignment is late. An Assignment submitted more than ten University Business Days after the deadline will have a Mark of zero recorded for that Assignment. Late submission of assignments may result in delays in receiving feedback. 9. Assignments can be submitted through Assignment Submission link which located on Course Home Assessment Page. File types allowed include doc or docx plus xls or xlxs only. Only two files will be accepted. If more than two file are uploaded, only first two files listed will be marked.

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