Unit 5: Management Accounting Semester and Academic Year 2020 - 2021

NATIONAL ECONOMICS UNIVERSITY
INTERNATIONAL SCHOOL OF MANAGEMENT AND ECONOMICS
HIGHER NATIONALS
BTEC HIGHER NATIONAL DIPLOMA IN BUSINESS (RQF)
Unit Code, NumberandTitle H/601/0548 RQF level 4 - Unit 5: Management Accounting
Semester and AcademicYear Semester 1/ Academic year 2020 - 2021
UnitAssessor(s) Nguyen Phuong Hoa / Le Quang Dung
Assignment NumberandTitle MA A2.1: Use of planning tools and management accounting to
respond to financial problems techniques (Assessment 2 of 2)
IssueDate Monday, November 16th 2020
SubmissionDate 10:00 am, Thursday, 10th December 2020
IVName Ho Hoang Lan
IV Date Thursday 12 November 2020
Student name Truong Cong Truong
NEU Student ID 10190333 Pearson ID
Plagiarism is a particular form of cheating. Plagiarism must be avoided at all costs and students who
break the rules, however innocently, may be penalised. It is your responsibility to ensure that you
understand correct referencing practices. As a university level student, you are expected to use
appropriate references throughout and keep carefully detailed notes of all your sources of materialsfor
material you have used in your work, including any material downloaded from the Internet. Please
consult the relevant unit lecturer or your course tutor if you need any further advice.
Student declaration
I certify that the assignment submission is entirely my own work and I fully
understand the consequences of plagiarism. I understand that making a
false declaration is a form of malpractice.
Student(s) name(s) /
Signature Date: 10/12/2020
1

Submission format and Instructions:
This assignment (Assessment 2) covers Learning Outcome 3 & 4 (LO3 and LO4).
 This is an individual assignment.
 The submission format is in the form of a written assignment.
 The assignment should have a cover page that includes the assignment code, number, tittle,
assessors’ names and student’s name and ID. Attach all the pages of assignment brief with your
report and leave them blank for official use.
 Ensure that authenticity declaration has been signed.
 Include a content sheet with a list of all headings and page numbers.
 Plagiarismisunacceptable. Studentsmustciteallsourcesand input
theinformationbyparaphrasing,summarising or usingdirectquotes. A Referral Grade isgiven
whenPlagiarismisidentified in yourwork. There are noexceptions.
 Your evidence/findingsmustbe cited using Harvard Referencing Style. Please refer to
Reference guiding posted on Moodle.
 This assignment should be written in a concise, formal business style using Arial 11 or Times
New Roman 13 font size and 1.5 spacing.
 The word limit is 3,000 words (+/- 10%). If you exceed the word limit (excluding references and
administrative sections) your grade will be penalised.
 YouMUSTcomplete and submit ahardcopyand softcopyof your workon the due datesstated on
Assignment brief. Alllate workis not allowed to submit. Thisruleisnot waived under
anycircumstances.Thesoftcopymust be submitted to Turn-it-in via Moodle; the hardcopyto
Assignment Box, Room 404A, D2 building.
 Read ALL Instructionson thisPage andreviewthe Pass, Meritand Distinction criteria carefully. To
pass the assignment, you must achieve ALL the Pass Criteria outlined in the marking sheet. To
achieve a Merit, you must achieve ALL the Merit criteria (and therefore the Pass criteria). To
achieve a Distinction, you must achieve ALL the Distinction criteria (and therefore the Pass and
Merit criteria).
UnitLearningOutcomes:
LO3 Explain the use of planning tools in management accounting
LO4 Compare ways in which organisations could use management accounting to respond to financial
problems
AssignmentBriefandGuidance:
2

SCENARIO 1:
Ricegreen Ltd. is a joint venture between HauGiang Rice Processing Company Ltd. and Thailand
Food Ltd. Ricegreen’s products are high-quality rice mainly for export. One kg of rice requires 1.2 kg
of paddy. Ricegreen receives the transfer of high technology from its long-lasting parent in Thailand.
Barriers to enter the sector of rice processing are (i) strict standards of importers for food safety and
hygiene and (ii) tariff and import quotas. Hence, the market penetration was difficult until recently
Vietnam signed CPTPP and EVFTA, exports to other countries are easier. Recently, Vietnamese
are more concerned with health and willing to pay more for high-quality rice. This pattern of
consumption is favourable to the sale of Ricegreen products.
Standard costs of Ricegreen for 1 kg of rice are as follows:
Paddy costs: 1.2 kg * $3/kg = $3.6
Direct labour costs: 0.5 labour hours * $4 per hour = $2
Predetermined overhead rate: 50% of prime costs (ie. direct material and labour costs)
Ricegreen applies normal costing to its products. In October 2020, Ricegreen processed and
completed 36 tons of rice. Of which 25 tons were exported to Penny supermarket of Germany
following the contract No. 198 signed on May 30, 2020. 6 tons remained in the warehouse at
October 30, 2020 for sale in November 2020. Actual overheads for October 2020 were reported
then $102,000. The policy of Ricegreen is that the over/under-allocation of overhead should be
counted in the cost of goods sold.
Estimates for the market possibility of rice in 2020 of Ricegreen are below:
Quantity demanded (kg) Selling price ($/kg)
640,000 10
620,000 11
580,000 12
540,000 13
500,000 14
The monthly sales volume in the high season (November-April) is 150% the monthly sales volume of
the low season (May to October). The monthly production volume is 40% of the sales volume of the
next month and 60% of sales volume of the current month.
The performance of Ricegreen in its balance scorecard 2019 is shown in the following table:
Measure Target of
2019
Actual
results
Financial Perspective
Increase profit Profit increase from price $90,000 $75,000
Profit increase from sales
volume
$80,000 $60,000
Customer perspective
Increase market share Market share 10% 8%
Internal businesses
Improve product quality Quality index 99 points 95 points
Inventory time Inventory time 25 days 40 days
Doubtful debts Doubtful debts percentages 5% 6%
Learning and Growth
R&D expenditures R&D expenditures as % of 4% 4.5%
3

operating costs
Required (LO3, Grades: P4, M3, D3):
1. Explain advantages and disadvantages of planning tools (standard costs, standard price,
budgets, balanced scorecard) for Ricegreen.
2. Calculate the cost of the contract No. 198. Calculate the standard cost for 1 kg of rice and
determine the selling price that helps Ricegreen maximize its revenue in 2020.
3. With the sales specified from the requirement 2, prepare the monthly budgets for sales revenue,
production volume, each production resource (raw materials, labour, variable overheads).
4. Now assume in October 2020, actual performance of Ricegreen was as follows: the purchasing
price of paddy: $3.4/kg of paddy, actual labour hour: 0.6 labour hours/kg of rice, other things
were the same as planned. Management accountants of Ricegreen evaluated performance of
Ricegreen in October 2020 and prepared reports to management indicating problems that
Ricegreen might acquire with the high price of paddy materials and inefficiency of processing
workers, then recommended remedies for the next months. Evaluate how planning tools respond
appropriately to solving financial problems to lead Ricegreen to sustainable success.
5. Apply PEST, SWOT and balanced scorecard analysis for Ricegreen Ltd.
SCENARIO 2:
Joining CPTPP provides many export opportunities for Vietnamese products but also raises
competition from imports to Vietnamese producers. This competition may lead to financial
problems of Vietnamese companies such as lower profit (hence lower owners’ capital) and
weaker liquidity (as sales can be more difficult and slow).
Ricegreen Ltd. company (mentioned in details in Scenario 1) is a large processor of rice, and
operating in Vietnam. Traditionally, it has been giving generous credit sales to customers to
compete. To catch the export opportunity to CPTPP and EVFTA members, since the late
2018, the General Director (GD) of Ricegreen has tried to introduce the new kinds of products
and sale patterns to satisfy better foreign customers. Besides, the GD has increased control
over its purchase, storage, receivables and quality of products so as to reduce operating costs
and ensure profit and liquidity. Ricegreen Ltd. established and strictly enforced quality
standards for rice products and paddy materials purchased to control and reduce costs of
quality. The GD also required management accountants to work with technicians to establish
standard costs for raw materials, labour and manufacturing overheads. Operational budgets
were then prepared (and made in details for each month of the year) based on these
standards. The GD also required management accountants to do variance analysis at the end
of month for cost items and revenue and inventory time. If a variance is more than the
threshold, which is specified to be 10% of the standard, management accountants have to
include such variance in the monthly report to the Director to help him recognize and correct in
time. The credit accountants were required to prepare monthly reports about the age of each
customer. Purchases are controlled by signing long-term contracts with farmers to ensure no
supply interruptions and no price fluctuations. Recently, the GD applied the balanced
scorecard for monitoring its strategy. The GD also demands accountants to prepare the annual
report about productivity and product quality but accountants have not been able to provide.
SpaceZ Company is a Vietnamese logistic company. Its strategy is to provide high quality
services and maintain the market share of 5% every year. Being worry about increasing
competition from CPTPP and EVFTA, since the late 2018, the Director of SpaceZ has
increased controls over customer profile, costs, revenue and risks. Budgets have been
stringent and expenditures have been made based on budget items only. The information
system was upgraded to receive and process quickly orders and complaints of customers, and
4

to trace easily the process of each order. Revenue and cost reports are prepared each quarter
by each kind of logistic services to help Director decide on expansion or reduction of a service
line. Standard behaviours are designed and trained for staff. Procedures for risk assessment
before signing logistic contracts were updated and communicated thoroughly to staff to reduce
the adverse selection. Feedbacks of customers are scrutinized by the Director to seek
improvements. Recently, the Director started to order McKinsey Vietnam Ltd. to build Porter’s
five forces so as to analyse its positions and to specify coping measures. The Director
demands SpaceZ accountants to analyse and report about SpaceZ competitiveness each
year, but the accountants have not been able to do such work.
Required (LO4, Grades: P5, M4, D3)
1. Compare how Ricegreen and SpaceZ are adapting management accounting systems to
respond to financial problems. Based on scenarios of Ricegreen and SpaceZ, indicate
characteristics of an effective management accountant? Finance problem, accoungting
system.
2. Analyse how in responding to financial problems, management accounting can lead
Ricegreen and SpaceZ to sustainable success.
3. Evaluate how planning tools for accounting respond appropriately to solving financial
problems to lead Ricegreen and SpaceZ to sustainable success.
Learning Outcomes and Assessment Criteria
LearningO
utcome Pass Achieved
(ticked) Merit Achieved
(ticked) Distinction Achieved
(ticked)
LO3 Explain
the use of
planning
tools in
management
accounting
P4 Explain
advantages and
disadvantages of
different types of
planning tools
used for
budgetary control
M3 Analyse the
use of different
planning tools
and their
application for
preparing and
forecasting
budgets
D2 Evaluate how
planning tools for
accounting
respond
appropriately to
solving financial
problems to lead
organisations to
sustainable
success
LO 4
Compare
ways in
which
organisations
could use
management
accounting to
respond to
financial
problems
P5 Compare how
organisations are
adapting
management
accounting
systems to
respond to
financial problems
M4 Analyse
how in
responding to
financial
problems,
management
accounting can
lead
organisations to
sustainable
success
D3 Evaluate how
planning tools for
accounting
respond
appropriately to
solving financial
problems to lead
organisations to
sustainable
success
5

Formative Feedback: Assessor to Student (please specific)
Action Plan
Summative Feedback: Assessor to Student (please specific)
Choose
One
(*)
The Student Is Awarded:
ReferralPASS Grade MERIT Grade DISTINCTION Grade
Name Of Assessor: Date Of Assessment:
Re-submission Feedback:
Choose One
(*)
The Student Is Awarded A:
ReferralPASS Grade
6