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Assignment 1
Assignment 1
Assignment 1
Unit Assessors Mr. Gnanendran, Ms. Sujata Suresh, Dr. Roslin Lazarus
SubmissionFormat:
ASSIGNMENT:
LO4: Compare ways in which organisations could use management accounting to respond to financial
problems.
1
Assignment Brief and Guidance:
Case Scenario
XYZ Company manufactures and sells two different brands of electronic products, known as ‘Pebble 101’ and
‘Stone 101’. ‘’Pebble 101’is produced in department 1 and ‘Stone 101’ in department 2. The business has a
capital investment of more than RO 700,000, with 450 employees working in manufacturing and administrative
units of the company. The financial statements of last two years (FY 2019 & FY 2018) of XYZ Company has
revealed an overall decline in sales, profitability and liquidity position. The directors of XYZ Company are
concerned about this sudden decline in the performance and prospects of the Company.
You have recently joined as a trainee management Accountant in XYZ Company and are now a part of the
Management Accounting team.
Directors want company’s management accounting team to prepare functional & master budgets for the
Financial year 2020, calculate relevant financial ratios considering benchmarks, key performance indicators
and budgetary targets, identify variances for last two financial years , apply relevant strategic planning tools ,
financial governance to monitor strategy, management accounting skill sets and effective strategies and
systems and compare the ways in which Company can respond to financial problems effectively and
efficiently.
XYZ Company’s budgeted information (FY 2020) & financial statements of last two years (FY 2019 & FY
2018) are given below: -
Finished product
‘Pebble 101’ ‘Stone 101’
Forecasted Sales (Units) 9,500 2600
Selling price per unit in RO 400 300
Ending inventory required (units) 2,870 100
Beginning inventory (unit) 270 95
B. Information for the FY 2020 of Standard material cost per unit and labour cost per hour:
RO
Material ‘A’ 2.8
Material ‘B’ 5
Direct labour 4
Overhead is recovered on a direct labour hour basis.
C. Information for the FY 2020 of the standard material and labour usage for each product is as
follows:
Finished product
‘Pebble 101’ ‘Stone 101’
Material ‘A’ in Units 20 9
Material ‘B’ in units 6 10
Direct labour in hours 20 25
D. Information for the FY 2020 of Direct Material
Material ‘A’ Material ‘B’
Beginning inventory (unit) 9,500 9,000
Ending inventory required (unit) 20,200 2,700
Department 1 Department 2
RO RO
Budgeted variable overheads rates
(Per direct labour hours)
Indirect materials 0.4 0.3
Indirect Labour 0.4 0.4
Power (Variable Portion) 0.25 0.2
Maintenance (Variable Portion) 0.06 0.2
Current assets:
Stock of finished goods 136,500
Stock of Raw materials 71,600
Debtors 82,250
Cash 9,500 299,850
Amt in RO
2019 2018
Non•current assets (carrying value) 390,000 360,000
Current assets
Inventory 90,000 63,000
Receivable 102,000 53,200
Cash 65,000 70,000
Total Assets 647,000 546,200
Non•current liabilities
10% Loan notes 120,000 60,000
Current liabilities
Accruals 42,000 33,600
Trade payables 36,000 30,000
Total Equity and liabilities 647,000 546,200
K. Actual Statements of profit or loss for the year ended 30th Dec
Amt in RO
2019 2018
Sales 320,000 224,000
Cost of sales 204,800 140,000
Gross profit 115,200 84,000
Administration expenses 48,960 24,640
Distribution costs 7,600 5,440
Operating profit 58,640 53,920
Interest 8,000 4,000
Profit before taxation 50,640 49,920
Taxation 2,200 1,000
Profit after taxation 48,440 48,920
M. XYZ Company - Budgeted information for the financial year 2019 & 2018, no change in actual units
& budgeted units produced and sold:
Amt in RO
2019 2018
Sales revenue 310,000 230,000
Cost of sales 204,900 100,000
Administration expenses 48,600 24,540
Distribution costs 7,400 5,600
Interest 8,200 4,100
As a member of Management accounting team of XYZ Company, you are required to evaluate how planning
tools for accounting respond appropriately to solving financial problems to lead organization to sustainable
success. (For details refer to Grades given in page 6 of the assignment)
Learning Outcomes and Assessment Criteria
Pass Merit Distinction
When submitting evidence for assessment, each learner must sign a declaration confirming that the
work is their own.
Please list the evidence submitted for each task. Indicate the page numbers where the evidence can
be found or describe the nature of the evidence (e.g. video, illustration).
Learner declaration
I certify that the work submitted for this assignment is my own. I have clearly referenced
any sources used in the work. I understand that false declaration is a form of malpractice.
Learner Date:
signature:
ASSESSMENT RECORD SHEET – FORMATIVE FEEDBACK
Programme BTEC HND BUSINESS LEVEL 5 Learner name
Mr. Gnanendran,
Planning tools used in management
Assignment title Assessor name Ms. Sujata Suresh,
accounting
Dr. Roslin Lazarus
Targeted learning
Unit no. & title Unit 5 Management Accounting aims/assessment LO 3 and LO 4
criteria
First Submission
Deadline Date submitted
Targeted Criteria
Assessment comments
criteria achieved
LO 3
LO 4
General comments
I certify that the evidence submitted for this assignment is the learner’s own. The
Assessor
learner has clearly referenced any sources used in the work. I understand that false
declaration
declaration is a form of malpractice.
Assessor signature Date
Date of feedback to
learner
Resubmission
authorisation Date
by Lead Internal Verifier*
* All resubmissions must be authorised by the Lead Internal Verifier. Only one resubmission is possible per assignment, providing:
● The learner has met initial deadlines set in the assignment, or has met an agreed deadline extension.
● The tutor considers that the learner will be able to provide improved evidence without further guidance.
● Evidence submitted for assessment has been authenticated and accompanied by a signed and dated declaration of authenticity by the learner.
**Any resubmission evidence must be submitted within 15 working days of receipt of results of assessment.
ASSESSMENT RECORD SHEET - RESUBMISSION – SUMMATIVE FEEDBACK
Deadline Date submitted
Targeted Criteria
Assessment comments
criteria achieved
P4
P5
M3
M4
D3
General comments
I certify that the evidence submitted for this assignment is my own. I have clearly
Learner
referenced any sources used in the work. I understand that false declaration is a form of
Declaration
malpractice.
Learner signature Date
I certify that the evidence submitted for this assignment is the learner’s own. The learner
Assessor
has clearly referenced any sources used in the work. I understand that false declaration is
declaration
a form of malpractice.
Assessor signature Date
Date of feedback to
learner