Reference no: EM131597618

ASSESSMENT 1 - STUDENT INFORMATION

This information is to be handed to each student to outline the assessment requirements.

Instructions for Students:

Whilst researching and writing your project it is important to:
- Read the Assessment description carefully.
- Assessment should be in a Word format.
- Assemble and analyze a set of sources that you have determined are relevant to the issues you are investigating.
- Acknowledge clearly when and how you are drawing on the ideas or phrases of others;
- Consult your instructors when you are unsure about how to acknowledge the contributions of others to your thought and writing.
- Read the Plagiarism policy and procedure carefully to understand the consequences that you could face if your work is plagiarized.
- Student can seek clarification regarding the assessment required to be done.
- Students can ask for reasonable time from Assessor for preparation of project or Assessment.
- Students can seek information on additional reading material and reference for completion of the assessments.
- Students with special needs can seek assistance from Assessors depending upon the nature of the need.

Assessment -1 - Case study

For this assessment, you are required to go through the case study and answer the questions that follow each case study.

Part 1

Fine Asian Royal Taste is a restaurant specialised in Asian cuisine. The owner Steve Chen has been in business for quite a while and would like to take his business to the next level. He has approached you to assist him in cost analysis in the aim to set up a system for management accounting purpose.

Steve Chen has provided you with three dishes that sell the best: Thai Curry Beef. Calamari with blackbean sauce, Satay Chicken with cashew nuts. The restaurant has a policy saying that purchase cost of beef, calamari and chicken must be kept separately. The policy also states that cost in electricity, heating and cooling, rent, staff wages, depreciation of kitchenware, telephone and delivery are all indirect (overhead) so they should be grouped together.

Question 1
Steve wants to set up a coding system for direct cost and asks for your advice. Which of those cost from the above paragraph should be classified as direct cost?

Question 2
In regards to coding each direct cost, Steve wants a four-digit sequence for chicken, beef and calamari. He suggests that the first digit can represent which type of meat and the second digit can represent the cut of the meat. For example, 12 could mean chicken breast. How do you suggest Steve should use the remaining two digits?

Question 3
According to one business policy, cost in electricity, heating and cooling, rent, staff wages, depreciation of kitchenware, telephone and delivery are all indirect cost. Steve is suspicious that the classification may not be accurate. Which one of the above do you think could be classified as direct cost?

Part 2
After careful consideration of the menu, Steve has provided you with the cost of producing one dish from those best-selling dishes.

The restaurant has received a call from a local business who is interested in hosting a staff party. They only need the bestselling dishes to be served on the party. The estimates based on experience are 30 Thai Curry Beef, 20 Calamari with black bean sauce and 40 Satay Chicken with cashew nuts. As the business owner, Steve needs to work out the total cost and give a quote to the local business in three days. The pricing policy for this kind of special order is cost plus 30% margin.

Q1. How much should Steve quote to the local business for the catering?

Q2 The duty manager has raised a question regarding the overhead allocation. "Chefs spend different time on cooking three dishes and kitchen hands also spend different time on cleaning and preparing. Is it fair that we charge $2.00 for all the three dishes?" Steve thought over it and called up the system from the computer.

Steve wants you to use the data to work out overhead allocated to each one dish for reconciliation purposes. Is it still $2.00 for all dishes?

Q3. Steve wants to advertise his restaurant in an attempt to increase revenue. How do you know if the business should go ahead with advertising or simply focus on existing customers?

ASSESSMENT 2 - WRITTEN QUESTIONS

Student Instructions: (Written Assessment Only)

This is a closed book written assessment. In allocated time of 2 hours, you are to answer all of the following questions. Make sure you:
- Print Clearly
- Answer all questions
- Use a pen. Assessments written in pencil will not be accepted.
- Ask your assessor if you do not understand a question. Whist your assessor cannot tell you the answer, he/she may be able to re-word the question for you
- Do not talk to your classmates. If you are caught talking, you will be asked to leave and your assessment will not be marked.
- Do not cheat. Anyone caught cheating will automatically be marked Not Yet Competent for this unit. There are NO EXCEPTIONS to this rule.

QUESTIONS

1. When formulating a budget, what types of cost information can be used and which department of the organisation should be consulted?

2. In order to prepare a manufacturing overhead budget for a clothing department, what variable and fixed items should be disclosed for management requirements?

3. As a door manufacturer, you have noticed a 10% variance in purchase cost of door hinges. After discussing with the purchase department, it is concluded that there is has been a short supply of door hinges due to a new design. What could you do to reduce or eliminate the possible variance for the next period?

4. List a few things you would do to make sure the budgets are error free, comprehensive of costing information and in compliance with management requirements and organisational practices?

5. Use the formula to work out variable overhead spending variance. Actual variable overhead - (AH x SVR)

AH = actual direct labour hours

SVR = Standard variable overhead rate

Actual variable overhead                         $14300

Actual direct labour hours                        $4600

Standard direct labour hours                    $4200

Standard variable overhead rate$3.00

What could be the reason for the spending variance? Is that favourable or unfavourable?

6. There is an argument between the production manager and general manager regarding wages of the supervisors who travel between shops and factory. Currently. the wages are assigned to overhead which causes a constant variance. Please explain your understanding in cost assignment of wages of the supervisors.

7. Give examples of the methods of data protection including back-ups & security procedures which you would employ in your organization?