Financial Decision Making:
Financial Decision Making: Year One (Level 4)
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Assignment Details
Unit learning outcomes assessed:
Learning outcome 2 – Evaluate the impact of technology and how it can aid the communication of management accounting concepts to both finance and non-finance personnel.
Requirement:
There are seven tasks in this assignment. All tasks must be completed and submitted in Microsoft Excel. You can only submit ONE file and this must be in Microsoft Excel. Any written parts to your work must be included within this file.
The tasks are designed to assess both management accounting, technology and research competences.
You will need to use the Excel skills covered during your weekly Computer lab sessions. All the material from the lab sessions can be found in weeks 1-7 on Moodle.
The management accounting skills were covered during lectures, supertutorials and tutorials. You can access the notes from these sessions on Moodle.
All work must be individual.
Hand In arrangements:
You are required to hand this assignment electronically via email to [email protected] by midnight on Friday 4th August 2017.
Financial Decision Making: Year One (Level 4)
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Assignment Title:
You are a junior analyst working for a firm of business advisers. One of your clients Mr P has come into the office with some figures from an ice cream franchise he owns.
http://www.franchisedirect.co.uk/foodfranchises/gallones-ice-cream-parlours-franchise-11166/
Your boss, Mr S would like you to carry out some analysis of the figures, and he has provided a breakdown below of what is required.
As the figures provided by Mr P estimates, they are likely to change in the future, Mr S wants you to produce a series of spreadsheets (a workbook) he can amend at a later date.
Your workbook must be fully linked with formulae throughout, clearly labelled and be easy for Mr S to use.
You must also show where you have gathered any research information from, so Mr S can revisit your data.
Mr S has suggested you read the whole brief and the marking criteria shown on the final two pages before beginning as you may wish to plan your workbook accordingly.
Financial Decision Making: Year One (Level 4)
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Task 1
Last year’s cost card and sales forecast are shown in Appendix 1 (page 6). As you can see, Mr P still produces inefficient hand written schedules, which will need to be checked for errors.
From the information you have been given prepare:
A standard cost card for last year, clearly highlighting any figures you have found to be incorrect.
Task 2
Mr P sold fewer servings than he expected and he thinks he should have made a profit of £129,329 this year (see Appendix 1), rather than the £140,000 he was hoping for.
Using the Actual results show in Appendix 2 (page 7) – prepare a budgetary control schedule showing the following:-
The original budget for the year.
A flexed budget for the actual level of sales.
The actual profit for the year.
You will need to explain to Mr P why his expected profit of £129,329 is incorrect.
Task 3
Calculate the following variances:-
Materials price and usage.
Labour rate and efficiency.
Fixed overhead expenditure and volume.
You should suggest a reason for each variance you have calculated (approx. 50 words per reason)
Prepare a Reconciliation Statement showing Budgeted to Actual profit.
Task 4
Mr P wants to do some planning for next year –
He is assuming sales of 105,000 servings (although this forecast may change).
Financial Decision Making: Year One (Level 4)
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He wants to reduce the serving size next year, but he does not know by how much. He
thinks it will be in the range of 1% to 5%.
Other changes to last year’s figures
Selling price – you will need to use your research from task 6 to determine the selling
price for next year.
Staff costs to change to either decrease to £7.50, stay the same or increase to £8.50
Fixed overheads will be £45,000.
No change to the royalty.
Prepare next year’s cost card for one serving.
Prepare next year’s budget.
Task 5
Using your budget from task 4, prepare a breakeven chart for next year.
Task 6
Research task – Mr P has noticed a number of other ice-cream parlours have opened
recently, and he has a feeling that his ice cream maybe incorrectly priced.
Perform some research on the likely competitors pricing.
Advise Mr P what you think the price should be and why.
Task 7 – Spreadsheet Functionality
Before submitting your spreadsheet to Mr S, make sure he can easily alter the
information that may be subject to change (see Task 4)
It is vital that the figures requested can be altered easily and the changes are reflected in
the rest of your workbook and you should test your workbook before handing it in. Mr S
must be able to alter these figures himself easily and see the effect of these changes on
the overall position.
Assessment of your work book
Your annual appraisal at work is due soon, and your boss (Mr S) will be evaluating you on
how well you have done this piece of work – fundamentally – does your workbook
function as a tool to advise Mr P. He will be looking at the following criteria:
Formulas – have you used formulas to make sure your workbook functions properly? If
you ‘type’ into cells, task 7 will not work and it will be difficult to provide any meaningful
advice to Mr P.
Financial Decision Making: Year One (Level 4)
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Workbook structure – is it clear what each page of the workbook is showing. Is it easy to
navigate round the workbook, are sheet tabs labelled etc. Remember, your boss will be
using this spreadsheet in a meeting – can he easily locate the info he needs?
Linkages between sheets – as for formulas, if your sheets are not linked it will not
function as it needs to, and the information will not flow through the workbook.
Tasks – are all of the seven tasks complete? Clients don’t appreciate (or pay for) half
finished work.
Data collection – is your research referenced – are there notes to show where numbers
were gathered from? Can Mr S easily find your data?
Workings – you should show any workings you have done to get to your figures. Are
workings labelled and tidy?
Management accounting knowledge – are you demonstrating your management
accounting knowledge in a way that in clear and simple– remember Mr P is not a finance
professional, and you should show any assumptions you have made.
Evaluation of business – how is the business doing? You must provide some advice to Mr
P based on the data you have produced.
Presentation and intended audience – does the workbook function properly? Is it clearly
labelled? Is it easy to find the cells that need altering for Task 7? Is it easy to read without
too much information per sheet.
See the Marking Criteria Rubric on Page 8 and 9 for more detail of the assessment criteria.
Financial Decision Making: Year One (Level 4)
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Financial Decision Making: Year One (Level 4)
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Financial Decision Making: Year One (Level 4)
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Marking Criteria
Your workbook will be graded using the following:-
Learning Outcome – Evaluate the impact of technology and how it can aid the communication of management accounting concepts to both finance and non-finance personnel
Grade
Fail
Marginal fail
Condonable Grade
Pass
2:2
2:1
1
%
0%-19%
20%-34%
35%-39%
40%-49%
50%-59%
60%-69%
70%-100% Overall Criteria Detailed Criteria
Use of technology Formulas No formulas are used Basic formulas are lacking in most areas Basic Formulas lacking in some areas Basic Formulas are used throughout Basic formulas used throughout with some advanced formulas attempted. Basic formulas and advanced formulas used effectively throughout Basic formulas and advanced formulas used in a sophisticated way. Work book Structure The workbook is devoid of meaningful structure The workbook is poorly structured and difficult to follow The workbook is difficult to follow in some places The workbook has a good basic structure The workbook is well structured The workbook is very well structured The workbook has a strong structure and flows seamlessly Linkages between formulas/sheets No links provided The links lacking in most areas Links lacking in some areas Most areas linked, but with some major errors Fully linked with no major errors Fully linked with some minor/inconsequential errors. The spreadsheet is fully and correctly linked
Completeness Tasks No tasks attempted Superficial attempt – most tasks omitted Partial attempt – some tasks omitted. All tasks attempted to an adequate standard All tasks completed to a sufficiently detailed standard All tasks completed to a very detailed standard, with All tasks completed meticulously Data collection No data sources identified Most data sources omitted Some data sources omitted Main data sources identified A range of data sources identified A wide range of data sources identified An extensive range of data sources identified
Financial Decision Making: Year One (Level 4)
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Management accounting concepts Workings No workings shown Most workings missing Some workings are missing Main workings shown Minor workings missing All of the required workings shown in detail. All workings shown in meticulous detail. Demonstration of Management accounting knowledge No demonstration Little demonstration Some demonstration of key areas Appropriate demonstration of key areas. Effective demonstration Extensive demonstration Extensive and insightful demonstration
Communication Evaluation of business No conclusion reached on the evaluation of the business Evaluation of business briefly covered Evaluation of business covered, yet unrealistic Evaluation of business realistic in parts Evaluation of business consistently realistic Evaluation of business realistic and alternatives explored Evaluation of business realistic and alternatives explored in detail Presentation and intended audience The workbook is poorly presented Superficial attempt at presentation to required audience. Fair attempt and presentation in parts. Audience considered in parts. Good presentation in parts. Adequate attempt to consider audience Good presentation throughout. Adequate attempt to consider audience Good presentation throughout. Good attempt to consider audience Excellent presentation throughout with intended audience clearly considered
