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I certify that the work submitted for this assignment is my own. Where the work of
others has been used to support my work then credit has been acknowledged.
Signature: . Date:
Key dates
Introduction
The aim of this unit is to provide learners with the understanding and ability to use
cost information for budgeting and forecasting purposes in the management of
business. This unit looks at the cost information, both current and future, of
businesses. It looks at how cost data is collected, compiled and analyzed, and
processed into information that is useful for business managers. Learners will have
the opportunity to apply these principles to practice.
The unit then deals with budgetary planning and control. It looks at how to prepare
forecasts and budgets and to compare these to actual business results. Learners will
again have practical experience of this. Finally, the unit considers different costing
and budgetary systems and the causes of resulting variances, together with the
possible implications and the corrective action the business will need to take.
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20171 | Page
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Learning outcomes
LO2. Be able to propose methods to reduce costs and enhance value within a
business
ASSIGNMENT REQUIREMENT:
Learners are encouraged to use a range of companys data to prepare the
following calculations:
LO01
Case 1
Classify different types of cost based on the following company information
Sparky Ltd is a business that employs a number of electricians. The business
undertakes range of work for its customers, from replacing fuses to installing
complete wiring Systems in new houses. In respect of a particular job done by Sparky
Ltd, into which category (direct or Indirect) would each of the following cost elements
fall.
The wages of the electrician who did the job;
Depreciation of the tools used by the electrician;
The salary of Sparky Ltds accountant;
The cost of cable and other materials used on the job;
Rent of the premises where Sparky Ltd stores its inventories
(Learners have to show knowledge of: Types of costs and classification: materials;
labor; overheads; direct and indirect; fixed; variable and semi-variable)
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20172 | Page
London Churchill College
defining the job costing; batch costing; process costing; contract costing and service
costing)
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20173 | Page
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3.3 Prepare budgets according to the chosen budgeting method from Case-3
(Budget preparation: limiting or key factors; master, subsidiary and functional
budgets; cash budgets; the preparation of sales budget, debtors budgets, creditors
budgets, production costs, raw materials and finished goods budget)
3.4 Prepare a cash budget.
(Prepare a cash budget from the class exercise) Behavioral consequences of budgets:
padding the budget; spending to budget; creative budgets.
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20174 | Page
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Case - 3
The XYZ company produces three products, X, Y, and Z. For the coming accounting period
budgets
are to be prepared using the following information:
Budgeted sales
Product X 2000 units at $100 each
Product Y 4000 units at $130 each
Product Z 3000 units at $150 each
Standard usage of raw material
Product X 5 2
Product Y 3 2
Product Z 2 1
X Y Z
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20175 | Page
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LO04
Case 4
A company has prepared the following standard cost card:
$ per unit
Materials (4 kg at $4.50 per kg) 18
Labour (5 hrs at $5 per hr) 25
Variable overheads (5 hrs at $2 per hr) 10
Fixed overheads (5 hrs at $3 per hr) 15
Total $68
4.1 Calculate variances, identify possible causes and recommend corrective action.
(What is Variances in budget? Calculate Variances in your budget: types; analysis;
calculation; possible causes; corrective action)
4.2 Prepare an operating statement reconciling budgeted and actual results
(Reporting: operating statement; reconciliation of budgeted and actual results. show
calculation)
4.3 Report findings to management in accordance with identified responsibility
centers.
(Write a letter to the management identifying the Responsibility centers of variances:
relevance to budgeting; identification of responsibility for variances.)
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20176 | Page
London Churchill College
In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in order to
achieve the following MERIT and DISTINCTION grades
Grade Descriptor Indicative characteristic/s Contextualization
M1 Effective judgments have been
Identify and apply strategies to made
To achieve M1, you need to Identify and
find appropriate solutions Complex problems with more than
apply strategies for various
one variable have been explored
performance indicators.
An effective approach to study and
research has been applied.
M2 Relevant theories and techniques
Select / design and apply have been applied
appropriate methods / techniques A range of methods and techniques
have been applied
A range of source information has
been used
To achieve M2, you need to Design &
The selection of methods and
apply appropriate methods of
techniques/sources has been
budgeting for with correct formats and
justified
techniques for your company data.
The design of methods/techniques
has been justified
Complex information/data has been
synthesized and processed
Appropriate learning
methods/techniques have been
applied.
M3 Communication is appropriate for familiar To achieve M3, you need to Present and
Present and communicate and unfamiliar audiences and appropriate communicate appropriate findings in
appropriate findings media have been used. the Management report letter providing
coherent, logical development of
principles/concepts for the intended
audience.
D1 Conclusions have been arrived at To achieve D1, you need tocritically
Use critical reflection to evaluate through synthesis of ideas and evaluate various cost measurements
own work and justify valid have been justified technique in your chosen
production/Manufacturing company.
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20177 | Page
London Churchill College
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20178 | Page
London Churchill College
If you still have any questions or need any help, please visit our Academic office.
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 20179 | Page
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Support materials
Textbooks
Textbooks
Drury C - Management Accounting for Business (Cengage Learning EMEA, 2009)
ISBN: 9781408017715
Seal W, Gamson H R and Noveen E Management Accounting (McGraw-Hill
Higher Education, 2008) ISBN: 9780077121648
Journals
The financial and mainstream press is a useful source of background
Information, and could provide case studies too.
In this the author's surname and year of publication are cited in the text, e.g. (Bond,
2004).
2. Reference List:
A reference list (of these citations) is included at the end of the assignment, in
alphabetical order by author. The reference list also includes additional details such
as the title and publisher.
A bibliography lists relevant items that you have used in the preparation of the
assignment but not cited in your text. A bibliography should also be in the Harvard
style and the inclusion of such a list shows that you have read widely beyond the
items you have cited.
Examples of citation within text or body of the report:
1. Cormack (1994, p.32-33) states that................
2. ............ This view has been supported in the work of Cormack (1994, p.32-33).
4. Corporate Author: 1st citation: Royal College of Nursing (RCN), 2007 2nd citation:
RCN, 2007
Examples of listings in reference list:
1. Books with one author:
Redman, P., 2006. Good essay writing: a social sciences guide. 3rd ed. London: Open
University in assoc. with Sage.
2. Books with two, three or four authors:
The required elements for a reference are: Authors, Initials, Year. Title of book.Edition.
Place: Publisher
Kirk, J. &Munday, R.J., 1988.Narrative analysis. 3rd ed. Bloomington: Indiana
University Press. Page 11 of 12 BTEC HND in Business/ Managing Human
Resources/May 2013
3. Books with more than four authors:
For books where there are more than four authors, use the first author only with
surname and initials followed by et al. The required elements for a reference are:
Author, Initials., Year. Title of book.Edition. (only include this if not the first edition)
Place: Publisher
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Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.
4. E-books
For e-books the required elements for a reference are :
Author, Year, title of book. [type of medium] Place of publication: Publisher
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
If available at website: Fishman, R., 2005. The rise and fall of suburbia. [e-book].
Chester: Castle Press.
Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].
5. Journal articles
Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part
number), Page numbers.
Perry, C., 2001. What health care assistants know about clean hands.Nursing Times,
97(22), p.63-64.
6. Newspaper articles
Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before
page numbers of article.
Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3
Sep. p.4-5.
3. Books with more than four authors:
For books where there are more than four authors, use the first author only with
surname and initials followed by et al.
The required elements for a reference are:
Author, Initials., Year. Title of book.Edition. (only include this if not the first edition)
Place: Publisher
Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.
4. E-books
For e-books the required elements for a reference are :
Author, Year, title of book. [type of medium] Place of publication: Publisher
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
If available at website:
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].
5. Journal articles
BTEC HND in Business/ Unit 9: Management accounting: Costing & budgeting Apr 201712 |Page
London Churchill College
Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part
number), Page numbers.
Perry, C., 2001. What health care assistants know about clean hands.Nursing Times,
97(22), p.63-64.
6. Newspaper articles
Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before
page numbers of article.
Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3
Sep. p.4-5.
7. Journal articles from an electronic source
Boughton, J.M., 2002. The Bretton Woods proposal: an indepth look. Political Science
Quarterly, [online]. 42 (6), Available at: http://www.pol.upenn/articles (Blackwell
Science Synergy) [accessed 12 June 2005].
8. Internet
National electronic Library for Health. 2003. Can walking make you slimmer and
healthier? (Hitting the headlines article) [Online]. (Updated 16 Jan 2005) Available at:
http://www.nhs.uk.hth.walking [accessed 10 April 2005].
The title of a web page is normally the main heading on the page.
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