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Prepare the monthly control report showing original budget, flexed budget, and variances.

Programme:

BA Business Management

Module:

Management Accounting

Module code:

LCBB5002

Contribution to Overall Module

Assessment (%):

70%

Lecturer:

 

Internal Verifier:

 

Assignment Title:

Assignment 2 Report

Word count (or equivalent):

2500

Submission deadline:

To be announced by the Assessment team-

Please refer to the assessments schedule published on Students’ Hall in Moodle

Return date of provisional marks & written feedback:

After the Exam Board

Submission method:

All written assessments, where practical and possible, must be submitted via Turnitin unless otherwise instructed by the Lecturer. (Please DO NOT put this assessment specification into Turnitin or it will match many similarities with other students’ submissions.)

Alternative submission method (if applicable):

Late submission of the assessment will result in a late penalty mark. Penalties for late submission: Up to one week late, maximum mark of 40%. Over one week late, 0%. Only the Extenuating Circumstances Panel may approve a change to submission dates.

Academic honesty / referencing:

Academic honesty is required. In the main body of your submission you must give credit to authors on whose research and ideas your work is based. Append to your submission a reference list that indicates the books, articles, etc. that you have used, cited or quoted in order to complete this assessment.

Prepare the monthly control report showing original budget, flexed budget, and variances

They have been operating a successful business for 40 years and have come to understand the dynamic nature of the tourism industry. Recently, the Covid-19 pandemic broke out in England leading the government to impose restrictions on movement and travel which severely impacted the tourism industry. Amana’s revenue took a big hit in April 2020 as tourists could not travel for the Easter holidays, sales picked up slightly in the summer of 2020; however, the prolonged lock down between December 2020 and February 2021 depleted any additional revenue that had been made in the summer.

Amana Ltd is a family-owned tourist business located in England which sells souvenirs to tourists. They have several locations in tourist hotspots across England namely Brighton, London bridge, Westminster bridge, Buckingham Palace, Birmingham city centre and Manchester city centre. Souvenirs are produced by a Chinese manufacturer specifically according to designs made by the Amana team.

In the past, Amana ltd has only traded within physical stores with a functioning website serving as a channel for marketing their business. Mr Amana, the owner of the business has hired you as a manager and provided a cost break down of their products.

 

Original budget (£)

Actual (£)

Units

100,000

80,000

Selling price

25

20

Variable costs:

 

 

Materials

2.50

280,000

Labour

4

440,000

Overhead

1.50

120,000

Contribution

17

760,000

Fixed overheads:

 

 

Warehouse rental

200,000

170,000

Insurance

100,000

100,000

Fulltime warehouse supervisor salary

50,000

35,000

*Figures are based on average estimates incurred in producing a mix of souvenirs.

Required:

(i) Prepare the monthly control report showing original budget, flexed budget, and variances. (25 marks)

(ii) Using your control report prepared in (i) above, prepare a report on Amana’s performance during the year 2020. (20 marks)

(iii) Provide recommendations to Amana’s CEO on areas of improvement. (15 marks) (1500 words, TOTAL = 60 marks

PART B

Mr Amana has noticed that a lot of his competitors now sell online to customers in the UK, Europe and US. He has been considering closing the Brighton, Birmingham city centre and Manchester city centre branches in order to streamline the business activities and move 50% of their sales online. Several factors have to be taken into consideration when making this decision.

i) Cost of setting up delivery network – £150,000

ii) Cost of upgrading current website to handle large volume of sales - £50,000

iii) Salary of a fulltime IT programmer - £35,000 per annum

iv) Based on market research, there would be guaranteed sales of 100,000 units annually

The business also has the alternative of selling their products directly on Amazon and would have to take the following factors into consideration when making this decision.

i) Amazon fulfilment fees - £50,000

ii) High levels of competition between Amana souvenirs and other sellers on these platforms – Guaranteed sales of 65,000 units on Amazon annually with the potential to increase depending on demand.

iii) Lack of control over pricing and return policy.

Required:

In your report, provide an analysis of Mr Amana’s decision to go online and advise if they should set up their own online shop or sell on Amazon. You should take into consideration all the relevant costs. (1000 words, TOTAL = 40 marks)

ALL QUESTIONS SHOULD BE ATTEMPTED

NOTE: The guidance offered below is linked to the five generic assessment criteria overleaf.

1. Engagement with Literature Skills

Your work must be informed and supported by scholarly material that is relevant to and focused on the task(s) set. You should provide evidence that you have accessed an appropriate range of sources, which may be academic, governmental and industrial; these sources may include academic journal articles, textbooks, current news articles, organisational documents, and websites. You should consider the credibility of your sources; academic journals are normally highly credible sources while websites require careful consideration/selection and should be used sparingly. Any sources you use should be current and up-to- date, mostly published within the last five years or so, though seminal/important works in the field may be older. You must provide evidence of your research/own reading throughout your work, using a suitable referencing system, including in-text citations in the main body of your work and a reference list at the end of your work.

Guidance specific to this assessment: Specific to this assignment: At least 12 references need to be cited

2. Knowledge and Understanding Skills

At level 5, you should be able to demonstrate: sound knowledge and critical understanding of the well- established concepts and principles of the subject area and the way in which those principles have developed; knowledge of the main methods of enquiry in the discipline. Knowledge relates to the facts, information and skills you have acquired through your learning. You demonstrate your understanding by interpreting the meaning of the facts and information (knowledge). This means that you need to select and include in your work the concepts, techniques, models, theories, etc. appropriate to the task(s) set. You should be able to explain the theories, concepts, etc. meaningfully to show your understanding. Your mark/grade will also depend upon the extent to which you demonstrate your knowledge and understanding.

Guidance specific to this assessment: A thorough and detailed understanding budgeting and variance in assessing performance and decision making

3. Calculation

Your work must contain clear calculations using professional layout and headings where relevant. Directions for variances should be clearly indicated as either favourable or unfavourable.

Guidance specific to this assessment: A control report should be prepared clearly showing the original budget, flexed budget, actual budget and variances

4. Practical Skills

At level 5, you should be able to use/deploy a range of established techniques within the discipline, and apply underlying concepts and principles outside the context in which they were first studied, including, where appropriate, the application of those principles in an employment context. You should be able to demonstrate how the subject-related concepts and ideas relate to real world situations and/or a particular context. How do they work in practice? You will deploy models, methods, techniques, and/or theories, in that context, to assess current situations, perhaps to formulate plans or solutions to solve problems, or to create artefacts, some of which may be creative. This is likely to involve, for instance, the use of real world artefacts, examples and cases, the application of a model within an organisation and/or benchmarking one theory or organisation against others based on stated criteria. You should show awareness of the limitations of concepts and theories when applied in particular contexts.

Guidance specific to this assessment: The practical application of budgeting, variances and relevant costing in assessing business performance and decision making especially with reference to the current global pandemic.5.    Transferable Skills for Life and Professional Practice

Your work must provide evidence of the qualities and transferable skills necessary for employment requiring the exercise of personal responsibility and decision-making. This includes demonstrating: professional development to advance existing skills and acquire new competences that will enable you to assume significant responsibility within organisations; that you can initiate and complete tasks and procedures, whether individually and/or collaboratively; that you can use appropriate media to effectively communicate information, arguments and analysis in a variety of forms to specialist and non-specialist audiences; fluency of expression; clarity and effectiveness in presentation and organisation. Work should be coherent and well- structured in presentation and organisation.

Guidance specific to this assessment: A report is required, 2,500 words, with appropriate referencing and headings

This section details the extent to which the assessment criteria are demonstrated by you, which in turn determines your mark. The marks available for each category of skill are shown. Lecturers will use the space provided to comment on the achievement of the task(s), including those areas in which you have performed well and areas that would benefit from development/improvement.

 

Generic Assessment Criteria

Marks available

 

Marks awarded

1. Engagement with Literature Skills

.

15

 

Extent of research and/or own reading, selection of credible sources, application of appropriate referencing conventions

 

 

2. Knowledge and Understanding Skills

20

 

Extent of knowledge and understanding of concepts and underlying principles associated with the discipline.

 

 

3. Calculations

25

 

Clarity and accuracy of calculations. Use of professional and well-structured layout.

 

 

4. Practical Application Skills

25

 

Deployment of methods, materials, tools and techniques; application of concepts; formulation of innovative and creative solutions to solve problems.

 

 

5. Transferable Skills for Life and Professional Practice

15

 

Attributes in professional practice: individual and collaborative working; deployment of appropriate media; presentation and organisation.

 

 

Assessment Mark (Assessment marks are subject to ratification at the Exam Board. These comments and marks are to give feedback on module work and are for guidance only until they are confirmed. )

Late Submission Penalties (tick if

appropriate)

 

%

Up to 1 week late (40% Max)

 

Over 1 week late (0%)

 

You need to start answering the assignment questions from here: Prepare the monthly control report showing original budget, flexed budget, and variances.


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