PERFORMANCE MANAGEMENT AND CONTROL
Mar 13,23Question:
Background:
| La Trobe Business School | |
| PERFORMANCE MANAGEMENT AND CONTROL
[ACC3MAC] |
|
| Assignment 1 (25%)
Due date: 11pm Sunday 23rd August (week 5) Campuses: Bundoora, Chisholm, Bendigo, Mildura, Albury-Wodonga, Shepparton (S2, 2020) Campus: Sydney (Study Period 2, 2020) Subject Coordinator: Dr. Kate Mai |
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Part A: Product design and master budget: Pushing your boundary
Purpose of this assignment: To assess student’s ability to work independently to develop standard costs for a product and prepare master budget for the product.
Graduate Capabilities Assessed: Autonomy and independence, critical thinking, inquiry/research, and disciplinary specific knowledge
Create a plan and budget for one product or service that you want to offer to the market. You can decide on the type of business (service, manufacturing or trading), type of product or service, the targeted market for your product or service, the time and social context that you want to offer the product.
Feel free to imagine. Do market research and complete the tasks described in part B.
Part B: Task requirements
| Requirements | Marks allocated | Explanation | Hints to get high marks | |
| 1 | Select and design product or service of your choice, and discuss the vision, purpose, and goal of your product/service. | 20 | 1) Propose a product/service with description of setting. Explain why the product/service is chosen using market research (social, political, legal, environmental contexts).
2) Discuss the vision, purposes, and goal of the business. Explain the linkage between the decision with the vision, purpose and goals of the business. You need to provide clear evidence of market research to arrive at the decision. Evidence of market research needs to be referenced using appropriate referencing style. |
The more research you do to arrive at your selection of product/service, and the more critical thinking you put in to evaluate the suitability of the product/service to society, as well as your business vision, purpose and goals, you will achieve greater marks.
Please refer to the marking rubrics, the A (80-100%) column |
| 2 | Estimate standard production costs including direct costs and overhead costs for your product or service (Note: you need to arrive at total standard cost per unit of product/service) | 30
(20 marks for explanation of direct costs and overhead costs, 10 marks for estimation of standard costs on Excel) |
1) Describe the production process and design of the product/service.
2) Develop standard direct material and labour costs, standard fixed and variable overhead costs, and total standard costs on Excel. 3) Provide a detailed explanation of the process of estimation, any assumptions used, and where you get the cost information from (data sources), and critically evaluate why you think the data is reliable. |
The key to get high marks in this part is to clearly understand your product/service, how it is produced or delivered.
Estimation of costs need to have critical evaluation of the reliability of the information you obtained. Market research on costs and product design is a must to get high marks. Please refer to the marking rubrics, the A (80-100%) column |
| 4) All data sources need to be properly referenced in-text and in the reference list.
5) Estimation of standard costs is to be done in Excel, in the same file with the preparation of master budget. This file is to be submitted as the second part of the assignment. |
Workshop 3 will equip you with the Excel skill for standard costs development. | |||
| 3 | Prepare a master budget for the first month after the product is offered to the market (including all components of a master budget) | 40 (10 marks for explanation of various figures in master budget, 30 marks for the master budget preparation on Excel) | 1) You are required to develop a master budget for your product/service for the first 1 month of offering it to the market. The master budget must include ALL components relevant to your chosen business. Sales estimation needs to be explained using market research (why and how you arrive at the sales estimation).
2) All budgets are to be presented in professional Excel format. All data sources need to be properly referenced. 3) The whole master in Excel is to be submitted as the second part of the assignment. |
The key point here is estimation of sales because it determines the whole budget. The more market research and critical evaluation of different sources of data you use for sales estimation, and other costs estimation, the better the mark will be.
Please refer to the marking rubrics, the A (80-100%) column Watch the tutorial video 6.24 carefully on the process of using Excel for master budget. |
| 4 | Reflection on the knowledge and skills you developed from this assignment | 10 | You need to reflect on the process of doing this assignment. What were the difficulties that you faced during the assignment, how did you overcome the difficulties, and what were the lessons you learned after doing the assignment? | The deeper and more critical you reflect on your personal experience of preparing the budget, the better the mark will be. It is the best if you can relate your personal experience of doing this budget with what you learn in class, in your daily life, and compare with other experiences that you know through interaction, reading, watching, etc.…
Please refer to the marking rubrics, the A (80-100%) column |
| Total | 100 |
Part C: Detail Rubrics
Please see below marking rubric indicating assessment criteria and marks.
| Criteria | Mark | A (80-100%) | B (70-79%) | C (60-69%) | D (50-59%) | N (0-49%) |
| Develop new product/s ervice | 20 | Demonstrates evidence of in-depth, intensive market research to examine different factors including needs of customers, current trend in social, political, legal and environmental contexts, via multiple sources. The proposed product/service is innovative, and the purpose of the product/service is highly appropriate for the context. The business demonstrates critical analysis of its potential
social impact. The business’s vision and goals are clearly identified, closely linked to each other, and achievable within the timeframe. |
Demonstrate reasonable market research (including some but not all of these areas: needs of customers, current trend in social, political, legal and environmental contexts) using a few sources. The purpose of the proposed product/service is appropriate for the market and the context. The business demonstrates some social responsibilities for the society.
Demonstrate some critical evaluation of the potential social impact of the product. The vision and goals of the business are clearly identified and linked to each other. |
Demonstrates some market research (including some but not all of these areas: needs of customers, current trend in social, political, legal and environmental contexts) using at least one source. The purpose of the proposed product/service is appropriate for the market and the context.
The business demonstrates intention for social responsibilities but does not show adequate critical analysis of the potential social impact of the product/service. The vision of the business is clear. Goals are clearly identified but not closely linked to vision. |
Demonstrates limited market research, discuss but not critically evaluate needs of customers, current trend in social, political, legal and environmental contexts. The purpose of the proposed product/service is appropriate for the market and the context. The business demonstrates little consideration for social responsibilities. The vision and goals of the business are stated but not very clear and weak connection to each other. | Demonstrates very little or no evidence of market research. Little or no critical evaluation of different factors influencing the product selection. The purpose of the proposed product/service is not quite appropriate for the market and the context. The business demonstrates no or little responsibilities for the society. The vision and goals of the are not clearly identified. |
| Develop standard
costs |
30 (10 mark for excel
work on |
Shows excellent understanding of the
product through clear and |
Shows good understanding through a clear description
of the production |
Shows reasonable understanding of the
production process |
Shows little understanding of the
production process with |
Shows no understanding of the
production process |
| standard | detailed description of the | processes and materials | through a brief explanation | very little explanation of | through the absence | |
| cost | production processes and | involved. The cost | of the product/services. | the product/services. | of explanation of the | |
| estimation) | materials involved. The cost | estimation includes detail | Costs are estimated with | Costs are estimated with | product/services | |
| estimation includes high- | explanation of the process | some explanation of the | limited explanation of the | production process. | ||
| level of detail explanation of | of cost estimation and | process of estimation but | process of estimation. | Costs are estimated | ||
| the process of cost | demonstrates some | little critical evaluation of | There is no critical | with no explanation of | ||
| estimation and | evaluation of reliability of | the reliability of the | evaluation of the | how the figures are | ||
| demonstrates critical | the sources. The standard | sources. Standard costs | reliability of the sources. | arrived. There is no | ||
| evaluation of reliability of | costs show some | show little alignment to | Standard costs show little | critical evaluation of | ||
| the sources. The standard | alignment with the | the purpose statement. | to no alignment to the | the reliability of the | ||
| costs are strongly aligned | purpose statement. | Very good demonstration | purpose statement. | sources. Standard | ||
| with the purpose statement. | Excellent demonstration of | of excel skill in developing | The standard costs are | costs show no | ||
| Excellent demonstration of | excel skill in developing | standard cost. | processed properly using | alignment to the | ||
| excel skill in developing | standard cost. | Excel. | purpose statement. | |||
| standard cost. (formatting, | Little or no | |||||
| cell references, uses of | demonstration of | |||||
| formula) | excel skill in | |||||
| developing standard | ||||||
| cost. | ||||||
| Develop | 40 (10 for | The master budget is clearly | The master budget is | The budget is weakly | The budget is not linked | The budget is |
| master | explanation | and strongly linked to the | linked to the identified | linked to the stated goals. | to the stated goals. All | prepared but does not |
| budget | and 30 for | identified goals. All | goals. All necessary | All necessary components | components of the | include all necessary |
| excel | necessary components of | components of master | of master budget relevant | budgets are completed in | components relevant | |
| budget) | the master budget relevant | budget relevant to the | to the chosen business | an understandable but | to the chosen business | |
| to the chosen business type | chosen business type are | type are completed with | not professional and neat | type. There is no link | ||
| are completed in an | completed with | understandable and neat | format. Sales are stated | between the budget | ||
| understandable manner and | professional presentation. | format. Sales estimation is | but no discussion further | and identified goals. | ||
| high level of professional | Sales estimation is stated | included with some | as to why the sales | Sales are stated but no | ||
| presentation. Sales | with some explanation | justification from market | figures are estimated. | explanation. Little or | ||
| estimation is clearly justified | using limited market | research. Some | Few or no assumption | no evidence of market | ||
| using extensive market | research as to how and | assumptions made in | are stated or discussed. | research being done to | ||
| research. All assumptions | why the figure is achieved. | developing the budget are | The excel budgets are | arrive at the sales. The | ||
| used in developing the | Some assumptions made | stated but not evaluated. | reasonably done with cell | excel budgets are not | ||
| master budget are critically | in developing the budget | The excel budgets are | references and formula | properly done with | ||
| discussed using market | are evaluated with limited | properly done with cell | used, clear and | cell references and | ||
| research. The excel budgets | market research. The excel | references and formula | understandable format | formula used, format |
| are excellently done with cell references and formula used, and professional formatted. | budgets are well done with cell references and formula used, very good and easy to understand format. | used, clear and easy to understand format | is unclear and not understandable. | |||
| Reflection | 10 | Demonstrates an excellent | Demonstrates a good | Demonstrates reasonable | Demonstrates weak | Shows very weak |
| ability to deeply and | ability to critically reflect | ability to reflect on | ability to reflect on | ability to reflect on | ||
| critically reflect on personal | on personal experience of | personal experience of | personal experience of | personal experience of | ||
| experience of preparing a | preparing a budget by | preparing a budget | preparing a budget. | preparing a budget. | ||
| budget through a detailed | clearly pointing out some | through discussing some | Challenges, solutions and | Reflection is very | ||
| discussion of challenges | challenges encountered | experiences during the | lessons learnt are not | general and there is no | ||
| encountered during the | during the process, how | process of doing the | well articulated and seem | reflection on | ||
| process, how the challenges | the challenges were | assignment. Challenges, | not reflected in the way | challenges faced, how | ||
| were overcome, and the | overcome, and the lessons | solutions and lessons | the assignment is done. | challenges have been | ||
| lessons learnt. The | learnt. | learnt are not clear. | overcome and what | |||
| reflection is clearly | lessons have been | |||||
| authentic through its | learnt. | |||||
| connection with the way the | ||||||
| assignment is done. |
Part D: Submission Guidelines
What to submit:
- TWO files: Report in PDF (1000 words limit), and Excel file (where you show all the works of estimating standard costs and master budget)
- In the Report, you still need to include all tables of standard costs, and budgets that you have prepared in the Excel. So, you have to prepare them in Excel first, then export them into word file, then convert the word file into PDF. Then you submit both the PDF file and the Excel file as two parts of the assignment. The Excel work accounts for 40 marks of this assignment, and the report accounts for 60 marks of the assignment.
Minimum Format requirement:
- Word limit: 1000 words excluding references
- Cover page must have your student name, student ID, subject code and name, assignment title, submission date, subject coordinator
- Design of the cover page: any design you want (feel free to be creative in the way you present information).
- All budgets are prepared in table format, using Excel, as illustrated in the workshop activities. This is to help you to improve your ability of using Excel. You should prepare the budget on Excel then export the tables to your word document. The Excel works and tables do NOT count towards the word
- Explanation: can be delivered in Words or Images. If it is in Words, use Arial, 12pt, 1.5 spacing. You are encouraged to use more images, charts or any form of visualisation to convey your contents. If you use images, make sure their meanings are
- All pages need to be
- All sections should have appropriate headings.
- Reference: APA 6th if you use in-text citing. Note: any idea or data which do not come from you needs to be referenced both in-text and in the reference list.
- Final report submission must be in PDF format. Workout of standard costs and master budget is in Excel
When to submit:
- Due date: 11pm Sunday (week 5) 23rd August
- Method of submission: via Turnitin link under LMSAssessmentsAssignment 1_part 1 and 2
- Extension and late submission: please refer to the Extension, Late Submission and Penalties section in the Subject Learning
- Academic Integrity: please refer to Academic Integrity section in the Subject Learning Guide
Assignment 1_ACC3MAC20
– Page 9
Answer:
Introduction
| Estimation of Overheads | |||
| Details | $ per item | No. of items | Total |
| Computer | $ 1,100 | 3 | $ 3,300 |
| Chairs | $ 200 | 5 | $ 1,000 |
| Printer | $ 185 | 1 | $ 185 |
| Computer accessories | $ 175 | 6 | $ 1,050 |
| Fire extinguisher | $ 33 | 1 | $ 33 |
| Business license annual fees | $ 140 | ||
| Cost per year | $ 5,708 | ||
| Cost per month | $ 476 | ||
| Estimation of Direct Labor | ||
| Labor | Rate per month | Total Cost |
| Me | $ 500 | |
| Sam | $ 350 | |
| Christy | $ 350 | $ 1,200 |
| Cost per person | $ 400 | |
| Revenue Budget | |||
| Clients | Fee per client | Revenue | |
| 10 | $ 650 | $ 6,500 | |
| Direct Labor Budget | |||
| Labor | Rate per month | Total Cost | |
| Me | $ 500 | ||
| Sam | $ 350 | ||
| Christy | $ 350 | $ 1,200 | |
| Cost per person | $ 400 | ||
| Overheads Budget | |||
| Details | $ per item | No. of items | Total |
| Computer | $ 1,100 | 3 | $ 3,300 |
| Chairs | $ 200 | 5 | $ 1,000 |
| Printer | $ 185 | 1 | $ 185 |
| Computer accessories | $ 175 | 6 | $ 1,050 |
| Fire extinguisher | $ 33 | 1 | $ 33 |
| Business license annual fees | $ 140 | ||
| Cost per year | $ 5,708 | ||
| Cost per month | $ 476 | ||
| Telephone expenses | $ 150 | ||
| Utility expenses | $ 610 | ||
| Rent expenses | $ 120 | ||
| Total cost | $ 1,356 | ||
| Support Department Budget | |||
| Department | Rate per hour | Hours | Total Cost |
| Administration | $ 24 | 8 | $ 192 |
| Budgeted Statement of Profit or Loss | |||
| Revenues | $ 6,500 | ||
| Gross margin | $ 6,500 | ||
| Operating Cost | $ 476 | ||
| Rent expense | $ 120 | ||
| Utility expense | $ 610 | ||
| Telephone expense | $ 150 | ||
| Salaries & wages | $ 400 | ||
| Administration | $ 192 | ||
| Total operating cost | $ -1,948 | ||
| Operating income | $ 4,552 | ||
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Table of Contents
Nur Tax & Accounting Consultancy Services. 3
Vision. 4
Estimation of standard service cost. 4
Overheads. 4
Estimation of overhead cost. 5
Estimates of Direct Labor. 5
Master Budget. 6
One month of service. 6
Revenue Budget. 6
Direct Labor Budget. 6
Overhead Budget 6
Support Department Budget. 7
Budgeted Statement of profit or loss. 7
References. 9
Nur Tax & Accounting Consultancy Services
The effect of real-time events and happenings on various industries of Australia is constantly monitored by the analysts of IBISWorld. Following are the highlights about the effect of COVID-19 on tax and accounting industry:
The outbreak of COVID-19 is supposed to have a moderate effect on the services of accounting and the possible reasons for this situation are falling of index of business confidence and facing of difficulties by the small and medium enterprises. The revenue for the industry related to services of accounting has now been reduced by 3.1% in the present year as compared to a hike of 0.5% in the previous year (IBISWorld – Industry Market Research, Reports, and Statistics, 2020).
The operators of the industry are providing help to the customers by telling them the ways of cutting business costs. The services of auditing will be needed for the markets in the downstream for the management of debts, distractions and impairments in chains of supply internationally. Although this is a positive effect on the industry of auditing services but still the industry of accounting services is bound to suffer due to this widespread pandemic. The players of the industry have adopted a variety of ways for slashing costs, which are inclusive of reduction of salaries, asking staff to take leave, lowering of costs related to operations, and to freeze the processes of recruitment and budgeting (IBISWorld – Industry Market Research, Reports, and Statistics, 2020).
The effect of this pandemic is supposed to be very light on the industry of auditing and taxation industry, because the government has taken various decisions for the revival of businesses and to comply with the existing and new laws, the companies will be in need of these services. On the other hand, the services of accounting are supposed to be greatly affected because the companies often consider it as a voluntary service (IBISWorld – Industry Market Research, Reports, and Statistics, 2020).
Average industry growth 2015–2020: 0.6%
The services of industry of accounting has shown average growth in the sales over the period of five years through 2015-2020, because of an increase in the use of telecommunications and information technology, and an increase in the demand for services of consultancy in relation to particular industry. The services of auditing have generated most of the revenues for the industry of accounting over the period of last five years, because auditing is a statutory requirement for the organizations. Additionally, this industry has added value to its services through the use of new technology like accounting based on cloud computing and data analytics. The margin of profit associated to these services is greater than old processes of taxation and auditing. Industry revenue is expected to increase at an annualised 0.5% over the five years through 2019-20, to reach $20.4 billion.
Vision
There are chances of improvement in the performance of the industry of services of accounting over the period of coming five years. The possible reasons for this anticipated rise would be an increase in the expenditure related to private capital, non-stop positive confidence in the business and an increase in the no. of companies over the period. Particularly, the demand for services of accounting is supposed to be boosted due to strong growth which has been predicted in relation to expenditure of capital nature by the private sector, because now the legal requirements like due diligence and services of auditing shall be increased in relation to businesses before sanctioning the expenditures of capital nature (IBISWorld – Industry Market Research, Reports, and Statistics, 2020). Our business is intended to help the companies fulfill their legal requirements and to support them in achieving higher growth.
Estimation of standard service cost
Overheads
For the tax and accounting consultancy services, we do not need many equipments or fixed assets, only few computers along with accessories and a printer will suffice. I have ordered the computers and their accessories from ABC Computers; the reason behind the selection of this supplier is his popularity and goodwill in the market. This seller has been selected after conducting a proper market research and getting quotations from a number of sellers available in the market. Apart from the computing devices, our company holds some fixed assets in the form of office furniture.
Estimation of overhead cost
| Estimation of Overheads | ||||
| Details | $ per item | No. of items | Total | |
| Computer | $ 1,100 | 3 | $ 3,300 | |
| Chairs | $ 200 | 5 | $ 1,000 | |
| Printer | $ 185 | 1 | $ 185 | |
| Computer accessories | $ 175 | 6 | $ 1,050 | |
| Fire extinguisher | $ 33 | 1 | $ 33 | |
| Business license annual fees | $ 140 | |||
| Cost per year | $ 5,708 | |||
| Cost per month | $ 476 | |||
Estimates of Direct Labor
I have started this consultancy business with the help of my two friends who are professionals of the field of accounting. I have decided to pay them and myself on monthly basis.
| Labor | Rate per month | Total Cost |
| Me | $ 500 | |
| Sam | $ 350 | |
| Christy | $ 350 | $ 1,200 |
| Cost per person | $ 400 |
Master Budget
One month of service
Revenue Budget
It has been decided after the conduct of proper market research that the consultancy charges should be kept at $1240 per month. This amount will easily cover the expenses of the firm and so some margin has also been added to it.
| Revenue Budget | ||
| Clients | Fee per client | Revenue |
| 10 | $ 1,240 | $ 12,400 |
Direct Labor Budget
| Direct Labor Budget | ||
| Labor | Rate per month | Total Cost |
| Me | $ 500 | |
| Sam | $ 350 | |
| Christy | $ 350 | $ 1,200 |
| Cost per person | $ 400 | |
Overhead Budget
| Details | $ per item | No. of items | Total |
| Computer | $ 1,100 | 3 | $ 3,300 |
| Chairs | $ 200 | 5 | $ 1,000 |
| Printer | $ 185 | 1 | $ 185 |
| Computer accessories | $ 175 | 6 | $ 1,050 |
| Fire extinguisher | $ 33 | 1 | $ 33 |
| Business license annual fees | $ 140 | ||
| Cost per year | $ 5,708 | ||
| Cost per month | $ 476 | ||
| Telephone expenses | $ 150 | ||
| Utility expenses | $ 610 | ||
| Rent expenses | $ 120 | ||
| Total cost | $ 1,356 |
Support Department Budget
| Support Department Budget | |||
| Department | Rate per hour | Hours | Total Cost |
| Administration | $ 24 | 8 | $ 192 |
Budgeted Statement of profit or loss
| Budgeted Statement of Profit or Loss | ||
| Revenues | $ 6,500 | |
| Gross margin | $ 6,500 | |
| Operating Cost | $ 476 | |
| Rent expense | $ 120 | |
| Utility expense | $ 610 | |
| Telephone expense | $ 150 | |
| Salaries & wages | $ 400 | |
| Administration | $ 192 | |
| Total operating cost | $ -1,948 | |
| Operating income | $ 4,552 | |
The constitution of my business is partnership and in Australia partnerships are considered tax free; however, the partners are taxed on the share of profits they receive from the partnership firm (Business, partnership and trust income, 2020).
References
Ato.gov.au. 2020. Business, Partnership And Trust Income. [online] Available at: https://www.ato.gov.au/individuals/income-and-deductions/income-you-must-declare/business,-partnership-and-trust-income/#:~:text=videos.-,Income%20from%20a%20partnership,income%20earned%20and%20deductible%20expenses.&text=Also%2C%20each%20partner%20must%20declare,in%20their%20individual%20tax%20return. [Accessed 20 August 2020].
Ibisworld.com. 2020. Ibisworld – Industry Market Research, Reports, And Statistics. [online] Available at: https://www.ibisworld.com/au/industry/accounting-services/561/ [Accessed 20 August 2020].
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