Coldarin designs, develops and sells PC games. Games have a short lifecycle lasting around 3 years only. Performance of the games is measured by reference to the profits made in each of the expected three years of popularity
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ASSIGNMENT INSTRUCTIONS
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Assessment
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Coursework
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Assessment code:
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010
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Academic Year:
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2020/2021
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Trimester:
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2
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Module Title:
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Managing Business Performance
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Module Code:
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MOD003460
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Level:
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5
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Module Leader:
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Weighting:
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50%
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Word Limit:
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Equivalent to 2,500 words
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This excludes bibliography and other items listed in rule 6.75 of the
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Academic Regulations:
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http://web.anglia.ac.uk/anet/academic/public/academic_regs.pdf
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Assessed Learning
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1 - 2
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Outcomes
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Submission Deadline:
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WRITING YOUR ASSIGNMENT:
This assignment must be completed individually. You must use the Harvard referencing system.
Your work must indicate the number of words you have used. Written assignments must not exceed the specified maximum number of words. When a written assignment is marked, the excessive use of words beyond the word limit is reflected in the academic judgement of the piece of work which results in a lower mark being awarded for the piece of work (regulation 6.74).
Assignment submissions are to be made anonymously. Do not write your name anywhere on your work.
Write your student ID number at the top of every page.
Where the assignment comprises more than one task, all tasks must be submitted in a single document.
You must number all pages.
SUBMITTING YOUR ASSIGNMENT:
In order to achieve full marks, you must submit your work before the deadline. Work that is submitted late – up to five working days after the published submission deadline - will be accepted and marked. However, the element of the module’s assessment to which the work contributes will be capped with a maximum mark of 40%.
Work cannot be submitted if the period of 5 working days after the deadline has passed (unless there is an approved extension). Failure to submit within the relevant period will mean that you have failed the assessment.
Requests for short-term extensions will only be considered in the case of illness or other cause considered valid by the iCentre Adviser. Please contact iCentre@lca.anglia.ac.uk. A request must normally be received and agreed by the iCentre Adviser in writing at least 24 hours prior to the deadline. See rules 6.56-6.65: http://web.anglia.ac.uk/anet/academic/public/academic_regs.pdf
ASSIGNMENT QUESTION
Managing Business Performance Coursework
Question 1 (55 marks)
Coldarin designs, develops and sells PC games. Games have a short lifecycle lasting around 3 years only. Performance of the games is measured by reference to the profits made in each of the expected three years of popularity. Coldarin accepts a net profit of 25% of turnover as reasonable. A rate of contribution of 75% is also considered acceptable.
Coldarin has a large centralised development department which carries out all the design work before it passes the completed games to the sales and distribution department to market and distribute the product.
Coldarin has developed a brand-new game called PCD and this has the following budgeted performance figures.
The selling price of PCD will be a constant £50 per game. Analysis of the costs show that at a volume of 10,000 units a total cost of £130,000 is expected. However, at a volume of 14,000 units a total cost of £150,000 is expected. If volume exceed 15,000 units the fixed costs will increase by 50%.
PCD’s budgeted volumes are as follows:
Sales volumes
7,500 units
16,800 units
4,200 units
In addition, marketing costs for PCD will be £80,000 in year one and £50,000 in year two. Design and development costs are all incurred before the game is launched and has a cost of £400,000 for PCD. These costs are written off to the income statement as incurred (i.e. before year 1 above).
1.1
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Explain the principles behind lifecycle costing and briefly state why Coldarin in particular
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should consider these life cycle principles.
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(20 marks)
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1.2
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Produce the budgeted results for PCD and briefly assess the game’s expected
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performance, taking
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into account the whole lifecycle of the game.
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(20 marks)
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1.3
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Explain why incremental budgeting is a common method of budgeting and outline the
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main problems with such an approach.
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(15
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marks)
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2.1. “Environmental management accounting: Innovation or Managerial Fad”?
Discuss the role environmental management accounting can play within an organisation in the modern business environment. (20 marks)
2.2 Explain the concept of Total Quality Management and list its fundamental features. (15 marks)
2.3 Pamtasian, a manufacturer of video games, is in the process of developing a new game called ‘The Sims’ and has undertaken market research to find out about customers’ views on the value of the product and also to obtain a comparison with competitor’s products. The results of this research have been used to establish a target selling price of £60 and an estimated life time volume of 300,000 games
Cost estimates have also been prepared based on the proposed product specification
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£
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Direct materials
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5.21
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Direct labour
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3.23
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Direct machining costs
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0.12
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Ordering costs
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1.23
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Quality assurance
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3.60
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Design
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19.80
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Marketing costs
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8.15
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Distribution costs
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3.25
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Warranty costs
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1.30
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The target profit margin is 20% of the proposed selling price.
Calculate the target cost of The Sims and discuss the implications of the result.
(10 Marks)
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