AFM112 Assignment One 2011
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Transcript of AFM112 Assignment One 2011
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Lana RoelandtsAFM112 Assignment 1 2011220032777ExternalAFM112 Assignment One
Question One
Four ethical standards that are part of the Australian Society of Certified Practising Accountants’ Code of Professional Conduct are included in APES 110 Code of Ethics for Professional Accountants. These include Integrity, Objectivity, Confidentiality and Professional Behaviour.
i) IntegrityIntegrity requires the accountant to be straightforward and honest in all professional and business relationships.
This means that the accountant shall not knowingly produce financial information that is misleading, or withhold information, where doing so would indeed be misleading.
ii) ObjectivityObjectivity requires the accountant to remain objective with regards to professional matters, and not allow their judgment to become impaired due to issues such as conflicts of interest, bias or influences from those around them.
iii) ConfidentialityConfidentiality requires the accountant to desist from divulging confidential information obtained through the provision of professional services, to a third party outside of the firm, unless there is a professional or legal right or obligation to do so.
Third parties to the accountant include business associates, family members of the accountant and prospective clients.
Confidentiality also requires the accountant to refrain from disclosing confidential information after termination/ending of the relationship between the accountant and the client.
iv) Professional BehaviourProfessional behaviour requires the accountant to observe appropriate laws and regulations, and to abstain from actions that have the ability to damage the reputation of the accounting profession.
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Lana RoelandtsAFM112 Assignment 1 2011220032777ExternalQuestion 2
Car – Toyota Prius
Research and Development- Toyota has been progressing in the development of hybrid cars which are more fuel efficient and economically sustainable. This is a valuable aspect because, as a consumer I am now more aware of environmental impacts (e.g. global warming) and Toyota has enabled the reduction of greenhouse gas emissions.
Design of Products, Services or Processes- -The convenience of Bluetooth connectivity for mobile phones is a valuable aspect of the product as it increases safety when talking on the phone as it is a hands-free service.-MP3 connectivity is valuable because it allows for the connection of MP3 players to the stereo system of the car, therefore increasing efficiency and providing a more spacious interior, due to not requiring storage for CDs.
Marketing- The ability to test drive the car prior to purchasing is a valuable aspect of the product because it provides the opportunity for the consumer to ‘get a feel for the car’ and determine whether they would like to proceed with the purchase.-Television promotion is also a valuable aspect as it creates consumer awareness of the product and its capabilities.
Customer Service- provision of a manufacturer’s warranty after purchase ensures that if the car is faulty, the problem will be rectified. This is valuable because it ensures that consumers are still considered after the initial purchase.- Provision of a free car servicing for the first service is sometimes provided. This is
valuable because consumers are saving money on their first service.
E-Toll
Design- Convenience and efficiency in design. Valuable because the consumer does not have to stop and pay the toll.- The design of different tags for different consumers’ needs is another important aspect,
as it allows for flexibility from consumers, which is valuable when making purchase decisions.
Production- Fast production time of e-toll tag for consumers is valuable because it ensures consumers will be able to use the product straight away.- Ability to order duplicates of the e-toll tag when required also ensures flexibility and convenience for consumers.
Distribution- application for e-toll is available over the phone, online and in person at the RTA. This caters for a wide range of people, particularly older people who may not have access to a computer. This convenience is valuable, because it also cuts waiting times at an RTA branch if opting to pay over the internet, making it more efficient.
Customer Service- Customer service and help providers are available over the phone, making it more convenient as customers don’t have to go to the local RTA branch.- The ability to top up your e-toll account online is also a very convenient and efficient
tool bringing value to customers.
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Question 3
Armidale Aluminium Company
Schedule of Cost of Goods Manufactured
For the year ended 31 December 2011 (in thousands)
Direct materials:
Beginning inventory, 1 January 2011 $120 000
Purchases of direct materials 500 000
Cost of Direct materials available for use 620 000
Ending inventory, 31 December 2011 140 000
Direct materials used 480 000
Direct manufacturing labour 800 000
Manufacturing overhead costs:
Indirect materials 20 000
Indirect labour 50 000
Depreciation on Plant and Equipment 200 000
Electricity 50 000
Other 60 000
Total manufacturing overhead costs 1 180 000
Manufacturing costs incurred during 2011 1 660 000 Beginning work-in-process inventory, 1 January 2011 240 000
Total manufacturing costs to account for 1 900 000 Ending work-in-process inventory, 31 December 2011 230 000
Cost of goods manufactured 1 670 000
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Armidale Aluminium Company
Schedule of Cost of Goods Sold
For the year ended 31 December 2011
Cost of goods sold:
Beginning finished goods inventory, 1 January 2011 $300 000
Cost of goods manufactured 1 670 000
Cost of goods available for sale 1 970 000
Ending finished goods inventory, 31 December 2011 330 000
Cost of goods sold 1 640 000
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Armidale Aluminium Company
Income Statement
For the year ended 31 December 2011
Revenues 2 210 000
Cost of goods sold:
Beginning finished goods inventory, 1 January 2011 $300 000
Cost of goods manufactured 1 670 000
Cost of goods available for sale 1 970 000
Ending finished goods inventory, 31 December 2011 330 000
Cost of goods sold 1 640 000
Gross profit 570 000
Operating Costs:
Selling and administrative expenses 220 000
Total operating costs 220 000
Gross Operating income 350 000
Tax 140 000
Net Operating Income 210 000
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Lana RoelandtsAFM112 Assignment 1 2011220032777ExternalQuestion 4
a) Option 1
(SP-VC) = Contribution Margin per unit
= (30 -18) = 12
Therefore, contribution margin per unit is 12.
Break-even point in units = fixed costs Contribution margin per unit
= 15 000 12
=1250
Therefore, the break-even point in units is 1250 units.
Contribution margin percentage = contribution margin per unitSelling price
= 12 30
= 40 % or 0.4
Break-even revenue = ________fixed costs_________Contribution margin percentage
= _______15 000______0.4
= 37 500
Therefore, break-even revenue is $37 500.
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Lana RoelandtsAFM112 Assignment 1 2011220032777External
Option 2
((SP-VC)-(SP x R%) = Contribution margin per unit
= ((30-18)-(30 x 0.1))
= (12 – 3)
= 9
Therefore, contribution margin per unit is 9.
Break-even point per unit = _______fixed costs_______Contribution margin per unit
= 9000 9
= 1000
Therefore, break-even point per unit = 1000 units.
Contribution margin percentage = contribution margin per unit Selling price
= __9__ 30
= 30% or 0.3
Break-even revenue = _________fixed costs_______Contribution margin percentage
= 9000 0.3
= 30 000
Therefore, break-even revenue is $30 000.
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Lana RoelandtsAFM112 Assignment 1 2011220032777External
Option 3
((SP-VC)-(SP x 0.2)) = contribution margin per unit
= ((30-18)-(30 x 0.2))
= (12 – 6)
= 6
Therefore, contribution margin per unit is 6.
Break-even point per unit = ______fixed costs_____Contribution margin per unit
= 4800 6
= 800
Therefore, break-even point per unit is 800 units.
Contribution margin percentage = contribution margin per unitSelling price
= _6__ 30
= 20% or 0.2
Break-even revenue = ________fixed costs__________Contribution margin percentage
= 4800 0.2
= 24 000
Therefore, break-even revenue is $24 000.
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b) For Option 1 and 2
15 000 = 9000 + 3A
3A= revenue + 10%
15 000 – 9 000 = 3A
15 000 – 9 000 = 6000
6 000 / 0.1 = $60 000
60 000/30 =2000 units
For Option 1 and 3
15 000 = 4800 + 3B
3B = revenue + 20%
15 000 – 4800 = 3B
15 000 – 4800 = 10 200
10 200/ 0.2 = 51 000
51 000/30 =1700 units
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References
Accounting Professional and Ethical Standards Board – APES110 – Code of Ethics for Professional Accountantshttp://apesb.org.au/attachments/APES%20110%20Code%20of%20Ethics%20for%20Professional%20Accountants%20December%202010%20-%20Final.pdf
Last accessed 18/08/2011