BA (Hons) Business Management
Level 5 – Management Accounting
Assessment 1
Assessment 1 (2,500 – 3,000 word assignment)
(Assessing outcome a and b)
Packwell Limited is a local Grimsby company that manufactures and sells a wide range of specialist packaging materials. Its customers are mainly manufacturers of ready-made foods, soft drinks and pharmaceuticals. It is a successful company which has been in operation for ten years. Part of this success has been down to the location of the business which is situated on the Humber bank amidst the busy industrial area. The company was started by Mr Chapman who initially operated as a sole trader but due to the success of the business he has expanded the operations of Packwell Ltd and currently has a workforce of 30 staff working a normal 9 – 5 working week. Please note that staff may have to work overtime if they are behind schedule with any orders and these are classed as indirect labour costs. Due to the continuous success with his business Mr Chapman plans to expand further in the near future.
Mr Chapman has submitted the following data regarding his business:
Stock
Packwell Ltd keeps a stock record card for the plastic components used in production. The stock record provided refers to entries for plastic component ‘A’ for the month of June 2009. This commodity has been increasing in price over the last few weeks. Please note that the stock record has only been partially completed. The costing technique used is AVCO.
Stock Record Card
Receipts Issues Balance
Date Quantity
kg Cost
per kgThe Essay is provided by UK Assignment http://www.szdhsjt.com
£ Total
cost
£ Quantity
kg Cost
per kg
£ Total
Cost
£ Quantity
Kg Total
£
Balance as at:
1 June 6,000 12,000
10 June 12,000 2.6 31,200 18,000 43,200
16 June 8,000 2.4 19,200
20June 1000 3.50
29 June 6,000
Timesheets
The following information relates to direct labour costs incurred in producing 18,000 type X pharmaceutical bottles during June 2009.
Normal time hours worked 350 hours
Overtime at time and a half worked 60 hours
Overtime at double time worked 40 hours
Total hours worked 450 hours
Normal time hourly rate £8 per hour
Overhead data
Packwell Limited has three departments involved in the first stage of its production which are plastics moulding, plastics extrusion and maintenance. Fixed overheads are allocated or apportioned to the departments on the most appropriate basis. The total maintenance overheads are then reapportioned to the two production departments. 60% of the Maintenance department’s time is spent maintaining equipment in the Plastics Moulding department.
The budgeted fixed overheads relating to the departments for the next quarter are:
£ £
Insurance of machinery 24,400
Rent & rates 58,800
Indirect labour costs
Plastics Moulding 88,500
Plastics Extrusion 78,300
Maintenance 24,800
Total 191,600
Total fixed overheads 274,800
The following information is also available:
Department Net Book value of fixed assets
£000 Square metres occupied Number of employees
Plastics Moulding 720 1,100 14
Plastics extrusion 360 800 12
Maintenance 120 100 4
Total 1,200 2,000 3
Fixed Overhead Basis of allocation or apportionment Total cost
£ Plastics Moulding
£ Plastics Extrusion
£ Maintenance
£The Essay is provided by UK Assignment http://www.szdhsjt.com
Insurance of machinery 24,400
Rent and rates 58,800
Indirect labour costs 191,600
Maintenance
274,8
Product costs (per batch of microwave containers)
Direct materials per batch £250.40
Direct labour per batch £392.20
Total variable overheads £91,520
Total fixed overheads £136,960
Number of batches produced 640
Assessment Criteria:The Essay is provided by UK Assignment http://www.szdhsjt.com
You work in the accounts department for Packwell Ltd and have recently been promoted. As part of your new remit you are expected to supply management with a monthly report that provides a detailed breakdown of production costs. Management require information which is of great interest to them. With the data that Mr Chapman has submitted you are required to produce a 2,500 – 3,000 word report which must include the following:
• An identification of the importance of management accounting and financial accounting in the business (30 marks).
• Explain the different types of cost a business would incur and give examples of these to support your explanation (15 marks).
• The completion of the stock record card and evaluation of the stock valuing method being used for June 2009 (15 marks).
• Calculate and analyse the cost of producing type X pharmaceutical bottles into direct and indirect labour costs (5 marks). 生产类型 直接和间接劳动力成本
• Allocate or apportion the overheads between the two production departments using the most appropriate methods (15 marks).
• Calculate the cost per batch of microwave containers using marginal costing and discuss and evaluate alternative costing techniques identifying the advantages and disadvantages to each technique. (20 marks) 计算每一批微波容器的成本费用
It is paramount that you include all of the above 6 elements within your report.
Please note: In order to earn higher marks you must offer a proper evaluation when indicated to do so rather than just a numerical calcualtion.
Structure to report:
The whole structure of the report should be clear at a glance. This not only means that the content should be structured, but that the structure must be visible to the marker. A contents page is essential and named sections are required for each of the 6 criteria to be covered. All findings must be reported in the main body of the report.
Structure:
The following sections are required:
• Front sheet identifying the title of the report, student enrolment details, name of unit and tutor information.
• Contents sheet
• Executive summary sheet, designed to summarise key findings
• Introduction section
• Main body sectionThe Essay is provided by UK Assignment http://www.szdhsjt.com
• Conclusion
• Reference List and Bibliography – presented in Harvard format. | 
