BUACC 2613

MANAGEMENT ACCOUNTING
Semester 1, 2020
INDIVIDUAL ASSIGNMENT

This assignment is worth 25% of your total mark.

Submission is due at 11:30pm on June 5th 2020.

In this course, we have focused on developing your understanding of the elements of

management accounting, which provides organisations with relevant cost-related information
to assist with their planning, controlling and decision-making. You will examine the process
of identifying, determining, classifying, analysing and allocating costs to products and services.
This assignment gives you the opportunity to demonstrate and apply your understanding of
product design and costing in a practical manner.

We have acknowledged that the global business environment has been more competitive than
ever before, especially in the rapid advancement of information technology and the
unprecedented level of globalisation and financial market integration. To survive and prosper
in such rapidly changing world, businesses must keep up the capacity to innovate products and
services, and to manage resources effectively and efficiently

This assignment requires you to develop and design a product (not service) of your choice. It
might be an existing product with your take on it with necessary improvement or a new product
that does not exist in the market. You need to undertake R&D to determine the design,
characteristics and functions of your product, calculate its upstream cost, and provide an
explanation as to why you want to produce this product. Then, you need to identify and
determine your product's production and downstream costs for 40,000 units manufactured.
Finally, you need to determine the price of your product and how it will be marketed.

Please confirm your product on the google doc, which is available on the Moodle shell, by
the end of week 7.

Required:

1. Design your product and provide it a name and a description and visual/picture of it (this can
be your own drawing or an image from the internet with your brand/logo assigned to the image).
Justify your choice by explaining in details the reasons why you selected your product (i.e. is
there a demand for it? will it solve any social, environmental or financial issues? etc.). What is
your vision for the selected product?

2. Estimate the product’s Research and Development (R&D) and Design costs (as you will be
undertaking the R&D, building a prototype, testing the product. You should assign yourself an
hourly wage rate based on market research and keep a record of the activities and how many
hours it took you to design your product. This will determine your R&D and Design costs).

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Provide detailed explanations about your R&D processes/steps and how product is
manufactured.

3. Conduct a market research (i.e. search the internet, field research) to identify, estimate and
determine the costs of your product's direct materials, direct labour and manufacturing overhead
(fixed and variable). Clearly list and determine how much and types of materials, labour and
other manufacturing resources will be required to produce one unit of your product and calculate
your product’s cost per unit. Explain the approach used to calculate the overhead cost per unit
and clearly differentiate/list fixed and variable manufacturing overheads.

4. During March, Let’s suppose that the cost of your beginning inventory was $5,000 and ending
inventory equalled $5,000, and you purchased materials to produce 40,000 units of your
product. Calculate the cost of direct materials purchased and used in production in March.

5. During March, the cost of your beginning work in process was $40,000, and ending was
$40,000. Calculate the cost of goods manufactured using a cost of goods manufactured
statement/schedule (for 40,000 units of your product) in March.

6. During March, the cost of your beginning finished goods was $40,000 and ending finished
goods equalled $40,000. Prepare a cost of goods sold statement for the month of March for
30,000 units produced and sold to customers.

7. Determine the price of your product per unit and explain in detail how you determined the
price (i.e. cost base used, the pricing method).

8. Conduct a market research to identify and estimate your downstream activities and the related
costs (i.e. marketing, packaging, handling, storing, distribution and so forth). Explain how you
will market and distribute your product in detail.

9. Prepare an income statement (using absorption costing) for the month of March given that
50,000 units were sold. Your administrative expenses in March totalled $3,000, and the
Australian company tax rate is 30%. Include all other relevant expenses for the month of March.

Please note the following:

• Required format: Report (word limit: 1,000 words, excluding references and tables)
• Submission document: using Word or Pdf
• Standard layout: The first page of your report should be a cover page with the subject
code, your name and student ID number 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 (1-9) and
each requirement needs to be clearly numbered. The last page should include your reference list
in alphabetical order. You need to include references for the resources you used and referred to
as part of your market research to determine your products costs, price etc. The report needs to
be page-numbered and presented in a professional and well-formatted manner. Please ensure to

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provide full and correct statement headings with month and year for the cost of goods
manufactured statement, cost of goods sold statement and income statement.
• Reference style: APA (please refer to the library resource if you need guidance with
this referencing style via https://federation.edu.au/library/student-resources/fedcite).
• The assignment is to comply with the University’s General Guide to Writing and Study
Skills, General Guide to Referencing, and Assignment Layout and Appearance Guidelines, via
the links below
http://federation.edu.au/__data/assets/pdf_file/0018/190044/General-Guide-to-Writing-and-
Study-Skills.pdf

https://federation.edu.au/__data/assets/pdf_file/0020/313328/FedUni-General-Guide-to-
Referencing-2016ed.pdf
https://federation.edu.au/__data/assets/pdf_file/0017/190043/General-Guide-to-Layout-and-
Appearance.pdf

• This is an individual assignment. Please make sure that your product is registered and
technically different from other students’ product.
• Please make sure that name and ID number is stated on the cover sheet of your
submission.
• Plagiarism is strictly penalised. Please refer to the university policy
https://federation.edu.au/current-students/assistance-support-and-services/student-support-
services/student-advisory-service/misconduct/accused-of-plagiarism-or-misconduct for more
information.

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