UK COLLEGE

BUSINESS AND COMPUTING

Module Booklet

Course: EDEXCEL BTEC (HND) BUSINESS

Group: Edexcel Level 4

Module: Unit 9 Management Accounting: Costing and Budgeting

Module type: Optional
Module Code: R/601/0836
Module Credit: 15
Teaching Period: (15+6 weeks)
Level: 4 (QCF)
Contact Hours: (15*3+ 6*3 = 63)
Lecturers: 15 weeks
Revision Clinic and assignment guidance: 3 week
Feedback and assessment: 3 weeks
Module Leader: Mrs Sunita Kotta
Lecturer: Solomon Odegbesan
Start date: 1/07/2015
Day:Tuesday
Time: 6pm - 9pm
Campus: WH
Term: Summer Term

CONTENTS

1. INTRODUCTION, AIMS AND OBJECTIVES

2. MODULE OUTLINE AND TEACHING METHODS

3. READING AND COURSE PREPRATION

4. LECTURE WITH DETAILED COURSE PROGRAMME AND OBJECTIVES

5. ASSESSMENT DETAILS

1. INTRODUCTION
Organisations operate in a very competitive and continually changing
environment where effective decision making is crucial if an organisation is to
survive or even be profitable. An important resource for decision making is
financial information and it is important for managers to be able to interpret,
analyse and evaluate this information effectively. This unit will give learners a
foundation in management accounting and techniques relevant to the strategic
management process. It encourages learners to explore the nature of cost-based
financial data and information, the impact of the budgeting process on the
organisation, and the development of cost reduction and management
procedures and processes. It also focuses on the management of these costs
through the use of forecasting, appraisal and financial reporting procedures.
One of the main objectives of this unit is for learners to develop the confidence
to apply, analyse and evaluate management and cost information.
The aim of this unit is to provide learners with the understanding and ability to
use,Cost information for budgeting and forecasting purposes in the
management of business.
This unit looks at the cost information, both current and future, of businesses.
It looks at how cost data is collected, compiled and analysed, and processed into
information that is useful for business managers. Learners will have the
opportunity to apply these principles to practice. The unit then deals with
budgetary planning and control. It looks at how to prepare forecasts and
budgets and to compare these to actual business results. Learners will again
have practical experience of this. Finally, the unit considers different costing and
budgetary systems and the causes of resulting variances, together with the
possible implications and the corrective action the business will need to take.
Learners will develop the ability to judge the sources, nature, accuracy and
completeness of cost-based information and influence others to make decisions
that are based on well-researched options. These important decision-making
skills will be enhanced further through the use and validation of forecasting
techniques, the consideration of financial statements and making judgements on
the validity of information sources used in the decision-making process.
Learners will also apply strategies associated with determining sound
management information with reference to sources of funds, the potential
investment of resources and the interpretation of financial statements.
Learners will study issues of cost, responsibility and control in the contexts of
management accounting and the management process. This unit gives learners

the opportunity to enhance their competency in the construction, review and

evaluation of cost-based financial information, and introduces them to the
analysis and control or reduction of costs in a range of situations.
Aim:
This unit will give learners a foundation in management accounting and
techniques relevant to the strategic management process. It encourages learners
to explore the nature of cost-based financial data and information, the impact of
the budgeting process on the organization, and the development of cost
reduction and management procedures and processes. It also focuses on the
management of these costs through the use of forecasting, appraisal and
financial reporting procedures.
This unit looks at the cost information, both current and future, of businesses.
It looks at how cost data is collected, compiled and analysed, and processed into
information that is useful for business managers. Learners will have the
opportunity to apply these principles to practice. The unit then deals with
budgetary planning and control. It looks at how to prepare forecasts and
budgets and to compare these to actual business results. Learners will again
have practical experience of this.
Finally, the unit considers different costing and budgetary systems and the
causes of resulting variances, together with the possible implications and the
corrective action the business will need to take.
Key Objectives: One of the main objectives of this unit is for learners to
develop the confidence to apply, analyse and evaluate management and cost
information.

This unit provides the learner with the skills to apply

management accounting techniques relevant to operations management in an

organisational context, including forecasting, capital appraisal, budgeting, cost
control and analysis.

Explain the nature and role of management accounting

Identify the main users of cost and management accounting information

and discuss the needs

Distinguish between financial and management accounting
Explain why an understanding of finance is likely to be relevant to ones

needs
Understand the accounting conventions
Make decision on the use of capacity, using knowledge of the

relationship between fixed and variable costs.

Discuss the purpose of costing techniques.

Learning Outcomes and assessment criteria:

On successful completion of this unit a learner will:
Be able to analyse cost information within a business
Be able to propose methods to reduce costs and enhance value within a
business
Be able to prepare forecasts and budgets for a business
Be able to monitor performance against budgets within a business.
Knowledge and Understanding:
Differentiate between management accounting, cost accounting and
financial accounting
List and describe each of the factors involved in decision making,
planning and control process
Justify the view that, broadly, firms seek to maximize the present value of
future net cash inflows
Explain the factors that have influenced the changes in competitive
environment
Outline the key success factors that directly affect customer satisfaction
Describe the functions of management accounting system
Indicative content:
1. Be able to analyse cost information within a business
Types of costs and classification: materials; labour; overheads; direct and indirect;
fixed; variable and semi-variable Costing methods: job costing; batch costing;
process costing; contract costing; service costing Cost measurement: absorption
and marginal costing; traditional overhead absorption and activity-based
costing; stock valuation methods (FIFO, LIFO, AVCO, standard costing) Costing
as basis for pricing and stock valuation: cost plus pricing; market pricing; target
costing Data collection and analysis: sampling methods and purpose; presentation
of data eg tabular, diagrammatical, graphical; index number
2. Be able to propose methods to reduce costs and enhance value within a
business
Cost reports: preparation; comparison with other data; explanation and
implication of
Variances Performance indicators: monitor and assess to identify potential
improvements Quality and value: definitions and interaction; added value; total
quality management
3. Be able to prepare forecasts and budgets for a business
The budgeting process: purpose; benefits; links with organisational
objectives/strategy; the budget manual; budgets as planning, coordinating,
motivation and control devices
Budget preparation: limiting or key factors; master, subsidiary and functional
budgets; cash budgets; the preparation of sales budget, debtors budgets,

creditors budgets, production costs, raw materials and finished goods budgets
Budgeting methods: incremental; zero-based; fixed and flexible Behavioural
consequences of budgets: padding the budget; spending to budget; creative
budgets
4 Be able to monitor performance against budgets within a business
Variances: types; analysis; calculation; possible causes; corrective action
Reporting: operating statement; reconciliation of budgeted and actual results
Responsibility centres: relevance to budgeting; identification of responsibility for
variances

Programme Specification
Accrediting Body: EDEXCEL
Course: BTEC HND IN BUSINESS
Unit: 9 MANAGEMENT ACCOUNTING
Wk

Lecture Schedule

Outcome of session
Learners will be able to;

Introduction to the module. Importance of Management

Accounting and reflection of the learning outcomes

Introduction to the module,

mode of assessment,
awareness of the awarding
body, assessment criteria
and the mode of assessment
Classify different types of
cost

Types of costs and classification

Accounting for materials

Value stock using FIFO,

LIFO and AVCO.

Accounting for labour and overheads

Remuneration methods and

calculation.
Overhead allocation,
apportionment and
absorption, Traditional
absorption costing.

Accounting for overheads

Activity/seminar
and formative
assessment
Background of the
expectations for the
awarding body
Examples and
problems
addressing learning
outcome 1.1

Resources

Examples and
problems
addressing learning
outcome 1.3
Examples and
problems
addressing learning
outcome 1.3

Power point slides ,

study notes and
whiteboard

Examples and
problems

Power point slides ,

study notes and

Module handbook.
Power point slides ,
study notes and
whiteboard

Power point slides ,

study notes and
whiteboard

addressing learning
outcome 1.3
Examples and
problems
addressing learning
outcome 1.2 and
1.3

whiteboard

Costing methods and techniques

Prepare costing using job,

batch, process, contract and
service.
Calculate cost using
absorption and marginal
costing techniques

Power point slides ,

study notes and
whiteboard

Pricing

Target costing, market

pricing and cost-plus
pricing.

Examples and
problems
addressing learning
outcome 1.4

Power point slides ,

study notes and
whiteboard

Quality and value

Presentation of information

Define and explain the

interaction between quality
and cost.
Use different sampling
methods and understand
their purpose.
Present data in tabular,
diagrammatical, graphical
and index numbers

Examples and
problems
addressing learning
outcome 1.4, 2.3

Power point slides ,

study notes and
whiteboard

Cost reports and performance indicators

Prepare cost reports,

monitor and assess
performance.

Case study and

addressing the
learning outcome

Power point slides ,

study notes and
whiteboard

Budgeting process

Explain the purpose,

objectives and strategy for
budgeting.

10

Budget preparation

11

Budgeting methods and behavioural consequences of

budgets

12

Standard costing and variance analysis

Prepare sales budget,

debtors budget, creditors
budget, production, raw
material and finished goods
budget.
Explain the purpose and
nature of the budgeting
process, spending to budget
and creative budgets.
Analyse, calculate and
explain possible causes.

13

Variance reports

14

Revision

15

Revision

16

Progress review and assignment writing workshop

Prepare and reconcile

budgeted and actual results

2.1 & 2.2

Examples and
problems
addressing learning
outcome 3.1
Examples and
problems
addressing learning
outcome 3.2 & 3.3
Examples and
problems
addressing learning
outcome 3.3 & 3.4
Examples and
problems
addressing learning
outcome 4.1
Examples and
problems
addressing learning
outcome 4.2 & 4.3

Power point slides ,

study notes and
whiteboard
Power point slides ,
study notes and
whiteboard

Power point slides ,

study notes and
whiteboard
Power point slides ,
study notes and
whiteboard
Power point slides ,
study notes and
whiteboard

17
18
19
20

August 2014 assignment support and revision

Deadline for assignment submission
Feedback
Feedback

Recommended text and links:

Core Text: Peter Atrill - Introduction to Management accounting: Costing and Budgeting
Colin Dury Management Accounting
Brammer J and Penning A Managing Costs and Resources (Osborne Books, 2007)
ISBN: 1872962440
Jones M Accounting for Non-Specialists (Wiley, 2008) ISBN: 0471495727
Journals and newspapers
The financial and mainstream press can be a useful source of information, both in terms of data for case studies and background understanding.
Videos
A variety of videos is available covering financial topics.
Websites
www.aat.co.uk The Association of Accounting Technicians
www.accountingtechnician.co.uk Accounting Technician magazine
www.bized.ac.uk provides case studies appropriate for educational purposes
www.iasb.org.uk International Accounting Standards Board

Wk
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15

Session Update

Date

Signature

Module Leader: Mrs Sunita Kotta

Campus:
Wentworth House and Lords House
Contact details: wodegbesan@yahoo.com
Assessment:
The module will be assessed meeting all the LO as specified by the awarding body, Ed Excel.
Please read the instructions carefully while addressing the tasks specified.
Contribution: 100% of the module
Outline Details: Individual report approx 4000 words. Details enclosed in the assignment brief.
Teaching and Learning Activities: The module tutor(s) will aim to combine lectures with tutorial activities. This environment will provide
opportunities for the student to understand the course material through case study and text and to apply it in a practical way. The intent is to
facilitate interactive class activities, and discussion about the significant role of research in a global and local business environment.
2.3 Teaching Ethos: The colleges approach towards teaching and learning is simple and effective. The main aim of UKCBC is to assist learners in
maximising their potential by ensuring that they are taught clearly and effectively. This will enable students to engage in the learning
environment and promote success in both their academic studies and subsequent career.
2.3.1 Methods of Delivery:
LECTURES:
These will be developed around the key concepts as mentioned in the indicative course content and will use a range of live examples and cases
from business practice to demonstrate the application of theoretical concepts. This method is primarily used to identify and explain key aspects
of the subject so that learners can utilise their private study time more effectively.
SEMINARS:
These are in addition to the lectures. The seminars are designed to give learners the opportunity to test their understanding of the material
covered in the lectures and private study with the help of reference books. This methodology usually carries a set of questions identified in
advance. Seminars are interactive sessions led by the learners. This method of study gives the learner an excellent opportunity to clarify any
points of difficulty with the tutor and simultaneously develop their oral communication skills.
CASE STUDIES: An important learning methodology is the extensive use of case studies. They enable learners to apply the concepts that they
learn in their subjects. The learners have to study the case, analyse the facts presented and arrive at conclusions and recommendations. This
assists in the assessment of the learners ability to apply to the real world the tools and techniques of analysis which they have learnt. The case
study serves as a supplement to the theoretical knowledge imparted through the course work.

Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and awarding bodies regulations. In this context the definition and
scope of plagiarism are presented below:
Plagiarism is presenting someones work as your won. It includes copying information directly from the web or books without referencing the
material; submitting joint coursework as an individual effort; copying another students coursework; stealing coursework form another student
and submitting it as your own work. Suspected plagiarism will be investigated and if found to have occurred will be dealt with according to the
college procedure. (For further details please refer to the plagiarism policy and the student code of conduct.)
Assessment:
The module will be assessed meeting all the LO as specified by the awarding body, Ed Excel.
Please read the instructions carefully while addressing the tasks specified.
Contribution: 100% of the module
Outline Details: Individual report approx 4000 words. Details enclosed in the assignment brief

ASSESSEMENT
Unit: 9 MANAGEMENT ACCOUNTING : COSTING AND BUDGETING
Learning Hours: 60 Hours.
Self-learning hours: 90 hours.
Course: HND Business Level 4
CREDIT VALUE: 15 CREDITS
Term:
Module Leader: Mrs Sunita Kotta
Internal Verifier: Mr Dalton Vincent
Lecturer: Solomon Odegbesan
Learners Name
Registration Number
Learners Declaration: I certify that the work submitted for this unit is my own:
Signed:
Hand out Date:
Submission Date:
The Following Sections to be completed by the assessor:
Center Name:
UKCBC
Center Number:
Please note that the assessors signature below denotes conformation that he/she
has in no way influenced the outcome of the assessment:
Assessors Name:
Assessors Signature:
Has the unit been Internally Verified?
Date of verification:
Internal verifiers signature:
Internal verifiers assignment brief:

Due Dates
Issue Date
Due Task- 1
Due Task- 2
Due Task- 3
Due Task - 4

Final Due Date

15/7/15
28/7/15
18/10/15
16/11/15

Y/N

15th week
04/12/15

Unit Outcomes
14

Outcome

Evidence for the criteria to

pass.

Assessors
decision

Internal
verification
decision.
(agree,
disagree)

TASK 1
You are required to carry out a research by using supportive materials like books,
websites, etc., and give a feedback of the findings on P1.1, P1.2,1.3, 1.4, The answers
need to be reflected to the CASE STUDY chosen for this task.
P1. Be able to
P1.1
P1.1
P1.1- Classify the different
analyze cost
(P,M,D)
(P,M,D)
types of cost. How are the
information within costs classified in the case
the business of
study?
Buccaneers Ltd
P1.2
P1.2- What are the different P1.2
(P,M,D)
(P,M,D)
costing methods. Identify
and explain the costing
method used by the org.
P1.3
P1.3
P1.3- How is the cost
(P,M,D)
calculated, using appropriate (P,M,D)
techniques. What is the
costing technique used by
the org to calculate its costs
P1.4
P1.4
P1.4- Analyze the cost data
(P,M,D)
(P,M,D)
of the org focusing on the
technique used for the
purpose.
Summarized
Feedback for Task
1(reflecting 1.1, 1.2,
1.3, 1.4, Pass merit
and distinction.)
IV comments
towards
Task 1

15

TASK 2
Choose a case study or an organization of your choice and present before the class
on your findings with the help of PowerPoint presentation, followed by a word
report not exceeding 1000 words. You are required to carry out a research by using
supportive materials like books, websites, etc., and give a feedback of the findings on
P2.1, P2.2, 2.3.
P2. Be able to
P2.1-How are the costs
propose methods to reports prepared and
P2.1
P2.1
reduce costs and
(P,M,D)
(P,M,D)
analyzed.
enhance value
P2.2
P2.2
P2.2- What are the various
within the
(P,M,D)
performance indicators used (P,M,D)
business
by the org to identify its
potential improvements.
P2.3
P2.3
P2.3 If you were their
(P,M,D)
(P,M,D)
Management accountant
what would you suggest to
the org to reduce its costs,
enhance value and quality?
Summarized
Feedback for Task
2(reflecting 2.1, 2.2,
2.3, 2.4, Pass merit
and distinction.)
IV comments
towards
Task 2
TASK 3
You are required to carry out a research by using supportive materials like books,
websites, etc., and give a feedback of the findings on P3.1, P3.2, P3.3, and P3.4. The
answers need to be reflected to the CASE STUDY chosen for this task. The case study
will be given to you at the start of Task 3 session.
TASK 3
P3.1
P3.1
P3.1- Explain the purpose
P3. Be able to
(P,M,D)
(P,M,D)
and nature of the budgeting
prepare forecasts
process adopted.
and budgets for a
P3.2
P3.2
P3.2- What is the budgeting
business
(P,M,D)
(P,M,D)
method used and reflect its
needs. Comment with your
advice and suggestions.

16

P3.3- How is the budget

prepared, what is the
method used for this
purpose. Comment with the
budgeting statement
published in the report.
P3.4 Illustrate the cash
budget and comment on its
findings.

P3.3
(P,M,D)

P3.3
(P,M,D)

P3.4
(P,M,D)

P3.4
(P,M,D)

Summarized
Feedback for Task
3(reflecting 3.1, 3.2,
3.3, 3.4, Pass merit
and distinction.)
IV comments
towards
Task 3
TASK 4
You are required to carry out a research by using supportive materials like books,
websites, etc., and give a feedback of the findings on P4.1, P4.2, P4.3, and P4.4. The
answers need to be reflected to the CASE STUDY chosen for this task. The case study
will be given to you at the start of Task 4 session
TASK 4
P4.1
P4.1
P4.1 How are the variances
P4. Be able to
(P,M,D)
calculated? Identify possible (P,M,D)
monitor
causes and recommend
performance
corrective action.
against budgets
P4.2
P4.2
P4.2 Reflect the operating
within the
(P,M,D)
(P,M,D)
statement and how it is
business.
reconciled with the budget
and actual result. Comment
on a few findings analyzing
the budget and the actual.
P4.3
P4.3 Comment on the report P4.3
(P,M,D)
(P,M,D)
findings and address as
instructed.
Summarized
Feedback for Task
4(reflecting 4.1, 4.2,
4.3, Pass merit and
distinction.)
17

IV comments
towards
Task 4
Merit grades
M1
awarded
Distinction
D1
grades awarded
Any other comments

M2
D2

Grade given by the Assessor:

Pass
Merit
Assessors Signature:
IV Grading Check:
Agree
Disagree
IV signature:
Date:
Students feedback:

M3

P1
D3

P2

P3

P4

Resubmit :

Distinction
Date:
Comments if any:
Modify grade to

Student Signature:
Date:
Plagiarism:
Any act of plagiarism will be seriously dealt with according to the colleges and
awarding bodies regulations. In this context the definition and scope of plagiarism
are presented below:
Plagiarism is presenting someones work as your won. It includes copying
information directly from the web or books without referencing the material;
submitting joint coursework as an individual effort; copying another students
coursework; stealing coursework form another student and submitting it as your own
work. Suspected plagiarism will be investigated and if found to have occurred will be
dealt with according to the college procedure. (For further details please refer to the
plagiarism policy and the student code of conduct.)

18

ASSIGNMENT
TASK 1 to TASK 4: You are required to follow the instructions as specified
towards each task and support with a research by using supportive materials like
books, websites, etc., and give a feedback on the findings by relating your
arguments to the relevant case studies as specified towards each task:
Task 1
Address the case study for the purpose (soft copy on e-learning) and answer
the following (approx 1000 words)
P1. The student should be able to analyze cost information within the business of
the chosen case study.
P1.1 Classify the different types of cost. How are the costs classified for
Buccaneers Ltd?
P1.2 What are the different costing methods? Identify and explain the costing
method used for the case study.
P1.3 - How is the cost calculated, using appropriate techniques? What is the
costing technique used to calculate its costs
P1.4 - Analyze the cost data focusing on the technique used for the purpose and
address the following for the information given below:
a. Allocate and apportion overheads to the three production departments
b. Deduce overhead recovery rates for each department using two different
bases for each department overheads.
c. Calculate the full cost of a job with the following characteristics for the
information in the case study:
Direct Labour hours:
Forming department
4 hours
Machining department 4 hours
Finishing department
1 hour
Machine Hours:
19

Forming department
1 hour
Machining department 2 hours
Finishing department
1 hour
Direct Materials:
Forming department
40
Machining department 9
Finishing department
4
Use whichever of the two bases of overhead recovery, deduced in (b) that you
consider the more appropriate.
d. Explain why you consider the basis used in (c) to be the more appropriate.

Case study for the purpose:

The manufacturing costs for Buccaneers Ltd for next year are expected to be as
follows:
000
Direct Material:
Forming department
Machining department
Finishing department

450
100
50

Direct Labour:
Forming department
Machining department
Finishing department

180
120
75

Indirect Materials:
Forming department
Machining department
Finishing department
Administration department

40
30
10
10

Indirect Labour:
Forming department
Machining department
Finishing department
Administration department

80
70
60
60

Maintenance costs:
Rent and rates

50
100
20

Heating and lighting

Building insurance
Machinery insurance
Depreciation of machinery

20
10
10
120

Total manufacturing costs

1,645

The following additional information is available:

i)
All direct labour is paid 6 an hour for all hours worked.
ii)
The administration department renders personnel and general services
to the production departments.
iii)
The area of the premises in which the business manufactures amounts
to 50,000 sq m, divided as follows:
Sq m
Forming department
20,000
Machining department
15,000
Finishing department
10,000
Administration department
5,000
iv)
The maintenance employees are expected to divide their time between
the production departments as follows:
%
Forming department
15
Machining department
75
Finishing department
10
v)
The machine hours are expected to be as follows:
Hours
Forming department
5,000
Machining department
15,000
Finishing department
5,000

Task 2
Choose a case study or an organization of your choice and present before the
class on your findings with the help of PowerPoint presentation, followed by a
word report and answer the following (approx 1000 words)
P2. . Be able to propose methods to reduce costs and enhance value within the
business
P2.1 How are the costs reports prepared and analyzed?
P2.2- What are the various performance indicators used to identify its potential
improvements
21

P2.3- If you were their Management accountant what would you suggest to
reduce its costs, enhance value and quality?
TASK 3
Address the case study for the purpose (soft copy on e-learning) and answer
the following (approx 1000 words)
P3. Be able to prepare budgets for the case study
P3.1- Explain the purpose and nature of the budgeting process adopted
P3.2- What is the budgeting method used for the case study and reflect its needs.
Comment with your advice and suggestions
P3.3- How is the budget prepared, what is the method used for this purpose.
Comment with the budgeting statement for the chosen case study.
P3.4 For the chosen case study of Antonio ltd draw up the following for the six
months ending 31 December:
i)
A raw materials inventories budget, showing both physical quantities
and financial values.
ii)
Trade payables budget.
iii)
A cash budget.
iv)
The cash budget reveals a potential cash deficiency during October and
November. Can you suggest any ways in which a modification of plans
could overcome this problem?
Case study to address task 3:
Antonio Ltd has planned production and sales for the next nine months as
follows:
Months
Production in units
Sales in Units
May
350
350
June
400
400
July
500
400
August
600
500
September
600
600
October
700
650
November
750
700
December
750
800
January
750
750
During the period, the business plans to advertise in order to generate these
increases in sales. Payments for advertising of 1,000 and 1,500 will be made in
July and October respectively.

22

The selling price per unit will be 20 throughout the period. Forty % of sales are
normally made on two months credit. The other 60% are settled within the
month of the sale.
Raw materials will be held for one month before they are taken into production.
Purchases of raw materials will be on one month credit (buy one month, pay the
next). The cost of raw materials is 8 per unit of production.
Other direct production expenses, including labour, are 6 per unit of
production. These will be paid in the month concerned.
Various production overheads, which during the period to 30th June had run at
1,800 a month, are expected to rise to 2000 each month from 1st July to 31st
October. These are expected to raise again from 1st November to 2,400 a month
and to remain at that level for the foreseeable future. These overheads include a
steady 400 each month for depreciation. Overheads are planned to be paid 80%
in the month of production and 20% in the following month.
To help to meet the planned increased production, a new item of plant will be
bought and delivered in august. The cost of this item is 6,600; the contract with
the supplier will specify that this will be paid in three equal amounts in
September, October and November.
Raw materials inventories are planned to be 500 units on 1st July. The balance at
the bank on the same day is planned to be 7,500.

TASK 4
Address the case study for the purpose (soft copy on e-learning) and answer
the following (approx 1000 words)
P4. Be able to monitor performance against budgets for the chosen case study.
P4.1 - How are the variances calculated?
P4.2 Reflect the operating statement to deduce the budgeted profit for may and
reconcile it, through variances with the actual profit in as much detail as the
information provided will allow.
P4.3 Comment with the report findings and state which manager should be held
accountable, in the first instance, for each variance calculated. Assuming that the
standards were all well set in terms of labour times and rates and materials
usage and price, suggest at least one feasible reason for each of the variances that
you identified for above, given what you know about the business performance
for may. If it were discovered that the actual total world market demand for the
business product was 10% lower that estimated when the may budget was set,
23

explain how and why the variances what you identified in the above could be
revised to provide that would be potentially more useful.

Case study for the purpose:

Toscanini Ltd makes a standards product, which is budgeted to sell at 4/ unit, in

a competitive market. It is made by taking a budgeted 0.4 kg of material,
budgeted to cost 2.40, and working on it by hand by an employee, paid a
budgeted 8/hour, for a budgeted 6 minutes. Monthly fixed overheads are
budgeted at 4, 800. The output for May was budgeted at 4000 units.
The actual results for May were as follows:

Sales revenue (3,500 units)

13,820
Materials (1,425 kg)
(3,420)
Labour (345 hours)
(2,690)
Fixed overheads
(4,900)
Actual operating profit
2,810
No inventories of any description existed at the beginning and end of the month.
Address 4.1, 4.2, 4.3 with the relevant information.

Assignment Guidelines:
Use a standard report structure, Word-process the report and use Normal script
of a proper font size 12.
Produce an academic report, detailing the above issues with an approx word
limit of 4000 to 4500 words.
Complete the title page and sign the statement of authenticity.
The Assignment sheet should be attached in the front.
Submit the document in a folder in the form of a file as well as a soft copy on the
submission date.
It should be uploaded on E-Learning platform before the deadline and submitted
to -------- and sign the submission form of the college.
Assignments submitted after the deadline will not be accepted unless mitigating
and may be entitled for a late fee.
Collusion and Plagiarism must be avoided.
Start each answer on a new page and pages should be numbered. Highlight each
question clearly.
Include a Bibliography at the end of the assignment and use the Harvard
referencing system.
All work should be comprehensively referenced and all sources must be fully
acknowledged, such as books and journals, websites (include the date of visit),
etc.
Try to give the page numbers, publishers' details and the year of publication

24

 In order to pass you need to address all the LO

In order to get a merit you need to address the characteristics of M1, M2,M3
In order to get a Distinction you need to address the characteristics of D1, D2 and
D3.
Use a common format for the questions, for example:
Introduction (analyze the question.)
Underpinning Knowledge (write about the relevant theory/points)
Applied knowledge(Data Analysis)
Conclusions and Recommendations (summarizing the whole scenario keeping in
view pass, merit, distinction criteria.)

Student feedback form with the Assessment Grid indicating their pass, merit
and distinction:
Name:
Registration
Number:
Unit: Management accounting
Outcomes/criteria:
Indicative characteristics
Possible
Feedback
evidence
P1. Be able to analyze
As per the assessment
Task 1
cost information within
criteria specified for pass
the business
P2. Be able to propose
Do
methods to reduce costs
Task 2
and enhance value
within the business
Do
P3. Be able to prepare
Task 3
forecasts and budgets for
a business
P4. . Be able to monitor
Do
performance against
Task 4
budgets within the
business .
Merit Description:
M. Identify and apply
strategies to find
appropriate solutions.

. Relevant theories and

techniques have been
applied.

25

M2. Select/ design and

apply appropriate
methods/ techniques.

M3. Present and

communicate appropriate
findings.

Distinction Description:
D1. Use critical reflection
to evaluate own work and
justify valid conclusion.

. Effective judgments have

been made.
. Complex problems with
more than one variable
have been explored.
. An effective approach to
study and research has
been used.
. A range of methods and
techniques has been
applied.
. A range of sources of
information used.
. The selection of methods
and techniques justified.
. Complex
information/data have
been synthesized and
processed.
.Appropriate learning
methods/ techniques
applied.
. Appropriate structure and
approach has been used.
. Logical and coherent
arguments have been
presented
. Technical language
accurately used.
. A range of methods of
presentation has been used.
. Familiar and unfamiliar
contexts have been used.
. It is appropriate for
familiar and unfamiliar
audiences.
. Synthesis has been used to
generate and justify valid
conclusions
26

D2. Take responsibility for

managing and organizing
activities.

D3. Demonstrate
convergent, lateral and
creative thinking

. The validity of results has

been judged
. Self-criticism of approach
has taken place.
. Evaluation has taken place
using defined criteria
. Realistic improvements
have been proposed against
defined characteristics for
success.
Autonomy/independence
demonstrated
Substantial
activities/projects or
investigations have been
planned, managed and
organized.
The unforeseen has been
accommodated.
The importance of
interdependence has been
recognized.
Ideas generate and
decisions taken
Convergent and lateral
thinking have been applied
Capacity for innovation
and creative thought has
been used.
Receptiveness to new ideas
has demonstrated.
Unfamiliar contexts have
been applied.

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