Cost Management Systems 22321

Major Assignment 2019 Autumn

Assessment weighting


This assignment contributes to 25% of the total subject mark.

Assessment objectives

This assignment provides students with a number of learning opportunities.

Students learn to collaborate with others to achieve a collective goal. Being able to work in a team is an important skill as management accountants increasingly work as part of integrated teams in practice.
Students are required to apply cost accounting concepts and techniques to solve a practice-based problem. This encourages students to learn about how cost accounting is applied in a real-world setting, and further develop critical thinking and problem-solving skills.
Students need to develop an understanding of how to tailor cost accounting techniques to a specific organisational setting. This promotes the development of research skills and critical evaluation.
Students will need to make estimates of costs to demonstrate their cost accounting solution. A fundamental aspect of management accounting is preparing information based on estimates and making decisions with limited information. This furthers the development of logical reasoning and analytical skills.


Group size and composition:

The assignment is to be completed in groups of 3 or 4 students.
All students in a group must be enrolled in the same tutorial.
Students are not permitted to complete the assignment individually and will not be allocated to a group by CMS teaching staff. It is your responsibility to find team members in time for final registration.
Assignment groups will be formed in Tutorial 2 (27thMarch 2019). If you are unable to attend this tutorial, you must email your tutor beforehand. Your group must submit a group registration sheet signed by all group members.
You are required to register your group with your tutor. This must be finalised by Tutorial 3 (3rdApril 2019). Failure to register in a team on time will incur an individual penalty.


Assessment details

The assignment is to be presented as a professional consulting report. The report must follow the formatting requirements outlined in the UTS Business School Writing Guide. The writing guide can be downloaded here:

https://www.uts.edu.au/sites/default/files/2018-07/UTS-Business-School-Writing-Guide.pdf



Only publicly available information may be used. For example, the Internet, annual reports, newspaper and journal articles, databases, and books. You are not to contact individuals within the firm to ask questions or request information. All sources of information must be referenced in the report using the Harvard referencing method. Details on this method can be found in the writing guide. Further information can be found here: http://www.uts.edu.au/current-students/business/study-and-assessment-resources/uts-harvard-referencing



The report is to be a maximum of 16 A4 pages and not more than 3,800 words. The page limit includes the title page, table of contents, executive summary, conclusion, as well as main tables and diagrams that are included in the body of the report. The word and page limit excludes the reference list and appendices (e.g. these may contain supporting assumptions and calculations). Any material in the appendices must be referenced in the main report.

The assignment must be based on one of the following organisations. Tutors will randomly allocate each group an organisation.



Amcor Limited (AMC) Ansell Limited (ANN) Aristocrat Leisure (ALL) The Boeing Co. (BA)
Brickworks Limited (BKW) (Building Products Division) British American Tobacco (BTI)


Dell Technologies Inc (DVMT) Diageo PLC (DEO)
Incitec Pivot Limited (IPL) Invocare (IVC) Kirin Holdings Limited (KNBWY) Philip Morris International Inc (PM)
The focus of the assignment is a product division of the organisation. If the organisation has multiple product divisions, you can choose one product category to focus on. For example, if your organisation is Unilever, you could focus on ice creams, deodorants, or another product category (as long as the category contains multiple products). Please seek advice from your tutor if you are unsure of what would be an appropriate focus.



Assignment submission

There are three points of submission for this assignment.

First submission (assessable): Part 1 of the assignment is to be submitted in-class to tutors on the 17thApril 2019. Tutors will award four marks for meeting the requirements outlined below. Tutors will provide feedback for you to improve your analysis before the final submission of the assignment.
A diagram depicting the value chain for the selected product category of the assigned organisation. The steps involved in the operations section of the value chain (i.e. the production process) must be included in the overall value chain diagram or as a separate diagram. (1 mark)
A written analysis of the value chain. This must be separate from the diagram(s). As a guide, you should aim for the analysis to be around 800-1000 words in length, excluding diagrams. Around half of your analysis should be describing the operations sectionof the value chain. (1 mark)
Formatting follows the UTS Business School Writing Guide(e.g. size 11 font, Times New Roman or Calibri; 1.5 line spacing, 2.5cm page margins). (1 mark)
A reference list with a minimum of five referenced sources. References must follow the Harvard referencing style. (1 mark)


Second submission (non-assessable): A review of Part 2 will take place in class on the 8thMay 2019. This is an opportunity to get feedback from your tutor. No marks are awarded.


Final submission (assessable): The completed assignment is to be submitted both to TurnItIn AND emailed to your tutor by 11:59am Monday 27thMay 2019. Late assignments will incur a deduction in marks of 20% per day or part thereof. Assignments submission are to be in softcopy as a single file in either Microsoft Word Document (.doc or .docx) or Adobe PDF (.pdf) format. The file submitted to your tutor must include a scanned copy of the group report cover sheet, peer review sheet, project activity summary, and group meeting records. More details below:
TurnItIn(one submission per group): A single file that includes the full assignment report and the group report cover sheet (in a single file). Submitted by one team member. TurnItIn is accessible through UTS Online under the Assignments Failure to submit to TurnItIn will result in a zero grade for the group.
Email(one submission per group): A single file that includes the full assignment, group report cover sheet, peer review sheet, project activity summary, and group meeting records, is to be emailed to your tutor by one team member. Tutor email addresses are listed on UTS Online under Staff Information. The documents required for submission (detailed below) can be downloaded from UTS Online from the Assignments
Assignment cover sheet: All boxes must be checked and include the handwritten signatures of all group members to certify original authorship. Failure to submit this sheet will result in a zero grade.
Peer review sheet: Group must agree on the overall contributions of each group member. Must include handwritten signatures of each group member. If group members cannot agree of the percentage allocations, then each member must complete an individual peer review sheet, with a supporting statement. Failure to submit peer review sheet(s) will result in a zero grade.
Project activity summary: This must include the main activities completed (a minimum of 10 activities specified), the team member(s) that contributed to each one, and the start and end dates. Adequate completion is worth 2 marks.
Group meeting records: A minimum of threegroup meeting records must be included. Each record must include at least three issues. Adequate completion is worth 3 marks.


Due dates and submission timetable:

What Where When Feedback and Marks
1. Team registration Team registration form Hard copy – hand into your tutor in class Wednesday 27th March (Tutorial 2) in the first 15 mins of your enrolled tutorial. Registration must be finalised by the beginning of Tutorial 3 (15th August) to avoid penalty.
2. First submission Part 1 Hard copy – hand to your tutor in class Wednesday 17th April (Tutorial 5) in the first 15 mins of your tutorial. Written feedback based on marking rubric and mark awarded (either 0 or 4 marks).
3. Second submission Part 2


Hard copy – bring in to class Wednesday 8th May (Tutorial 7) in the first 15 mins of your tutorial. Student directed informal interaction with tutors in class. No marks awarded.
4a. Final submission (TurnItIn) Complete final report (with group report cover sheet) Online – UTSOnline, Assignment, “CMS Major Assignment (TurnItIn)” link 11:59am Monday 27th May 2019. None.
4b. Final submission (email) Complete final report (with group report cover sheet, peer review sheet, project activity summary, and group meeting records) Email – email to your tutor 11:59am Monday 27th May 2019. Written feedback based on marking rubric and overall mark (out of 100).

Further notes:

The emailed final report must match the online submission made to TurnItIn.
Please ensure that only one group member submits the assignment to TurnItIn and the same member emails the assignment to your tutor.
Students found copying or submitting work that is not their original work will be referred to the student misconduct committee and subject to significant penalties, including exclusion from UTS.

Late penalties:

Groups that do not conform to the submission timeline will incur the following penalties:

Team registration – 20% penalty for every weeklate (or part thereof), applied to final report mark of the individual that registered late. For example if your tutor does not have your name recorded on a group registration form in the first 15 mins of Tutorial 4, you will receive a 20% penalty. The other team members’ mark will not be affected by this.
First submission – if you do not hand in the requirements of the first submission in the first 15 minutes of your enrolled tutorial your group will receive 0 out of the 4 marks allocated to this submission.
Final submission Turnitin (online) – 20% penalty for every daylate, applied to final report mark. A day is a 24 hour period or part thereof. For example if you submit your final report at 1:00pm on Wednesday 10th of October the group will receive a 40% reduction of the overall mark given for the assignment.
Final submission email – 20% penalty for every daylate, applied to final report mark.
Assignment requirements

Your group is a consulting team hired by the Chief Financial Officer (CFO) of your assigned organisation (see above). Your team has been asked to prepare a report to address product costing issues in the organisation. Your report is to have three main parts.



Part 1 – Business Processes

Your team is required to present an analysis of the value chain of the product category of your organisation. The value chain model should be tailored to the specific industry context, operations and characteristics of your organisation and the selected product category. This section should include a detailed diagram or other figures representing the value chain or aspects of it. While the full value chain should be briefly outlined, the main focus of this section should be on the operations component of the value chain.



Part 2 – Costing System

Your team is to design a costing system for the product category of your organisation. The costing system must be based on the principles of Activity Based Costing (ABC). Assume that your organisation has not adopted ABC and currently uses a conventional costing system. Your team should present:

An outline of ABC and how it differs to traditional costing systems.
An outline of the benefits and disadvantages of ABC for your specific organisation.
Presentation of a product costing system that has been tailored to cost products in the product category you have selected. The system must incorporate overhead allocation based on ABC principles. The system only needs to incorporate product related costs (period costs can be ignored) and the chosen costs must relate to the value chain specified in part 1 of this assignment. You need to:
Identify all relevant direct and indirect costs associated with the product category.
Identify the relevant activity cost pools (we recommend no more than 6 activity cost pools).
Identify cost drivers for each activity cost pool.
Classify whether the activity cost pools are at the unit, batch, product or facility level (cost hierarchy).
The report should explain the rationale for identifying and classifying the direct and indirect costs, activity cost pools, cost drivers and cost hierarchy classification.



Part 3 – Product Costing

Show how your costing model can be used to cost products for your business. Select one product as an example from the product category of your organisation and estimate the full product cost per unit (direct materials, direct labour, and overheads). All data sources, estimations and assumptions for direct costs, indirect costs and activity drivers must be clearly justified and referenced. Direct costs are to be estimated for the selected product only. Indirect costs and activity rates should be estimated for all products in the product category, and then allocated to the example product. Supporting cost data, assumptions, calculations, tables, and diagrams etc., may be shown in appendices.



You can make the following assumptions:

All products in your product category are produced in a single factory in Australia.
Production is for the Australian market only.

References

While the assignment is largely practical, marks will also be awarded for the breadth and quality of references used. Ideally, a range of references should be used from a variety of sources. Reliance on textbooks is insufficient – teams should seek information from consulting reports and professional and academic journals to support ABC related arguments. A wide variety of sources should be used to support the use of cost data and assumptions (not just annual reports!). Harvard referencing style must be used.



To gain high marks the assignment will need to refer to academic literature to support arguments (in particular for Part 2), in addition to Internet and practitioner-based literature. We suggest between 4 to 10 academic articles. These can be located through search engines (e.g. Google Scholar) and the UTS library website. Journals that you might consider reviewing are as follows:

Accounting, Organizations and Society
Management Accounting Research
Accounting and Finance
Journal of Management Accounting Research
Journal of Cost Management
Accounting Horizons


Some useful references are as follows. Students are expected to find and use references beyond the references provided.

Cooper, R. (1990). Cost classification in unit-based and activity-based manufacturing cost systems. Journal of Cost Management, Fall, 4–14.
Cooper, R. & Kaplan, S. (1992). Activity-based systems: Measuring the cost of resource usage. Accounting Horizons, 6, September, 1–13.
Cooper, R. & Kaplan, S. (1991). Profit Priorities from Activity-Based Costing. Harvard Business Review, 69(3), 130–135.
Krumwiede, K. R. (1998). The Implementation Stages of Activity-Based Costing and the Impact of Contextual and Organizational Factors. Journal of Management Accounting Research, 10, 239–277.
Al-Omiri, M., & Drury (2007). A survey of factors influencing the choice of product costing systems in UK organizations. Management Accounting Research, 18, 399–424.



Cost Management Systems 22321 Group Assignment: Marks and Feedback
Tutorial time and tutor: Tutor’s Name Tutorial Day Tutorial Time
00000000 First name LAST NAME 00000000 First name LAST NAME 00000000 First name LAST NAME 00000000 First name LAST NAME
Marking item Below criteria (Fail = 0% – 49%) Meets criteria (Pass/Credit = 50% – 74%) Exceeds criteria (Distinction/HD = 75% – 100%) Mark
Report presentation and communication



(10 marks)

An appropriate report structure is not used. The individual sections of the report are not integrated. Diagrams, dot points or flow charts are not used or are used inappropriately.





Formatting is inconsistent and the presentation and style of the report is unprofessional. The Harvard referencing method is applied incorrectly. The page limit and/or word count is not adhered to.





Communication of the report is unclear making it difficult for the reader to understand the ideas being presented. Few arguments are convincing. This may be the result of poor grammar, imprecise language, poor use of diagrams and figures, or lack of appropriate logical structure.



An appropriate report structure is mostly used. The individual sections of the report are mostly logically integrated. Good use of visual material to support written information. Diagrams, dot points or flow charts are used appropriately.



Formatting is mostly consistent and the presentation and style of the report is generally of a professional standard. The Harvard referencing method is applied consistently, with a few errors. The page limit and/or word count is adhered to.



Communication is mostly clear and reasonably concise, making it easy for the reader to follow the arguments and understand the concepts being presented. Some arguments are convincing. A few grammatical and/or punctuation errors may be present.



An appropriate report structure is used. The individual sections of the report are logically integrated. Excellent use of visual material that is well integrated with written information. Diagrams, dot points or flow charts are used professionally.



Formatting is consistent throughout the report and the presentation and style of the report is of a professional standard. The Harvard referencing method is applied consistently with no errors. The page limit and/or word count is adhered to.



Communication is clear, concise and precise and demonstrates an expert understanding of technical concepts. There is a coherent flow of convincing argumentation. There are no grammatical and/or punctuation errors present.



Additional comments:







Initial value chain analysis



(4 Marks)



No submission was made on the due date or submission was made on the due date but does not meet the at least two of the four criteria.

Submission was made on the due date and meets two or three of the four criteria.

Submission was made on the due date and meets all of the four criteria.

Value chain analysis



(16 marks)

Descriptions of the value chain may be incomplete, lack detail or generic in nature. No attempt has been made to tailor the value chain appropriately to the assigned organisation or selected product category.







Inadequate detail is given to the operations section of the value chain.





Diagrams and figures representing the value chain or parts of it are missing, too simplified, too generic, copied from another source, poorly presented or not integrated with the written text.



Few references are used to support information being presented.

The analysis of the value chain describes most relevant aspects of the value chain of the product category of the organisation. Some attempt has been made to tailor sections of the value chain to the selected product category of the assigned organisation.



There is a clear outline of the activities that occur in the operations component of the value chain, but more detail is required.



Diagrams and figures representing the value chain have some detail, are informative and neatly presented and integrated with the written text.





Information is supported by appropriate references.



The analysis of the value chain clearly and comprehensively describes in detail all relevant aspects of the full value chain of the product category of the organisation. All sections of the value chain are tailored to the selected product category of the assigned organisation.



The operations component of the value chain is convincingly specified in detail.





Diagrams and figures representing the value chain are detailed, highly informative, professionally presented and integrated with the written text.





Information is supported by academic references that represent significant research efforts.



Additional comments:







Cost system design



(30 marks)

The report does not correctly describe an outline of ABC. The differences between ABC and traditional costing methods are not clearly explained. The advantages and/or disadvantages of ABC are missing, unclear or are too generic and not related to the assigned organisation. There are few or no academic references to support explanations and arguments.









The product costing system design has not been tailored to cost the products in the selected product category or does not demonstrate overhead allocation based on ABC principals. The product costs in the system are not clearly related to the value chain developed in part 1. Overall the system is unlikely to work in practice without substantial modification.



Direct costs are missing, incorrect, or not clearly associated with the product category, lack convincing explanation for their selection or it is not clear how they relate to the product category of the assigned organisation.



Indirect costs are missing, incorrect, or not clearly associated with the product category, lack convincing explanation for their selection or it is not clear how they relate to the product category of the assigned organisation.



Activity cost pools are missing, incorrect, or not clearly associated with the product category, lack convincing explanation for their selection or it is not clear how they relate to the product category of the assigned organisation, or do not clearly relate to the operations component of the value chain.







Cost drivers are missing, incorrect, or not clearly associated with the activity cost pool or lack convincing explanation for their selection.





The classification of each activity cost pool (unit, batch, product or facility) is missing, incorrect, or not clearly associated with the activity cost pool, or little to no convincing explanation has been provided for why the classification has been selected.



The report describes a basic outline of ABC. There is a clear explanation of the differences between ABC and traditional costing methods. The advantages and disadvantages of ABC are clearly specified and some attempt has been made to relate them to the assigned organisation. Academic research has been used to make or support some arguments and explanations.









Parts of the product costing system design have been tailored to cost the products in the selected product category and the design demonstrates basic overhead allocation based on ABC principals. The product costs in the system are implicitly related to the value chain developed in part 1. Overall the system is likely to work in practice with minimal modification.



Most of the direct costs are correctly identified and the reason for their selection is explained and related to the product category of the assigned organisation.







Most of the indirect costs are correctly identified and the reason for their selection is explained and related to the product category of the assigned organisation.







Most of the activity cost pools are correctly identified and the reason for their selection is explained and related to the product category of the assigned organisation. The activity cost pools relate to the operations component of the value chain developed earlier in the report.







Most of the cost drivers are correctly identified and the reason for their selection is clearly explained and related to the activity cost pools.





Most activity cost pools are correctly classified (unit, batch, product or facility) and an acceptable explanation has been provided for why the classification has been selected.

The report comprehensively describes the fundamental aspects and mechanics of ABC. There is a clear and sophisticated explanation of the differences between ABC and traditional costing methods. The advantages and disadvantages of ABC are convincing, detailed and comprehensively tailored to the specific context and characteristics of the assigned organisation. There is a high level of engagement with academic research which is comprehensively used to support arguments and explanations.



The product costing system design has been specifically tailored to cost the products in the selected product category and demonstrates a sophisticated and comprehensive overhead allocation based on ABC principals. The product costs in the system are explicitly related to the value chain developed in part 1. Overall the system is likely to work in practice with no modification.



Almost all of the direct costs are comprehensively identified and the reason for their selection is clearly and persuasively explained in detail and related to the product category of the assigned organisation.





Almost all of the indirect costs are comprehensively identified and the reason for their selection is clearly and persuasively explained in detail and related to the product category of the assigned organisation.





Almost all of the activity cost pools are comprehensively identified and the reason for their selection is clearly and persuasively explained in detail and related to the product category of the assigned organisation. The activity cost pools clearly and explicitly relate to the operations component of the value chain developed earlier in the report.





Almost all of the cost drivers are comprehensively identified and the reason for their selection is clearly and persuasively explained in detail and related to the activity cost pools.



Almost all of the activity cost pools are correctly classified (unit, batch, product or facility) and a clear and persuasive explanation has been provided for why the classification has been selected.

Additional comments:







Cost system application



(35 marks)

The report does not appropriately apply the cost system developed in the prior section to calculate the full product cost of one product. This may be because the report does not follow the costing system developed in the previous section, or because direct materials, direct labour and/or overhead costs identified are missing or unclear, or overhead costs are not allocated to activity cost pools, overhead activity rates are not calculated, overhead activity rates are not correctly applied to the product or the total product cost is not correctly calculated.



Assumptions and the estimation process used to derive cost and driver data is missing, unclear, not justified, and/or not correctly referenced. Few real-world sources are drawn upon to derive cost data. There is insufficient detail on how calculations are made or calculations are difficult to follow or are not logical. Minimal or no appendices are provided in the report.



The cost system developed in the prior section is mostly applied correctly to calculate the full product cost of one product. Most of the direct materials, direct labour and/or overhead costs identified are included, overhead costs are allocated to activity cost pools, activity rates are calculated and applied to the product and the total product cost is calculated.











Assumptions and the estimation process used to derive cost and driver data are clearly specified for most of the costs. Real-world sources are used where possible to derive cost data. Calculations are presented in sufficient detail and are mostly easy to follow and logical. The report includes appendices to provide support data, assumptions and calculations.



The cost system developed in the prior section is applied correctly and comprehensively to calculate the full product cost of one product. All of the direct materials, direct labour and/or overhead costs identified are clearly included, overhead costs are clearly and convincingly allocated to activity cost pools, activity rates are correctly calculated and correctly applied to the product and the total product cost is correctly calculated.









Assumptions and the estimation process used to derive cost and driver data are detailed, persuasive and clearly explained. A significant amount of research has been conducted to identify multiple real-world sources to derive cost data. All calculations are presented in extensive detail in an easy to follow and logical manner. Appendices are included that provide significant detail on supporting data, assumptions and calculations.



Project activity summary



(2 marks)



Submission not made.

Submission made by the due date but not adequately completed (e.g. less than 10 activities detailed)

Submission made by the due date and adequately completed.

Group meeting records



(3 marks)



Submission not made or submission made with less than 3 meeting records adequately completed.

Submission made by the due date but with less than three meeting records and/or meeting records not sufficiently detailed.

Submission made by the due date and at least three meeting records were adequately completed.

Additional comments



Total (100 marks)