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PROGRAMME NAME HND Business Management/Marketing/AccountingSTUDENT NAME / NO.TERM TERM I-FEBRUARY 15UNIT TITLE MANAGEMENT ACCOUNTING: COSTING & BUDGETING (QCF)

ASSIGNMENT TITLE KOPI LUWAK

ASSIGNMENT NO. 2 of 2NAME OF ASSESSOR Ariyani IndahSUBMISSION DEADLINE 29 September 2015WORD COUNT N/A

LEARNING OUTCOMES COVERED ASSESSMENT CRITERIA COVERED2.1 2.1

3.1 - 3.4 3.1 – 3.44.1 - 4.3 4.1 – 4.3

I, __________________________ hereby confirm that this assignment is my own work and not copied or plagiarised from any source. I have referenced the sources from which information is obtained by me for this assignment.

________________________________ _________________________

Signature Date

RECEIVED BY QC NAME OF ASSESSOR

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BTEC HNDAssignment Cover Sheet

BTEC HNDAssignment Front Cover Sheet

Unit Title: Management Accounting

Lecturer’s Name: Ariyani Indah

Assignment Title & NumberKopi Luwak

Learning Outcomes Covered:

LO2 Be able to propose methodsto reduce costs and enhancevalue within a business

LO3 Be able to prepare forecastsand budgets for a business

LO4 Be able to monitorperformance againstbudgets within a business

Assessment Criteria Covered

2.1 prepare and analyse routine cost reports

3.1 explain the purpose and nature of the budgetingprocess3.2 select appropriate budgeting methods for theorganisation and its needs3.3 prepare budgets according to the chosen budgetingmethod3.4 prepare a cash budget

4.1 calculate variances, identify possible causes andrecommend corrective action4.2 prepare an operating statement reconciling budgetedand actual results4.3 report findings to management in accordance with identified responsibility centres.

Submission Date

Assignment 2

29 September 2015

NOTES TO STUDENTS Your assignment should be word-processed with 1.5 spacing, use proportional font and 12 point. Two submissions are required. The hard copy must be submitted in person during the college's business hour

between 9am and 5pm. The soft copy must be sent to academic@uic-usg.com at the same day. Check carefully the submission date and the instructions given with the assignment. Late assignments will

not be accepted. Failure to hand-in work due to printing or technical problems will not be accepted. If you are unable to hand in your assignment on time and have valid reasons such as illness, you may apply

(in writing) for an extension. Failure to achieve a PASS grade will results in a REFERRAL grade being given. Take great care that if you use other peoples work or ideas in your assignment, you properly reference them,

using the Harvard referencing system, in your text and list of references. NOTE: if you are caught plagiarising, you could have your grade reduced to zero, or at worst, you could be

excluded from the course.

Task 1

The supervisor of Roasting Department has just prepared the cost report to the factory manager.A typical departmental cost report for a recent period follows:

Roasting DepartmentCost Report

For the Month ended on June 31

Planning Budget Actual Results VariancesMachine hours 40,000 35,000

Variable cost : Supplies $ 32,000 $29,700 $2,300 F Scrap 20,000 19,500 500 F Indirect material 56,000 51,800 4,200 FFixed cost: Wages and salaries 80,000 79,200 800 F Equipment depreciation 60,000 60,000 -Total cost $248,000 $240,200 $7,800 F

Required:

The company’s president is unhappy with the cost reports and would like you to evaluate their usefulness to the company. You are also required to prepare and analyze the new performance report to present how well cost controlled in Roasting Department. (Outcome 2.1)

Task 2

The Board of Directorsof PT Prima Java Abadi forecast sales revenues based on their projection market growth and successful product sales. They used this data to construct the master budget for the company, which they then broke down into departmental budgets. They spent almost three weeks to work out the details of the budgets. Then, the various departmental budgets were distributed to the departmental manager’s with the letter requested everyone’s assistance in working together to achieve the budget objectives.Some of the department managers were displeased with how budgeting process was undertaken. In discussing the situation among themselves, they felt that some of the budget projections were overly optimistic and not realistically attainable.

a. Comment on the budgeting process used in PT. Prima Java Abadi. Explain the purposes and the nature for the behavioral implications of the way the company went about preparing the master budget. (Outcome 3.1)

b. Recommend the budgeting method that is suitable to be implemented in the company. (Outcome3.2)

Task 3

You plan to set up your own business using your saving. You have done some researches and you have decided to open a booth in ITC PermataHijauwhich sells a consumable product. You have a number of good business contacts, and are confident that your business will do well. You think that some additional finance will be required in the short term and plans to approach your bank for this. You are pretty sure that the bank will require a cash projection to analyze your suitability to accept the financial grant. You are to prepare the cash budget for your new business for the next six months under several considerations:

The business will commence in July 2015. Fixed assets needed to set up your business will be bought in early July and will

be paid immediately. Depreciation is to be charged on the straight line basis. The product requires minimum 2 (two) kinds of raw materials. You should set up

a production schedule accompanied by the need of ending inventory to be maintained at the end of the month.

Monthly purchases of raw material stocks will be paid for in the month following delivery.

The selling price of goods is fixed at the cost price plus 25% markup. The encourage sales, you need to set the credit collection policy to customer, ie

you allow two month’s credit to customers. You hire staffs to help you run the business. Running expenses covering variable and fixed expenses will be paid in the

month during which the costs are incurred.

Required :

a. Prepare sales budget, production budget, and raw materials purchase budget.(Outcome 3.3)

b. Prepare the cash budget to be presented to your bank. (Outcome 3.4)

Grade Descriptor: Possible Evidence2.1 Prepare and analyse routine cost reports

M1 Student presents critical thinking in analyzing a routine cost report. Student also prepares the new and appropriate cost report to provide

3.1 explain the purpose and nature of the budgetingprocess

3.2 select appropriate budgeting methods for theorganisation and its needs

3.3 prepare budgets according to the chosen budgetingmethod

3.4 prepare a cash budget

4.1 Calculate variances, identify possible causes andrecommend corrective action

4.2 prepare an operating statement reconciling budgetedand actual results

4.3 report findings to management in accordance with identified responsibility centres.

better information.

M1Student applies relevant theories of budgeting to explain the nature of budgeting and its importance for an organization. Student also explains the pro and cons of budgeting process and impact to the company that does not apply any of the budgeting process.

M2 Student explains why different organization needs different budget system. Student also can elaborate the answer to match each budgeting system with appropriate condition. Student selects appropriate budgeting methodto be implemented in an organization as given in the case study.

D1 Student demonstrates a depth understanding through a self- criticism about the most appropriate budget system to be implemented in the organization. The report sounds of practical information and would benefit to a real world condition. Student also recommends budgeting method that is suitable for the company along with the pros and cons when the selected budget method being implemented.

M3 Student prepares detail budget for his/her own business: Sales budget, production budget, raw material budget, expected cash collection, expected cash disbursement, direct labor budget, manufacturing overhead budget. The amount has to be established on logical assumption, interdependent and presented in a well tabular media.

D3 Student’s assignment will show that he/she has developed an innovation and creative ideas through investigating theory and applying this appropriately to the budget prepared. Effective thinking has taken place in unfamiliar contexts and you will have evaluated what you have done, making valid judgments on the decisions you have taken.

M3 Student prepares cash budget for his/her own business as the compilation of all detail budget has has been prepared in outcome 3.3. Financing section has also included. The amount has to be established on logical assumption presented in a well tabular media.

D3 Student’s assignment will show that he/she has developed an innovation and creative ideas through investigating theory and applying this appropriately to the cash budget prepared. Effective thinking has taken place in unfamiliar contexts and you will have evaluated what you have done, making valid judgments on the decisions you have taken.

M3 Student’s understanding will be evaluated through in-class assignment. Student can complete the work with minimum supervision to show logical thinking upon the question given.

D2 Student can complete the question with no supervision during in-class assignment. A very good understanding in the area of discussion together with independence is demonstrated.

M3 Student’s understanding will be evaluated through in-class assignment. Student can complete the work with minimum supervision to show logical thinking upon the question given.

D2 Student can complete the question with no supervision during in-class assignment. A very good understanding in the area of discussion together with independence is demonstrated.

M1 Student is able to identify the area of variances that needs to be further investigated based on relevant theory. Some criteria must be found to investigate a variance further.

D1 Student presents critical thinking of the importance of investigating further variances. Improvement against defined criteria of performance indicator is proposed.