Part 1: Essay Question (worth 10% of total overall marks).
Explain the difference between the job descriptions of a Financial Accountant versus the job description of a Management Accountant. (see marking rubric attached, appendix 1), limit of 500 words.
Part 2: Problem solving question.
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Festive Flowers Pty Ltd
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Income Statement
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Year Ended 30 June 2013
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2013
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2012
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Revenue
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Flowers
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3,578,750
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74%
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3,457,015
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76%
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Cellophane
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1,245,784
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26%
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1,104,875
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24%
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Total Sales
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4,824,534
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100%
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4,561,890
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100%
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Less Expenses
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Accountancy Fees
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15,879
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0%
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12,547
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0%
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Advertising
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30,875
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1%
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25,891
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1%
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Bad Debts
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2,487
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0%
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6,522
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0%
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Bank Charges
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7,889
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0%
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8,512
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0%
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Consultancy Fees
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15,789
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0%
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12,487
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0%
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Cleaning & Rubbish Removal
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5,687
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0%
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3,589
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0%
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Computer Maintenance
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8,975
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0%
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5,784
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0%
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Depreciation
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36,750
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1%
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52,500
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1%
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Donations
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1,000
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0%
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1,000
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0%
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Electricity
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45,879
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1%
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37,855
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1%
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Gifts & Entertainment
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4,895
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0%
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3,574
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0%
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Hire Plant & Equipment
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45,872
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1%
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45,872
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1%
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Insurance
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35,891
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1%
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45,871
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1%
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Interest
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859,788
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18%
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752,369
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16%
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Internet Costs
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452
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0%
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385
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0%
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Materials Flowers
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1,073,625
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22%
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1,037,105
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23%
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Motor Vehicle Costs
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- Leases
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25,200
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1%
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25,200
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1%
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- Fuel & oil
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10,080
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0%
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8,400
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0%
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- Repairs & Maintenance
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9,800
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0%
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7,800
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0%
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- Insurance & Registration
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3,920
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0%
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3,920
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0%
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Printing, Postage & Stationery
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8,759
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0%
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4,578
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0%
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Repairs & Maintenance
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5,544
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0%
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4,587
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0%
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Rent
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375,000
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8%
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375,000
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8%
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Salaries & Wages
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1,250,844
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26%
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1,250,879
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27%
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Security
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5,498
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0%
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2,578
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0%
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Staff Welfare & Training
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45,871
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1%
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50,987
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1%
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Subscriptions
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5,687
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0%
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5,478
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0%
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Superannuation Contributions - Employees
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112,576
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2%
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112,579
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2%
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Travel Expenses
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2,587
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0%
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9,875
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0%
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Telephone Expenses
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148,744
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3%
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124,588
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3%
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Other Expenses
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1,548
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0%
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1,547
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0%
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TOTAL EXPENSES
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4,203,391
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87%
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4,039,859
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89%
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NET OPERATING PROFIT
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621,143
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13%
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522,031
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11%
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Students are to create an Activity Based costing spreadsheet where the two businesses of a) flower arranging and b) cellophane wrapping are separated into 2 distinct income statements. The total of the income statements must equal the overall total, and each items calculation must be justified. Students can use assumptions such as revenue to allocate costs, or factory space occupied or a combination of both.
Some extra information is:
a) The size of the warehouse is as follows:
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20%
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Cellophane
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Machines
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3 in Total
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Flowers Distribution
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For Sale
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70%
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10%
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Reception
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Board Room
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b) Of the Salaries paid $250,169 are paid to the cellophane machine operators, the rest of the wages are for administration and sales staff.
c) Of the materials purchased, 80% are flowers.
Students need to justify why they have allocated costs as they have, and then work out which (if any) of the two businesses are more or less profitable than the other and briefly discuss their findings to management. Word limit 1,500.Worth 20% of overall total.