MANAGEMENT ACCOUNTING FOR COST AND CONTROL TASKS

The purpose of Assessment item is to establish the skills needed in the workplace for costing products and services using the appropriate processes and tools and apply analytical processes to construct accounting systems and models using workplace tools. Each question uses realistic data and the professional practices similar to that found in workplaces.

Your assignment consists of different question styles including discussion questions, reports, exercises, problem questions and spreadsheet questions. It assesses learning outcomes as listed in the assignment rationale below.

QUESTION 1 - Management accounting

What is the purpose of management accounting reports? Give examples (about 150 words).

QUESTION 2 - Control

What is meant by the control function of management accounting? Refer to the text chapter 1 material on Panopticism. Give examples (about 150 words).

QUESTION 3 - Cost concepts

What four purposes of product costing are identified in chapter 1 of your text? Give examples

QUESTION 4 - Manufacturing statement and income statement

Spreadsheet. See the Spreadsheet Advice PDF in Interact2 Resources and the examples in your textbook.

Check the assignment requirements below paying particular attention to the spreadsheet requirements. Ensure you have separate data and report areas with the latter showing only formulas. Use IF functions to allow for the possibility of either a net profit or a net loss. Show row and column headings and paste both a normal view and a formula view.

Adjustments are to be made in respect of the following:

(a) Accrued expenses: Salaries (Office) $5000, Salaries (Factory) $3000

(b) Insurance paid in advance, $2000

(c) Taxation expense for current year, $500 000

(d) Depreciation of factory plant, $35 000

(e) Insurance and rates are to be apportioned three-quarters to the factory and one-quarter to the office.

Required:

(a) Prepare a manufacturing statement for the year.

(b) Prepare an income statement for the year.

QUESTION 5 - Labour cost concepts

A. Recording labour costs involves two interlocking double entries, reflecting the two aspects of labour costs to be accounted for. Explain. Give examples

B. Should overtime payments be treated as direct labour, or as overhead?

QUESTION 6 - Understanding the entries in the Materials Control account

The Materials Control account balance was $20 000 on 30 June. Raw materials purchased during June cost $90 000. Direct materials issued to production during June were $50 000 and indirect materials consumed were $30 000.

Required: Materials Control T-account to record these transactions and to determine the balance of Materials Control on 1 June.

QUESTION 7 - Understanding the entries in the Accrued Payroll account

Salaries and wages payable to factory employees were $10 000 on 1 March and $4000 on 31 March. Gross salaries and wages paid during March totalled $40,000. March's direct labour totalled $18 000.

Required: T-account for Accrued Payroll and general journal entries for recording salaries and wages earned by, and paid to, factory employees during March.

QUESTION 8 - Payroll entries

The Patel Company has a gross payroll of $8 000 per day. Withholdings for PAYG taxes are $2400 per day. There are no other deductions from employees' earnings. The firm works five days per week, Monday to Friday inclusive. The payroll period covers Thursday to Wednesday inclusive and the payroll for the week is paid on the following Friday.

Gross payroll consists of $4800 direct labour, $1600 indirect factory labour, $1120 selling expenses and $480 general and administrative expenses each day. The following calendar should be used to answer the questions:

 (a) What is the total amount to be credited to Accrued Payroll in respect of September earnings?

(b) If balance day adjustments are performed at the end of each month, what would be the balance in Accrued Payroll account at the close of business on September 30?

(c) Suppose that a single journal entry is made on the last day of each month to record the distribution of total labour costs for the month, but that entries are made each Friday to record payment of wages and withholdings. Also, PAYG taxes withheld are remitted to the Taxation Department at the end of each month.

(i) Show the weekly journal entry.

(ii) Construct the necessary ledger accounts to show all entries in respect of labour costs during the month of September.

QUESTION 9 - Activity Based Costing

Your employer is contemplating changing the existing traditional costing systems used in the business to adopt activity based costing (ABC).

Prepare a business report outlining the traditional costing system and evaluate arguments for and against ABC. Use the Internet as a resource and academic journal articles (about 400 words excluding references). Use the Internet for advice of business report structures.

QUESTION 10 - Service department cost allocation

Direct, step and reciprocal methods of overhead allocation -

A firm has two service departments, S₁ and S₂, and two production departments, P₁ and P₂. The primary allocation of indirect manufacturing expenses is as follows:

The percentage allocation of service centre costs is:

Re-allocate the service centre costs to the production departments by

(a) the direct method

(b) the step method

(c) the reciprocal services method.

A. Create a manual, handwritten solution. Scan or use your phone to copy and paste an image in your assignment. If using a smart phone, consider using a free scanning app such as Camscanner, Office Lens or Google Drive or search for an app. Let us know which app you chose.

Use the algebraic method for the reciprocal services method.

B. Solve with a spreadsheet. Show the Matrix algebra solution.

Rationale - This assignment assesses your achievement of learning outcomes including:

• the application of cognitive skills in the design and operation of costing systems;
• being able to critically evaluate the design and operation of performance management systems
• manufacturing statements,
• job costing systems,
• Activity Based Costing (ABC),
• methods of service department cost allocation;
• the role of management accounting in organisational contexts,
• the implications for management accounting of different paradigms;
• the application of analytical and synthetical skills in report writing;
• quantitative techniques and computer software including
• using the Internet as a professional source;
• the creation and implementation of computerised decision models and;
• to critique how managers make decisions.

In particular, this assignment is designed to assess;

• your application of knowledge,
• understanding and skills in certain topics including cost flows in management accounting,,
• terminology,
• manufacturing statements,
• spreadsheet construction,
• product costing,
• materials acquisition systems,
• labour payment systems,
• accounting for overhead,
• business report writing,
• activity based costing, (ABC) and,
• the allocation of overhead including service department costs.

Requirements - Assignment Requirements (also check the presentation expectations above).

1. On the first page of your assignment list all questions attempted and include an academic integrity statement that the work submitted is your own and that all sources used have been acknowledged.

2. Your Turnitin submission will consist of two files - a Word file and an Excel file.

3. Paste the spreadsheet solution and a formula view of each spreadsheet in the word file showing row and column headings for both. Paste the normal view first then the formula view. Your word file will provide a complete answer to every question. Use portrait orientation wherever possible. All data will be in the data entry area. The report area will contain no data - just formulas. Check the spreadsheet requirements carefully. You only need to submit a spreadsheet file for those problems specifying such. You can, if you wish submit spreadsheet solutions to other assignment questions but these do not need to comply with the spreadsheet requirements. Name the two files with your family name only as the file name. Record your name, student ID number and page number as a footer on every page of your assignments. Where you are asked to make changes in a spreadsheet, please highlight the changes.

4. Assignment solutions must be presented in the same sequence as set out in the Study Schedule.

5. See referencing requirements above in the Presentation section.

6. Your text and Interact2 resources may provide spreadsheet relevant templates.

7. For good spreadsheet design it is very important that you have completely separate data entry and solution/report areas. A good spreadsheet solution format is to key in the question in a structure which allows the solution to be completely formula driven. Thus NO data/numbers are entered into the solution/report area.

8. Create the spreadsheets as separate spreadsheets in one workbook. Name the tags at the bottom of the computer screen with the question number. See the examples provided with the Spreadsheet Advice PDF in Interact2 Resources.

9. Where appropriate, use the IF function to provide built-in checks etc. Variances?Net income or net loss?

10. How do you display potential negative numbers in brackets? Google the question! Hint. Format / Cells / Number and select Custom. Enter this: #,##0;(#,##0);0

11. Save each spreadsheet in your workbook with the cursor in cell A1 of the first spreadsheet.

12. Examples of spreadsheets are provided in the Spreadsheet Advice document in Interact2. You MUST read and follow these examples. If you choose to create spreadsheet solutions for other assignment problems, these solutions do not need to comply with the spreadsheet requirements.

13. Please check for viruses. Do not use macros in your files.

14. Keep a copy of all your work. Make copies of your work in progress in case your computer has an accident. Backup frequently.

15. It is imperative that you retain a copy of your assignments including your spreadsheets. Complete feedback will be provided to you with your grade and comments by the assessor.

You can discuss your work with other students prior to submission using the discussion forum. However, please do not post complete versions of answers to the forum. Do not leave assignments until the last minute.

The first page of your assignment should consist of the following parts:

• subject code and name;
• your name and student ID number;
• assignment task number;
• list of questions attempted and a list of questions not attempted;
• dates and details of any extension granted; usually include a copy of the approval email;
• an academic integrity statement that the work submitted is your own;
• an acknowledgement of all your sources, and
• a footer with your name, student ID and page number.

In today's business environment we need verbal skills, writing skills, numeracy skills AND digital literacy skills. All of these skills are assessed throughout your study. It is suggested that you attempt the assignment questions week by week.

Solutions to questions should vary in length according to the nature of the question. Solutions to exercises and problem questions should be in a similar form to that demonstrated in the text.

Check the Assignment Requirements above AND the Spreadsheet Advice PDF. Also check the interactive videos.

You should normally submit the assignment only once. Multiple copies received by the University can result in unnecessary delays.