TNA67 Pearson BTEC HND in Business
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ICON COLLEGE OF TECHNOLOGY AND MANAGEMENTPearson BTEC HND in Business (RQF)Unit 5 Management AccountingAssignment BriefSession: February 2021
TNA67 Pearson BTEC HND in Business
Unit number and title
Unit Level and CreditValue
Dr Fidelis Akanga, Dr Anthony Stevenson, Dr Posi Olatunbosun, DanSookun
8 March 2021
Final assignmentsubmission deadline
14-19 June 2021
Late submission deadline
14-19 June 2021The learners are required to follow the strict deadline set by the Collegefor submissions of assignments in accordance with the BTEC level 4–7submission guidelines and College policy on submissions.
Formative feedback will be available in class during the semester.Final feedback will be available within 2 weeks of the assignmentsubmission date.
• The work you submit must be in your own words. If you use a quote or anillustration from somewhere, you must give the source.• Include a list of references at the end of your document. You must give allyour sources of information.• Make sure your work is clearly presented and that you use correct grammar.• Wherever possible use a word processor and its “spell-checker”.
Prof Nurun Nabi
Signature (IV of thebrief) *
Assignment Brief – continued2ICON College of Technology and ManagementPearson BTEC HND in Business (RQF)Unit 5: Management Accounting (L4)Session: February 2021CourseworkRecommended Word limit: 3,500–4,500This Unit will be assessed by assignment.You are strongly advised to read “Preparation guidelines of the Coursework Document”before answering your assignment.ASSIGNMENTAssignment Context and Business ScenarioSelect a company of your choice operating in the manufacturing industry and assume that thecompany is undergoing major restructuring. One of this restructuring is creating the position of aJunior management Accountant to work under the direct supervision of the Finance Director.Assume that you have been appointed by this company as the Junior management Accountant.However, the Board of Directors do not understand the role of a Management Accountant within thecompany. Upon your appointment, you realise that the existing management accounting systems donot meet the present day global competitive market and cannot help the company compete with itscompetitors.You are required to write a report to the Board of Directors in which:1. You explain the role of management accounting for an organization such as theirs, thedifferent management accounting systems used for reporting, show why managementaccounting systems are required for their company and how these managementaccounting systems can help the company compete with competitors,2. Use management accounting techniques to show how management accounting can helpimprove on their costing techniques,3. Show how the company can use different budgetary methods as a major planning andcontrol tool,4. Show how management accounting can provide management with information to helpresolve any financial issues faced by the company.In your report, using your own data, provide examples of income statements prepared usingboth absorption costing and marginal costing methods. Your data may be attached asappendices and if attached they must be appropriately referenced within the body of your report.In the case of any major calculations, these calculations MUST be attached as appendices andonly a summary of key figures should be used within your report.Your report must be appropriately structured. The following structure is suggested as a guidanceon how a good report should be:• An introductory section indicating what your report will cover and a brief backgrounddiscussion of your chosen company.• The main section (body) of the report, which may be subdivided on the basis of the fourthemes listed above corresponding to the tasks on the next page. The main body is foranalysis of the main issues and supported by referenced academic literature• A concluding section that briefly summarises your work, your findings and yourrecommendations to the Board of Directors.Assignment Brief – continued3What you must doThe following issues are required to be carried out:LO1: Demonstrate an understanding of management accounting systemsYou are required to explain Management Accounting and different methods used for managementaccounting reporting. You should also evaluate the benefits of different types of managementaccounting systems and their application in your chosen organisation. In addition, critically evaluatehow management accounting systems and management reporting are integrated in context of yourselected organisation.LO2: Apply a range of management accounting techniques.Based on the data provided in the appendix prepare an income statement using marginal andabsorption costing principles using the template provided in the Appendices. There are 4 optionsand you should choose only ONE of the options to demonstrate your understanding.You should also produce a statement of reconciliation of profit and interpret the differences in profitand analyse cost in terms of variable cost, fixed cost and semi variable cost (You must presentyour calculations to your tutor for approval in WEEK 7)LO3: Explain the use of planning tools used in management accountingBudget is an important Strategic planning tool. Explain the advantages and disadvantages ofdifferent types of budgeting used in budgetary control (Please note that the calculations of thesetools are not necessary).You are also required to analyse and evaluate the use of different planning tools (at least two) suchas Balance Score Card, Variance Analysis, Porter’s Five Forces analysis, and their application forpreparing and forecasting budgets. You should apply all theories in relation to your selectedorganisation.LO4: Compare ways in which organisations could use management accounting to respond tofinancial problems.Using your chosen organisation and any other organisation, compare how organisations are usingthe following management accounting methods to respond to financial problems: Benchmarking Key performance indicators (financial and non-financial KPIs) Financial governance, and Activity based costing (ABC)You should be able to analyse and critically evaluate how these management accounting tools canhelp your organisation to respond to financial problems that will have sustainable success in contextof your chosen organisation.Assignment Brief – continued4Relevant InformationTo gain a Pass in a BTEC HND Unit, you must meet ALL the Pass criteria; to gain a Merit, you mustmeet ALL the Merit and Pass criteria; and to gain a Distinction, you must meet ALL the Distinction,Merit and Pass criteria.
LO1 Demonstrate anunderstanding ofmanagementaccounting systems.
P1 Explainmanagementaccounting and givethe essentialrequirements ofdifferent types ofmanagementaccounting systems.P2 Explain differentmethods used formanagementaccounting reporting.
M1 Evaluate thebenefits ofmanagementaccounting systemsand their applicationwithin an organisationalcontext.
D1 Critically evaluatehow managementaccounting systemsand managementaccounting reporting isintegrated withinorganisationalprocesses.
LO2 Apply a range ofmanagementaccounting techniques
P3 Calculate costsusing appropriatetechniques of costsanalysis to prepare anincome statementusing marginal andabsorption costs.
M2 Accurately apply arange of managementaccounting techniquesand produceappropriate financialreporting documents
D2 Produce financialreports that accuratelyapply and interpretdata for a range ofbusiness activities
LO3 Explain the use ofplanning tools used inmanagementaccounting
P4 Explain theadvantages anddisadvantages ofdifferent types ofplanning tools used inbudgetary control.
M3 Analyse the use ofdifferent planning toolsand their applicationfor preparing andforecasting budgets.
D3 Evaluate howplanning tools foraccounting respondappropriately to solvingfinancial problems tolead organisations tosustainable success.
LO4 Compare ways inwhich organisationscould use managementaccounting to respondto financial problems
P5 Compare howorganisations areadapting managementaccounting systems torespond to financialproblems.
M4 Analyse how, inresponding to financialproblems, managementaccounting can leadorganisations tosustainable success.
Assignment Brief – continued5Guide to student1. Preparation guidelines of the Coursework Documenta. All coursework must be proof-read.b. Document margins must not be more than 2.54 cm (1 inch) or less than 1.9cm (3/4 inch).c. The assignment should be in a formal business style using single spacing and font size 12.d. Standard and commonly used type face such as Arial should be used.e. All figures, graphs and tables must be numbered.f. Material taken from external sources must be properly referenced using the Harvardreferencing system.g. You should provide references using the Harvard referencing system.h. Do not use Wikipedia, business dictionary, accounting coach, accounting dictionary,Investopedia, etc as references. Only referenced journals and books should be used2. Plagiarism and CollusionAny act of plagiarism or collusion will be seriously dealt with according to the Collegeregulations. In this context the definition and scope of plagiarism and collusion are presentedbelow:Plagiarism is presenting somebody else’s work as your own. It includes copying informationdirectly from the Web or books without referencing the material; submitting joint courseworkas an individual effort.Collusion is copying another student’s coursework; stealing coursework from anotherstudent and submitting it as your own work.Suspected plagiarism or collusion will be investigated and if found to have occurred will bedealt with according to the College procedure. (For details on Plagiarism & Collusionplease see the Student Handbook)3. Submissiona. Initial submission of coursework to the tutors is compulsory in each unit of the course.b. Student must check their assignments on ICON VLE with plagiarism software Turnitin tomake sure the similarity index for their assignment stays within the College approved level. Astudent can check the similarity index of their assignment three times in the DraftAssignment submission point located in the home page of the ICON VLE.c. All Final coursework must be submitted to the Final submission point into the unit (not tothe Tutor). A student would be allowed to submit only once and that is the finalsubmission.d. Any computer files generated such as program code (software), graphic files that form partof the coursework must be submitted as an attachment to the assignment with alldocumentation.e. Any portfolio for a unit must be submitted as a hardcopy to the Examination Office.f. The student must attach a tutor’s comment in between the cover page and the answer in thecase of Resubmission.4. Good practiceMake backup of your work in different media (hard disk, memory stick, etc.) to avoid distressdue to loss or damage of your original copy.Assignment Brief – continued65. Extension and Late Submission and Resubmissiona. If you need an extension for a valid reason, you must request one using an ExceptionalExtenuating Circumstances (EEC) form available from the Examination Office and ICONVLE. Please note that the tutors do not have the authority to extend the courseworkdeadlines and therefore do not ask them to award a coursework extension. The completedform must be accompanied by evidence such as a medical certificate in the event of youbeing sick.b. Late submission will be accepted and marked according to the College procedure. It is notedthat late submission may not be graded for Merit and Distinction.c. All Late coursework must be submitted to the Late submission point into the unit (not tothe Tutor). A student will be allowed to submit only once and that is the final submission.d. Only one opportunity will be given for reassessment (resubmission) will be permitted and theassessment will be capped at Pass for the unit. In addition, no resubmission will be allowedin any component of the assessment for which a Pass grade or higher has been achieved.e. Repeat Units – A student who has failed to achieve a Pass in both Final/Late submissionand in the Resubmission must retake the unit with full attendance and payment of the unitfee. The overall unit grade for a successfully completed repeat unit is capped at Pass forthat unit. Units can only be repeated once.6. Submission deadlinesSubmission deadlines Online to the ICON College VLEFinal Submission date: 7-12 June 2021Late Submission date: 14-19 June 2021Glossary:Analyse: Break an issue or topic into smaller parts by looking in depth at each part. Support eachpart with arguments and evidence for and against (Pros and cons). Break something down into itscomponents; examine factors methodically and in detail to recognise patterns by applying conceptsand making connections to predict consequences.Apply: Use a particular method/technique to solve a problemCritically Evaluate/Analyse: When you critically evaluate you look at the arguments for andagainst an issue. You look at the strengths and weaknesses of the arguments.Conduct: To do or carry out, to organise and perform a particular activityDetermine: Find a solution by argument, making clear your reasoning (e.g., determine the type ofevent that has occurred, based on the data provided”) (application) or “Determine the mostappropriate course of action for the company, within the given constraints” (higher order skills).Demonstrate: Show that you can do a particular activity or skill. Provide several relevant examplesor related evidence which clearly support the arguments you are making.Explain: When you explain you must say why it is important or not important.Clarify a topic by giving a detailed account as to how and why it occurs, or what is meant by the useof this term in a particular context.Identify: When you identify you look at the most important points. Establish or indicate the origin,nature or definitive character of somethingAssignment Brief – continued7AppendicesData 1Quality Shirts Ltd produces and sells men’s shirts, the standard cost of one shirt is as follows:
Selling Price per unit
Variable cost per unit
The total fixed production overhead is budgeted at £ 40,000 per month based and is absorbed on a rate pershirts basis. The monthly budgeted production capacity is 8,000 units.Administration, sales and distribution cost are budgeted at £20,000 per monthThe following activity took place during January and February:
There is an opening stock on 1 January of 200 shirts.Data 2Cottage Ltd manufactures and sells a single product. Cost and revenue details of theproducts are as follows:
Selling Price per unit
Variable cost per unit
Fixed Production cost per month
Fixed Selling and distribution cost permonth
It is the policy of the company that the budgeted units of output are 1,000 per month, but due tofluctuations in the market the following details are also relevant:
Actual units produced
Actual units sold
There is no opening stock at the start of the operations.Data 3Beanlands ltd produces a single product, the ‘Bean’ which is sold for £18 per unit. The variable cost(labour, material and other expenses) are £10.00 per unit. The total fixed production costs are£12,000 based on a budgeted production of 6,000 units.Non fixed production (Administration, Sales and Promotion) is £10,000 per month.The following results are also relevant:
Actual units produced
Actual units sold
There is no opening stock in the first month of January.Data 4Cameron Ltd began business on 1 July, producing one product. Cost and revenue details of theproducts are as follows:
£ per unit
The fixed production overhead £15,000 has been calculated on the basis of a budgeted monthly output of3,000 units.Assignment Brief – continued8Estimated Non-production fixed cost (administration, sales and distribution) is £18,000 per month.The number of units produced and sold for the first two months were as follows:
There is no opening stock at the start of the operations.Template for income statementReconciliation of Profit
Profit as per marginal costing
Adjustment of differences of valuation of stock
Profit as per Absorption costing
Budgeted Profit as Per absorptioncosting
Les Full cost of sales
Less Closing Stock
Less Non-production cost
Budgeted Profit as Per Marginalcosting
Less variable cost of sales
Less Closing Stock
Less Fixed cost
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