Faculty of Business and Law

aCADEMIC YEAR 2019/20

assessment brief

Module Code:

UMAD5H-15-2

Module Title:

Accounting Information for Business

Submission Deadline:

16^th July 2020

Assessment Component

B (Coursework)

Assessment Weighting:

40 per cent of total module mark

Submission:

Group submission (3 to 5 group members), electronic submission via Moodle

Marking and feedback deadline

Assessment Instructions

Business Background:

Kouzina Ltd (KL) is a manufacturer of home and kitchenware appliances which was established back in 1990 by Philip Papandreou, the Managing Director. The company has developed a reputation for designing and manufacturing high quality domestic appliances such as coffee machines, kettles, toasters and waffle makers & grills. KL's products are aimed at the high-end market and have developed a loyal, yet demanding, customer base in the UK and Europe. Examples of KL's main competitors are KitchenAid, Bosch, Kenwood and Smeg. KL distributes and sell their products through high street and online retailers.

KL have enjoyed an average growth of 5% over the last decade and the board of directors is confident that the company has a strong market position and is looking for opportunities to accelerate the rate of expansion. One of the opportunities which the directors are considering is the launch of new product to add to their range. The new product is multi-functional food processor which can perform several functions such as liquidising, chopping, dicing and mixing.

KL have developed a revolutionary electric motor to be used in the food processor which is highly efficient and quiet. Over the past two years the company have been designing and testing the new product which has cost 450,000, also business consultants were hired to investigate the market needs and desire for the product. The consultants charged 100,000 for their services and the overall feedback from the consultants was very positive. When designing a new product, one of the criteria that the must be met is that the new product must be marketable for five years.

The board of directors has decided to initiate the production of the new food processor in a bid to increase profits and boost a stagnating sales growth. As with all the other products they manufacturer, they had planned to manufacture in the UK by expanding their manufacturing plant in Bristol. However, the Sales Director, through her global contacts, has had discussions with a manufacturer in Brazil who has agreed to manufacture the product at a cheaper price. Their average price per unit would be two thirds of average total unit cost of manufacturing themselves in the UK. The Brazilian manufacturer has also agreed to include the shipping costs as part of the total costs.

You have recently joined the business analysis and development team within the company. During your interview you discussed the project that you undertook at the university which concerned the investment appraisal process and you also discussed in great detail the need for organisations and individuals to consider their impact on the local community and the global environment. You have been asked to prepare a business report for the board of directors which would consider the financial viability of the project as well as conducting an ethical and sustainability evaluation of the options.

The Task:

You have been assigned to work as a part of a small team which is required to produce a business report for the board of directors. Initiating the project would require investment in new machinery and working capital and managers require you to undertake the investment appraisal to assess the financial viability of the project.

The management accountant produced the following list of estimates to allow you to conduct the financial analysis of the project.

Year 1Year 2Year 3Year 4Year 5

Sales volume (units)12,75013,65012,45010,75010,250

The company plan to sell the new products to retailers for 300 each, however for the final year the price will be reduced to 290.

The management accountant estimates that each unit will take on average 4 hours to produce. Production workers are currently paid 20 per hour, this is expected to increase by 2% year on year after year 1.

The cost of raw materials will be 110 per unit in year 1, this is expected to increase by 5 in year 2 followed by a further 5% increase in year 3. No further increases are expected after year 3.

Packaging costs will be 5 per unit for years 1 & 2 but due to the need to reduce packaging waste this cost is expected to reduce by 10% for the remainder of the project.

The production overhead incurred solely by this project is a semi-variable cost and the management account has supplied you with the following information; when 10,000 units are produced the cost is budgeted to be 370,000, however, when 12,000 units are produced the production overheads are budgeted to increase to 414,000. Production overheads are forecast to increase by 2% year on year after year 1.

Three of the current managers, sales, production and procurement, who are paid 60,000 per annum each are expected to provide support for the project as a part of their current contractual duties. A further five members of staff will need to be recruited; they will each attract a salary of 30,000 per annum.

With the new product the distribution costs are expected to increase by 550 per annum for every 200 units sold.

The company is planning to support the new product with a marketing budget of 200,000 in the first year, this will then be halved in year 2. In year 3 the marketing budget will be reduced by a further 50,000 and this level of investment will remain for year 4.There is currently no plan to market the product in year 5.

The expansion of the plant in Bristol requires investment in buildings and machinery and working capital. The expansion will cost 1.15 million and will have a value of 250,000 at the end of the products life. Working capital of 50,000 is required throughout the project.

The company's cost of capital is 12%. Currently the company generates ROCE of 20%. The board of directors is concerned with risk associated with this project as it requires a significant investment and has already incurred costs. Kouzina Ltd pays tax at 20% on all profits.

The current exchange rate between UK and Brazil is 1 GBP to 5.47 BRL.

Requirements (and marking criteria):

You have been assigned to work as a part of a small team which is required to produce a business report for the board of directors. The report should contain the following:

Provide an overview of the usefulness of the main investment appraisal techniques. The board expects information from the academic and industry sources about the reliability and application of investment appraisal in practice. (15%)

Use the above information to undertake a financial analysis of the project using the main investment appraisal techniques. The board of directors expect to see summarised information of the annual unit contribution, the annual cash flow forecast and the results of the investment appraisal within the main body of the report, with supporting calculations/working referenced within the appendices. (25%)

Identify and discuss the main risks, both financial and non-financial associated with this project and the proposal put forward by the Sales Director, to sub-contract the manufacture of the new product and import from Brazil. (20%)

Conduct an ethical and sustainability evaluation of both proposals. (15%)

Provide a conclusion and recommendations to the directors based on the findings from your report. (5%)

Format and presentation, see below for more details (10%)

Relevant referencing is required use UWE Harvard referencing, however, please remember that this is a business report and not an academic article. (5%)

Details of your group meetings and discussions, this should include the format of the meetings, attendees, dates and times, what was agreed and what was expected before the next meeting. You should clearly identify who had responsibility for each element of the report and their overall contribution. This should be included on the same document but clearly identified and separate from the main report. This also does not form part of the word count. (5%)

Submission:

The submission will be made via Blackboard by one member of the group for all group members.

Your submission must be ONE Microsoft Word document which contains all elements of your submission. If we are unable to open your submission, then we are unable to mark it.

The maximum word count is 2,000 words beyond which nothing will be read or marked.

The word count must be clearly and correctly stated on the title page of the assignment with the module name and number and the student number for each member of the group.

You must use 12-point font size and 1.5 line spacing.

The report must be in a business format.

The report must be properly referenced using UWE Harvard referencing.

All appendices must be correctly referenced within your business report.

You are required to use a clear business report format. Any additional information which is not included in the main report should be submitted in the appendix. You must produce a title page, a table of content and an executive summary of up to 200 words. These three elements and any subsequent appendices ARE NOT included in the word count.

You can view the UWE word count policy here: http://www1.uwe.ac.uk/aboutus/policies

Groups: Guidelines for completion of assignment

1. Students are responsible for the formation of teams; team members do not necessarily have to be in the same tutorial group. Each group member must register with their group on Blackboard by 13th February 2020. Any changes in team members after this date must be authorised by the module leader. Please do not join an existing group on Blackboard without agreement from other members first.

Note: Students who have difficulty in forming/finding a team should attend all lectures, workshops and tutorials. It is the student's responsibility to find and register with a group before 13th February 2020.

2. The mark awarded to the group's report will also be the mark allocated to each individual member of the group. The learning log should provide a record of what was discussed and agreed at team meetings, work allocations, contributions from team members, etc. which can be used in case of disagreements about the level of contribution from individuals in the team.

If group members wish to have a different method of allocating marks to individual members, a request should be made in writing to the module leader by 27th February 2020, indicating the reason and rationale for the different method of allocation. The group should then arrange to discuss this with the module leader to obtain authorisation.

Groups which are experiencing issues or disputes must inform the module leader immediately. The latest date for informing the module leader is 27th February 2020, to allow sufficient time for issues / disputes to be resolved.

Note: It is an assessment offence for a student to claim an equal share of the marks if he/she has made minimal or no contribution to the completion of a group assignment.

Referencing:

Please ensure you adhere to the principles of good academic practice and ensure you use the UWE Harvard system to reference your work. Failure to properly reference your work to original source material can be grounds for the assessment offence of plagiarism and may result in failure of the assessment or have more serious implications.

For further guidance on correct referencing go to:

http://www1.uwe.ac.uk/students/studysupport/studyskills/referencing.aspx

Details of what constitutes plagiarism and how to avoid it can be found here:

http://www1.uwe.ac.uk/students/studysupport/studyskills/readingandwriting/plagiarism.aspx

For general guidance on how to avoid assessment offences see:

http://www1.uwe.ac.uk/students/academicadvice/assessments/assessmentoffences.aspx

Instructions for submission:

You must submit your assignment before the stated deadline by electronic submission throughBlackboard. Notification that the electronic submission portal is open for your assignment is displayed (usually two weeks before the submission date) in the Coursework tab in myUWE, the Coursework tab in Blackboard and via an announcement in the Blackboard course.

Please ensure you allow sufficient time to upload your script, noting thatthe system becomes busier and slower as the deadline approaches. Only your final upload will be counted. Ensure all your information is submitted at one attempt to avoid 'overwriting' your intended submission. Always check and retain your receipts.

Late submission in the 24 hours following the deadline will be accepted but the assignment mark will be capped at 40%. Submissions after 24 hours will not be accepted. For full guidance on online submission through Blackboard, see:

http://info.uwe.ac.uk/online/Blackboard/students/guides/assignments/default.asp

Submissions of coursework by any other method (including a paper copy, on disc, by email or by fax) are NOT permissible for this module unless specifically agreed in advance of the submission date.

Before submitting your work, please ensure the following:

That you have proof read you work thoroughly to ensure your work is presented appropriately

That you have addressed all the required elements of the assessment

That you have referenced in accordance with the guidance provided

That you have addressed each of the marking criterion

That the submission is in the correct format

Feedback:

Students will normally receive marks and feedback on their submission within 20 working days of the submission deadline (not including any public holidays or university closure days). Any delay in returning students' work will be communicated by the module leader via Blackboard.

THERE WILL BE NO ADVANCE READING OF DRAFTS BY TUTORS!

Further Guidance:

Guidance on study skills: http://www1.uwe.ac.uk/students/studysupport/studyskills.aspx

Support from the FBL Academic Success Centre (2B076):

http://www1.uwe.ac.uk/bl/bbs/aboutus/studentexperience/academicsupportcentre.aspx

Guidance on UWE assessment regulations and terminology: http://www1.uwe.ac.uk/students/academicadvice/assessments/assessmentsguide.aspx

Guidance on using the library: http://www1.uwe.ac.uk/library/usingthelibrary.aspx

Personal Circumstances

If you are experiencing difficulties in completing a piece of assessment on time due to unexpected circumstances (for example illness, accident, bereavement), you should seek advice from a Student Support Adviser at the earliest opportunity.

Please note the module leader cannot grant personal circumstances or extensions.

Appointments with a student adviser can be made via an Information Point or online at:

http://www1.uwe.ac.uk/students/academicadvice/studentadvisers.aspx

The Student Support Adviser will advise as to whether you should submit an application for 'Personal Circumstances (PCs)', how to do so and what evidence is required to support the application.

Further details on PC's can be found here:

http://www1.uwe.ac.uk/students/academicadvice/assessments/personalcircumstances.aspx

Discount Factors

4%

5%

10%

12%

15%

20%

Period

0

1.000

1.000

1.000

1.000

1.000

1.000

1

0.962

0.952

0.909

0.893

0.870

0.833

2

0.925

0.907

0.826

0.797

0.756

0.694

3

0.889

0.864

0.751

0.712

0.658

0.579

4

0.855

0.823

0.683

0.636

0.572

0.482

5

0.822

0.784

0.621

0.567

0.497

0.402

6

0.790

0.746

0.564

0.507

0.432

0.335

7

0.760

0.711

0.513

0.452

0.376

0.279

8

0.731

0.677

0.467

0.404

0.327

0.233

9

0.703

0.645

0.424

0.361

0.284

0.194

10

0.676

0.614

0.386

0.322

0.247

0.162