Management Accounting and Performance Management

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Word Limit: 2,000 words (Plus or minus 10%)

Learning outcomes assessed:
• Critically appraise the means to initiate and use standard costing, budgeting techniques and methods, and control of business risks and uncertainty within the modern organization
• Critically assess the needs and apply techniques for measuring performance and control within an organisation.

This coursework is worth 100% of the total marks for this module.

Coursework Instructions
Please read carefully

• Carefully read the module handbook, the marking criteria and the grade descriptors.

Academic Misconduct
You are responsible for ensuring you understand the policy and regulations about academic misconduct. You must:
• Complete this work alone except where required or allowed by this assignment briefing paper and ensure it has not been written or composed by or with the assistance of any other person.
• Make sure all sentences or passages quoted from other people’s work in this assignment (with or without trivial changes) are in quotation marks, and are specifically acknowledged by reference to the author, work and page.
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Assignment Questions
Water Ltd. is a new company, which will be incorporated on 1 January 2016. The company will manufacture one product.

The following details relate to the company’s first financial year:
Direct materials cost £40 per unit
Selling price £300 per unit
Direct labour 3 hours per unit
Direct labour cost £7.00 per hour

An overhead absorption rate of £5 per direct labour hour has been calculated for the variable production overheads. Variable distribution costs of £2.50 per unit sold will also be incurred.

Direct materials will be purchased during the month they are required for production and paid for during the following month. Monthly production is planned to meet expected sales demand for the following month. All sales will be on credit terms, with customers paying two months later. Water Ltd. will issue 20,000 ordinary shares of £1 at par for cash on 1 January 2016.

Water Ltd. will buy and pay for office equipment costing £2,400 in February 2016. The equipment will be depreciated by 25% per annum. Depreciation is not included in the overhead details given above.

Production targets for the forthcoming financial year are as follows:

Month 2016 Units

January 120
February 140
March 160
April 180
May 200
June 220
July 240
August 260
September 240
October 240
November 160
December 180
Total for year 2016 2,340

Total fixed production overheads of £9,900 and total fixed administration and distribution overheads of £3,900 for the year will be incurred on an even basis throughout the year. All overheads and the direct labour costs will be paid for in the month in which they are incurred. All production machinery will be leased – the costs of leasing the machinery are included in the above figures.

You are required to produce the following:

1. Based on the information provided, prepare the following budgets on a monthly basis for the 12 months ended 31 December 2016 in as much detail as the information given allows (you should also include a total column for the year ended 31 December 2016):

a) Production Budgets
b) Sales Budgets
c) Materials Purchases Budgets
d) Direct Labour Budgets
e) Overheads Budgets (10 marks)

2. Based on the information provided, prepare a Cash Budget for the company on a monthly basis for the 12 months ended 31 December 2016 in as much detail as the information given allows (you should also include a total column for the year ended 31 December 2016).

(10 marks)

3. Based on the information provided, prepare one budgeted Income Statement and one budgeted Balance Sheet for the whole of the year (12 months) ended 31 December 2016. (10 marks)

4. Write a memorandum (maximum 1,500 words) to the shareholders to accompany the budgets that:

a) Critically evaluates the use of budgets in the modern business world. (30 marks)

b) Critically analyses the figures shown in the cash budget.
(15 marks)
c) Suggests ways in which the cash budget could be improved. (10 marks)
Presentation/layout of budgets (5 marks)

Presentation/layout of memo, referencing, bibliography (10 marks)

Total marks for assignment: 100

Notes:
• Use a spreadsheet package for parts 1 to 3.
• Word Process the answer to part 4.
• Submit your work on the Student Portal.
• Ignore taxation and work-in-progress.

What is expected within students’ answers

Thorough understanding and application of relevant ideas

Sound analysis of material
Clear and well referenced argument
Coherent structure and well written
Evidence of independent reading
Spelling, structure & grammar

End of Assignment Brief

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Marking Criteria
GENERIC ASSESSMENT MARKING CRITERIA LEVEL 5
KNOWLEDGE & UNDERSTANDING INTELLECTUAL & COGNITIVE SKILLS Graduate Skills: transferable, employability, practical and academic skills
Factual and conceptual knowledge and understanding; use of class materials; independent reading Critical thinking; conceptualisation; creativity; synthesis, analysis and evaluation; application; problem solving and research/investigation Written, oral and presentation skills; interpersonal, group and teamwork skills; leadership skills; numeracy; digital skills; practical, professional and academic skills (including referencing/presentation
MARKING BAND MODULE LEARNING OUTCOMES CLASSIFICATION WEIGHTED AT 40% WEIGHTED AT 35% WEIGHTED AT 25%
86 – 100% Achieved at this level FIRST (1ST) Includes all required factual content, accurately and succinctly summarised. Well developed, highly relevant, reasoned introduction and conclusions, demonstrating some originality. Within word count or presentation time.
Includes relevant factual content only. Clearly and logically structured material, showing excellent understanding of the discipline. Accurate spelling, grammar, punctuation, paragraphing.
Systematic, accurate identification of relevant concepts, theories and/or principles, appropriate to this level. Information or data selected from a very good range of highly relevant, current primary and secondary sources, and categorised, analysed or evaluated using relevant, methods or techniques. Professional, fluent writing style, appropriate to the assignment OR professional, engaging, confident, audible and well paced presentation. Excellent use of technical vocabulary, where appropriate.
Exceptional understanding of factual and conceptual material, relative to this level, including some understanding of the limits to knowledge in this area. Well developed, coherent arguments, systematically referencing primary and secondary literature, with clear rationale for choices. Professional visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are accurate, clearly set out, with precise explanations. Excellent integration of theory and practice, for this level, using appropriate conceptual frameworks. Correct and systematic use of academic conventions, references and bibliography.
Independent, wide-ranging, relevant reading and research, from authoritative primary and secondary sources, appropriate to this level. Excellent application of numerical and statistical methods to defined problems. Outstanding, consistent, flexible delivery of group work obligations, for this level. Accepts responsibility and ameliorates conflict. Undertakes complex tasks.
Substantiated, highly relevant recommendations. Excellent awareness of ethical issues, where relevant. Excellent, well articulated reflection on own strengths and weaknesses in relation to defined professional and practical skills at this level. Identifies required actions.
70 – 85% Achieved at this level FIRST (1ST) Includes all required factual content, accurately summarised. Well developed, relevant, reasoned introduction and conclusions, demonstrating some originality. Within word count or presentation time.
Includes relevant factual content only. Clearly and logically structured material, showing very good understanding of the discipline. Accurate spelling, grammar, punctuation, paragraphing.
Accurate identification of relevant concepts, theories and/or principles, with evidence of a systematic approach, appropriate to this level. Information or data selected from a good range of relevant, current primary and secondary literature, and categorised, analysed or evaluated using relevant, methods or techniques. Professional writing style, appropriate to the assignment OR engaging, confident, audible and well paced presentation. Very good use of technical vocabulary, where appropriate.
Excellent understanding of factual and conceptual material, relative to this level, including some understanding of the limits to knowledge in this area. Coherent arguments, systematically referencing primary and secondary sources, with clear rationale for choices. Professional visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are accurate, clearly set out, with very good explanations. Very good integration of theory and practice, for this level, using appropriate conceptual frameworks. Correct use of academic conventions, references and bibliography.
Independent, relevant reading and research, from authoritative primary and secondary sources, appropriate to this level. Very good application of numerical and statistical methods to defined problems. Very good, consistent, flexible delivery of group work obligations, for this level. Accepts responsibility and ameliorates conflict. Undertakes complex tasks.
Substantiated relevant recommendations. Very good awareness of ethical issues, where relevant. Very good, well articulated reflection on own strengths and weaknesses in relation to defined professional and practical skills at this level. Identifies required actions.
60 – 69% Achieved at this level UPPER SECOND (2:1) Includes most required factual content, mostly accurately summarised. Relevant and valid introduction and conclusions. Within word count or presentation time.
Includes relevant factual content only. Clearly structured material, with some gaps in logic, but showing understanding of the discipline. Mostly accurate spelling, grammar, punctuation, paragraphing.
Mainly accurate identification of relevant concepts, theories and/or principles, appropriate to this level. Information or data selected from mainly relevant primary and secondary sources, and categorised, analysed or evaluated using relevant methods or techniques but with minor gaps or misunderstandings. Mainly fluent writing style, appropriate to the assignment OR mainly engaging, audible and well paced presentation. Good use of technical vocabulary, where appropriate.
Very good understanding of factual and conceptual material, relative to this level, showing some appreciation of the limits of knowledge in this area. Mostly coherent arguments, with some perceptive points, referencing well selected primary and secondary literature. Mostly professional visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are mainly accurate, clearly set out, with good explanations. Good integration of theory and practice, for this level, using appropriate conceptual frameworks. Mostly correct use of academic conventions, references and bibliography.
Independent reading and research from a range of mostly authoritative primary and secondary sources, appropriate to this level. Mainly good application of numerical and statistical methods to defined problems, with some gaps, errors or misunderstandings. Consistent delivery of group work obligations, for this level. Some ability to accept responsibility and modify responses. Undertakes non-routine tasks.
Some relevant recommendations. Satisfactory awareness of ethical issues, where relevant. Clear reflection on own strengths and weaknesses in relation to defined professional and practical skills. Partial identification of required actions.
50 – 59% Achieved at this level LOWER SECOND (2:2) Includes essential required factual content, but with some gaps or misunderstandings. Satisfactory introduction and conclusions. Within 10% of word count or presentation time.
Includes some irrelevant factual content. Mostly clearly structured material, with some gaps in logic. Some mistakes in spelling, grammar, punctuation, paragraphing.
Adequate identification of relevant concepts, theories and/or principles, appropriate to this level. Information or data selected from mainly secondary sources, and categorised, analysed or evaluated using mostly relevant methods or techniques but with gaps or misunderstandings. Writing style is appropriate but not always fluent OR a presentation that is not always engaging, audible or well paced. Some use of technical vocabulary, where appropriate.
Satisfactory understanding of factual and conceptual material, relative to this level, showing basic appreciation of the limits of knowledge in this area. Satisfactory arguments, referencing mostly secondary literature. Appropriate visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations may have some inaccuracies, or issues relating to set out and explanation. An adequate attempt to relate theory to practice, for this level. Inconsistent use of academic conventions, references and bibliography.
Adequate independent reading and research from mostly secondary sources, appropriate to this level. Adequate application of numerical and statistical methods to defined problems, with some gaps or errors. Inconsistent delivery of group work obligations, for this level. Some awareness of responsibility and options.
Basic recommendations. Satisfactory awareness of ethical issues, where relevant. Some evaluation of own strengths and weaknesses in relation to defined professional and practical skills. Limited identification of required actions.
40 – 49% Marginal achievement at this level THIRD (3RD) Includes limited required factual content, with many gaps or inaccuracies. Basic introduction and conclusions. Within 10% of word count or presentation time.
Includes considerable irrelevant factual content. Unevenly structured material, with many gaps in logic. Frequent mistakes in spelling, grammar, punctuation, paragraphing.
Some identification of relevant concepts, theories and/or principles, appropriate to this level. Information or data selected from secondary sources, and poorly categorised, analysed or evaluated using inappropriate methods or techniques. Awkward or inappropriate writing style OR a presentation that is not engaging, audible or well paced. Does not use technical vocabulary, where appropriate.
Basic understanding of factual and conceptual material, relative to this level, showing very limited appreciation of the limits of knowledge in this area. Sense of emerging argument, mainly descriptive or personal opinion, with limited and superficial reference to literature. Negligible use of primary literature. Inappropriate visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are often inaccurate, with many issues relating to set out and explanation. Little attempt to relate theory to practice, using appropriate conceptual frameworks. Inconsistent or incomplete use of academic conventions, references and bibliography.
Basic independent reading and research from secondary sources, appropriate to this level. Weak application of numerical and statistical methods to defined problems, with many gaps or errors. Unreliable delivery of group work obligations, for this level. Limited awareness of options.
Confused recommendations. Little awareness of ethical issues, where relevant. Limited reflection on own strengths and weaknesses in relation to defined professional and practical skills.
30 – 39% Marginal failure at this level FAIL. POSSIBLE COMPENSATION. Includes insufficient required factual content, with significant gaps or inaccuracies. Incoherent or irrelevant introduction and conclusions. More than 10% outside word count or presentation time.
Includes substantial irrelevant factual content. Incoherently structured material. Serious mistakes in spelling, grammar, punctuation, paragraphing.
Limited identification of relevant concepts, theories and/or principles, appropriate to this level, showing no appreciation of the limits of knowledge in this area. Little selection of information or data, and little attempt at collation, categorisation, analysis or evaluation. Poor writing style OR a presentation that is not engaging, audible or well paced. Does not use technical vocabulary, where appropriate.
Limited understanding of factual and conceptual material, relative to this level. Little or no argument, entirely descriptive or personal opinion, with no reference to literature. Poor visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are mostly inaccurate, or incorrectly set out or explained. Theory not related to practice, using appropriate conceptual frameworks. Inaccurate or incomplete use of academic conventions, references and bibliography.
Minimal independent reading and research, appropriate to this level. Very weak application of numerical and statistical methods to defined problems, with significant errors. Poor delivery of group work obligations, for this level. No awareness of options.
Irrelevant or no recommendations. Little or no awareness of ethical issues, where relevant. Very limited reflection on own strengths and weaknesses in relation to defined professional and practical skills.
16 – 29% Not achieved at this level FAIL. NO COMPENSATION. Includes almost no required factual content, and with very significant inaccuracies. Incoherent or missing introduction and conclusions. More than 10% outside word count or presentation time.
Includes mainly irrelevant factual content. Very incoherently structured material. Serious and extensive mistakes in spelling, grammar, punctuation, paragraphing.
Minimal or inaccurate identification of relevant concepts, theories and/or principles. No evidence of the selection, categorisation, analysis or evaluation of information or data. Incoherent writing style OR an inaudible, poorly paced and unengaging presentation.
Limited understanding of factual and conceptual material, relative to this level, showing no appreciation of the limits of knowledge in this area. No argument, entirely descriptive or personal opinion, with no reference to literature. Very poor visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are inaccurate, with no explanations. Theory not related to practice. Very inaccurate or no use of academic conventions, references and bibliography.
No independent reading and research, appropriate to this level. Minimal application of numerical and statistical methods and techniques to defined problems, with significant errors. Very poor delivery of group work obligations, where relevant.
No recommendations. No awareness of ethical issues, where relevant. Minimal or no evaluation of own strengths and weaknesses in relation to defined professional and practical skills.
0 – 15% Not achieved at this level FAIL. NO COMPENSATION. Does not include required factual content. No introduction and conclusions. More than 10% outside word count or presentation time.
Includes entirely irrelevant factual content. Very incoherently structured material. Serious and extensive mistakes in spelling, grammar, punctuation, paragraphing.
No identification of relevant concepts, theories and/or principles. No evidence of the selection, categorisation, analysis or evaluation of information or data. Incoherent writing style OR an inaudible, poorly paced and unengaging presentation.
No understanding of factual and conceptual material, showing no appreciation of the limits of knowledge in this area. No argument, entirely personal opinion, with no reference to sources. Exceptionally poor visual presentation, including font, spacing, margins, headings, graphics, images and appendices.
Calculations are missing, with no explanations. Theory not related to practice. No use of academic conventions, references and bibliography.
No independent reading and research, appropriate to this level. No application of numerical and statistical methods to defined problems. No delivery of group work obligations, for this level.
No recommendations. No awareness of ethical issues, where relevant. No evaluation of own strengths and weaknesses in relation to defined professional and practical skills.

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