Subject Code :- ACCT2003
Title :- Management Accounting Major
Weighted :- 30%
Assessment Type :- Assignment
You are a management accountant working for LEGO Australia. As a successful global organisation one of their key objectives is ‘to play their part in building a sustainable future and making a positive impact on the planet our children will inherit’.
ACCT2003 Management Accounting Major Assignment
In order to do this they are working towards their most challenging mission which is to make all core LEGO products from sustainable, plant-based materials by 2030.
They are planning to create and sell three (3) test LEGO sets ready to hit the Australian shelves by the beginning of 2022.
You have been tasked to prepare a master budget for these select three sustainable products for 2022 and to help LEGO to make informed decisions to ensure their business continues to operate successfully into the future.
The following information has been gathered:
1.Products :- The budget you are to prepare will be for the following three (3) sustainable LEGO Packs that will be trialled in 2022 made out of plant-based materials:
2.Operations :– LEGO Australia operate on a financial calendar-year basis July through to June. The business runs out of owned premises in Parramatta Sydney. Their sales team have provided the expected monthly sales per LEGO pack.
3. Property Plant and Equipment :– Depreciation totals $1,000 per quarter.
4.Cash collections :- LEGO expects to collect 90% of its credit sales in the month of sale and the remaining 10% of credit sales will be collected in following month. The company’s bad debts are negligible.
5.Payments :– LEGO plans to pay for 20% of its material purchases with in the month of purchase and the remaining 80% in the following month.
6. Ignore both GST and Income Tax.
7. All of the planning and budgeting assumptions for this test sustainability LEGO project have been provided to you in a budget template ready for you to use to prepare the Master Budgets. Please find these budget assumptions ACCT2003 S2 2021 LEGO Budget.xls file in the Major assignment folder on Black Board.
REQUIRED:
PART ONE:
Prepare a Master Budget (15 marks weighted 50% of assignment total) Using the information provided prepare a master budget for LEGO for the twelve-month period from July 2022 to June 2023 to produce and sell the three sustainable LEGO packs.
ACCT2003 Management Accounting Major Assignment
Your budget spreadsheet must be submitted in Excel Format not as an appendix in your WORD document). The first worksheet should contain the budget assumptions. All future worksheets need to be linked to this data. Show all calculations and use Excel functions where possible. While you should use examples in your text as a guide the key to using spreadsheets is that they are structured so that others can use them and follow the flow of information without difficulty.
Include the following:
1.A sales budget and expected cash collections
2.A production budget
3.A direct materials budget and expected cash disbursements for purchases of materials
4.A direct labour budget
5.A manufacturing overhead budget
6.Monthly Operating Cost budget
7.An ending finished goods inventory budget
8.Cost of Sales Budget
9.Budgeted Income Statement for the year ended 30th June 2023
10.Monthly Cash Budget
Use the planning and budgeting assumptions for this test sustainability LEGO project provided to you in the budget template ACCT2003 S2 2021 LEGO Budget. xls file in the Major assignment folder on Black Board. Complete this workbook and submit as this first part of your assignment.
ACCT2003 Management Accounting Major Assignment
PART TWO:
Analysis & Recommendations (15 marks/30 marks, 50% of assignment total)
Write a report (Maximum 1,500 words, 10% (+/-) will be accepted with no penalty) for the Head of Sustainability, LEGO Australia.
ACCT2003 Management Accounting Major Assignment
The report should include:
- An overview of the expected results for the 2022/23 year including total revenue, operating expenses and expected final cash position;
- Compare the financial performance of each product and make recommendations about how to improve the individual and overall profitability of the sustainable products range.Where appropriate use industry data (e.g. comparative product comparison, consumer confidence, labour rates) to support your recommendations for change.
- Identify three major risks for the business in 2022/2023, quantify these risks in terms of the potential impact on the profit and loss statement and provide recommendations on how to mitigate them.
- Explain how the master budget you have prepared can assist LEGO to plan for different‘what-if’ scenarios and help them to pivot according to changes in economic conditions.
- Use visual aids such as tables and graphs to enhance your report presentation.
The report should be submitted as a WORD (not PDF) document.
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