11:18 MAP csl question-converted - Read-only Read Only - You can't save changes to this... This question analyses CSL Limited using a variety of sources including company annual reports, company website, internet, newspapers and articles. The analysis utilises various management accounting processes, techniques and methods. We have to attempt a report which should address the following requirements: A. By using the figures in the consolidated income statement of the company annual report prepare the followings on an Excel Spreadsheet: (1) Summarised absorption costing income statement for 2020 showing operating profit of the company (Hint: ignore some revenue and expense items presented in the current consolidated income statement and consider 2.716.5 operating profit as the bottom-line profit). (11) Summarized contribution margin income statement for 2020. We may need to use appropriate cost classification methods and assumptions for this purpose. Assume all expenses are either variable or fixed except for cost of sales and selling and marketing expenses which should be classified as mixed costs. Cost of sales can be separated out to fixed and variables costs assuming that 40% of the total cost of sales in 2020 consist of fixed manufacturing overhead costs while selling expenses could be separated using high low method with annual sales units as the measure of unit level. Consider sales for 2019 and 2020 as a measure of level of activity for estimating cost function assuming 2019 and 2020 sales being 100,000 units and 125,000 units respectively. (ii) Budgeted income statement for 2021. This statement should be prepared using the contribution margin income statement that is prepared in requirement (F. ii) above and making realistic and logical assumptions about the trends. We are not required to prepare operational budgets such as sales budget, production budget, to prepare a budgeted income statement. The excel file used for preparing the above three statements should consist of two sheets. The first sheet .......................---........................ III 11:18 PM.. Read Only - You can't save changes to this.... assumptions about the trends. We are not required to prepare operational budgets such as sales budget, production budget, to prepare a budgeted income statement. The cxcel file used for preparing the above three statements should consist of two shects. The first sheet should be used to record any input data and assumptions that you use for your calculations. For example, data used with high-low in F(ii) above should be shown here. The second sheet of excel file should show the output of the analysis (i.e. the three statements mentioned in (1) to (iii) above. Input and output sheets should be linked by formulas. In other words, the excel file should be readily available for sensitivity analysis ("what if analysis") i.e. if the manager change the input data or an assumption in the input sheet, he/she should be able to see the impact of the changes on the output sheet immediately. B. Managers regard relevance, accuracy, and timeliness as important characteristics of information However, much of accounting information provided to managers does not rank highly on these criteria, because some management accountants are tied to financial models of reporting. To regain their role as primary information provides, management accountants need to become more directly involved in the operation of data collection and reporting systems, and move closer to the managers they are serving (McKinnon & Bruns 1992). In light of the above statement, we need to provide 5 examples of information that management accountants can provide to managers of CSL Limited to assist them in managing company resources (example, customer profitability analysis to identify the most important customers of CSL Limited) C. By looking to the 2020 annual report of CSI. Limited following questions are to be answered. 1. What are the cost objects in the annual report? II. What is the product cost in the annual report and how much is it? III. What are the three period costs, and explain why they are period costs? IV. Would CSL Limited be able to make use of cost volume profit analysis within its business operations? Explain. V. Examining the segment information contained in the annual report and comment on the results. VI. After examining the annual report, conclude whether there is a budgetary system in operation in CSL Limited, VII. What would be the key element driving a budgetary system for CSL. Limited? What budgets might the company prepare? III