Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, of 7

Submission

Requirements.

UNIT CODE: ACT507

UNIT NAME: ACCOUNTING FOR MANAGERS

Assignment Information

Semester 1 2021

Assessment 45%

The assignment is to be submitted before 23.59pm Monday 14th June 2021 in Week 15

The assignment must be lodged online via the ACT507 Learnline Assignment

Lodgement link on the ACT507 Learnline site

Assignment should be typed. Only word docs and/or Excel converted to pdf will be

acceptable. Handwritten answers will be rejected.

DO NOT LODGE BY FAX nor EMAIL nor at LECTURER'S OFFICE KEEP A COPY

The assignment must be lodged on or before the due date indicated in the assignment details.

The assignment must conform to the requirements set out in this assignment

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.

Assignment lodgements will be acknowledged automatically on the Learnline site, on submission.

DO NOT submit an assignment front sheet.

KEEP A COPY - Ensure you have a copy of the assignment lodged. If you have submitted

assessment work electronically, please make sure you have a backup copy.

Resubmission

As a general rule resubmission of assessment items is NOT possible, however the Lecturer

may ask for resubmission if it is deemed appropriate. Details for such resubmission will be

made available by the Lecturer if and when the situation occurs.

University Plagiarism policy

Plagiarism is the unacknowledged use of material written or produced by others or a rework

of your own material. All sources of information and ideas used in assignments must be

referenced. This applies whether the information is from a book, journal article, the internet, or

a previous essay you wrote or the assignment of a friend.

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 2 of 7

Plagiarism policy is available at:

http://learnline.cdu.edu.au/studyskills/studyskills/avoidingplagiarism.html

and Student Breach of Academic Integrity Procedures

http://www.cdu.edu.au/governance/doclibrary/pro-092.pdf

Assignments must be submitted by the due date.

EXTENSIONS AND LATE LODGEMENTS

LATE ASSIGNMENTS WILL GENERALLY NOT BE ACCEPTED UNLESS AN

EXTENSION TO THE DUE DATE HAS BEEN GRANTED BY THE BUSINESS

ADMINISTRATOR.

Exceptions will only be made where assignments are late due to special circumstances that

are supported by documentary evidence and may be subject to a penalty of 5% of

assignment marks per day. Partially completed assignments will be accepted with

appropriate loss of marks for the incomplete portion.

Should students foresee potential difficulties with submission of assessment items, they

should contact the lecturer immediately the difficulties come to notice, to discuss suitable

arrangements etc. for the submission of those assessment times. An Application for

Assignment Extension or Special Consideration should be completed and provided t..s@cdu.edu.au.

This application form, explanation and instructions is available on the ACT507 CDU

Learnline course site or direct from

http://learnline.cdu.edu.au/units/lb_school_templates/deployed/assignment_extension.docx

Please note that it is now College policy that all extension requests must be approved by

the Business Administrator. The lecturer is no longer able to personally approve extension

requests.

Leaving a request for an extension, special assessment or special consideration until the last

moment, based on grounds that students could have reasonably been able to foresee, may result

in the application being rejected.

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 3 of 7

Question One

You have been approached by the owner of a local retailer Berrimah Stores Pty Ltd to give

them advice on how their business is performing. You have been provided with a copy of

the following draft financial statements.

Berrimah Stores Pty Ltd

Statement of profit or loss

For the year ended 30th June 2021

Sales revenue $607,500

Cost of sales 440,100

Gross profit 167,400

Expenses 97,200

Profit (after interest expenses $3,402 and income

tax $34,020)

$70,200

Berrimah Stores Pty Ltd

Statement of financial position

as at 30th June 2021

Current assets

Cash $9,612

Accounts receivables $161,595

Less: Allowance for doubtful debts 10,206 151,389

Inventories 136,080

Total current assets 297,081

Non-current assets

Land 34,020

Building 122,040

Less: Accumulated depreciation 20,412 101,628

Fixtures and fittings 25,515

Less: Accumulated depreciation 14,714 10,801

Total non-current assets 146,449

Total assets $443,530

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 4 of 7

Current liabilities

Accounts payable $146,286Income tax payable 15,650Accruals 6,804Total current liabilities 168,740Non-current liabilities

Mortgage loan 34,020Total liabilities $202,760Equity

Share capital: 6% preference shares $27,000Ordinary shares 136,080Retained earnings 77,690Total equity 240,770Total liabilities and equity $443,530

You have also been provided with the following additional information:

Statement of financial position (extract)

as at 30th June 2020

Required:

Perform a ratio analysis to identify:

a. the entity's earning ability by calculating the ROE, ROA, Profit margin and the Gross

profit margin,

b. how the business has financed its asset purchases by using equity with the debt ratio,

c. the length of time in days that it takes to collect the accounts receivable,

d. how long measured in days the inventory stays on the shelves before it is sold,

e the ability of the business to use short term resources to meet its immediate liabilities if

there are unanticipated financial demands,

f. the ability of the entity's profits to cover the interest payments.

(7 Marks)

Accounts receivables $170,100

Allowance for doubtful debts (15,309)

Inventories 119,070

Total assets 407,700

Total equity 194,940

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 5 of 7

Question Two

During the COVID-19 crisis Ben lost his job and decided to put his savings into a new

business called Top End Walkabout Tours. Once the internal travel restrictions were lifted,

he intended to make the most of the NT tourist boom by providing the local hotels with

customised travel experiences in and around the Top End.

He drew up an estimate of his original cash outlay, income and expenses for the three

months to the 30th June 2021.

April May June

Capital investment $83,200

Fees charged (on credit) 26,551 $32,035 $41,847

Fees collected 15,007 19,625 29,437

Office equipment 19,913

Administration expenses 3,175 3,175 3,175

Advertising and

marketing

7,215 5,772 3,463

Monthly cash drawings 3,463 3,463 3,463

Office rent 4,618 4,618 4,618

Required

a. Prepare a monthly cash budget for the three months ending 30th June, 2021.

b. Prepare a variance report for April 2021 incorporating the following information:

Fees received $10,920

Office equipment 21,320

Cash drawings 6,760

All other cash items agreed with the original budget.

(14 Marks)

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 6 of 7

Question Three

Your Contentment is a business that sells Wellness Packages and has the following

financial information:

The year to the 30th June 2020 2021

Wellness packages (units) 27,000 40,500

Sales $2,700,000 $4,050,000

Less: Expenses 1,350,000 1,822,500

Profit $1,350,000 $2,227,500

Chantelle, the owner, is contemplating an investment in new deluxe massage chairs

and spa baths. The combined cost will be $540,000 which will incur an annual

depreciation charge of $108,000. The investment will result in a reduction of variable

costs of $0.90 per package.

Required

a) From the two years data for 2020 and 2021 what is the break-even point in units and

sales dollars?

b) If the investment in the new equipment takes place what would the new break-even

point be in both units and sales dollars?

c) If the profit of $2,295,000 was to be maintained in 2022 and the equipment purchase

took place what would be the required level of sales in dollars and units?

Round to the nearest dollar.

(9 Marks)

Question Four

The Jabiru Crocodile Jerky Supply Company has three main national retail customers

which sell the product through their networks. The costs of processing and delivering

orders has been increasing and the management have undertaken an activity analysis of

the indirect costs for the customers.

Estimated Total

expected

Use of cost driver

Indirect use of National retail

customers

Activity cost

pool

Cost driver costs cost

driver

1 2 3

Orders

processing

Number of orders

$119,700 525 340 125 60

Returns

processing

Number of returns

30,000 120 60 25 35

Delivery Number of deliveries 61,500 820 450 250 120

Rush orders Number of rush orders 42,000 70 25 22 23

Sales visits Number of visits 16,800 140 75 30 35

The total expected use of the cost driver is expressed in the numbers of the units of

measure.

Asia Pacific College of Business and Law ACT507 Accounting for Managers Semester 1, 2021 Page 7 of 7

The sales to each of the three national retail customers were as follows:

The sales are marked up 50 per cent on cost.

Required

a. Calculate the gross profit for each customer.

b. Calculate the activity cost rate for each activity.

c. Assign the activity costs to each of the three national retail customers.

d. Calculate the total (full) cost for each customer and the contribution of each to profit.

e. Discuss the difference between the analyses in (a) and (d).

f. Advise the management of the Jabiru Crocodile Jerky Supply Company as to

whether any changes should be made in its relationships with customers.

(15 Marks)

National retail customers

1 2 3

Sales $510,000 $279,000 $381,000