Solved by verified expert :Management Accounting Project:
Due
Date (For all parts): 9/10/2014 at 6.30pm
Part
1: (Theory)
Instructions:
·
Each student should submit write a report
answering the following questions.
·
You are also required to do research and
reference your work academically.
·
You are required to use at
least three resources (e.g. Journals, Articles, books… etc) from EBSCO.
Brave
Brands Marketing is a well-renowned marketing organisation with a strong
workforce of dedicated employees. However, the CEO has recently identified that
many of his staff members have a poor understanding of financial statements and
difficulty in interpreting financial data as their tertiary education has not
exposed them to such information. As an ADSM graduate, you have been asked to
do research which will enable you to answer the following
questions
in preparation for the training course that you will perform internally for the
company.
1
In a brief but comprehensive response, define the role of accounting. (You are
required, amongst others, to address accounting information, users of financial
information, the accounting process and the role of financial accounting vs.
management accounting.)
2. In
general, explain what the statement of comprehensive income (income statement)
and statement of financial position (balance sheet) portray about a business
entity and briefly discuss what is contained in each statement.
3. Briefly
discuss the difference between the cash basis and accrual basis of accounting
using the example of rent of 24000AED being paid in advance by Company A for 12
months from 1 September 2014. Company A has a December year end.
4.The
CEO has described an item in the financial statements of Brave Brands Marketing
as “…a present obligation, arising from a past event, the settlement of which
is expected to result in an outflow from the enterprise of resources embodying
economic benefits.” Describe using accounting terms the above statements
5.
You received the following chart:
You
need to:
1- Arrange these costs in a table that lists
factory overhead costs for the year.
2- Analyze the remaining costs and select
those related to production activity for the year; selected costs should
include the materials and goods in process inventories and direct labour.
Part 2:
Instructions:
·
This is a group assignments. Students should
form groups of 2- 4 members
·
Please note that groups of
more than 4 people can’t be accepted and their work will not be graded
·
All students in a group can produce the same
answers
·
Each student should provide
a reflective paragraph on the challenges and problems they faced in the report
and how they overcame it. (This shouldn’t be more than 100 words per student)
·
Answer the following three cases:
Case
1:
A
Dubai factory manufactures garden huts. The production process is classified
into two production departments, Assembly and Joinery. There is one service
department, the canteen. The relevant forecast information for the year ahead
is as follows:
Indirect
costs for all three departments in total as well as the apportionment methods
are as follows:
The following information is available for
each department:
REQUIRED
1. Allocate production overhead costs to the
Assembly, Joinery and Canteen departments using the apportionment methods
provided. Use the format below to answer the question.
For
each production department, calculate an overhead cost rate, based on
labour hours, which may be used to absorb production overhead cost to jobs
(correct to two decimal places).
Find
the overhead cost of a job which spends three labour hours in the Assembly
department and four labour hours in the Joinery department (correct to two
decimal places).
Case
2:
The
following planned results are available for ABC Company with a single product:
REQUIRED
1
Calculate the break-even
point in units.
2
Calculate the margin of
safety in units.
3
What would be the required
sales volume to earn a profit of 10 000?
Case
3:
XYZ
Company has a single product and the following information for the period has
been provided:
1
– What sales revenue is required to break even (rounded to the nearest whole
cent) using the contribution margin %?
2-
Briefly explain what happens to the breakeven point and the margin of safety in
the following circumstances:
A.
An increase in the selling
price of a product
B.
A decrease in variable costs
per unit
C.
An increase in fixed costs
