ACCG3001

Organisational Planning and Control

Session 1, 2020

Tutorial In-Class Exercise - Student Handout

WEEK 12

STUDENT NAME: SID:

TUTORIAL DAY / TIME: TUTOR:

FOLEO FONES CASE STUDY - Chapters 12&13:

Assume you are the management accountant for the Foleo Group.After her meetings with the various business units, Tracey Chen has identified a number of opportunities for the organisation to improve its sustainability performance.One such opportunity is Robyn Smith's suggestion for moving the manufacturing operations of Foleo Fones and Accessories off-shore to address the local residents' concerns.Robyn had done some research and has supplied Tracey with the below data relating to the relocation of Foleo's manufacturing plants offshore (specifically to Guangzhou in southern China).

Australian Plants Guangzhou Plant Annual Direct Labour Costs $1,953,315 $1,074,323 Annual Direct Materials Costs $2,976,480 $1,785,888 Annual operational expenses (Variable Manufacturing Overheads) $343,440 $120,204 Annual waste produced from operations requiring disposal 710 tonnes p.a, 825 tonnes p.a. Cost of waste disposal per kg $120 per tonne $110 per tonne Annual fixed manufacturing overheads $625,000 $375,000 Average / estimated delivery time for Slifones and Accessories 5 working days 35 working days Estimated CO2 emissions produced by operations per hour of 260 grams per operation hour 430 grams per hour Number of employees required by manufacturing operations 1,450 1,250 Number of working weeks per year per employee 40 weeks 50 weeksCosts / Benefits Maintaining Australian Operations Relocating Operations to China Year 0 Years 1-5 TOTAL Year 0 Years 1-5 TOTAL Initial outlay for the relocation of operations to China Estimated inflow of funds from sale of assets and subleasing plants Annual Direct Labour Costs Annual Direct Materials Costs Annual operational expenses (Variable Manufacturing Overheads) Annual waste produced from operations requiring disposal Annual fixed manufacturing overheads Payout of entitlements to Australian factory workers TOTAL NET FINANCIAL COST / (BENEFIT)