MAA262 – Management Accounting – Trimester 2 2021 Assessment Task 1 – Individual Assignment I

DUE DATE AND TIME:                        Week 5, 13/08/2021, by 8:00 pm (AEST) PERCENTAGE OF FINAL GRADE:                                               20%

WORD COUNT:                                   2,000 words

Description

This assignment task will consolidate your understanding of some of the key concepts covered in this unit. Please submit your answers to the questions in the order they are presented, clearly identifying on the document which question is being addressed. As long as you are identifying which question is being addressed you are not required to repeat the question on your assignment.

Your response should respond to all questions. The word limit is 2,000 words (maximum) in total, and words limit includes headings, tables, references, and appendices. Note that a contents page, cover page, and an executive summary are not required. Regarding the formatting of the assignment, there is no specific requirement regarding font, font size and line spacing. There is no minimum amount of words. Any word above the limit of 2,000 will be penalised by 1 mark for each additional word, thus 2,010 words have a 10 marks penalty, 2,020 words have a 20 marks penalty, and henceforth.

Please peruse the discussion forum as you may find the information you are looking for. If you are unable to find the information regarding the individual assignment you are looking for, please contact the teaching team by using the discussion forum on CloudDeakin. Contact via email with the unit chair or teaching team should only be used for a personal and private matter.

Specific Requirements

Use the Harvard style of referencing. More information regarding referencing styles

There is no such thing as a minimum or maximum amount of references to be used in this assignment, and references should be used only when required. If a question requires research for answering, check the guidelines available on the academic skills study support page

Learning Outcomes

This task allows you to demonstrate achievement towards the unit learning outcomes. The ULOs are aligned with specific graduate learning outcomes – that is, the skills and knowledge graduates are expected to have upon completion of their studies – and this assessment task is an important tool in determining achievement of those outcomes.

If you do not demonstrate achievement of the unit learning outcomes, you will not be successful in this unit.

It is good practice to familiarise yourself with the ULOs and GLOs as they provide guidance on the knowledge, understanding and skills you are expected to demonstrate upon completion of the unit. In this way, they can be used to guide your study.

Unit Learning Outcomes (ULO)	Graduate Learning Outcomes (GLO)
ULO1: Incorporate ethical factors into managerial accounting decisions.	GLO1
ULO2: Apply cost and budget concepts to the organisation’s planning, control and management accounting decisions.	GLO1
ULO3: Analyse and evaluate performance measures and link to organisational strategy.	GLO1 and GLO5
ULO4: Communicate management accounting concepts and use appropriate technology to provide information to relevant stakeholders.	GLO2

Submission

You are to submit your assignment in the individual Assignment Dropbox in the MAA262 CloudDeakin unit site on or before the due date. When uploading your assignment, name your document using the following syntax:

<your surname_your first name_your Deakin student ID number_[unitcode].doc (or ‘.docx’).

For example, ‘Jones_Barry_123456789_ABC123.doc’.

Submitting a hard copy of this assignment is not required. 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 electronic or other means for the purposes of detecting collusion and/or plagiarism.

When you submit an assignment through your CloudDeakin unit site, you will receive an email to your Deakin email address confirming that it has been submitted. You should check that you can see your assignment in the Submissions view of the Assignment Dropbox folder after upload, and check for, and keep, the email receipt for the submission.

Marking and feedback

The marking rubric for this task is attached at the end of this document.

It is always a useful exercise to familiarise yourself with the criteria before completing any assessment task. Criteria act as a boundary around the task and help identify what assessors are looking for specifically in your submission. The criteria are drawn from the unit’s learning outcomes ensuring they align with appropriate graduate attribute/s. Identifying the standard you aim to achieve is also a useful strategy for success and to that end, familiarising yourself with the descriptor for that standard is highly recommended.

Students who submit their work by the due date will receive their marks and feedback on CloudDeakin 15 working days after the due date.

Extensions

Extensions will only be granted for exceptional and/or unavoidable circumstances outside the student’s control.

Students seeking an extension for an assignment prior to the due date should apply directly to the Unit Chair by completing the Assignment and Online Test Extension Application Form. Requests for extensions will not be considered after 12 noon on the due date. Applications for special consideration after the due date must be submitted via StudentConnect.

Late submission

The following 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 day up to five days, and work that is submitted more than five days after the due date will not be marked and will receive 0% for the task.

‘Day’ means working day for paper submissions and calendar day for electronic submissions. The Unit Chair may refuse to accept a late submission where it is unreasonable or impracticable to assess the task after the due date.

Calculation of the late penalty is as follows:

• 1 day late: submitted after Friday 11:59 pm and before Saturday 11:59 pm– 5% penalty.
• 2 days late: submitted after Saturday 11:59 pm and before Sunday11:59 pm – 10% penalty.
• 3 days late: submitted after Sunday 11:59 pm and before Monday 11:59 pm – 15% penalty.
• 4 days late: submitted after Monday 11:59 pm and before Tuesday 11:59 pm – 20% penalty.
• 5 days late: submitted after Tuesday 11:59 pm and before Wednesday 11:59 pm – 25% penalty.

Dropbox closes the Wednesday after 11:59 pm AEST time.

Support

The Division of Student Life (see link below) provides all students with editing assistance. Students who wish to take advantage of this service must be organized and plan ahead and contact the Division of Student Life in order to schedule a booking, well in advance of the due date of this assignment.

Referencing

Any material used in this assignment that is not your original work must be acknowledged as such and appropriately referenced. You can find information about plagiarism and other study support resources.

Academic misconduct

For information about academic misconduct, special consideration, extensions, and assessment feedback, please refer to the document Your rights and responsibilities as a student in this Unit in the first folder next to the Unit Guide in the Resources area of the CloudDeakin unit site.

Additional Information

For the sake of simplicity, this assignment does not consider taxes and other fees and there is no stock or work in process in the beginning or end of every year. Therefore, all the amount of stock produced is sold during the year, hence the quantity of sales equals the number of goods produced. You might have to use information from previous questions for answering information for following questions and whenever possible support your arguments with your calculations.

For the assignment you will be required to answers questions regarding topics which were not taught yet during the trimester. Whereas some units require students to do some research, which often means searching in academic books and journals for a suitable solution for the matter discussed, in this unit you must study parts of the textbook which were not taught yet.

Regarding how answering the questions, please note there is a choice for quality over quantity. This means most questions are complex but do not require wordy answers. Instead of asking students to define a concept, often the request is for students to apply a concept to the specific case of the assignment and supporting it with your own calculations using the data provided on the assignment. When preparing your answers, please break down the information as much as you can. Please classify apart the items (i.e., break down the items) because if you are providing the total amounts and they are incorrect, you get zero marks, whereas if you provide the breakdown and some of items are correct, you can get some marks. Keep in mind you are not preparing reports for financial accounting, so break down the cost items as much as possible.

CASE STUDY: Sleep Well Inc.

Sleep Well Inc. is a Geelong based furniture company which makes a new style of beds that combine the bed frame with mattress. The company is owned by Koren and Jingran. You are a junior accountant working at Sleep Well Inc. Koren and Jingran decided they need a management accountant to help them understand their business so that they can come out and hired a person named Jonathan for this role.

Question 1

One of your high school classmates who poses himself as an entrepreneur and recently got the investment from a venture capital. He runs a small manufacturing firm and wants to expand his business into the bedroom furniture. He has offered you a one chance in a lifetime of becoming his partner in this new incredible business. The entrepreneur has offered you a partnership in this venture under the condition you share with him the Sleep Well Inc.’s customers contact list. The entrepreneur has guaranteed you a commission for any Sleep Well Inc. customer who buys his new beds.

Required

State the ethical standard, as provided by the Institute of Management Accountants (IMA) Statement of Ethical Professional Practice¹, which is being jeopardized and justify why the standard is being jeopardized, if you accept the offer. Please elaborate on how the business offer could be accepted without jeopardizing any ethical standard. (Chapter 1, 10 marks)

1 This is the additional reading for this unit. A copy of the document is available at https://www.imanet.org/insights-and-trends/business- leadership-and-ethics/ima-statement-of-ethical-professional-practice

Question 2

Jonathan is reviewing the activities for the past year. Sleep Well Inc. rents a small administrative office in Melbourne’s central business district (CBD) for $40,000 per year and a large warehouse in Geelong for $60,000 per year.

Sleep Well Inc. has a staff handling all the administrative work in the office in CBD, and pays the staff with an annual salary of $60,000. Sleep Well Inc. has hired a professional marketing firm for managing the sales and this marketing firm charges a commission of $15 for each completed sale; each sale equals one bed sold. The invoicing system used by Sleep Well is outsourced and for each sale completed the outsourced firm charges

$5; each sale equals one bed sold. The miscellaneous cost that incurred in the administrative office was $4,000, mostly costs with the lease of material and stationery, and this yearly cost is expected to remain the same amount for years to come.

In the warehouse in Geelong there is one full-time employee who gets paid $80,000 per year for supervising the casual staff working in the warehouse. The warehouse had miscellaneous costs of $8,000 in the past year and is expected to remain the same amount for years to come.

Sleep Well Inc. has a contract with a delivery firm for delivering the beds to their clients, but Jonathan is not able to find the contract and is not sure how much the delivery firm charges per transaction. The only information he can gather is regarding the past few years:

Table 1 – Annual unit delivery and costs

Year	Delivery Cost	Units Delivered
2016	$758	470
2017	$870	550
2018	$940	600
2019	$1,010	650

Below is a table listing all the material used during the past year to manufacture 500 beds and the costs incurred. There was no stock or work in process in the beginning or end of the year.

Table 2 – Material costs

Material	Quantity	Total Cost
Fabric	1,500 m²	$3,000
Timber	6000 Units	$36,000
Foam	500 Kilograms	$500
Button stud	5,000 Units	$500
Varnish	500 Litres	$10,000
Bolt	5,000 Units	$500

The manufacturing activity is made by casual staff. The first stage is the woodworking, where a carpenter is hired by $20 per hour for working with the timber. This task is very labour intensive and for preparing the material a carpenter takes 5 hours per bed. Once the timber is ready for being assembled, a casual staff is paid

$30 per hour for assembling the bed frame with the bolts and then adding (fabric, foam, and button studs) to make the mattress attached to the bed frame. The assembling takes only 2 hours per bed. The final stage of manufacturing is varnishing the bed frame. A casual staff is paid $30 per hour for varnishing the bed frame and this task takes 1 hours.

Required

• Jonathan is having some trouble crunching the numbers and has asked for your help identifying and classifying all the costs between (a) fixed, mixed, or variable, (b) direct or indirect, and (c) product cost or period cost. Use a table for presenting the answer to this question, as format suggested below. (Chapter 2, 10 marks)

Cost item	Fixed, mixed, or variable cost	Direct or indirect cost	Product or period cost
[cost item #1]
[cost item #2]
[cost item #3]
[….]

• Use the high-low method for estimating the cost function for annual delivery costs. (Chapter 9, 10 marks)
• Jonathan is also having trouble and asked for your help in calculating the per unit product cost and cost of goods sold for the 500 beds for the past year for Sleep Well Inc. (Chapter 2, 10 marks)

Question 3

To have a better picture of what has happened during the previous year, Koren and Jingran want to figure out the operating profit for Sleep Well Inc., and Jonathan has asked you to provide him with this information. The beds are sold for $900 each. When preparing the income statements, please break down the information as much as you can. Keep in mind you are not preparing reports for financial accounting, so break down the cost items as much as possible.

Required

1. Prepare a variable-costing income statement for the previous year for Sleep Well Inc. (e.g., Panel A, Exhibit 7.3, Chapter 7, 5 marks)
2. Prepare an absorption-costing income statement for the previous year for Sleep Well Inc. (e.g., Panel B, Exhibit 7.3, Chapter 7, 5 marks)

Question 4

In the current year, Koren and Jingran were approached by a student apartment manager who wants to buy 50 beds to furnish the newly built apartments. Koren and Jingran want to know the manufacturing costs for this job, considering Sleep Well Inc. has a production budget of 600 beds for the current year. For allocating the manufacturing overhead (i.e., indirect cost pool), Sleep Well Inc. uses the direct labor hours for assembling and woodwork (i.e., cost-allocation base), but Jonathan is struggling with how to apply job costing to the product cost of these beds and thus has asked for your help.

Required

1. Regarding this specific job, calculate per unit direct manufacturing cost, the manufacturing overhead rate per allocation base, the indirect manufacturing costs allocated for each bed, and the per unit manufacturing cost for these beds. (Job costing in manufacturing, Chapter 3, 5 marks)

• Considering the industry benchmark for manufacturing overhead for similar jobs is 300% of direct material cost, identify whether this job has a manufacturing overhead lower or higher than a similar job using the industry benchmark. Briefly explain what could cause a difference. (Job costing in manufacturing, Chapter 3, 5 marks)
• The apartment manager offers to purchase the 50 beds at $800 per bed, which he claims is much higher than the product cost for these beds. Considering the actual figures for the current year follow what has been budgeted, will Sleep Well Inc. be profitable if Koren and Jingran use the $800 as the selling price for all sales during the current year? Use your calculations for supporting your argument. When the selling price is higher than the per-unit product cost, will the business always be profitable? (Chapter 2, 10 marks)

Question 5

Sleep Well Inc. has a production budget of 600 beds for the current year and for allocating the manufacturing overhead (i.e., indirect cost pool). Sleep Well Inc. uses the direct labour-hours for assembly and woodwork (carpenter) to allocate manufacturing overhead. Koren and Jingran are not sure whether the production budget will be met and some of its consequences.

Required

1. If the quantity produced in the current year reaches the budgeted amount of 600 beds whereas in the past year the production was 500 beds, Jonathan says the per unit product cost in the current year will increase when compared to the previous year because the production has increased. Is Jonathan right or wrong in his statement and why? Use calculations for supporting your argument. (Chapter 2, 10 marks)
2. Considering Sleep Well Inc. uses budgeted indirect costs during the year, if the quantity produced in the current year is only 400 beds whereas the production budget for the current year is 600 beds, Jonathan says there will be an overallocation of indirect costs. Is Jonathan right or wrong in his statement? What could lead to an overallocation or underallocation of indirect costs specifically for the beds? Use calculations for supporting your argument. (Budgeted indirect costs and end-of-period adjustments, Chapter 3, 10 marks)

Question 6

In order to diversity its product line and meet the needs of different customers, Jonathan wants to propose to Koren and Jingran two new products for Sleep Well Inc., the Ultra-Soft Bed and the Super-Shinny Bed. These new products are the standard bed (with mattress) manufactured by Sleep Well Inc. with some additional work on them. For the Ultra-Soft Bed, an extra layer of mattress is applied, and for the Super-Shinny Bed, no extra layer of mattress is applied but extra shiny bolts are added.

Regarding the Ultra-Soft Bed, attaching another layer of mattress takes an additional 2 hours of direct manufacturing activity (assembly) for each bed; the additional layer of mattress requires 2 square meters of fabrics and 1 kilogram of extra soft foam for each bed. The extra soft foam is 400% more expensive than the foam used for the standard bed and the additional fabrics used for the Ultra-Soft Bed is the same as those applied to the standard beds. Regarding the Super-Shinny bed, adding the extra shiny bolts take an additional 1 hour of assembly for each bed and 10 additional shiny bolts for each bed. These shiny bolts are 200% more expensive than the normal bolts used for the standard product.

Whereas a unit of the standard bed (with mattress) is sold by $900 per unit, Jonathan says the Ultra-Soft Bed could be sold by $1,000 so Sleep Well Inc. would make more money with this new product. However, Jonathan is not sure which price would be appropriate for the Super-Shinny Bed.

Required

Koren and Jingran are skeptical about the two new fancy beds that Jonathan proposed and have asked you to crunch the numbers and show whether it is worth processing the standard bed into the Ultra-Soft Bed and selling it for $1,000. Koren and Jingran also want to know which is the minimum price Sleep Well Inc. should charge for a Super-Shinny Bed for it being worth processing further from a standard bed. (Sell or process further, Chapter 6, 10 marks)

Criteria	N (0-29%)	N (30-49%)	P (50-59%)	C (60-69%)	D (70-79%)	HD (80-100%)
Q1: Ethics, ULO1, GLO1 (10 marks)	1.5	4	5.5	6.5	7.5	10
	Not able to list the ethical standard or justify why this standard is being jeopardized and how mitigating the risk.	Not correctly list the ethical standard or justify why this standards is being jeopardized and how mitigating the risk.	List some of the ethical standards or justify why this standard is being jeopardized and how mitigating the risk.	List the ethical standard and partially justify why this standard is being jeopardized and how mitigating the risk.	List the ethical standard and justify why this standard is being jeopardized and how mitigating the risk.	Clearly and succinctly list the ethical standard and justify why this standard is being jeopardized and how mitigating the risk.
	(0-2.9 marks)	(3- 4.9 marks)	(5-5.9 marks)	(6-6.9 marks)	(7-7.9 marks)	(8-10 marks)
Q2a-c: Costs, ULO4, GLO2 (30 marks)	4.5	12	16.5	19.5	22.5	30
	Not able to identify, classify and calculate the activities.	Not able to identify, classify and calculate correctly most of the activities.	Identify, classify and calculate correctly most of the activities.	Identify, classify and calculate correctly a substantial part of activities.	Identify, classify and calculate correctly the majority of activities.	Identify, classify and calculate correctly all activities.
	(0-8.9 marks)	(9- 14.9 marks)	(15-17.9 marks)	(18-20.9 marks)	(21-23.9 marks)	(24-30 marks)
Q3a-b: Income statement, ULO4, GLO2 (10 marks)	1.5	4	5.5	6.5	7.5	10
	Not able to calculate the income statement.	Not able to properly calculate the income statement.	Partially calculate the income statement.	Calculate most of the income statement.	Calculate the income statement.	Calculate clearly and succinctly the income statement.
	(0-2.9 marks)	(3- 4.9 marks)	(5-5.9 marks)	(6-6.9 marks)	(7-7.9 marks)	(8-10 marks)
Q4a-c: Costs, ULO4, GLO2 (20 marks)	3	8	11	13	15	20
	Not able to calculate the job order and price effects.	Not able to properly calculate the job order and price effects.	Partially calculate the job order and/or price effects.	Calculate most of the job order and/or price effects.	Calculate the job order and price effects.	Calculate the job order and price effects, supporting your answer with sound information.
	(0-5.9 marks)	(6- 9.9 marks)	(10-11.9 marks)	(12-13.9 marks)	(14-15.9 marks)	(16-20 marks)
Q5a: Costs, ULO4, GLO2 (10 marks)	1.5	4	5.5	6.5	7.5	10
	Not able to provide an argument regarding unit product costs.	Not able to properly provide an argument regarding unit product costs.	Partially provide an argument regarding unit product costs.	Provide a shallow argument regarding unit product costs.	Provide a sound argument regarding unit product costs	Provide a sound argument regarding unit product costs, supporting your answer with sound information.
	(0-2.9 marks)	(3- 4.9 marks)	(5-5.9 marks)	(6-6.9 marks)	(7-7.9 marks)	(8-10 marks)
	1.5	4	5.5	6.5	7.5	10

Q5b: End-of-period adjustments, ULO4, GLO2 (10 marks)	Not able to provide an argument regarding end- of-period adjustments.	Not able to properly provide an argument regarding end-of-period adjustments.	Partially provide an argument regarding end- of-period adjustments.	Provide a shallow argument regarding end- of-period adjustments.	Provide a sound argument regarding end- of-period adjustments.	Provide a sound argument regarding end- of-period adjustments, supporting your answer with sound information.
	(0-2.9 marks)	(3- 4.9 marks)	(5-5.9 marks)	(6-6.9 marks)	(7-7.9 marks)	(8-10 marks)
Q6: Sell or process further, ULO3, GLO1 & GLO5 (10 marks)	1.5	4	5.5	6.5	7.5	10
	Not able to analyse the sell or process further situation.	Not able to properly analyse the sell or process further situation.	Partially analyse the sell or process further situation.	Analyse most of the sell or process further situation.	Analyse the sell or process further situation.	Analyse the sell or process further situation, supporting your answer with sound information.
	(0-2.9 marks)	(3- 4.9 marks)	(5-5.9 marks)	(6-6.9 marks)	(7-7.9 marks)	(8-10 marks)
Overall	N (0 or above)	N (30 or above)	P (50 or above)	C (60 or above)	D (70 or above)	HD (80 or above)

 

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