ST.

CLAIR COLLEGE OF APPLIED ARTS & TECHNOLOGY

Assignment #2
(Worth 15% of Final Grade)
ACC422C - Managerial Accounting
Due Date: November 20, 2014*
*2 mark per day grade penalty for late submissions

**PREPARE THIS ASSIGNMENT USING THE EXCEL SPREADSHEET PROVIDED**

Student Name:_________________________________________

Student I.D. #__________________________________________

1

HUMAN RESOURCES DEPARTMENT BUDGET (50 MARKS)

*PREPARE RESPONSE USING EXCEL SPREADSHEET TEMPLATE PROVIDED IN SEPARATE EXCEL FILE*
Amco Manufacturing has facilities worldwide and maintains its head office in Windsor, Ontario. The
Human Resources department is run out of the head office and is one of many departments that must
submit an annual budget for approval. The budget for 2014 is due to be submitted by January 15th,
2014. The 2013 year end actual results have been completed and compared against the 2013 year
budget. Amazingly the actual costs incurred were exactly in line with what was budgeted for 2013
therefore it can be used as a basis for preparing the new 2014 budget.
You are the new Human Resources Manager and have been provided with the details of the 2013
budget (attached). Your first assignment is to complete and update the budget for the Human
Resources department for 2014. This budget will be prepared based on the 2013 detailed budget along
with the information that you have gathered below.
General Budget Guidelines:
1. General inflation is expected to be a 2% increase from 2013 to 2014
2. General salary increases take place on April 1, 2014 and are expected to be 3%
3. Union clerical staff salaries will increase on June 1st, 2014 by 4% to reflect recent negotiated
increases.
4. Employee benefits are expected to increase to 30% of total salaries (supervisor salaries + clerical
salaries) effective January 2014.
5. Your manager salary is excluded from the department budget as it is included in the Executive
Group Budget.
6. The company expects to replace all of its computers in September 2014. Each department will
only have to pay the cost of its own software when installed at a rate of $450 per person.
7. The mileage rate paid by the company is increasing from $0.30/km to $0.32/km effective
January 2014. The average kilometres claimed for business use in the Human Resources
department is 433km per month.
8. The information technology IT department will begin allocating its Help Line costs to individual
departments based on a charge of $20 per call.
9. The cost of the annual Holiday Turkey gift basket given to employees will now be allocated to
each department at a cost of $100/employee. These will be purchased in December 2014 and
allocated to employee benefits.
10. Costs are allocated to line items in preliminary budgets regardless of whether they will be
expensed or capitalized by the accounting department.
Human Resource Department Information:
1. Number of employees paid from the department budget 2 supervisors & 10 clerical employees
= 12 employees total.
2. Your supervisors have requested the purchase of 2 new laser printers at a cost of $1,000 each.
The current printers are obsolete and toner can no longer be purchased for them. The current
toner supply should last until March 2014 and new printers will need to be purchased in March
to replace them.
2

3. After years of pleading, your department was moved to window offices on the south side of the
building. Now your staff is complaining about the heat and bright sunlight. They have
requested that reflective film and blinds be installed on the windows. This will cost $10,000 and
should be installed by May 2014 before the hot summer begins.
4. You want to take your department on a 2 day retreat in February 2014 to discuss department
goals and objectives. This would take place during the week and food/accommodations are
estimated to cost $3,000. This can be grouped under travel expense hotel.
5. You want to build an interface between the Human Resources Management System (HRMS) and
the Payroll module of the Accounting System. You received a quote for $30,000 and you add
another 25% to the cost (multiply quote by 1.25) as a safety factor since IT systems projects
always go over budget. You estimate your department could save nearly 15 hours per week of
data entry time in your department if you had the interface. This project is expected to receive
final approval and can be added to your budget to begin in June 2014 and be expected to be
implemented by November 2014. The IT firm completing the work will bill the costs over the 6
month time period so you can spread the costs evenly over the 6 months starting in June.
6. 2013 Software costs budgeted were for software licence renewals that will need to be renewed
again in 2014. These renewal costs will not increase with 2% inflation. These are in addition to
the costs associated with the new payroll interface software project.
7. Your department is responsible for the Presidents year end company party. Last year the party
was held at the Windsor Casino and included a 5 course meal with an open bar and live
entertainment. The actual cost was $78,000 in line with the budget from 2013. The party was
such a hit that everyone is expecting a similar event this year if it is approved in the budget. The
costs should be adjusted to reflect inflation increases.
8. Consulting fees have averaged $65,000 per year over the past 3 years. The only fees that are
anticipated this coming year are those related to Pension Plan specialists to assist with a review
of the companys pension plan. You have received a quote for $50,000 to complete this review
over the year, billed on a quarterly basis at the end of every 3 months.
9. You or one of your supervisors regularly fly to the companys satellite office in Calgary to assist
with hiring, firing, retirements and other important HR matters. The visits take place on average
once per month. The flight costs were $1,000 round trip in 2013. Flight costs are expected to
increase with general inflation.
10. The national HRAI conference takes place in October of each year. The fees for the conference
that is being held in Windsor, Ontario will be $10,000 in 2014.
11. On average the human resources department makes 1,200 Help Desk calls per year spread
evenly throughout the year.
12. All other department expenses are expected to remain consistent with 2013 but should be
adjusted for the increase caused by general inflation rate of 2%.
Prepare a monthly human resources department budget for the 2014 year using the excel spreadsheet
file provided. You will need to refer to the 2013 budget detail along with the general budget
guidelines and human resources department information noted above. Each line of the budget must
be accompanied by explanations of the amounts calculated. The first budget line has been completed
for you. Marks are allocated as 2 marks per budgeted amount. Marks will be deducted if supporting
calculations are missing and for poor presentation/format. (50 MARKS)

Human Resources Department - Approved 2013 Budget

Account
Office supplies
Office furniture & fixtures
Postage
Telephone
Cellular phones
Travel expenses - mileage
Travel expenses - air fare
Travel expenses - Meals & entertainment
Travel expenses - hotel
Training
Computer software
Computer hardware & printers
Conferences (registrations)
Consultants
Company Year End Party
Meeting expenses (beverages, snacks, etc)
Clerical salaries
Supervisory salaries
Employee benefits
PC Help Line
Total

JAN
430
640
525
650
130
1,000
200
500

FEB
430
640
525
650
130
1,000
200
500

MAR
430
640
525
650
130
1,000
200
500
2,000

APR
430
640
525
650
130
1,000
200
500

MAY
430
640
525
650
130
1,000
200
500

JUN
430
640
525
650
130
1,000
200
500
4,000

JLY
430
640
525
650
130
1,000
200
500

AUG
430
640
525
650
130
1,000
200
500

SEP
430
640
525
650
130
1,000
200
500
4,000

OCT
430
640
525
650
130
1,000
200
500

NOV
430
640
525
650
130
1,000
200
500

DEC
430
640
525
650
130
1,000
200
500

1,600
9,000
16,250

16,250

16,250

16,250

100
29,280
8,100
10,466

100
29,280
8,100
10,466

100
29,280
8,100
10,466

100
29,280
8,262
10,512

100
29,280
8,262
10,512

100
30,158
8,262
10,758

100
30,158
8,262
10,758

100
30,158
8,262
10,758

100
30,158
8,262
10,758

100
30,158
8,262
10,758

100
30,158
8,262
10,758

100
30,158
8,262
10,758

52,021

53,621

70,271

52,229

52,229

73,603

53,353

53,353

73,603

62,353

53,353

69,603

*actual results for 2013 were in line with the budget

TOTAL
5,160
7,680
6,300
7,800
1,559
12,000
2,400
6,000
10,000
1,600
9,000
65,000
1,200
357,509
98,658
127,727
719,592

Human Resources Department - Draft 2014 Budget

Account
Office supplies
Office furniture & fixtures
Postage
Telephone
Cellular phones
Travel expenses - mileage
Travel expenses - air fare
Travel expenses - Meals & entertainment
Travel expenses - hotel
Training
Computer software
Computer hardware & printers
Conferences (registrations)
Consultants
Company Year End Party
Meeting expenses (beverages, snacks, etc)
Clerical salaries
Supervisory salaries
Employee benefits
PC Help Line
Total

JAN
439

FEB
439

MAR
439

APR
439

MAY
439

JUN
439

JLY
439

AUG
439

SEP
439

OCT
439

NOV
439

DEC
439

439

439

439

439

439

439

439

439

439

439

439

439

Supporting Calculations:
A - $430 per month cost from 2013 x 1.02 for inflation in 2014 - no other adjustments required for 2014
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T

TOTAL Notes
5,263
A
B
C
D
E
F
G
H
I
J
K
L
M
N
O
P
Q
R
S
T
5,263