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UNIT CODE: PRBA007

UNIT NAME: ACCOUNTING FOR MANAGERS

Assignment Two Information

Semester 2 2015
Assess
ment
40%
PRBA007assignment2sem0220155

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SUBMISSION REQUIREMENTS.
Due Date
Thisassignmentmaybesubmittedatorbefore12midnightonSundayofStudyWeek13(25October2015).

Lodgement
The Assignment must include a coversheet that shows the student full name, student number, campus, and lecturers name. Do not use the
standard CDU Assignment Cover Sheet templates.
Assignment must be lodged online via the PRBA007 Learnline Assignment Lodgement link on the CDUPRBA007Learnlinesite .
Ensure your file is named using a file naming convention that allows the lecturer to identify to whom it belongs. Failure to use an
acceptable file naming convention may result in your assignment lodgement being rejected.
DONOTLODGEVIAEMAILorFAXassignmentslodgedbyemailorfaxwillnotbeaccepted.
KEEPACOPYEnsureyouhaveacopyoftheassignmentlodged.Ifyouhavesubmittedassessmentworkelectronicallypleasemakesure
youhaveabackupcopy.

Itisthestudentsresponsibilitytoensurethatsubmissionoftheassignmentissuccessful.

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Format
Theassignmentmaybecompletedmanually,orwiththeuseofanelectronicspreadsheet,wordprocessingsoftwareorwiththeuseof
accountingsoftware.Marksmaybedeductedforillegibleorpartiallyillegiblepapers.
Assignments(orpartsthereof)preparedusingMSWordcanbelodgedinMSWord2003,MSWord2007,orMSWord2010format.
Assignments(orpartsthereof)preparedusingMSExcelcanbelodgementMSExcel2003,MSExcel2007,orMSExcel2010format.
Assignments(orpartsthereof)preparedusinganyformatotherthanindicatedabove(egmanually,wordprocessingsoftwareor
accountingsoftwareetc)mustbeprovidedinPDFformat.
Documentspreparedinformatsotherthanindicatedabovewillnotbeaccepted.
Youmaypreparedifferentpartsofyourassignmentindifferent(approved)formatsandlodgeeachpartasseparatedocuments,provided
youcomplywiththeformatrequirementsshownabove.

University Plagiarism policy


Plagiarismistheunacknowledgeduseofmaterialwrittenorproducedbyothersorareworkofyourownmaterial.Allsourcesof
informationandideasusedinassignmentsmustbereferenced.Thisapplieswhethertheinformationisfromabook,journalarticle,the
internet,orapreviousessayyouwroteortheassignmentofafriend.FormoredetailspleaserefertoPRBA007Learnlinesite.
School of Law and Business
Semester 2, 2011 Page 2 of Faculty of Law
Business and Art

PRBA007assignment2
sem0220155

Preparation guidelines
Assignmentpreparationandpresentationguidelines,instructionsonlodgementoftheassignment,areprovidedwithand/orseparatelyto
thisdocumentandareavailableonthePRBA007CDULearnlinesite.
Studentsarerequiredtocomplywiththeserequirements.
FAILURETOCOMPLYWITHTHESEREQUIREMENTSWILLRESULTINYOURASSIGNMENTBEINGREJECTEDWITH
SUBSEQUENTLOSSOFMARKS.

Late Assignments and Extensions


LATEASSIGNMENTSWILLGENERALLYNOTBEACCEPTED.
Exceptionswillonlybemadewhereassignmentsarelateduetospecialcircumstancesthataresupportedbydocumentaryevidence,and
maybesubjecttoapenaltyof5%ofassignmentmarksperday.Partiallycompletedassignmentswillbeacceptedwithappropriatelossof
marksfortheincompleteportion.
Shouldstudentsforeseepotentialdifficultieswithsubmissionofassessmentitems,theyshouldcontactthelecturerimmediatelythe
difficultiescometonotice,todiscusssuitablearrangementsetcforthesubmissionofthoseassessmenttimes.AnApplicationfor
AssignmentExtensionorSpecialConsiderationshouldbecompletedandprovidedtotheHeadofSchool,SchoolofLawandBusiness.
Thisapplicationform,explanationandinstructionsisavailableonthePRBA007CDULearnlinecoursesite.
Leavingarequestforanextension,specialassessmentorspecialconsiderationuntilthelastmoment,basedongroundsthatstudents
couldhavereasonablybeenabletoforesee,mayresultintheapplicationbeingrejected.

Summary of Assignment Related Documents


The following is a summary of documents associated with and/or provided for this Assignment.

The Assignment Requirements Document (this document)

Assignment Two Data in MS Excel format

Assessment Rubrics for each part


These documents are available from the PRBA007 CDU Learnline course site, in various document formats.

School of Law and Business


Semester 2, 2011 Page 3 of
Faculty of Law Business and Arts

PRBA007assignment2sem0220155

REQUIREMENTS FOR ASSIGNMENT TWO:


Therearefourpartstothisassignment.
Thefirstpartrequiresyoutoprepareabasicmasterbudget.ThegeneraldescriptionisprovidedinPartA,inthisdocument.Howeverthe datafor
theassignmentistobeobtainedfromtheassociatedassignmentdatafile.ThisfileisinMSExcelformatandrequiresyoutoenteryourstudent
numbertogeneratetheassignmentdata.Thedatageneratedisuniquetoeachstudent.Thebasicformatandrequirementsoftheassignmentarethe
sameforeachstudent,howeverthedifferentdatasetswillresultinasubstantiallydifferentsolutionforeachstudent.

ThedatafileforthisassignmentisavailableonthePRBA007Learnlinesiteinthesamesectionfromwhereyouobtainedthisdocument.
ThesecondpartrequiresyoutowriteabriefreportontheCostStructuresidentifiedinthebudgetpreparedforPartAandinthedata
providedinthedatafileforthisassignment.Theanswerforthispartwillnotbeaffectedbytheaccuracyorotherwiseofyouranswerto
PartA.Theappropriateness(orotherwise)ofthisreportwillbebasedontheanalysisyouundertakeusingthedatayouproduceinPartA
andtheadditionalcalculationsyouprovideforthispart.
ThethirdpartalsorequiresyoutowriteabriefreportontheBudgetedversusActualOutcomesusingthebudgetpreparedforpartAand
theadditionaldataprovidedinthedatafileforthisassignment.Theanswerforthispartwillnotbeaffectedbytheaccuracyorotherwise
ofyouranswertoPartA.Theappropriateness(orotherwise)ofthisreportwillbebasedontheanalysisyouundertakeusingthedatayou
produceinPartAandtheadditionalcalculationsyouprovideforthispart.
Thefourthpartrequiresyoutoresearchabehaviouralandcommunicationissuerelatedtobudgetingandperformanceevaluation.You
arerequiredtorefertotheoutcomesofPartCtoillustrateyouressay/report.DetailsoftheissueareprovidedinPartD.Youaretowritea
shortessayorreport,appropriatelyreferenced.Ashortconciseanswerisallthatisrequired.

School of Law and Business


Semester 2, 2011 Page 4 of

PRBA007assignment2sem0220155

Part A - Prepare a Master Budget (30% of the assignment assessment marks)


AllthatisrequiredforthispartistheBudgetSchedules.TheycanbeprovidedinMSWord,MSExcelorPDFformat.(Wordcountfor
thispartisnotrelevant)
WittgensteinPtyLtdproducespropellersusedintheproductionofwindpoweredelectricitygeneratingequipment.Thepropellersare
soldtovariousengineeringcompaniesthatproducewindgeneratorsinAustraliaandEurope.
Projectedsalesinunitsforthecomingfourmonthsareprovidedintheassignmentdatasheet.
ThefollowingdatapertaintoproductionpoliciesandmanufacturingspecificationsfollowedbyWittgensteinPtyLtd.
Thefollowingdetailsareprovidedintheassignmentdatasheet
FinishedgoodsinventoryonJanuary1.
Thefullabsorptioncostoftheopeningfinishedgoodsinventory.
Thevariablemanufacturingcostoftheopeningfinishedgoodsinventory.
Thedesiredfinishedgoodsendinginventoryforeachmonth.
Thedataonmaterialsused.
Theamountofmaterialstobeonhandatthebeginningofthemonth
ThisstipulatedamountofmaterialstobeonhandatthebeginningofthemonthisexactlytheamountofmaterialonhandonJanuary
1.(Assumethatthematerialcostsarethesameascurrentquarter'sproduction.)
Thedirectlabourusedperunitofoutput.
Theaveragedirectlabourcostperhour.
DetailsoftheOverheadsforeachmonthareprovidedinthedatalist.TheOverheadsareestimatedusingaflexiblebudgetformula.
(Activityismeasuredindirectlabourhours.)YouwillhavetodeterminetheMaintenancecostandrelevantstatisticaldatanecessaryfor
youtodosoisprovidedinthedataList
Monthlysellingandadministrativeoverheadexpensesarealsoestimatedusingaflexiblebudgetingformula.(Activityismeasuredin
unitssold.)Financechargesandbaddebtsareincludedinthefiguresprovidedanddonotneedtobeidentifiedseparatelyintheselling
andadministrativeoverheadexpenses.Detailsareprovidedinthedatalist.
Otherinformationprovidedtheassignmentdatalistare:
Theunitsellingpriceofthepropeller.
ThecostoflandtobepurchasedinFebruary.Thecompanyplanstopurchasethelandforfutureexpansion.
Thevalueandtimingofdividendspaidtoshareholders.
Salesareoncreditandthecashreceiptspatternforeachmonthisprovided,asisthelevelofAccountsReceivableasatJanuary1.
Thepaymentforlabourandpurchasesofmaterialsandothercostsareforcashandpaidforinthemonthofacquisition.Thereisno
AccountsPayableamountforthisassignment.
ThecashbalanceonJanuary1.
Ifthefirmdevelopsacashshortagebytheendofthemonth,sufficientcashisborrowedtocovertheshortage(includinganyinterest
paymentsdue).Anycashborrowedisrepaidonemonthlater,asistheinterestdue.Theannualinterestrateisprovidedwiththe
assignmentdata.

Required:
Prepareanoperatingbudgetforthefirstquarter(showingeachmonthandtotalsforthequarter)withthefollowingschedules:
a. Salesbudget
b. Productionbudget
c. Directmaterialspurchasesbudget
d. Directlabourbudget
e. ManufacturingOverheadbudget
f. Endingfinishedgoodsinventorybudget
g. Costofgoodssoldbudget
h. Budgetedincomestatement(ignoreincometaxesandGST)
i. Cashbudget
NotethatwhilsttheSellingandAdministrationexpensesmustbeincluded,thereisnorequirementtoprovideaSellingand
AdministrationExpensebudgetschedule.

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PRBA007assignment2sem0220155

Part B - Report on the impact of Cost Structures (20% of the assignment assessment marks)
Youarerequiredtoprovideareportofapprox500wordsorless(excludingattachmentsandreferences),accompaniedbyrelevant
calculations,inMSWord,MSExceland/orPDFformat(orcombination).UsingaReportstyleisrecommendedbutnotcompulsory.
RitaArthurs,thesalesmanagerisdiscussingthepossibleoutcomeoftheforthcomingelectionwithPauloFarmer,theproduction
manager.Shenotedthatifoneofthemajorpoliticalpartieswinstheelectionandformsgovernment,thereisastrongpossibilitythat
alternativeenergysourcessuchaswindgeneratedelectricitymaynolongerbeasactivelysupportedbythenewgovernmentasisthecase
underthecurrentgovernment.Ritasprimaryconcernisthatthecurrentmarketforalternativepowergenerationequipmentisalready
volatileandsubjecttosignificantuncertainty.Pauloisalsoconcernedabouthisplanstobuildthenewhighlyautomatedmanufacturing
facilityonthelandtobepurchasedinFebruary.Thisnewmanufacturingfacilitywillenablehimtomanufacture,inhouse,themajortwo
partsheisnowpurchasingforassemblyandtosignificantlyautomatetheassemblyprocessthatiscurrentlysomewhatlabourintensive.
Hisprojectionsforthenewfacilityindicateareductionindirectmaterialanddirectlabourcostsof25%butthathisfixedmanufacturing
overheadsarelikelytoincreaseby50%duetotheincreasedinvestmentinproductioncapacity.

Required:
WriteabriefreportaddressingRitasconcerns,usingsomeoftheconceptscoveredinchapters(15,16,17,20,22,23)inthisunit,
ANDtheinformationprovidedfromthecompletionofPartAofthisassignment,andanyadditionalcalculationsusingthe
existingdatathatyoufeelarerelevant.YourreportshouldalsoincludeadiscussionoftheimpactofPaulosintendedinvestment
innewmanufacturingcapacity.Supportyourreportwithrelevantcalculations.
Notethatyoushouldrestrictyourreporttothoseconceptsspecificallycoveredinchapters16,17,20andmoregenerallyinchapters22
and23,andnotdiscussthecurrentpoliticalsituation,environmentalissues,orthemarketingofalternateenergysourcesetc.orother
interestingbutotherwiseirrelevantissues.

Part C - Report on the Budgeted versus Actual Outcomes (20% of the assignment assessment marks)
Youarerequiredtoprovideareportofapprox500wordsorless(excludingattachmentsandreferences),accompaniedbyrelevant
calculations,inMSWord,MSExceland/orPDFformat(orcombination).UsingaReportstyleisrecommendedbutnotcompulsory.
Attheendofthebudgetingperiod,PauloFarmer,theproductionmanagerisreviewingtheactualoutcomes(inparticularthedirect
materialsanddirectlabour)andcomparingthesetothebudgetthatwasoriginallyproduced(inPartA).
ThefollowingdatarelatedtotheactualresultsrecordedaftertheendofthequarterbyWittgensteinPtyLtd,andareprovidedinthe
assignmentdatasheet:
ActualSalesVolumeforthequarter.
Theactualvolumeofdirectmaterialsusedduringthequarter(foreachpart).
Theactualcostofthedirectmaterialsusedduringthequarter(foreachpart).
Theactualdirectlabourhoursusedduringthequarter.
Theactualcostofdirectlabourusedduringthequarter.
Pauloisconfusedbytheoutcomes.Heisawarethatthebudgetthatwascreatedbeforethestartofthequarterwasawellconsideredand
constructedestimate,andhedidnotexpectthattheactualoutcomeswouldbeexactlyasforecast.Howeverheisfindingitdifficultto
understandthereasonsforthedifferences.

Required:
PrepareabriefreporttoassistPaulodeterminewhatmighthavecausedthedifferencesbetweentheoriginalbudgetandthefinal
actualoutcomes.Speculationsofthecausesaresufficient,providedtheyaresupportedbyrelevantcalculationstakenfromthe
dataprovided,andthebudgetproducedinPartA,.Thesecalculationsshouldbeincludedin,andreferredto,inyourreport.
Restrictyourdiscussiontothechangesrelatedtodirectmaterialsanddirectlabour.AsPauloisawarethatbudgetestimatesmay
beinaccurateatthetimeofbudgetpreparation,donotincludethisparticularcauseofdifferenceinyourreport.

School of Law and Business


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PRBA007assignment2sem0220155

Part D - Discussion on Participative Budgeting (20% of the assignment assessment marks)


Youarerequiredtoprovideanessayorreportofapprox500wordsorless(excludingattachmentsandreferences),accompaniedbyrelevant
calculations,inMSWordorPDFformat.Thestyleofyouressayorreportisnotimportantprovidedyourideas,argumentsand/or

recommendationsetcareclearandunderstandableandproperlyreferencedusingaacceptedreferencetechnique

Aneffectivebudgetconvertsthegoalsandobjectivesofanorganizationintodata.Thebudgetservesasablueprintformanagement's
plans.Thebudgetisalsothebasisforcontrol.Managementperformancecanbeevaluatedbycomparingactualresultswiththebudget.
Thus,creatingthebudgetisessentialforthesuccessfuloperationofanorganization.
Findingtheresourcestoimplementthebudgetthatis,movingfromastartingpointtotheultimategoalrequirestheextensiveuseof
humanresources.Howmanagersperceivetheirrolesintheprocessofbudgetingisimportanttothesuccessfuluseofthebudgetasan
effectivetoolforplanning,communicating,andcontrolling.

Required:

Discussthebehaviouralimplicationsofplanningandcontrolwhenacompany'smanagementemploys:
i.

Animposedbudgetaryapproach

ii.

Aparticipativebudgetaryapproach

IllustrateyourdiscussionwithreferencetoyourreporttoPauloFarmerinPartC,discussinghowPaulomightrespondtothe
variousoutcomesofPartCifthebudgethadbeenimposedandcontrastthatwithhowhemightrespond(ifdifferently)hadthe
budgetbeenpreparedusingaparticipativebudgetaryapproach.

Assignment Preparation and Presentation (10% of the assignment assessment marks)


YouarerequiredtopresentandlodgeyourassignmentinamannerthatcomplieswiththerequirementssetoutintheAssignmentDetails
andonLearnline.Requirementswouldincludesuchelementsaslayout,grammar,referencing,andvariouslodgementdetails.Reports
shouldbeeasytoreadandunderstand,demonstratinggoodwritingskills.
Awordlimithasbeensuggested4forpartsB,CandDThesuggestedlengthisprovidedsothatyoucangaugetheextentofthework
required.Markswillnotbedeductedifyouexceedtherecommendedlength,howeveressaysthatsignificantlyexceedtherecommended
lengthwillnotbegivenanyadditionalmarks.Aconciseclearanswerwillattractmoremarksthanalongramblingone.

3Any generally accepted referencing technique is acceptable however it should be used consistently throughout your paper
4The length of assignment is an indication of the depth of analysis that is required. It does not include appendices or calculations. The
length of the assignment is provided only a guide and need not be adhered to exactly. The intention is that students demonstrate that
sufficient analysis is undertaken, without excessive workload.
School of Law and Business
Semester 2, 2011 Page 7 of
Faculty of Law Business and Arts

PRBA007assignment2sem0220155