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Management Accountingsee file attached each Q answer should be in one page............................... management_accounting_spring_2020_approved_assignment.pdf.pdf Unformatted Attachment Preview College of Banking and Financial Studies Assignment Brief – BTEC Higher National Diploma in Business (Level 5) Student Name /ID Number Unit Number and Title Unit 5 Management Accounting Academic Year Spring 2019 -2020 Unit Assessors Mr. Gnanendran, Ms. Sujata Suresh, Dr. Roslin Lazarus I. V. Name Dr. Niranjan Shetty , Member , LIVT Assignment Title Planning tools used in management accounting Issue Date 4th March 2020 Submission Date For Formative feedback: 3rd April 2020 For Summative feedback: Within 7 days of giving formative feedback Date Submission Format: ASSIGNMENT: 1. The submission is in the form of an individual numerical/written report. 2. This should be written in a concise, formal business style using single spacing and font size 12. 3. You are required to make use of headings, paragraphs and subsections as appropriate, and all work must be supported with research and referenced using the Harvard referencing system. 4. Provide working notes wherever required. 5. The document must be submitted to Turnitin in word document. 6. Please provide a bibliography using Harvard referencing system if you referred any sources for theoretical parts or questions. 7. The numbers/numerical statements and calculations must be neatly/clearly shown so that the assessor assess the work of the learner appropriately. 8. The recommended word limit is 2000-2500 words, although you will not be penalised for exceeding the total word limit. 9. The file must be saved in the format: student ID-MA-Formative -A1, for formative submission and student ID-MA-Summative -A1. 10. In case of extenuating situations, the relevant college policies apply. Unit Learning Outcomes: LO3 Explain the use of planning tools used in management accounting LO4: Compare ways in which organisations could use management accounting to respond to financial problems. 1 Assignment Brief and Guidance: Case Scenario XYZ Company manufactures and sells two different brands of electronic products, known as ‘Pebble 101’ and ‘Stone 101’. ‘’Pebble 101’is produced in department 1 and ‘Stone 101’ in department 2. The business has a capital investment of more than RO 700,000, with 450 employees working in manufacturing and administrative units of the company. The financial statements of last two years (FY 2019 & FY 2018) of XYZ Company has revealed an overall decline in sales, profitability and liquidity position. The directors of XYZ Company are concerned about this sudden decline in the performance and prospects of the Company. You have recently joined as a trainee management Accountant in XYZ Company and are now a part of the Management Accounting team. Directors want company’s management accounting team to prepare functional & master budgets for the Financial year 2020, calculate relevant financial ratios considering benchmarks, key performance indicators and budgetary targets, identify variances for last two financial years , apply relevant strategic planning tools , financial governance to monitor strategy, management accounting skill sets and effective strategies and systems and compare the ways in which Company can respond to financial problems effectively and efficiently. XYZ Company’s budgeted information (FY 2020) & financial statements of last two years (FY 2019 & FY 2018) are given below: A. Sales Budget information for FY 2020. Finished product ‘Pebble 101’ 9,500 400 2,870 270 Forecasted Sales (Units) Selling price per unit in RO Ending inventory required (units) Beginning inventory (unit) ‘Stone 101’ 2600 300 100 95 B. Information for the FY 2020 of Standard material cost per unit and labour cost per hour: Material ‘A’ Material ‘B’ Direct labour RO 2.8 5 4 Overhead is recovered on a direct labour hour basis. C. Information for the FY 2020 of the standard material and labour usage for each product is as follows: ‘Pebble 101’ 20 6 20 Material ‘A’ in Units Material ‘B’ in units Direct labour in hours 2 Finished product ‘Stone 101’ 9 10 25 D. Information for the FY 2020 of Direct Material Material ‘A’ 9,500 20,200 Material ‘B’ 9,000 2,700 Department 1 RO Department 2 RO 0.4 0.4 0.25 0.06 0.3 0.4 0.2 0.2 35,000 35,000 20,000 21,400 30,000 20,000 600 899 Beginning inventory (unit) Ending inventory required (unit) E. Factory overhead budget information for the FY 2020 Budgeted variable overheads rates (Per direct labour hours) Indirect materials Indirect Labour Power (Variable Portion) Maintenance (Variable Portion) Budgeted fixed overheads Depreciation Supervision Power (fixed portion) Maintenance (Fixed portion) F. Non-manufacturing overheads budgeted Information for the FY 2020: Information of Estimated non-manufacturing overheads: Stationary etc. (Administration) Salaries sales Salaries office Commissions Car expenses (Sales) Advertising Miscellaneous (Office) TOTAL RO 2,000 28,500 8,000 25,000 6,500 30,000 4,000 104,000 G. Opening cash balance is RO 9500 for the financial year 2020 H. Cash flows Budgeted Information for the FY 2020 are as follows: Quarter 1 Quarter 2 Quarter 3 Quarter 4 RO 650,000 RO 700,000 RO 880,000 RO 846,250 Materials 300,000 320,000 250,000 336,996 Payment for wages 303,406 330,000 360,000 235,094 Other costs and expenses 30,000 25,000 218,004 333,409 Receipts from customers Payments: 3 I. Budgeted balance sheet for the previous year ended 2019 was as follows: RO RO Non-current assets: Land Building and equipment Less: Depreciation 523,000 63,750 459,250 Current assets: Stock of finished goods Stock of Raw materials Debtors Cash 136,500 71,600 82,250 9,500 299,850 RO 262,772 Less current liabilities Creditors Net assets 72,200 Equity: Represented by shareholder’s interest: 700,000 ordinary shares of RO 1 each Reserves Equity 722,022 227,650 949,672 700,000 249,672 949,672 J. Actual Statements of financial position as at 31st Dec Amt in RO 2019 390,000 RO‘000’ 2018 360,000 RO‘000’ Current assets Inventory Receivable Cash Total Assets 90,000 102,000 65,000 647,000 63,000 53,200 70,000 546,200 Equity and Liabilities Ordinary share capital ($100 per share) Reserves 389,000 60,000 356,000 66,600 120,000 60,000 42,000 36,000 647,000 33,600 30,000 546,200 Non-current assets (carrying value) Non-current liabilities 10\% Loan notes Current liabilities Accruals Trade payables Total Equity and liabilities 4 K. Actual Statements of profit or loss for the year ended 30th Dec Amt in RO 2019 320,000 RO‘000’ 204,800 115,200 48,960 7,600 58,640 8,000 50,640 2,200 48,440 Sales Cost of sales Gross profit Administration expenses Distribution costs Operating profit Interest Profit before taxation Taxation Profit after taxation 2018 224,000 RO‘000’ 140,000 84,000 24,640 5,440 53,920 4,000 49,920 1,000 48,920 Other relevant information: L. Benchmarks – Average data for companies similar to XYZ Company Ratios for financial year ended 31st Dec Gross profit ratio Operating profit margin Return on Capital Employed (ROCE) Current ratio Quick ratio Inventory days Receivables days Payable days Gearing ratio Benchmark 38\% 15\% 13\% 2.2:1 1.5:1 40 days 45 days 50 days 30\% M. XYZ Company - Budgeted information for the financial year 2019 & 2018, no change in actual units & budgeted units produced and sold: Amt in RO Sales revenue Cost of sales Administration expenses Distribution costs Interest 2019 310,000 204,900 48,600 7,400 8,200 2018 230,000 100,000 24,540 5,600 4,100 As a member of Management accounting team of XYZ Company, you are required to evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organization to sustainable success. (For details refer to Grades given in page 6 of the assignment) 5 Learning Outcomes and Assessment Criteria Pass Merit Distinction LO3 Explain the use of planning tools used in management accounting P4 Explain the advantages and disadvantages of different types of planning tools used for budgetary control. M3 Analyse the use of different planning tools and their application for preparing and forecasting budgets. LO4: Compare ways in which organisations could use management accounting to respond to financial problems P5 Compare how organisations are adapting management accounting systems to respond to financial problems. M4 Analyse how, in responding to financial problems, management accounting can lead organisations to sustainable success. 6 D3 Evaluate how planning tools for accounting respond appropriately to solving financial problems to lead organisations to sustainable success. LEARNER ASSESSMENT SUBMISSION AND DECLARATION When submitting evidence for assessment, each learner must sign a declaration confirming that the work is their own. Please list the evidence submitted for each task. Indicate the page numbers where the evidence can be found or describe the nature of the evidence (e.g. video, illustration). Task ref. Evidence submitted Page numbers or description 1 2 Additional comments to the Assessor: Learner declaration I certify that the work submitted for this assignment is my own. I have clearly referenced any sources used in the work. I understand that false declaration is a form of malpractice. Learner signature: Date: 7 ASSESSMENT RECORD SHEET – FORMATIVE FEEDBACK Programme BTEC HND BUSINESS LEVEL 5 Learner name Assignment title Planning tools used in management accounting Assessor name Mr. Gnanendran, Ms. Sujata Suresh, Dr. Roslin Lazarus Unit no. & title Unit 5 Management Accounting Targeted learning aims/assessment criteria LO 3 and LO 4 First Submission Deadline Targeted criteria Date submitted Criteria achieved Assessment comments LO 3 LO 4 General comments Assessor declaration I certify that the evidence submitted for this assignment is the learner’s own. The learner has clearly referenced any sources used in the work. I understand that false declaration is a form of malpractice. Assessor signature Date Date of feedback to learner Resubmission authorisation by Lead Internal Verifier* Date * All resubmissions must be authorised by the Lead Internal Verifier. Only one resubmission is possible per assignment, providing: ● The learner has met initial deadlines set in the assignment, or has met an agreed deadline extension. ● The tutor considers that the learner will be able to provide improved evidence without further guidance. ● Evidence submitted for assessment has been authenticated and accompanied by a signed and dated declaration of authenticity by the learner. **Any resubmission evidence must be submitted within 15 working days of receipt of results of assessment. 8 ASSESSMENT RECORD SHEET - RESUBMISSION – SUMMATIVE FEEDBACK Deadline Targeted criteria Date submitted Criteria achieved Assessment comments P4 P5 M3 M4 D3 General comments Learner Declaration I certify that the evidence submitted for this assignment is my own. I have clearly referenced any sources used in the work. I understand that false declaration is a form of malpractice. Learner signature Assessor declaration Date I certify that the evidence submitted for this assignment is the learner’s own. The learner has clearly referenced any sources used in the work. I understand that false declaration is a form of malpractice. Assessor signature Date Date of feedback to learner 9 ... Purchase answer to see full attachment