BUACC 2613
Management Accounting 1
Semester 1, 2013
Assignment
Contribution to overall assessment: 25%
This assignment has two equally weighted parts:
Part 1 – Technical
Part 2 – Essay ( 1500 – 1800 word)
The assessment criteria are on p. 4.
Please note: your work must comply with the University’s General Guide for the Presentation of Academic Work.
http://www.ballarat.edu.au/current-students/publications,-policies-and-forms/general-guide-for-the-presentation-of-academic-workhttp://www.ballarat.edu.au/current-students/publications,-policies-and-forms/general-guide-for-the-presentation-of-academic-work
PART 1
Yummy-Pop Ltd makes lollipops in two sizes, large and giant. The company sells these lollipops to convenience stores, fairs, schools for fundraisers, and in bulk on the Internet.
Summer is approaching and Yummy-Pop is preparing its budget for the month of December 2013. The lollipops are hand-made, mostly out of sugar and attached to wooden sticks. Expected sales are based on past experience.
Other information for the month of December follows:
Input prices
Direct materials
Sugar
$0.50 per kilogram (kg)
Sticks
$0.30 each
Direct manufacturing labour
$8 per direct manufacturing labour-hour
Input quantities per unit of output
Direct materials
Large
Giant
Sugar
0.25 kg
0.5 kg
Sticks
1
1
Direct manufacturing labour-hours (DMLH)
0.2 hour
0.25 hour
Set-up hours per batch
0.08 hour
0.09 hour
Inventory information, direct materials
Sugar
Sticks
Beginning inventory
125 kg
350
Target ending inventory
240 kg
480
Cost of beginning inventory
$64
$105
Yummy-Pop accounts for direct materials using a FIFO cost flow assumption.
Sales and inventory information, finished goods
Large
Giant
Expected sales in units
3000
1800
Selling price
$3
$4
Target ending inventory in units
300
180
Beginning inventory in units
200
150
Beginning inventory in dollars
$500
$474
Yummy-Pop uses a FIFO cost flow assumption for…