Reference no: EM131204200 , Length:
COOL RIDE SKIS LTD CASE STUDY
ASSESSMENT REQUIREMENTS
This assessment has four primary aims:
1. To provide you with an opportunity to develop your understanding of standard costing and variance analysis;
2. To provide you with the means to further refine your analysis and problem solving skills;
3. To provide you with an opportunity to develop teamwork capabilities;
4. To provide you with an opportunity to develop your report writing skills.
YOUR TASK
After considering carefully all the information above you (as assistant to Grace Miller) are going to prepare a report to be presented in a meeting to Grace, Jackson Pham, Michelle Lee and Janek Sidhu. Within the report you need to address the following.
1. Outline and explain the purpose and potential benefits of standard cost systems and variance analysis. (To gain marks your discussion must not simply be a restatement of the Horngren text).
2. Using the information in the case,
(a) Prepare a flexible budget for Cool Ride Skis Ltd for the year ended 31 December 2015.
(b) For each product (skis and snowboards) prepare a complete analysis of the variance between budgeted profit and actual profit, contained in Exhibits 1 and 2. In your analysis include the following variances:
- Sales volume variance (calculate individually for each product)
- Sales mix variance (calculate individually for each product)
- Sales quantity variance (calculate individually for each product)
- Market size and market share variances (calculate individually for each product)
- Selling price variance
(Note that the selling price variance has not been directly covered in lectures).
- Price and quantity variances for each type of direct material
- Rate and efficiency variances for direct labour
- Spending and efficiency variances for each variable overhead category
- Spending variances for each fixed overhead category.
3. Provide an evaluation of how well Cool Ride Skis Ltd (Victoria) has managed its revenue and costs in 2015. Each revenue/cost item should be discussed separately in your report. Your evaluation should do the following:
- Use the variances calculated in part 2 and information in the case as support for your arguments;
- Identify the likely causes of the variances you calculated in part 2.
- Identify any interdependencies among the variances you calculated in part 2.
- Raise any concerns you have with the calculation of the variances.
4. Based on your evaluation of Cool Ride Skis' revenue and cost performance in 2015, identify and discuss the major items which should be investigated further in subsequent meetings.
5. Identify any limitations you believe exist in the following areas at Cool Ride Skis and give your recommendations on the existing system to improve and overcome the limitations you identified in the following areas:
- The Standard Costing System.
- Variance Analysis.
6. Briefly explain how management accounting reporting practices can be considered as a social practice?
Note that the last two issues require you to read beyond the Horngren text.
PREPARATION OF THE REPORT
When preparing the report please note the following.
1. You must prepare the report in a professional format that would be suitable for presentation at a meeting of Cool Ride Skis management. Although the preceding points are numbered, they must not be regarded as a list of Questions, rather as a guideline of minimum issues that must be addressed in your Professional Report.
2. The RMIT Study and Learning Centre provides on-line tutorials to help students with their Report Writing Skills. You can find these tutorials at the following website:
https://www.dlsweb.rmit.edu.au/lsu/content/2_AssessmentTasks/02reports.htm
3. As a general guideline your report should include the following sections;
Title Page
Contents Page
Executive Summary:
Include a summary of results (not just contents) of your report so that the reader would understand the key issues and findings. This is not the place to discuss the business in detail;
Introduction:
Introduce the business and provide a context/background for your report. Provide a brief outline of the content of your report.
The Body of your Report
This section should have a number of sections, each one relating to a specific issue you are analysing/discussing. Each section should begin with a Heading or Subheading. These Headings or Subheadings should give the reader a specific idea of the issue to which the section relates.
Conclusion:
Draw together your discussion into a specific and concise conclusion, so that the reader could understand the basic issues and findings of your Report by reading this section only.
Bibliography/References:
Evidence of research. If you are unsure about how to reference, please view the following RMIT website.
https://www.dlsweb.rmit.edu.au/lsu/content/4_WritingSkills/05referencing.htm
Appendices: detailed calculations
Footnotes: If you have quoted or used the ideas of any text/article or other source you must footnote this source. Otherwise you will be plagiarizing! If you are unsure about how to footnote, please view the following RMIT website.
https://www.dlsweb.rmit.edu.au/lsu/content/4_WritingSkills/05referencing.htm
4. Marks will be deducted for poor presentation and inadequate referencing of materials used. Please note that PLAGIARISM is a serious university offence. Any evidence of plagiarism in this assignment will be sent to the Head, School of Accounting. If you are unsure of the meaning of plagiarism, please read this subject's course guide, and/or see the course coordinator.
5. The assignment is worth 30% of your total assessment and has a 2,500 word limit.
6. The assignment due date is on the 8th October 2016 on or before 12.00 Midnight
7. You are expected to work in groups of 4 with all students having joint responsibility for every part of the assignment. No individual assignments will be accepted.
8. Please ensure you attach the following assessment page to the front of the assignment. This is a guideline of the attributes your tutor will be assessing.
Attachment:- Cool Ride Ltd Case Study.rar