BMAC5203 Accounting for Business Decision Making Assignment Help

BMAC5203 Accounting for Business Decision Making Assignment Solutions

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Subject: Business

Number of Words: 3000

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Task 1a: CLO3


The purpose of this assignment is to enable learners to understand an organisation’s financial goals through the preparation of operating, financial, and cash budgets that together integrate into a business plan


Budgets and Budgetary Controls


BulatRimba Company manufactures and sells plastic tires for automated cleaning machines. It is completing its financial plans for 2021 and needs assistance in the budgeting phase. The following information is available:

BulatRimba Company

Balance Sheet

Current assets:   
Cash $200,000 
Account Receivables (net) 294,000$494,000
Property, plant and equipment:   
Land $100,500 
Buildings and equipment$350,000  
Less accumulated equipment(118,000)232,000 
Total assets  332,500
Liabilities and Stockholders’ Equity Current liabilities: Accounts payable Stockholders’ equity: Capital stock Retained earnings Total liabilities and stockholders’ equity      $132,000

Selling price for each wheel is $30 per unit. Budgeted sales unit for 2022 are:

First quarter15,000
Second quarter16,000
Third quarter18,000

BulatRimba will have no finished goods (wheel) and materials (plastic and rims) inventories at the beginning of the year. Management desires 5,000 kg of plastic at the end of the first quarter and 6,000 kg at the end of the second quarter. Each wheel takes 2kg of plastic. BulatRimba should have 2,000 rims at the end of the first quarter and 2,500 at the end of the second quarter. Finished inventory should total 1,000 wheels at the end of the first quarter and 1,500 at the end of the second quarter.

 Direct MaterialsDirect Labour
Plastic2kg @ $30.5 hour
Rims1 each @ $2 

Variable factory overhead is applied at the rate of $3 per direct labour hour for each finished unit. Fixed factory overhead is $170,000 per quarter, including non‐cash expenditures of $54,000 and is allocated on the total number of units completed direct labour averages $20 per hour.


For the first quarter of 2022, prepare the following:

  • Sales budget.
  • Production budget in units.
  • Direct materials usage and purchase budget (Plastic and Rims).
  • Direct labour budget.

Task 1b: CLO3


Additional information pertaining to BulatRimba above follows:

  • All sales are on credit and are collected 30 percent in the quarter of sale and 70 percent in the quarter following the sale. The company has a history of no bad debts. The sale from the last quarter of 2021 were $420,000.
  • Purchases of direct materials are paid for in the quarter acquired; direct labour costs are paid in the quarter incurred.
  • Overhead expenses are paid in the next quarter.
  • The accounts payable on the balance sheet is for overhead expenses from the last quarter of 2021
  • Selling and administrative expenses are paid in the quarter incurred. The total are $40,000 per quarter, including $10,000 of depreciation.


Refer to the sales budget prepared in Task 1. Construct a cash budget for BulatRimba for the first and second quarter of 2022

Task 1c (CLO2)


To enable learners to utilise the Cost Volume Profit analysis in making informed decisions and cost‐effective actions related to the products or services the business sells.


Cost Volume profit analysis Question

Dalila Manufacturing Berhad (DMB) is suffering from the global economic effects for its main product. The product is sold in supermarkets throughout Malaysia. The following table shows the results of DMB’s operations for 2021.

Sales (12,500 units @ $84)$1,050,000
Variable costs (12,500 units @ $63)787,500
Contribution margin262,500
Fixed costs296,100
Operating profit (loss)($33,600)


  • Compute DMB’s breakeven point in both units and $.
  • What would be the required sales, in units and in $, to generate a pretax profit of $30,000?
  • Assume an income tax rate of 30%, what would be the required sales volume in both units and $.
  • Prepare a contribution income statement showing the pretax and after tax income as per the requirement above.
  • The manager believes that a $60,000 increase in advertising would result in approximately a $200,000 increase in annual sales. If the manager is right, what will the effect on the company’s operating profit or loss?
  • Refer to the original data. The vice president in charge of sales feels that a 10% reduction in price in combination with a $40,000 increase in advertising will cause unit sales to increase by 25%. What effect would this strategy have on operating profit (loss)?


Task 2a: CLO3


To enable learners to use variance analysis for the purpose of benchmarking when evaluating performance and to further control organisational output, efficiency and sustainability.


Standard Costing & Variance Analysis


Muar Fabrics Corporation manufactured 20,000 units of special multilayer fabric with the name Stailoo. The following standard costs were developed for Stailoo:

Direct materials: 6 meter x $2 per meter$12.00
Direct labor:         5 hours x $3 per hour15.00
Variable overhead: 5 hours x $1 per hour5.00
Fixed overhead:      5 hours x $5 per hour25.00
Total standard cost per unit$57.00

The following information is available regarding the company’s operations for the period: Materials purchased                                                                                        130,000 meters at $2.10 per meter

Materials used                                                           110,000 meter

Direct labour                                                               115,000 hours at $3.25 per hour Overhead incurred:

Variable                                                                   $112,500

Fixed                                                                         $440,000

Budgeted fixed overhead for the period is $450,000, and the standard fixed overhead rate is based on the expected capacity of 90,000 direct labour hours. The materials price variance is computed at the time of purchase.


Calculate the following variances and indicate whether they are favourable or unfavourable.

  • Materials price and usage variances
  • Labour rate and efficiency variances
  • Variable overhead spending and efficiency variances
  • Fixed overhead spending and volume variances

Task 2b: CLO4


To enable learners to identify the relevant costs and benefits from costs and revenue information available in the financial database to aid decision making in a timely manner.


Short term decision making


NiceView Company manufactures custom‐made photographic equipment. NiceView received a special order enquiry from a potential client, a company in Kota Bharu, interested in photographic equipment similar to the equipment NiceView made to earlier clients. NiceView submitted a bid of $29,500. The following cost data relate to the bid submitted to the company in Kota Bharu.

Direct Material A$4,500
Direct Material B6,000
Direct Labour  7,500
Manufacturing overhead     5,600
(20% direct labour costs)     $23,600

NiceView adds a 25% profit margin to all jobs, computed on the basis of the total cost. In this client’s case, the profit margin amounted to $5,900 (23,600      25%), producing a bid price of $29,500. Assume that 60% of manufacturing overhead is fixed, and Niceview is currently operating below its normal capacity.


The client offered to buy the equipment for $22,750. Considering that this one time offer could lead to future business with the client, should NiceView accept the client’s offer? Why?

Task 2c: CLO1


To enable learners to utilise financial ratios as a mechanism to evaluate firm’s financial performance and identify areas for making decisions for improvement.


Financial Statement Analysis


The condensed financial statements of the Lavender Companies, Inc. for the years ended June 30, 2021 and 2020 are presented as follow:

Lavender Companies, Inc Balance Sheets

June 30 (in millions)

Current assets  
Cash and cash equivalents$546.9$346.7
Account Receivables (net)624.8580.6
Prepaid expenses and other current assets211.4181.3
Total current assets1,927.61,738.9
Property, plant and equipment (net)580.7528.7
Intangibles and other assets877.9910.2
Total assets$3,416.5$3,218.8
Liabilities and Stockholders’ Equity  
Current liabilities$959.6$856.7
Long‐term liabilities635.0650.0
Stockholders’ equity – common1,821.91,712.1
Total liabilities and stockholders’ equity$3,416.5$3,218.8

Lavender Companies, Inc Income Statements

For the year ended June 30 (in millions)

Cost and expenses  
Cost of goods sold1,273.41,226.4
Selling and administrative expenses3,133.62,947.6
Interest expense17.626.7
Total costs and expenses4,424.64,200.7
Pretax income326.9481.4
Income taxes114.4174.0
Net income$212.5$307.4


Analyse Lavender’s financial statements. Include computation of the following ratios for 2020 and 2021 and comparisons of these ratios in your discussion.

  • Current ratio
  • Inventory turnover (Inventory on June 30 2019 was $546.3)
  • Return on assets (Assets on June 30 2019 were $3,043.3)
  • Return on common stockholders’ equity
  • Debt to total asset ratio

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