MAA703 – Accounting for Management - Trimester 1 2024

Assessment Task 2 Part A – Case study analysis (written

research report) - Group

DUE DATE AND TIME: Week 8, Wednesday, 1 May 2024 by 8:00 PM (AEST)
PERCENTAGE OF FINAL GRADE: 20%
WORD COUNT: 2,500 words

Purpose
This task provides you with opportunities to learn the knowledge (ULO1 & GLO1) and skills
(ULO2 & GLO3) required in the study and practice of management accounting. By completing
this task, you will develop your skills in identifying, locating and synthesising management
accounting information from diverse sources.

You will work as a team with three other students to complete this task. You are expected to
meet regularly, to keep evidence of your meetings, the decisions you make during those
meetings, a record of contributions to the task by each team member, and notes on how you
managed the teamwork process. You will use this evidence for Part B of this task which is a
written reflection on your capacity to work as a productive and positive member of the team.
Teamwork is one of the vital components of many workplaces and the ability to demonstrate
teamwork in the learning environment is an important component of your university
education. Thus, one important skill being assessed in this task is your capacity to work as
a member of a team and to be able to identify the elements that make for a successful team.
To this end, it will be important for you to consider how you might work as a team to undertake
this task.

• What roles might each team member need to take on to complete the questions?
• What discussions might you need to have, for instance, in framing your assessment
of the two costing systems?

The case description

Company background:
Established in 2021, Geelong Electronics Manufacturing Ltd (GEM) is a young but promising
manufacturer of parts based in Geelong. GEM has swiftly gained recognition in the industry
for its commitment to quality and innovation. The company specialises in producing a variety
of electronic components, including microchips, capacitors, resistors, and printed circuit
boards.

Geelong's Manufacturing Industry:

Geelong, situated in Victoria, Australia has a strong manufacturing heritage. Once known
primarily for its automotive industry, the city has diversified its manufacturing base over the
years, incorporating sectors such as aerospace, pharmaceuticals, and electronics. Geelong's
strategic location, skilled workforce, and access to key infrastructure make it an attractive
destination for manufacturing enterprises.

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Market Presence:
Despite its relatively short tenure, GEM has established a foothold in the Australian market,
supplying electronic parts to clients nationwide. The company caters to a diverse clientele,
ranging from small-scale electronics manufacturers to large multinational corporations.
GEM's commitment to delivering superior quality products and meeting the stringent
demands of the electronics industry has earned it a loyal customer base and a positive
reputation in the market.

Challenges:
While GEM has experienced rapid growth since its inception, it faces several challenges
common to young companies in the manufacturing sector. In particular, the recent closure of
a competitor's business during the latter part of 2022 resulted in a significant market
disruption, leading to a 20% drop in sales for GEM in the year. GEM’s management is
concerned about this operating result. More specifically, they can’t understand why profits
doubled in 2022 when sales dropped by 20% and why a loss was incurred in 2023 when
sales recovered to previous levels. The senior management accountant at GEM, Alisson
Peter, was tasked to prepare financial analysis and explanations to address management’s
concerns. Allison believes the variations in the operating results are to do with the costing
approaches (variable costing and absorption costing). You recently joined the company as a
junior management accountant. Alisson is your supervisor and asked you to help her prepare
the financial analysis. As the first step, you have extracted the following operating data from
the first three years records of the company.

Selling price per unit $20

Number of units produced:
2021 500,000
2022 600,000
2023 400,000
Number of units sold:
2021 500,000
2022 400,000
2023 500,000

Additional information:
a. When preparing the production budget, management had expected sales to remain
constant at 500,000 units; the increased production in 2022 was designed to provide the
company with a buffer of protection against unexpected spurts in demand. By the start of
2023, management could see that inventory was excessive and that spurts in demand
were unlikely. To reduce inventories, GEM cut back production during 2023, as shown
above.
b. The company’s manufacturing facilities are highly automated. Variable manufacturing
costs (direct materials, direct labour, and variable manufacturing overhead) totaled only
$4 per unit, and fixed manufacturing overhead costs totaled $6,000,000 per year.
c. Fixed manufacturing overhead costs were applied to units of product on the basis of each
year’s production. That is, a new fixed manufacturing overhead rate is computed each
year.
d. Variable selling and administrative expenses were $2 per unit sold. Fixed selling and
administrative expenses totaled $700,000 per year.
e. The company uses a FIFO inventory flow assumption.

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Specific Requirements
1. As a way of background to the financial analysis, prepare a conceptual analysis of the
differences between the absorption costing and the variable costing approaches. In your
analysis, ensure to explain the implications of the differences for product costing,
inventory valuation, and managerial decision making. This task requires to be supported
with literature research. (15 marks)
2. Compute the unit product cost in each year under absorption costing. Show how much of
this cost is variable and how much is fixed. (6 marks)
3. Prepare an absorption costing income statement for each year. (9 marks)
4. Prepare a contribution format income statement for each year. (15 marks)
5. Reconcile the variable costing and absorption costing net operating income amounts for
each year. Show all your computations in MS Excel. (9 marks)
6. Refer to the absorption costing income statement. Explain why net operating income was
higher in 2022 than it was in 2021 under absorption approach, in light of the fact that fewer
units were sold in 2022 than in 2021. (6 marks)
7. Refer again to the absorption costing income statement. Explain why the company
suffered a loss in 2023 but reported a profit in 2021 although the same number of units
was sold in each year. (5 marks)
8. Explain how operations would have differed in 2022 and 2023 if the company had been
using Lean Production, with the result that ending inventory was zero. (5 marks)

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General Requirements
1. Form a team of four and register the team. Details for how to register your team are on the
unit’s CloudDeakin site. The sooner you organise your team, the sooner you can get started.
However, this has to be completed by the end of week 3 at the latest.
2. Have the initial team meeting and upload team contact.
3. Meet regularly to plan and progress towards achieving the assessment objectives (at least
3 meetings). All meeting minutes must be uploaded.
4. It is vital that as you work with your team members, you compile evidence of your
contributions to and interactions with the team. See the assessment brief for Part B of this
task for more details.
5. Using the MAA703_T1_2024 Assignment 2-Part A- Report Submission Template
(available on the unit’s CloudDeakin site in the assessment folder), compile your assignment.
6. The completed assignment must be submitted electronically by the due date by ONE
member of the team (team leader). That means, only one submission per team.

The report should include answers to the questions (see the ‘Specific Requirements’ above)
in the order they are presented, clearly identifying which question is being addressed. You
are not required to repeat the question in your submission. Compile your answers for all the
computational questions and statements in MS Excel clearly showing the computations
(using the Excel functions). Then, copy and paste your answers into an MS Word file. This
means, each group will be submitting one Excel working file for all questions that require
computations, and one MS Word file containing all answers.

For some of the theoretical questions, you will need to search additional primary-sources i.e.,
peer-reviewed journals, scholarly books or book chapters, videos, or discussion thread, or
blog (avoid ChatGPT, Wikipedia and similar sources). Your conclusion should provide
evidence that you have carefully examined the literature, understood the articles you have
selected, and been able to critically analyse their essential contents by integrating their
insights and conclusions into your own arguments and perspective.

The 2,500-word count includes all tables and texts.

Learning Outcomes
This task allows you to demonstrate achievement of the unit learning outcomes. The ULOs
are aligned with specific graduate learning outcomes – that is, the skills and knowledge
graduates are expected to have upon completion of their studies – and this assessment task
is an important tool in determining achievement of those outcomes.

If you do not demonstrate achievement of the unit learning outcomes, you will not be
successful in this unit.

It is a good practice to familiarise yourself with the ULOs and GLOs as they provide guidance
on the knowledge, understanding and skills you’re expected to demonstrate upon completion
of the unit. In this way they can be used to guide your study.

Unit Learning Outcomes (ULO) Graduate Learning

Outcomes (GLO)
ULO 1: Develop and apply management accounting techniques for GLO1: Discipline-
costing, control, planning, budgeting and performance specific knowledge and
measurement and management. capabilities
ULO 2: Identify, locate and synthesise management accounting GLO3: Digital Literacy
information from diverse sources.
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Submission
You are required to submit your assignment in the MAA703 Assessment Task 2 Part A
Dropbox in CloudDeakin on or before Wednesday 1 May 2024, 8:00 PM.

The team leader is to upload the assignment – only ONE submission per team is required.
When uploading your assignment, name your document using the following syntax: <your
team_number_ [unitcode].doc (or ‘.docx’). For example, ‘Team_01_MAA703.doc’.

Submitting a hard copy is not required. Each member of the team must keep a backup copy
of the submission, until the marked assignment has been returned to you. In the unlikely
event that your assignments is misplaced, you will need to submit your backup copy.

Any work you submit may be checked by electronic or other means for the purposes of
detecting collusion and/or plagiarism.

When you submit an assignment through your CloudDeakin unit site, you will receive an
email to your Deakin email address confirming that it has been submitted. You should check
that you can see your assignment in the Submissions view of the Assignment Dropbox folder
after upload, and check for, and keep, the email receipt for the submission.

Evidence
It is vital that as you work with your team members you compile evidence of your contributions
to and interactions with the team. See the assessment brief for Part B of this task for more
details.

Marking and feedback

Students who submit their work by the due date will receive their marks and feedback on
CloudDeakin 15 working days after the submission date.

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Extensions
Extensions can only be granted for exceptional and/or unavoidable circumstances outside of
your control. Requests for extensions must be made by 12 noon on the submission date
using the online Extension Request form under the Assessment tab on the unit CloudDeakin
site. All requests for extensions should be supported by appropriate evidence (e.g., a medical
certificate in the case of ill health).

Applications for extensions after 12 noon on the submission date require University level
special consideration and these applications must be must be submitted via
StudentConnect in your DeakinSync site.

Late submission penalties

If you submit an assessment task after the due date without an approved extension or special
consideration, 5% will be deducted from the available marks for each day after the due date
up to seven days*. Work submitted more than seven days after the due date will not be
marked and will receive 0% for the task. The Unit Chair may refuse to accept a late
submission where it is unreasonable or impracticable to assess the task after the due date.
*'Day' means calendar day for electronic submissions and working day for paper
submissions.

An example of how the calculation of the late penalty based on an assignment being due on
a Thursday at 8:00pm is as follows:
• 1 day late: submitted after Wednesday 11:59pm and before Thursday 11:59pm– 5%
penalty.
• 2 days late: submitted after Thursday 11:59pm and before Friday 11:59pm – 10%
penalty.
• 3 days late: submitted after Friday 11:59pm and before Saturday 11:59pm – 15%
penalty.
• 4 days late: submitted after Saturday 11:59pm and before Sunay 11:59pm – 20%
penalty.
• 5 days late: submitted after Sunday 11:59pm and before Monday 11:59pm – 25%
penalty.
• 6 days late: submitted after Monday 11:59pm and before Tuesday 11:59pm – 30%
penalty.
• 7 days late: submitted after Tuesday 11:59pm and before Wednesday 11:59pm – 35%
penalty.

The Dropbox closes the Wednesday after 11:59pm AEST/AEDT time.

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Support
The Division of Student Life provides a range of Study Support resources and services,
available throughout the academic year, including Writing Mentor and Maths Mentor online
drop ins and the SmartThinking 24 hour writing feedback service at this link. If you would
prefer some more in depth and tailored support, make an appointment online with a
Language and Learning Adviser.

Referencing and Academic Integrity

Deakin takes academic integrity very seriously. It is important that you (and if a group task,
your group) complete your own work in every assessment task Any material used in this
assignment that is not your original work must be acknowledged as such and appropriately
referenced. You can find information about referencing (and avoiding breaching academic
integrity) and other study support resources at the following website:
http://www.deakin.edu.au/students/study-support

Your rights and responsibilities as a student

As a student you have both rights and responsibilities. Please refer to the document Your
rights and responsibilities as a student in the Unit Guide & Information section in the
Content area in the CloudDeakin unit site.

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