ACCM 4100 – ABC Firm assignment

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ABC Firm assignment

1.Use ABC to estimate the cost of an individual and business
return.
In the 1980’s, Harvard business school introduced a series of academic literature review
to state and explain the activity-based costing. (Time Activity-based Costing, Nov 2004)
According to Cooper and Kaplan (September-October, 1988), in those academic
articles, activity-based costing is stated as an approach to trace indirect costs, which
include individual products or families of productions, doing a favor for managers to
make better decisions and revealing accurate costs.
According to the case, individual returns are easy to process and the TaxEzy uses the
ATO’s free etax software to prepare and submit the returns. The costs of individual
return include interview client, obtain missing data, input data verify return with client,
verify return with client, rectify errors after ATO query and submit return, which are
necessary for individual returns. Firstly, TaxEzy’s workers need to interview clients in
order to get necessary information from customers. Then, TaxEzy’s employers have to
collect in order to obtain missing data. Next, TaxEzy’s employers need to input data in
the computer. It probably exists some mistakes when employers input customers’
information. Therefore, verifying return with client is the necessary process. In addition,
it occurs several mistakes after first verification. Therefore, rectify errors after ATO
query , which can happens during the process of individual returns.

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Description

  1. Assessment Information
    Subject Code: ACCM 4100
    Subject Name: Management Accounting 1
    Assessment Title: Excel Team Assignment (15%) and Individual Self Reflection (10%)
    Weighting: 25 Marks: 15 marks technical and 10 marks for professional

    competency skills

    Electronic submission. Please note to adjust for time differences if needed. ACCM 4100 – ABC Firm assignment.

    .
    Assessment Description

    Learning Outcome 4: Formulate and recommend possible solutions using management accounting

    techniques and tools, in a given scenario, working in teams in some instances. ACCM 4100 – ABC Firm assignment.

    Objective: The objective of this assignment is to effectively work in teams to formulate and recommend
    possible solutions in a practical scenario using management accounting techniques and tools, especially
    excel spreadsheets. ACCM 4100 – ABC Firm assignment.
    Required:
    This assignment comprises two parts as follows:
    Part 1 (15%): Work in teams (groups) of 3 members (you must obtain your lecturer’s approval for a
    different number) to complete the case study using the excel spreadsheet program as noted in the
    details of assignment.
    Part 2 (10%): Individual self-reflection on team work; as noted in part 2 below.
    Each student will need to submit a self-reflection document separately. ACCM 4100 – ABC Firm assignment.
    Forming Teams – You must discuss the selection of teams with your lecturer, who may decide to
    allocate you into teams or he/she may decide to form teams using a random process. Any work which
    has been copied or shared between groups or teams will result in a Fail grade for all students
    concerned. So please make sure that the answer to this team assignment is your own work and not
    copied from any source. ACCM 4100 – ABC Firm assignment.
    The assignment will need to be submitted electronically on the portal, via the moodle site. There will be
    three separate links– one for the excel spreadsheet, another for the team written work and the third for
    your individual written self reflection on team work. ACCM 4100 – ABC Firm assignment.
    Please make sure you follow the guidelines noted in your subject outline especially those
    relating to the presentation of written work, late assignment policy and academic integrity.

    ACCM 4100 Management Accounting 1
    Trimester 3, 2017: Assessment 2 – Excel Assignment and Self Reflection on Teamwork
    PART 1: Technical competency (Assessable Value 15%)
    CASE STUDY USING EXCEL SPREADSHEET
    TaxEzy offers an income tax preparation service for small businesses and individuals.
    Individual customers are charged $149 and businesses $399.
    Individual returns are normally relatively straightforward to process and the firm uses the ATO’s free etax
    software to prepare and submit the returns. The individual returns do not tend to vary much in the
    workload required to complete them. ACCM 4100 – ABC Firm assignment.
    The processing of small business tax returns is more complex and requires a specific software package
    that the TaxEzy has purchased for an annual licence fee of $25,000 plus $2.50 for each return processed.
    Processing of business returns varies as to the workload each one requires. ACCM 4100 – ABC Firm assignment.
    The owner-manger of the firm, Robbie Savage, is concerned that last year only a small profit was made
    despite the volume of work being higher than ever. He commented: “We are good tax accountants for our
    clients but we don’t seem to keeping our own house in order!”
    To help improve the situation Savage decided to recruit a dedicated management accountant with a
    proven track record, Julie Bishop. ACCM 4100 – ABC Firm assignment.
    On her first day in the job, Savage tells Bishop “I want you to get to the bottom of our recent poor
    profitability but I do not want you to buy in expensive ‘solutions’ which may quickly become out of date and
    are still prone to error. Also any new systems must be understandable to staff and in some instances
    clients, whom we must justify our price to.”
    One of the first concerns Bishop has is that TaxEzy’s pricing is not optimal. She has noticed that whilst
    the firm has been extremely busy with a record number of 9,000 small business returns last year, they
    have had relatively few individual returns (3,000). Julie has also done some basic market research where
    she has found other tax agents charging individuals as little as $100 for a basic return. ACCM 4100 – ABC Firm assignment.
    As a starting point, Bishop decides to use an Activity Based Costing (“ABC”) approach to help assess the
    cost of preparing each type of return. From the firm’s timesheet and other records she produces the
    following information for the previous year:
    Activity Cost
    Interview client $1,615,000
    Obtain Missing data $800,000
    Input data $390,000
    Verify return with client $875,000
    Rectify errors after ATO query $40,000
    Submit return $50,000
    Other information Bishop collected is:
    On average each individual takes 20 minutes to interview and each business takes 2 hours. Last year a
    total of 19,000 hours were spent interviewing clients. ACCM 4100 – ABC Firm assignment.
    Follow-up conversations to obtain missing data relates to business returns only.
    Data input took a total of 9,750 hours, with it taking an average of 15 minutes for an individual and 1 hour
    for a business.
    Verification of the return with the client took an average of 10 minutes for individuals and 55 minutes for
    small businesses. ACCM 4100 – ABC Firm assignment.
    There were 1,065 returns requiring rectification and only 22 of these were for individuals.
    Submission time was approximately the same across all returns.

    ACCM 4100 Management Accounting 1
    Trimester 3, 2017: Assessment 2 – Excel Assignment and Self Reflection on Teamwork
    Required:
    1) Use ABC to estimate the cost of an individual and a business return. Make clear any assumptions you
    have made. (12 Marks) ACCM 4100 – ABC Firm assignment.
    2) How might these estimates help explain the poor profitability experienced last year and what
    implications do they have for the firms’ pricing policy? (7 Marks) ACCM 4100 – ABC Firm assignment.
    3) Explain the advantages and disadvantages of ABC, relating your discussion to TaxEzy. (10 Marks)
    4) Julie Bishop uses the ABC approach based on the above data as a ‘starting point’. Can you suggest
    any other ways of altering the firms’s costing and pricing policies which will be more beneficial to
    TaxEzy? (6 Marks)
    Word Limit: 1,500 words. ACCM 4100 – ABC Firm assignment.
    4 marks are allocated for presentation and use of formulas within Excel.
    4 marks are allocated for presentation, grammar, spelling and appropriate Harvard referencing where
    needed.
    2 marks are allocated for appropriate teamwork as evidenced by your minutes and any other observations
    made by your lecturer. ACCM 4100 – ABC Firm assignment.

    Total Technical Mark = 45 marks, weighted to 15% overall

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ABC Firm assignment

1.Use ABC to estimate the cost of an individual and business
return.
In the 1980’s, Harvard business school introduced a series of academic literature review
to state and explain the activity-based costing. (Time Activity-based Costing, Nov 2004)
According to Cooper and Kaplan (September-October, 1988), in those academic
articles, activity-based costing is stated as an approach to trace indirect costs, which
include individual products or families of productions, doing a favor for managers to
make better decisions and revealing accurate costs. ACCM 4100 – ABC Firm assignment.
According to the case, individual returns are easy to process and the TaxEzy uses the
ATO’s free etax software to prepare and submit the returns. The costs of individual
return include interview client, obtain missing data, input data verify return with client,
verify return with client, rectify errors after ATO query and submit return, which are
necessary for individual returns. Firstly, TaxEzy’s workers need to interview clients in
order to get necessary information from customers. Then, TaxEzy’s employers have to
collect in order to obtain missing data. Next, TaxEzy’s employers need to input data in
the computer. It probably exists some mistakes when employers input customers’
information. Therefore, verifying return with client is the necessary process. In addition,
it occurs several mistakes after first verification. Therefore, rectify errors after ATO
query , which can happens during the process of individual returns. ACCM 4100 – ABC Firm assignment….

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