Cost Accounting & Decision-Making

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Cost Accounting & Decision-Making (ACC2CAD)

Individual Assignment (20%)

 
  DUE DATE: Monday 27th September 5pm (Melbourne time).  
• Please note that assignments submitted the fifth (5th) working day after the due date are not  
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 accepted for marking as per university policy.  
Please confirm your chosen product with your workshop facilitator during the week 4 workshop.  
If you are repeating this subject, you need to selecte a different product from your last semester
and please do not self-plagiarise.  
 
SUBMISSION: Submitted via LMS Turnitin as PDF document

 
WORD LIMIT: Approximately *1,000 words (excluding calculations and references)

*if you exceed 1,000 words, that will be okay so long as the content is relevant.

 
RELEVANT SUBJECT LEARNING INTENDED OUTCOMES

1.      Identify and apply various costs types and cost behaviours.

2.      Develop, use and apply different cost accounting techniques to produce cost information for decision-making.

 
GRADUATE CAPABILITIES ASSESSED

•       2.1 INQUIRY AND ANALYSIS – Research and Evidence-Based Inquiry: The ability to identify, analyse, and interpret data and information in various forms to draw connections across fields of knowledge.

•       2.2 INQUIRY AND ANALYSIS – Critical Thinking and Problem Solving: The ability to identify, analyse, and interpret data and information in various forms to draw connections across fields of knowledge.
RATIONALE

In this subject, you will develop your understanding of the elements of cost and management accounting, which provides organisations with relevant cost-related information to assist with their planning, controlling and decision-making. You will undertake the process of identifying, determining, classifying and allocating costs to a product. This assessment task gives you the opportunity to demonstrate and apply your understanding of product design and costing in a practical manner.

 
TASK

You are required to select a product (not a service) of your choice. It might be an existing product with your take on it (i.e. you determine its name/brand, design, colour, etc) or a new product that does not exist in the market. Please note that it does not need to be a complicated product, you can select a simple product.

 

You need to undertake research and development (R&D) to determine the design, characteristics and functions of your product and calculate its upstream cost and provide an explanation as to why you selected the product. Then, by undertaking market research you need to determine your product’s production and downstream costs for 60,000 units manufactured for the month. Finally, you need to determine the price of your product and how it will be marketed and distributed to consumers.

 

Please refer to the specific instructions and requirements of the assignment on the next page.

 

 

 

 
INSTRUCTIONS/REQUIREMENTS

1.      Design your product and give it a name/logo, provide a description of its functions and visual/picture of it (this can be your own drawing or an image from the internet with your product brand/logo assigned to the image). Critically explain why you selected your product (i.e. will there be a demand for it? How is it similar or different to existing products in the market? will it solve any social, environmental or financial issues? etc.) (approximately 150 words and please substantiate any claims you make).

2.      Identify and estimate your upstream activities (R&D and design) and costs for your product. As you will be undertaking the R&D and product design activities, assign yourself an hourly R&D wage rate based on market research (i.e. search the internet) and provide detailed explanations and records (log with dates and timing of your activities) about your upstream processes/steps/activities for your chosen product.

3.      Undertake market research (i.e. search the internet) to estimate and determine the cost of your product’s direct materials, direct labour and manufacturing overheads (fixed and variable). Clearly list and determine the quantity and types of direct materials, direct labour and manufacturing overheads that will be required to produce one unit of your product and calculate your products per unit cost. Explain the approach/method and activity level you used to calculate the overhead cost per unit and clearly differentiate/list fixed and variable manufacturing overheads.

4.      During the month, the cost of your beginning inventory was $60,000 and ending inventory equalled $60,000, and you purchased materials to produce 60,000 units of your product. Calculate the cost of direct materials purchased and used in production for the month.

5.      During the month, the cost of your beginning work in process was $150,000 and ending was $150,000. Calculate the cost of goods manufactured using a cost of goods manufactured statement/schedule for 60,000 units of your product produced for the month.

6.      During the month, the cost of your beginning finished goods was $200,000 and ending finished goods equalled $200,000. Prepare a cost of goods sold statement for the month to calculate the cost of goods sold for 60,000 units sold for the month.

7.      Determine the price of your product per unit and critically explain how you determined the price (i.e. explain and justify the pricing method, cost base and mark-up you selected and used, and how your products’ price compares to competitors prices if there are any).

8.      Undertake market research to identify and estimate your downstream activities and costs for your product for the month (i.e. marketing, packaging, handling, distribution and so forth) and explain in detail how you will market and distribute your product to consumers.

9.      Prepare an income statement using the absorption costing method for the month for the 60,000 units sold. Company tax rate is 30%. Make sure to include all relevant expenses for the month.

10.  Reflection: provide a written reflection about the knowledge and skills you developed from this assignment, and which parts/sections of this assignment you enjoyed the most and found practical and which requirements you found the most challenging and/or difficult.

 
SUBMISSION REQUIREMENTS

•       You need to present and submit the above requirements as a report in PDF format.

•       The first page of your report should be a cover page with the subject code, your name and student ID and the name of your product.

•       The second page should be a table of contents.

 

• The body of the report will include the requirements above (1-10) and each requirement needs to be clearly numbered.
• The last page should include your reference list in alphabetical order.
• You need to include in-text references for resources you used and referred to as part of your market research to determine your products costs, price etc.
• Please use the APA referencing style (please refer to the library resources if you need guidance with this style).
• The report needs to be page numbered and presented in a professional and well-formatted manner.
• Please ensure to provide full and correct statement headings with the month (you can determine the month) and year (should be 2021) for the cost of goods manufactured statement, cost of goods sold statement and income statement.

 

Marking Rubric

Criteria Mark

Allocation

 Standard (A, 80‐100%) Standard (B, 70‐79%) Standard (C, 60‐69%) Standard (D, 50‐59%) Standard (N, 0-49%)

 
Provides a detailed description of the chosen product and its functions/characteristics and why it was selected.

 

 10 marks Provides an in depth and succinct analysis and explanation for selecting the product and its functions/characteristics. Provides detailed explanations as to whether the product will help contribute to solving social, economic or environmental issues. Provides a detailed description with reasonable explanations for selecting and designing the product and its functions/characteristic s, and some discussion

about social, environmental or economic implications of the product.

 

 Provides a clear description with limited explanations for selecting and designing the product and its functions/characteristics, and its possible impact on society, economy or environment.

 

 Provides limited and narrow explanations and reasons for selecting and designing the product and its characteristics. Provides no explanation for the design and selection of the product and its functions/characteristic s, and possible impact on society, economy or environment.
Provides a detailed record of upstream activities and calculates reasonable upstream cost based on market research. 10 marks Clearly assigns themselves a reasonable and realistic hourly wage rate (based on market research) and provides detailed evidence of keeping a record of the activities and hours spent to design the product to determine the upstream costs. Provides detailed explanations about their upstream activities.

 

 Assigns themselves a reasonable and realistic hourly wage rate (based on market research) and provides some evidence of keeping a record of the hours spent to design the product to determine the upstream costs. Provides reasonable explanations about their upstream activities. Assigns themselves a reasonable hourly wage rate (based on market research) and provides limited evidence of keeping a record of the hours spent to design the product to determine the upstream costs. Provides limited explanations of the upstream process and steps. Assigns themselves an hourly wage rate (not based on market research) and provides no evidence of keeping a record of the hours spent to design the product to determine the upstream costs. Does not explain the upstream process and steps. No assignment of a reasonable hourly wage rate (based on market research) and no evidence of keeping a record of the hours spent to design the product to determine the upstream costs. Does not provide explanations of the upstream process and steps.

 

Undertakes market research to identify and estimate a reasonable cost for direct labour, direct materials and manufacturing overheads to determine the products per unit cost. 15 marks All relevant materials, labour and overheads for the product have been identified and realistic and appropriate quantities and costs have been estimated using thorough market research. Detailed explanations have been provided as to how the costs were identified and calculated to determine per unit product cost. All relevant materials, labour and overheads for the product have been identified and their costs have been estimated using some market research and are realistic and appropriate for the product. Clear explanations were provided for the determination and calculation of costs. Limited material, labour and overhead costs have been identified and estimated using some market research. Limited explanations were provided for the determination of the costs. Makes some reference to market research but does not explain how it determined the products production costs and per unit cost. No costs have been determined and calculated.
Calculates the cost of direct materials purchased and used in production for the month for 60,000 units. 10 marks Accurately calculates the cost of direct materials purchased and used based on the direct materials cost determined in requirement 3. Presents calculations in a correct, detailed and clear manner. Calculates the cost of direct materials purchased and used based on the direct materials cost determined in requirement 3 with limited details. Calculates the cost of direct materials purchased and used based on the direct materials cost determined in requirement 3 with some errors. Calculates the cost of direct materials purchased and used not based on the direct materials cost determined in requirement 3. No calculations of the cost of direct materials purchased and used.
Calculates the cost of goods manufactured

using a cost of goods manufactured

statement/schedule for 60,000 units for the month.

 10 marks Accurately calculates the cost of goods manufactured based on the product costs determined in requirements 3 and 4 using the correct cost of goods manufactured statement Calculates the cost of goods manufactured based on the product costs determined in requirements 3 and 4 with limited errors using the correct cost of goods manufactured statement Calculates the cost of goods manufactured based on the product costs determined in requirements 3 and 4 with limited errors without using a cost of goods manufactured statement. Calculates the cost of goods manufactured not based on the product costs determined in requirements 3 and 4. No calculations of the cost of goods manufactured.

 

    structure/format with correct and full statement heading. structure/format with incomplete heading.      
Prepares a cost of goods sold statement for the month for 60,000 units produced and sold to customers. 10 marks Accurately calculates the cost of goods sold based on the product costs and cost of goods manufactured determined in requirements 3, 4 and 5 using the correct cost of goods sold statement structure with correct and full statement heading. Calculates the cost of goods sold based on the product costs and cost of goods manufactured determined in requirements 3, 4 and 5 with limited errors using the correct cost of goods sold statement structure with incomplete heading. Calculates the cost of goods sold based on the product costs and cost of goods manufactured determined in requirements 3, 4 and 5 with limited errors and without using a cost of goods sold statement. Calculates the cost of goods sold not based on the product costs determined in requirements 3, 4 and 5 and without using the correct cost of goods sold statement structure/format. No calculations of the cost of goods sold.
Determines the price of the product per unit and explains how the price was determined and compares with competitors prices.

 

 10 marks Determines a reasonable and realistic product price by providing thorough explanations of how the price was determined and calculated (i.e. clearly explains and justifies the cost base and pricing approach used) and how their product price compares to competitors’ prices. Determines a reasonable and realistic product price with some explanations of how the price was determined and calculated (i.e.

clearly explains the cost base used and pricing approach). Makes some reference to how product price compares to competitors’ prices.

 Determines a product price based on limited market research and limited explanations of how the price was determined and calculated and makes some comparison to competitors’ prices. Determines the product price with no or very little explanations and calculations. Does not determine product price.
Undertakes market research to identify and estimate the products downstream costs with explanations of how the product will be marketed 10 marks All relevant downstream activities have been identified and explained and their costs have been estimated using thorough market research and are Majority of the downstream activities have been identified and explained and their costs have been estimated using some Limited downstream

activities identified. The costs have been estimated using some market research and are realistic and appropriate

 Makes some reference to market research but does not explain how it determined the products downstream costs and activities. No downstream costs and activities have been determined and calculated.
and distributed for the month.   realistic and appropriate for the product. Detailed explanations have been provided as to how the costs were determined and how the product will be marketed and distributed. market research and are realistic and appropriate for the product. Clear explanations were provided for the determination of the marketing and distribution methods and costs. for the product. Some explanations were provided for the determination of the marketing and distribution costs.    
Prepares an income statement (using the absorption costing method) for the month for the 60,000 units sold. 10 marks Accurately prepares an income statement using the absorption costing format/structure with full and correct statement format and heading, including all other additional information in requirement 9. Prepares an income statement using the absorption costing method with incomplete heading, including most of the other additional information in requirement 9. Prepares an income statement using the absorption costing method, but not including all other additional information in requirement 9, and no statement heading. Prepares a nonabsorption costing method income statement and does not include the additional information in requirement 9. Does not prepare an income statement.
Reflection 5 marks Provides a detailed written reflection about the skills and konwledge gained in this assignment and the overall experience (i.e. sections most enjoyed, and challenges and/or difficulties). Provides a reasonable written reflection about the skills and konwledge

gained in this assignment and the overall experience (i.e. sections most enjoyed, and challenges and/or difficulties).

 Provides some written reflection about the skills gained and assignment experience (i.e. sections most enjoyed, and challenges and/or difficulties). Provides very minimal written reflection about

the assignment experience.

 Provides no written reflection about the assignment aspects most enjoyed or challenging and/or difficult.
  Total 100 marks