FNSACC507 Managerial Accounting Assignment Sample
Here’s the best sample of FNSACC507 Managerial Accounting Assignment, written by the expert.
Task 1
In order to prepare an effective budget, there is a need of the lots of the information and data. The information and data are collected through the various sources that are below
- The business plan
- Historical information from the organization’s accounting system
- The knowledge of key personnel in the organization
These sources provide all the required information and data that helps to develop a budget (Hussey, 2014).
Task 2
| Variance analysis report | ||||||
| Example | ||||||
| Quarter 1 | Year to date | |||||
| Budget | Actual | % Variance | Budget | Actual | % Variance | |
| Revenues | ||||||
| Sales | 10000 | 9000 | -10% | 10000 | 9000 | -10% |
| Dues | 1000 | 800 | -20% | 1000 | 800 | -20% |
| Fund Raisers | 4000 | 2000 | -50% | 4000 | 2000 | -50% |
| Total revenue | 15000 | 11800 | -21.30% | 15000 | 11800 | -21.30% |
| Expenses | ||||||
| Cost of the | ||||||
| Goods | 4000 | 3500 | 12.50% | 4000 | 3500 | 12.50% |
| Payroll | 2000 | 2100 | -5% | 2000 | 2100 | -5% |
| Employer’s FICA | 150 | 160 | -6.70% | 150 | 160 | -6.70% |
| Suppliers | 1000 | 940 | 6% | 1000 | 940 | 6% |
| Miscellaneous | 100 | 125 | -8% | 100 | 125 | -8% |
| Total expenses | 7520 | 6825 | 5.80% | 7520 | 6825 | 5.80% |
| Net income/ loss | 7750 | 4975 | -36% | 7750 | 4975 | -36% |
A) Single largest contributor to the $ variance in net profit
The above variance report shows that the single largest contributor to the $ variance in the net profit is fund raisers because it has highest positive variance with 50%. Due to this, 36% negative variance can be seen in the profit.
B) Percentage of expenses is due to the cost of supplies for the first quarter
The percentage of the expenses is 13.77% due to the cost of supplier for the first quarter. The calculation of percentage of expenses of cost of supplier can be seen below
Total expenses = 6825
Supplier expenses = 940
Percentage of expenses = 940 /6825 *100
= 13.77%
C) Percentage of the variance in net income/loss
The above Variance analysis report depicts that there is -36% in the net income. It is because the budgeted profit was 7750 but the actual profit is analyzed only 4975. In this amount of variance is 2775 that shows -36% variance in the profit.
D) Payroll Higher
In the budget, payroll was slightly higher because there was need to overtime to clean up some of the slight damage due to typhoon water leakage. Hence, the company had to pay some extra money as the payroll (Langevin and Mendoza, 2013).
E) Budget report
An effective budget report is important for the management to compare the estimated expense and income with the actual expenses and income. The above budget shows that there is variance in the several elements of the budget as the income and expenses. The estimated and budgeted income is 15000 of the company. But, actually, it was recorded 11800 with the -21.30% variance. At the same time, total expenses were estimated 7520 but actually, it was calculated 6825 with 5.80% variance. In additionally, it was also identified that there is a variance of -36% in estimated net profit and actual net profit.
Task 3
A) Relevant Factory Ledger Account
| DR. | Raw material control | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| 1-Jun | Balance B/D | 5000 | WIP | 18000 | |
| Accounts payable | 25000 | FOC | 6000 | ||
| 30-Jun | balance c/d | 6000 | |||
| 30000 | 30000 | ||||
| 1-Jul | Balance b/d | 6000 | |||
| DR. | Labor control account | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| Accrued payroll | 37143 | WIP | 18000 | ||
| FOC | 6000 | ||||
| 30-Jun | Balance c/d | 13143 | |||
| 37143 | 37143 | ||||
| DR. | Factory overhead control (FOC) | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| Raw material control | 1000 | Factory overhead applied | 19000 | ||
| Labor control | 13143 | ||||
| Accumulated depreciation | 3600 | ||||
| Factory insurance | 600 | Balance c/d | 2143 | ||
| Factory rent | 2800 | ||||
| 21143 | 21143 | ||||
| DR. | Factory overhead applied (FOA) | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| Factory overhead control | 19000 | WIP (27143*70%) | 19000 | ||
| 19000 | 19000 | ||||
| DR. | Work in progress (WIP) | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| 1-Jun | Balance b/d | 15200 | Finished goods | 37143 | |
| Raw material control | 1000 | ||||
| Labor control | 13143 | 30-Jun | Balance c/d | 11200 | |
| Factory overhead applied | 19000 | ||||
| 48343 | 48343 | ||||
| Balance b/d | 11200 | ||||
| DR. | Finished goods | Cr. | |||
| Date | Details | Amount | Date | Details | Amount |
| 1-Jun | Balance b/d | 15000 | Cost of goods sold | 68000 | |
| Work in progress | 11200 | ||||
| 30-Jun | Balance c/d | 41800 | |||
| 68000 | 68000 | ||||
B) Manufacturing statement
| Manufacturing statement | ||
| Direct materials | 18000 | |
| Opening inventory 1 June | 20000 | |
| Purchase | 19000 | 57000 |
| (less) raw material (indirect) | 2000 | |
| (less) closing inventory 30 June | 39000 | 41000 |
| Direct labor | 27143 | |
| Factory overhead | 19000 | |
| Current cost of goods manufactured | 87143 | |
| Work in progress 1 June | 15200 | |
| Total manufacturing cost incurred | 102343 | |
| (Less) work in progress 30 June | 40343 | |
| Cost of goods manufactured | 62000 | |
C) Trading Statement
| Trading statement | ||
| Sales | 110000 | |
| (Less) the cost of Goods sold | 68000 | |
| Opening inventory – FG 1 June | 42000 | |
| (+) the cost of goods manufactured | 62000 | |
| Cost of goods available for sales | 104000 | |
| (less) closing inventory – FG30 June | 68000 | |
| Gross profit | 36000 | |
Task 4
A) Inventory Ledger Card
| (a) | purchase | issue | balance | ||||||
| qty | unit | total | qty | unit | total | qty | unit | total | |
| $ | $ | $ | $ | $ | $ | ||||
| June 1 bal | 240 | 6 | 1440 | ||||||
| 5 | 160 | 5.5 | 880 | ||||||
| 400 | 5.8 | 2320 | |||||||
| 10 | 40 | 6 | 240 | ||||||
| 360 | 5.778 | 2080 | |||||||
| 15 | 220 | 6 | 1320 | 140 | 5.429 | 760 | |||
| 20 | 260 | 6 | 1560 | ||||||
| 400 | 5.8 | 2320 | |||||||
| 22 | 100 | 6 | 600 | ||||||
| 300 | 5.733 | 1720 | |||||||
| 25 | 200 | 6 | 1200 | ||||||
| 100 | 5.2 | 520 | |||||||
| 29 | 10 | 6 | 60 | ||||||
| 110 | 5.273 | 580 | |||||||
B) General Entry to Record the Total Issue
| Date | Particular | Dr | Cr |
| 10-Jun | Cash and bank ac | 240 | |
| Inventory | 240 | ||
| (Issued 40 units @ 6 per) | |||
| 15 | Cash/bank ac | 1320 | |
| Inventory | 1320 | ||
| (Issued 220 units @ 6 per) | |||
| 22 | Cash/bank ac | 600 | |
| Inventory | 600 | ||
| (Issued 100 units @ 6 per) | |||
| 25 | Cash/bank ac | 1200 | |
| Inventory | 1200 | ||
| (Issued 200 units @ 6 per) | |||
| 3360 | 3360 |
C) General Entry to Record the Return to the Supplier
| 25 | Inventory | 60 | |
| Return to supplier ac | 60 | ||
| (Return10 units @ 6 per) | |||
| 60 | 60 |
Task 5
A) Calculation of the factory overhead recovery rate
| Variable cost | Fixed cost | Machine hours | |
| Actual | 90000 | 205000 | 20000 |
| budget | 95000 | 190000 | 19000 |
Factory overhead recovery rate = Total of indirect cost/machine hours (Kinney and Raiborn, 2012)
Total of indirect cost = 90000
Machine hours = 20000
Factory overhead recovery rate = 90000 / 20000
= 4.5 per machine hour
B) Amount of over or under overhead
In the accounting, when applied (budget) cost is more than to actual cost then it is known as the over-applied manufacturing overhead. On the other hand, when applied (budget) cost is less than to actual cost then it is known as the under-applied manufacturing overhead. In the regard of this case amount of over or under overhead can be calculated below manner:
Variable cost
Actual cost = 90000
Applied (budget) cost = 95000
Variance = 5000
In the context of variable cost, it can be said that variable cost is over applied
Fixed cost
Actual 205000
Applied (Budget) = 190000
Variance = -15000
The fixed cost shows that amount is under applied
Machine hours
Actual = 20000
Applied (Budget) = 19000
Variance = -1000
In the context of fixed cost, it can be said that amount is under applied
C) Over/under applied overhead into a spending variance and a capacity variance
The above calculations show the spending variance and a capacity variance. In this, the spending variance depicts the variance between the actual and budgeted amount in the manufacturing. In the referees of this case, spending variance can be seen below
Actual amount or cost = 90000 + 205000 + 20,000
= 315000
Budgeted amount = 95000 + 190000 + 19000
= 304000
= 315000 – 304000
Spending variance = 11000
References
Hussey, R. (2014) MBA Accounting. UK: Palgrave Macmillan.
Kinney, M. and Raiborn, C. (2012) Cost Accounting: Foundations and Evaluations. US: Cengage Learning.
Langevin, P. and Mendoza, C. (2013) How can management control system fairness reduce managers’ unethical behaviours?. European Management Journal, 31(3), pp. 209-222.
Maher, M., Stickney, C., and Weil, R. (2011) Managerial accounting: An introduction to concepts, methods and uses. USA: Cengage Learning.
Quinn, M. (2013) Brilliant Accounting: Everything you need to know to manage the success of your accounts Brilliant Business. UK: Pearson.
Rubin, S. and I. S. (2015) Public Budgeting: Policy, Process and Politics. UK: Routledge.
Schick, A. (2014) The metamorphoses of performance budgeting. OECD Journal on Budgeting, 13(2), p.1B.
Swain (2015) Budgeting for Public Managers. New York: M.E. Sharpe.
Vanderbeck, E. J. (2012) Principles of Cost Accounting. US: Cengage Learning.
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