FNS50215 Diploma of Accounting - Module 2.3 Assignment

This assignment focuses on providing management accounting information. It contains multiple assessment activities that need to be completed. The assignment covers topics such as budgeted per unit costs, budgeted totals, general journal entries, and job cost system. It is part of the FNSACC507 unit of competency.

FNS50215 Diploma of Accounting
Module 2.3Assignment
Instructions:
 This assignment contains multiple Assessment Activities
 Please complete the Declaration of Authenticity at the bottom of this page
 Save this assignment (e.g. on your desktop)
 To complete the assignment, read the instructions for each question carefully.
 You may be required to refer to your learning materials or other sources to complete
this assessment.
 You are required to type all your responses in the spaces provided
 Once you have completed all parts of the assignment and saved it, login to the
Monarch Institute LMS to submit your assignment for grading
 To submit your assignment click on the file ”SubmitDiploma of AccountingModule 2.3
Assignment” in the Module 2.3section of your course and upload your assignment file.
 Please be sure to click “Continue” after clicking “submit”.This ensures your assessor receives
notification of your submission – very important!
Declaration of Understanding and Authenticity *
I have read and understood the assessment instructions provided to me in the Learning Management System.
I certify that the attached material is my original work. No other person’s work has been used without due
acknowledgement. I understand that the work submitted may be reproduced and/or communicated for the purpose
of detecting plagiarism.
Student Name*: Date:
* I understand that by typing my name or inserting a digital signature into this box that I agree and am bound by the
above student declaration.
Diploma of Accounting - Module 2.3 Assignment 180701 Page 1 of 16

Units Covered: FNSACC507
Important assessment information
Aims of this assessment
This assessment focuses on providing management accounting information.
Marking and feedback
This assignment contains multiple Assessment Activities each containing specific instructions.
You are required to attempt all questions.
This particular assessment forms part of your overall assessment for the following unit(s) of
competency:
 FNSACC507 Provide management accounting information
Grading for this assessment will be deemed “competent” or “not-yet-competent” in line with
specified educational standards under the Australian Qualifications Framework.
What does “competent” mean?
These answers contain relevant and accurate information in response to the question/s with
limited serious errors in fact or application. If incorrect information is contained in an answer, it
must be fundamentally outweighed by the accurate information provided. This will be assessed
against a marking guide provided to assessors for their determination.
What does “not-yet-competent” mean?
This occurs when an assessment does not meet the marking guide standards provided to
assessors. These answers either do not address the question specifically, or are wrong from a
legislative perspective, or are incorrectly applied. Answers that omit to provide a response to any
significant issue (where multiple issues must be addressed in a question) may also be deemed
not-yet-competent. Answers that have faulty reasoning, a poor standard of expression or include
plagiarism may also be deemed not-yet-competent. Please note, additional information regarding
Monarch’s plagiarism policy is contained in the Student Information Guide which can be found
here: http://www.monarch.edu.au/student-info/
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Units Covered: FNSACC507
What happens if you are deemed not-yet-competent?
In the event you do not achieve competency by your assessor on this assessment, you will be
given one more opportunity to re-submit the assessment after consultation with your Trainer/
Assessor. You will know your assessment is deemed ‘not-yet-competent’ if your grade book in the
Monarch LMS says “NYC” after you have received an email from your assessor advising your
assessment has been graded.
Important: It is your responsibility to ensure your assessment resubmission addresses all areas
deemed unsatisfactory by your assessor. Please note, if you are still unsuccessful in meeting
competency after resubmitting your assessment, you will be required to repeat those units.
In the event that you have concerns about the assessment decision then you can refer to our
Complaints & Appeals process also contained within the Student Information Guide.
Expectations from your assessor when answering different types of assessment questions:
Knowledge based questions:
A knowledge based question requires you to clearly identify and cover the key subject matter
areas raised in the question in full as part of the response.
Performance based questions:
A performance based question requires you to clearly demonstrate your ability to complete
certain tasks, that is, to perform these tasks.
Good luck
Finally, good luck with your learning and assessments and remember your trainers are here to
assist you 
Diploma of Accounting - Module 2.3 Assignment 180701 Page 3 of 16

Units Covered: FNSACC507
The following questions are based on the material in the text “Provide Management Accounting Information”
by Colin Davy & Danny Bruce, 7th edition (July, 2015) or 8th edition (January 2018).
Activity instructions to candidates
 This is an open book assessment activity.
 You are required to read this assessment and answer all questions that follow.
 Please type your answers in the spaces provided.
 Please ensure you have read “Important assessment information” at the front of this assessment
 Estimated time for completion of this assessment activity: 2-3 hours
Diploma of Accounting - Module 2.3 Assignment 180701 Page 4 of 16
Assessment Activities
Short Answer and Worked Answer Questions
FNSACC507 Provide management accounting information

Units Covered: FNSACC507
The following questions are based on the material in Chapter 1:
Q1. At a production level of 5,000 units, the budgeted product cost per unit is:
Direct materials $30
Direct labour $10
Fixed factory overhead $6
Variable factory overhead $4
Total $50
Required:
Calculate the following budgeted per unit costs if expected productionis 8,000 units:
(a) Prime cost.
(b) Conversion cost.
Diploma of Accounting - Module 2.3 Assignment 180701 Page 5 of 16
Conversion cost = Direct labour + Manufacturing overhead
Conversion cost = 8,000 x ($10 + $4 + $6) = $160,000
Prime cost = Raw material + Direct labour
Prime cost = 8,000 x ($30 + $10) = $320,000

Units Covered: FNSACC507
Q2. Fletcher Adams has commenced business manufacturing fiberglass sailboards.
His budgeted costs for the current month are as follows:
Fiberglass and resin $12,000
Sailcloth $3,500
Rigging and Fittings $3,000
Production Wages $10,000
Factory Rent $2,500
Variable Factory Overhead $500
Depreciation - Factory Equipment $700
General Office Rent $3,750
General Office Salaries $2,050
Fletcher Adams accounts for all manufacturing costs as product costs.
Required:
Calculate the following budgeted totals for the month:
Your answers:
(a) Prime cost.
(b) Period cost.
Diploma of Accounting - Module 2.3 Assignment 180701 Page 6 of 16
Prime cost = Raw material + Direct labour
Prime cost = $12,000 + $3,500 + $3,000 + $10,000 = $28,500
Period cost = Depreciation + General office rent + General office salaries
Period cost = $700 + $3,750 + $2,050 = $6,500

Units Covered: FNSACC507
(c) Fixed Manufacturing cost.
(d) Variable Manufacturing cost.
Diploma of Accounting - Module 2.3 Assignment 180701 Page 7 of 16
Variable manufacturing cost = Material + Variable factory overhead
Variable manufacturing cost = $12,000 + $3,500 + $3,000 + $500 = $19,000
Fixed manufacturing cost = Production wages + Factory rent + Depreciation + General office
rent and salaries
Fixed manufacturing cost = $12,000 + $3,500 + $3,000 + $500 = $19,000

Units Covered: FNSACC507
The following questions are based on the material in Chapter 2:
Q3.
The Bambi Company commenced operations inDecember and records its operations in a single ledger.
The following information relates to its production for the month:
Raw material purchased on credit (including 10% GST) $22,000
Raw material issued to production $15,000
Raw material issued as factory supplies $2,000
Direct labour charged to production $17,000
Indirect labour $2,000
Factory labour payroll paid (net of PAYG Withheld of $3,000) $16,000
Factory rent paid excluding 10% GST $8,500
Depreciation on factory machinery $7,500
Factory Overhead charged to production $20,000
Cost of Goods Manufactured sent to finished goods store $32,000
Goods sold on credit: Sales price (excluding 10% GST)
Cost price of Goods Sold on credit
$30,000
$22,000
Required:
Prepare the general journal entries to record the above transactions that took place during
December.
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Units Covered: FNSACC507
Your answers Q3:General Journals
General Journal Debit Credit
Raw Material Control 20,000
G.S.T. Paid 2,000
A/c Payable 22,000
Raw material purchased on credit (including 10% GST)
Work in Process 15,000
Raw Material Control 15,000
Raw material issued to production
Factory O/H Control 2,000
Raw Material Control 2,000
Raw material issued as factory supplies
Work in Process 17,000
Labour Control 17,000
Direct labour charged to production
Factory O/H Control 2,000
Labour Control 2,000
Indirect labour
Labour Control 16,000
PAYG Tax Withheld 3,000
Accrued Payroll 13,000
Factory labour payroll accrued
Accrued Payroll 13,000
Bank 13,000
Factory labour payroll paid
Factory O/H Control 8,500
G.S.T. Paid 850
Bank 9,350
Factory rent paid (incl. GST)
Factory O/H Control 7,500
Accumulated Depreciation Machinery 7,500
Depreciation on factory machinery
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Units Covered: FNSACC507
General Journal…continued Debit Credit
Factory O/H Applied 20,000
Factory O/H Control 20,000
Factory Overhead charged to production
Work in Process 20,000
Factory O/H Applied 20,000
Factory Overhead charged to production transferred to
WIP
Finished Goods 32,000
Work in Process 32,000
Cost of Goods Manufactured sent to finished goods store
Accounts Receivable 33,000
Sales 30,000
G.S.T. Collected 3,000
Goods sold on credit (incl. GST)
Cost of Goods Sold 22,000
Finished Goods 22,000
Cost price of Goods Sold on Credit
The following questions are based on the material in Chapter 6:
Q4.The Matham Company is a motor repair company operates a Job Cost System and providesyou
with the following details relating to January.
Balance Brought Forward
Work In Progress
Job No.40 $ 6,500
Job No.41 2,500 $ 9,000
Transactions for the month of January
Raw Material and stores
purchased on credit (excluding
10% GST)
$ 32,000
Raw Material and stores
issued
Job No.40 $ 1,500
Job No.41 500
Job No.42 21,000
Job No.43 6,300 29,300
Indirect 700 $ 30,000
Time sheet summary
Job No.40 $ 1,000
Job No.41 300
Job No.42 11,000
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Units Covered: FNSACC507
Job No.43 2,800 15,100
Indirect 1,900 $ 17,000
Factory Depreciation $ 4,900
• Factory Overhead Recovery Rate – 50% of direct labour cost.
Jobs invoiced to customers
Job No.40 (excluding 10% GST) 9,900
Job No.41 (excluding 10% GST) 3,600 $ 13,500
• Job No.42 was finished during January, but was not delivered by 31 January.
• Job No.43 was in process at the end of January.
Required:
(a) Prepare a Job Card summary for January.
(b) Journal entries to record the transactions that took place during January.
(c) Calculate the Cost of Goods Sold during January and prepare ledger accountsfor Work In
Progress and Finished Goods.
Your answers:
( a ) Job Cost Summary Card
Job No. 40 41 42 43 Total
Opening Balance $6,500 $2,500 $9,000
Input:
Material $1,500 $500 $21,000 $6,300 $29,300
Labour $1,000 $300 $11,000 $2,800 $15,100
Factory O/h
Applied
$500 $250 $5,500 $1,400 $7,650
Total $ $9,500 $3,550 $37,500 $10,500 $61,050
( b ) Journal entries
Journal Entries Debit Credit
Raw Material Control $32,000
G.S.T. Paid $3,200
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Units Covered: FNSACC507
Journal Entries Debit Credit
Accounts Payable $35,200
Raw material & stores purchased on credit (incl. GST)
Work In Process $29,300
Factory Overhead Control $700
Raw Material Control $30,000
Raw Material and stores issued
Work In Process $15,100
Factory Overhead Control $1,900
Labour Control $17,000
Direct & indirect labour
Labour Control $17,000
Accrued Payroll $17,000
Factory payroll accrued
Accrued Payroll $17,000
Bank $17,000
Factory payroll paid
Factory Overhead Control $4,900
Accumulated Depreciation Factory Plant $4,900
Factory depreciation
Factory Overhead Applied $7,650
Factory Overhead Control $7,650
Factory Overhead charged to production
Work In Process $7,650
Factory Overhead Applied $7,650
Factory Overhead Recovery applied (50% of
Direct Labour)
Finished Goods $37,500
Work In Process $37,500
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Units Covered: FNSACC507
Journal Entries Debit Credit
Finished goods moved from WIP to Finished
Goods inventory
Cost of Goods Sold $13,500
Finished Goods $13,500
Cost value of finished goods sold to customers
Accounts Receivable $14,850
Sales $13,500
G.S.T. Collected $1,350
Credit sales of finished goods to customers
(incl. GST)
Factory Overhead Applied $7,650
Cost of Goods Sold $7,650
Factory Overhead overapplied adjusted to
COGS
( c ) Work In Process
Opening Balance $9,000 Finished Goods $13,500
Raw Material Control $32,000
Labour Control $17,000
Factory Overhead Applied $7,650 Closing Balance $52,150
$65,650 $65,650
Finished Goods
Opening Balance $0 Cost of Goods Sold $
Work in Process $37,500 Closing Balance $37,500
$37,500 $37,500
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Units Covered: FNSACC507
The following questions are based on the material in Chapter 7:
Q5. The overhead budget for Hugh Demand Ltd for the year to 30 June 2016 wasestimated on
20,000 direct labour hours.
Using this base, the overhead recovery rate per direct labour hour was determined as:
Fixed costs ($216,000) $10.80
Variable costs $ 8.10
$18.90
Actual results achieved for the year were:
Fixed costs $220,500
Variable costs $170,940
Direct labour hours 21,000 hours
Required:
Calculate the factory overhead spending (budget) variance and capacity(volume) variance.
Specify whether the Spending Variance and the Capacity Variance are Favourable orUnfavourable.
Your answer:
Actual Flexible Budget Applied
$220,500 Fixed $216,000 hrs x $
$170,940 Variable $162,000 20,000 x 8.1
$391,440 $378,000 $13,440
$12,600 $840
Overhead Spending Variance Overhead Capacity Variance
$
Over applied Total Variance 13,440
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Units Covered: FNSACC507
The following questions are based on the material in Chapter 8:
Q6. Traves Company produces one type of machine with the following costs andrevenues for the
year:
Total revenues $4,200,000
Total fixed costs $1,400,000
Total variable costs $2,800,000
Total units produced and sold 700,000 units
Required:
(a) What is the selling price per unit?
(b) What is the variable cost per unit?
(c) What is the contribution margin per unit?
(d) What is the breakeven point in units?
(e) How many units must be sold for Traves to make an operating profit of$1,000,000 for the
year?
Your answers:
(a) What is the selling price per unit?
(b) What is the variable cost per unit?
Diploma of Accounting - Module 2.3 Assignment 180701 Page 15 of 16
Selling price per unit = Total revenues/Total units sold
= $4,200,000/700,000 units = $6
Variable cost per unit = Total variable costs/Total units sold
= $2,800,000/700,000 units = $4

Units Covered: FNSACC507
(c) What is the contribution margin per unit?
(d) What is the breakeven point in units?
(e) How many units must be sold for Traves to make an operating profit of $1,000,000 for the
year?
Diploma of Accounting - Module 2.3 Assignment 180701 Page 16 of 16
Contribution margin per unit = Selling price per unit – Variable cost per unit
= $6 - $4 = $2
Breakeven point in units = Total fixed costs/Contribution margin per unit
= $1,400,000/2 = 700,000 units
Units to earn desired operating profit = (Desired profit + Fixed cost)/Contribution margin per unit
= ($1,000,000 + $1,400,000)/$2 = 1,200,000 units