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BUACC 3714
Semester 1, 2020
DUE DATE AND TIME: Week 10, Sunday 31st May at 5:00 PM
(Online group submission via Moodle)
PERCENTAGE OF FINAL GRADE: 30% of your total marks for this unit.
Assignment Description / Requirements
This is a group assignment. Each group must be completed in a group of 2 to 3 members. It is
students’ responsibility to form/ join a group and to ensure that the group dynamics work.
Please make sure that names and ID numbers of all group members are stated on the cover
sheet of your submission.
The assignment has four parts. All parts have to be submitted to the assignment folder. You
will need to have completed Topics 1 to 4, to complete this part of your assignment.
Students must fully reference the relevant sources of all materials (i.e., textbook, journals,
newspapers, or internet), even if you have re-expressed the ideas, facts or descriptions;
acknowledge all direct quotations; and not submit their work that has been researched and
written by another person. Plagiarism is heavily penalised.
Please monitor Moodle regularly for any further instructions or announcements.
Format of the Assignment:
• Title Page – including group number, student names and student IDs.
• Part A Answer
• Part B Answer
• Part C Answer
• Part D Answer
• References
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Submission Instruction:
This assignment is to be submitted online only. (You are not required to submit a hard copy)
The completed assignment must be submitted into the allocated area on Moodle under the dropbox folder on or before the due date. Only one submission per group is required. i.e. only one
student submits on behalf of all other group members.
Once submitted you cannot take your assignment back but you can submit another version.
The most recent version submitted will be marked.
You must keep a backup copy of every assignment you submit, until the marked assignment
has been returned to you. In the unlikely event that one of your assignments is misplaced, you
will need to submit your backup copy.
Any work you submit may be checked by electronic or other means for the purposes of
detecting collusion and/or plagiarism.
Marking, Dispute Resolution and Free Riders:
The marking will be done for the group as a whole not on individual basis. Each group member
is awarded the same mark.
Working in groups has its pros and cons. It is beneficial that you can learn a lot by discussing
the issues with your fellow students. Invariably different group members bring different skills
to a project; it is up to you to make the best of it. If you find your group members are “not
pulling their weight” or there are problems with any member’s commitment, please try to
resolve those issues amongst yourselves. Open and honest communication always helps.
If you are unable to resolve these issues, you are most welcome to see your lecturer. We will
try to sort out the problems together. Do this as soon as possible and certainly before the due
date. In case of any dispute among the group members or if there are any free riders identified
in the group, members should report to your lecturer in writing.
Assessment Feedback:
Students who submit their work by the due date will receive their marks and feedback on
Moodle within 15 working days of the assignment submission due date.
Penalties for Late Submission:
The marking penalties will apply if you submit an assessment task after the due date without
an approved extension: 5% will be deducted from available marks for each calendar day.
Requests for extension of time must be made with the lecturer concerned and based on Special
Consideration guidelines.
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• There is a discussion area on Moodle titled ‘Assignment discussion Forum’. This area is
for you to discuss the assignment. It is an area for students to help each other.
• The assignment is to comply with the University’s General Guide to Writing and Study
Skills, General Guide to Referencing, and Assignment Layout and Appearance
Guidelines, via the links below:
• Penalties for late submission: The marking penalties will apply if you submit an
assessment task after the due date without an approved extension: 5% will be deducted
from available marks for each calendar day up to five days, and work that is submitted
more than five days after the due date will not be marked. Requests for extension of time
must be made with the lecturer concerned and based on Special Consideration guidelines.
For further information on Discretionary Assessment Extensions and Special
Consideration, including access to the policy, procedures or associated forms, see
• Plagiarism and collusion are forms of cheating and are considered a serious academic
misconduct, and severe penalties are associated with them. Please refer to the university
policy for more information.
• Turnitin: Students are strongly recommended to check originality through Turnitin, prior
to submitting the final assessment. For more information about Turnitin and how to check
for originality, refer to the following useful links:
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This assignment has four parts.
Part A:
Martini Ltd is organised into three divisions: Metro, Regional and Rural. Data for these
divisions for the 2019 financial year end were as follows:

Production and sales in units47,50030,00035,000
Average selling price per unit$25$30$10
Average variable manufacturing cost per unit$8$10$5
Average variable selling cost per unit$4$5$1
Fixed expenses controlled by division managers$250,000$230,000$60,000
Fixed expenses allocated to the divisions$200,000$80,000$110,000
Common fixed expenses $90,000

1. Prepare a profit statement that highlights the performance of the three divisions and the
performance of three divisional managers.
2. Explain why it is important to distinguish between the performance of division
managers and the performance of divisions.
(20 + 5 = 25 marks)
Part B:
Armando Corporation consists of two manufacturing divisions: Crater Division and Dollar
Division. The Crater Division manufactures and transfers partially processed components to
the Dollar Division at a predetermined transfer price. It could also sell these components to
outside buyers at $480 per unit in a perfectly competitive market.
The standard cost per unit in each division is as follows:

Crater DivisionDollar Division
Direct material$90$160
Direct labour$120$110
Manufacturing overhead$450*$360**

*Manufacturing overhead is 50% variable and 50% fixed.
**Manufacturing overhead is 40% variable and 60% fixed.
The Dollar Division can sell the finished product to outsiders at $1,140 per unit.
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1. What the transfer price would you recommend if there was no outside market for the
partially processed component and Crater Division had spare capacity?
Does it matter if Crater Division is identified as a cost centre or a profit centre? Explain
your answer.
2. Assume that the head office has intervened to dictate the transfer price at standard
absorption cost plus a 10% mark up. The Dollar Division has been approached with a
special order for 300 components at $940 each. From the perspective of Armando
Corporation as a whole, should the special order be accepted or rejected? Explain and
show the supporting calculations.
3. Advise whether is desirable for the head office to dictate the transfer price? Explain
your answer.
(10 + 11 + 4 = 25 marks)
Part C:
Essendon company manufactures guidance systems for rockets that are used to launch
commercial satellites. The company’s Software Business Division reported the following data
for the last year:

Sales revenue$1,000,000
Sales returns$60,000
Cost of goods sold$550,000
Operating expenses$300,000
Total assets at year-beginning$900,000
Total assets at year-end$940,000
Total current liabilities at year-beginning$30,000
Total current liabilities at year-end$34,000

The company’s required rate of return is 9 percent.
Additional information:
• The total assets at year-end include a piece of vacant land valued at $240,000. It is
identified as a non-productive asset by the corporate management.
• The divisional manager manages all current liabilities.
• The use of average balances is recommended.
In an attempt to improve its return on investment (ROI), Essendon company is planning to:
• speed-up the collection of all account receivables by $85,000.
• write-off and discard $45,000 of obsolete inventory.
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1. Calculate the Software Business Division’s return on investment (ROI) and residual
income (RI). (Note: Textbook Chapter 13 “Learning objective 13.5-Measuring Profit
and Invested capital” will be a good guide to define profit and invested capital in the
ROI and RI calculations).
2. Explain should the above plans be adopted in order to improve its ROI for Software
Business Division?
3. If profit and sales remain the same in the coming year, but the investment turnover
increases to 0.80, calculate the new ROI?
(14 + 6 + 5 = 25 marks)
Part D:
Corporate social responsibility (CSR) and sustainability are key issues in the current business
environment. According to Martin and Steele (2010 p.13, available on Moodle), “The two
principal professional associations in Australia – CPA Australia (the CPA) and the Institute of
Chartered Accountants in Australia (the Institute) have indicated their awareness of the
significance of issues of sustainability reporting and development of appropriate skill sets in
word and in deed. The commitment of both organisations to sustainability principles has been
shown by their adoption of, and support for, sustainability-focused reporting approaches and
by their opting to take up membership of the Accounting for Sustainability Forum.”
Discuss the stance and initiatives of the Australian accounting profession on corporate social
responsibility and sustainability. In your view, what role can the accounting profession play in
this context? Using at least two academic research articles to support your background
(800-900 words) (25 marks)
Total of 100 marks will be scaled to a mark of 30%.
End of Document

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