Reference no: EM133511208
Foundations of Management Accounting
Details
• Demonstrating accuracy in accounting calculations.
• Understanding and the ability to analyse and interpret the information from the calculations undertaken.
• Breadth of quality of analyses and providing appropriate guidance to management decision-making.
• Communication - use of appropriate grammar and the use of appropriate format.
• Correctly using the APA referencing system to cite academic sources in-text and in the reference list.
Assignment questions
Brass Musical Pty Ltd manufactures brass musical instruments for use by School of Accounting students. The company uses a job costing system in which manufacturing overhead is applied based on direct labour hours. The company's budget for the current year included the following prediction.
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Budgeted total manufacturing overhead
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$426.300
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Budgeted total direct labour hours
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20,300
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During March, the firm began two production jobs:
• Job number T8I, consisting of 76 trombones.
• Job number C40, consisting of 110 cornets. The events of March are described as follows: 1,000 square metres of rolled brass sheet metal were purchased on credit for $5,000.
400 kilograms of brass tubing were purchased on credit for $4,000.
The following requisitions were filled on 5 March:
- Requisition number 112: 250 square meters of brass sheet metal @ $5.00 per square meter (For job number T81)
- Requisition number 113: 1,000 kilograms of bras tubing @ $10 per kilogram (for job number C40)
- Requisition number 114: 10 litres of valve lubricant @ $10.00 litre
All brass used in production is treated as direct material. Valve lubricant is an indirect material.
An Analysis of labour time sheets revealed the following labour usage for March.
- Direct labour: Job number T81, 800 hours @$20 per hour
- Direct labour. Job number C40, 900 hours @$20 per hour
Indirect Labour: general factory clean-up, $4,000
Indirect labour: factory supervisory salaries, $9,000 Depreciation of the factory building and equipment during March amounted to $12,000.
Rent paid in cash for warehouse space used during March was $1,200.
Electricity costs incurred during March amounted to $2,100. The invoices for these costs were received, but the bills were not paid in March.
March council rates and property taxes on the factory were paid in cash, $2,400.
The insurance cost covering factory operations for March was $3,100. The insurance policy had been prepaid in February.
Costs of salaries and on-costs for sales and administrative personnel paid in cash during
March amounted to $8,000.
Depreciation on administrative office equipment and space amounted to $4,000.
Other selling and administrative expenses paid in cash during March amounted to $1,000.
Job number T81 was completed in March.
Half (50%) the trombones in job number T81 were sold on credit during March for $700 each.
The 1st of March balances in selected accounts are as follows:
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Cash
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$10,000
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Accounts receivable
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$21,000
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Prepaid Insurance
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$5,000
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Raw material inventory
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$149,000
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Manufacturing supplies Inventory
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$500
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Work in process inventory
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$91,000
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Finished goods inventory
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$220,000
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Accumulated depreciation: Building and equipment
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$102,000
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Accounts payable
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$13,000
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Wages payable
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$8,000
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Required:
Question 1: Executive summary: The one-page executive summary should offer a concise overview of the critical issues outlined in the case study and provide a brief background context. Additionally, it must include a summary of the key findings derived from your analysis.
Question 2: Management Accounting Reports: Provide the Cost of goods manufactured (COGM), Cost of Goods Sold (COGS) and Income Statement (I/S). Be sure to show all calculations for each of these reports. Accuracy in your calculations will be crucial for scoring well in this section. Present the data in a clear and organised manner to enhance the readability of your reports.
Question 3: Recommendation (Maximum 500 words): In the recommendation section, you must provide detailed and justified recommendations based on your case study analysis. Your recommendations should be well-reasoned and supported by evidence from your findings.
Referencing style (APA style)
Formatting:
You must consider the case study provided and write an executive report using Microsoft Word. Your report should be set out in an appropriate format under the following headings:
I. Title Page
2. Table of Contents
3. Executive Summary
4. Management Accounting Report
5. Recommendation and Conclusion
6. References
7. The report needs to use Times New Roman font, with a font size of 12.