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日期:2022-04-28 10:42

ACCT2019 Management Accounting

Group Assignment

Semester 1, 2022


Instructions for Parts A & B

Scope: There are two parts in this assignment. Part A is a group assessment and Part B

is an individual assessment. Part A requires students, as a group, to carry out an

analysis of the case study (Gretzky Pty Ltd – described in this document) and

submit an executive report in PowerPoint format. Part B requires each student

to map the Gretzky Pty Ltd case study data in the SAP accounting system and

complete several transactions and reports and submit a document. This

assignment requires students to demonstrate their:

i) Ability to identify and apply relevant management accounting concepts

and techniques to practical business contexts and make recommendations

with a focus on the usage of qualitative and quantitative information.

ii) Specialist SAP software skills by mapping the business scenario in SAP,

determination of relevant master data and transactions, their creation

and/or execution and producing relevant reports from the SAP accounting

system.


Weighting: Part A – Case analysis – Group (15%)

Part B – SAP component – Individual (15%)


Due date: 7th May 2022, Saturday, 11:59 PM AEDT

Submission: Two files should be submitted. One for Part A & one for Part B.

Both files must be saved and submitted in PDF document format.

Please submit in Canvas in the two folders in the ‘Assessment’ section:


i) Part A – Case analysis – Group

ii) Part B – SAP Component – Individual

Your Part A PDF file should include the cover page, PowerPoint report, appendices and the

peer evaluation form.


Hockey Sticks Extraordinaire - Case Study

Composite carbon technology has been used in prosthetics, aerospace, car racing and now in

ice hockey sticks. Manufacturing and structural advances in composite technology have

allowed manufacturers to combine the best properties of wooden and aluminium sticks while

adding innovations that make composite sticks ideal for today’s hockey players.

In the early 1980s, many players, including Wayne Gretzky, the all-time leading scorer in

National Hockey League (NHL) history, experimented with aluminium shafts with wooden

blades. These sticks gained popularity throughout the 80’s and 90’s due to their unmatched

durability, stiffness and stability. The shaft was a rectangular aluminium tubing with a

replaceable wooden blade. Although the aluminium sticks were lighter, stronger and more

durable than wooden sticks, they did not provide players with a “feel” for the puck. This was

the primary reason for their failure.

In the late 1990s, full composite sticks were introduced to the sport. These sticks were made

from graphite fibres bound together by polymer resin, which made them extremely light.

Composite hockey sticks have soared in popularity and are currently used by more than 80%

of players in the NHL. Composite stick technology is ideal because it combines the flexibility

of wood to generate hard shots, the stiffness and stability of aluminium for control and a

lightness that is unmatched by wood or aluminium. The stick is lighter which means quicker

movement and faster release of the puck for passing and shooting.

Upon retirement, Wayne Gretzky and his father Walter Gretzky formed Gretzky Pty Ltd (GPL)

as a manufacturer and supplier of (ice) hockey sticks1. They produce two types of hockey

sticks, The Hull and The Howe. The Hull is sold as a stick that is highly effective for slap

shots, whereas The Howe is more of a finesse shooter’s stick (i.e. it has less power but greater

accuracy). Both products are top-of-the-line and too expensive for non-professional players.

Stick cost is not an issue for a professional hockey player even if they did have to buy them,

which they don’t. Their team would pay for all equipment costs including for sticks.

A quick Google search provides some insights into GPL’s competition and the hockey stick

market.

12 Best Hockey Sticks 2021 Review | Honest Hockey

Best Hockey Sticks 2022 - Top 5 Ice Sticks and Related Info (lifeinhockeywood.com)

Do NHL Players Pay for Sticks? – Getting Started with Hockey (startinghockey.com)

NHL Equipment Brand Stats - GearGeek

NHL Totals (geargeek.com)


1 Canadians never put “ice” before “hockey”. There’s only one kind of hockey in Canada.

And they never refer to “the boards” as ‘the wall’.

Gretzky Pty Ltd sell The Hull and The Howe directly to professional hockey teams. Wayne’s

sales and price forecasts for 2021 are provided in the “Sales and Finished Goods” table below.

This table also provides actual inventory count values at the start of 2021. Production costs

from 2020 for The Hull inventory is $250 per stick while for The Howe, it is $300 per stick.

SALES FORECASTS and FINISHED GOODS VOLUMES - 2021

PRODUCT

Sales

Volume

(units)

Selling

price/unit

Desired ending

inventory (# of

sticks)

Opening inventory

(actual # of sticks)

The Hull 50,000 $500 1,500 2,500

The Howe 85,000 $650 2,000 2,850


DIRECT MATERIALS – STANDARDS and INVENTORY VOLUMES - 2021

Direct material required for

each hockey stick (grams)

Desired

ending

inventory

(grams)

Opening

inventory

(grams) Material Cost per gram The Hull The Howe

Composite wood $0.12 240 250 45,000 22,400

Fibre glass $0.30 150 130 15,000 4,650

Carbon fibre $3.00 10 15 13,000 9,500

Kevlar $2.50 20 35 5,000 4,000


DIRECT LABOUR STANDARDS - 2021

Process The Hull The Howe

Assembly - direct labour hours per batch 2.0 2.5

Finishing - direct labour hours per batch 2.3 2.2

Total processing hours per batch 4.3 4.7


Batch size (# of sticks) 50 36

Direct labour hours per stick 0.086 0.1306

Direct labour cost per hour $45 $45


MANUFACTURING OVERHEAD - 2021

Variable overheads: Budgeted cost ($) Actual costs ($) Costs to be charged to

Indirect labour 540,000 570,000 Maintenance

Supplies 125,000 150,000 Maintenance

Electricity 400,000 420,000 Maintenance

Repairs & maintenance 750,000 760,000 Maintenance

Rates & Insurance 300,000 300,750 Maintenance

Total variable overheads 2,115,000 2,200,750

Fixed overheads:

Rent 2,500,000 2,500,000 Accounting

Depreciation 1,500,000 1,500,000 Accounting

Miscellaneous 750,000 840,000 Accounting

Total fixed overheads 4,750,000 4,840,000

Total overheads 6,865,000 7,040,750

GPL has six departments – Accounting (A###), Maintenance (M###), Sales (S###), Tech.

services (T###) and The Hull (L###) production unit and The Howe (W###) production unit

within their Gretzky cost centre group (GG###), and all of them are classified as service cost

centres in SAP.

The management of GPL (Walter & Wayne) use a traditional volume-based method of

allocating overheads with a predetermined rate based on the number of sticks produced. They

have recently hired your team as their Management Accountants to prepare various

components of their operating budget, cost of goods sold budget and a budgeted income

statement. You have been provided with the following information:

GPL’s actual sales in 2021 were 59,600 sticks for The Hull at an average price of $550 per

stick and 80,900 sticks for The Howe at an average selling price of $675 per stick.

Actual year-end ending inventories were 1,000 sticks and 1,800 sticks of The Hull and The

Howe respectively.

Walter indicates that composite wood was purchased for $0.15 per gram and Kevlar was

purchased at $2.25 per gram. The cost of fibre glass and carbon fibre were $0.22 per gram

and $3.5 per gram respectively.

GPL used 7,900 kilograms (the complete purchase amount) of fibre glass for producing The

Hull, while they bought and used 11,200 kilograms of fibre glass for producing The Howe.

Wayne indicates that they bought and used 525 kilograms of carbon fibre for The Hull and

1,125 kilograms of carbon fibre for The Howe. 14,873.6 kilograms of composite wood were

bought and used for The Hull, whereas 19,164 kilograms were bought and used for The

Howe. For The Hull, 1452.5 kilograms of Kevlar were bought and used, whereas 3,194

kilograms were bought and used for The Howe.

Actual direct labour hours for each The Hull produced was 0.108 hours, while for The Howe

it was 0.125 hours. Total labour cost for The Hull was $875,400 and for The Howe it was

$655,500.

For 2021, the total actual variable manufacturing overhead spent was $ 2,200,750 and total

fixed overhead spent was $4,840,000.

Unfortunately for GPL and other hockey stick manufacturers, stick breakage has been making

the news in hockey circles. Several players have been extremely vocal and demonstrative with

their complaints (see Appendix A).

While professional hockey players do not worry about the cost of their equipment, they are

extremely particular that it functions flawlessly. Sticks breaking at inopportune times can result

in missed goals and games lost. Several of GPL’s major competitors have been emphasising

the durability of their products. Wayne and Walter have been concerned in recent times with

the quality of their sticks.

On the production front, GPL has tried to bring more control over product quality by reducing

GPL’s reliance on labour and increasing the use of computerised manufacturing methods.

Several aspects of production that required manual labour had been automated. GPL has also

been trying to understand the quality of its direct materials. Walter has been talking to various

suppliers that can provide higher quality materials at negotiable prices. Given the current

breakage concerns for The Hull and The Howe, this has been an important concern for the two

Gretzky’s.

Rent expenses were fixed for the year. Based on an invoice submitted by a Real Estate agent

(called ###Realty), monthly payments are made by GPL towards the actual rent. For

administrative purposes, GPL management allocates rent costs to various cost

centres/departments based on the are occupied by each centre/department using an appropriate

method of allocation in their SAP system. Management does not want the identity of this cost

to be shown in the receiving cost centres’ report. The area occupied by The Hull (L###), The

Howe (W###), Maintenance (M###), Accounting (A###), Sales (S###) and Tech. services

(T###) is 450, 350, 200, 100, 300 and 180 square metres respectively.

Management has also noticed the increase in variable overheads. For controlling purposes, it

has decided to allocate 25% of the variable overhead costs to each of The Hull (L###) and The

Howe (W###) production units, 30% to Maintenance (M###), 10% to technology services

(T###) and 5% each for the remaining two cost centres – Accounting (A###) and Sales (S###).

Management would like these costs to be shown in the receiving cost centres’ performance

reports, as it will give an indication of the variable overheads involved in each department and

motivate the departments to reduce the costs. Budgeted variable overheads for the Hull (L###),

the Howe (W###), Maintenance (M###), Accounting (A###), Sales (S###) and Tech. services

(T###) are $500,000, $560,000, $600,000, $100,000, $120,000 and $235,000 respectively.

Except for rent, all other actual overheads (both fixed and variable) as shown in the

‘MANUFACTURING OVERHEAD - 2021’ table, are posted directly into the general ledger

and charged to various cost centres as shown in same the table. In addition, actual direct

material costs and direct labour costs are also posted directly in the general ledger every month

and charged to their respective cost centres, i.e. The Hull (L###) and The Howe (W###). Even

though The Hull (L###) and The Howe (W###) are products, for cost identification and

allocation purposes, they are treated as cost centres in the SAP Accounting system and costs

are charged to them accordingly. All the budgeted costs are also to be posted in SAP as planned

costs.

Management would like to allocate the cost of providing technological service (TS###) by the

Technical services (T###) cost centre to the other departments in the company. In the current

month, T### has provided 200, 300, 190 and 60 hours of service respectively to The Hull

(L###), The Howe (W###), Accounting (A###), Maintenance (M###) and Sales (S###) cost

centres respectively. The total planned activity is 675 hours per month and the service rate is

$150 per hour. It is important for GPL to see these costs mapped in SAP and shown in the SAP

reports for reference for controlling purposes.

You are also provided with the following information with regards to selling and administrative

expenses. Wayne takes care of all the sales and other related activities for the company. He

incurred $2,450,000 of expenses for GPL in 2021. Walter takes care of all administrative duties

(including accounting and maintenance) with $1,715,000 of costs in 2021. They both estimate

increases in these costs for 2022 by 15%. Please note that you are not required to map these

costs ($2,450,000 and $1,715,000) in SAP.

Walter & Wayne want your team to explain any significant sales, expenses and profit variances.

They also want you to conduct a full cost-volume-profit analysis with specific indications on

how the results of this analysis can be used to improve operations.

The Gretzky’s forecast a 10% increase in sales in 2022. Expected inventory levels in 2022 will

be in the same proportion as last year except for the ending inventory of composite wood and

fibre glass which they expect to have 450 and 250 kilograms respectively. Your team notes that

GPL’s direct labour cost per hour would increase by $2 per hour in 2022 and that you are

required to prepare a forecasted budget for the year 2022.

You and your team are required to generate analytical insights in relation to:

- All the variances (for both sales and costs), the potential reasons behind these variances and

what these variances suggest about GPL’s performance.

- The potential issues that might arise from the cost allocation methods currently used at GPL

for allocation of overheads, and the potential improvements to these methods.

Also, in relation to all the quantitative and qualitative analyses undertaken, management would

like you to provide specific and detailed recommendations for improvements.

Based on the information analysed and the calculations your team has provided, you need to

prepare a PowerPoint presentation to report to Walter and Wayne. Your report should contain

the following:

a. Executive summary (1 slide limit only) – provides an overall summary of the case

including background, analysis, major findings and recommendations and limitations (so that

an executive reading the report will have enough detail to attend and participate at a meeting

even if he/she has not read the rest of the report in detail). An executive summary needs to be

thorough, detailed and also succinct.

b. Background – a full description of all the important issues and their background that are

relevant to the case study and your findings.

c. Analysis – provides an overview of all detailed analytical/critical insights generated in light

of the results obtained. Significant calculations should not be included here (do so in the

appendices), with this section referencing the appropriate appendices.

d. Findings – detail and justify all your key findings/discoveries from the analysis (this should

not be a simple repetition/rephrasing of the analysis). Take care to recognise and describe any

assumptions or where additional data may be necessary to further understand the situation.

e. Recommendations – detail and justify your recommendations from the analysis and

findings. For example, your recommendations may include the need for further specific forms

of analysis or research on identified issues. Ensure that your recommendations are

reasonable/justifiable and directly address the case and/or the analyses undertaken above.

f. Action Items (Next Steps) – map out a plan that highlights specific/concrete actions to be

taken in order to implement any proposed changes based on the findings and recommendations

noted. This should not be a simple repetition/rephrasing of the recommendations.

g. Limitations – detail specific limitations from the analyses such as assumptions made, any

missing information, limitations underlying the data, calculations and case study context.

h. Appendices – include all other relevant supporting material such as detailed calculation

work (that has been referenced in the body of the report). There should be no new material or

important material in the appendices.


1. Important note: While your calculations are important, the assignment will be assessed

mainly for its critical analysis, depth and creativity.

2. Report: You are required to prepare your report using PowerPoint. The report must meet

the purpose of providing details for a manager with sufficient time to sit and read the material

(you will not be required to present). The body of the report must not exceed 10 PowerPoint

slides. The executive summary has a limit of one (1) slide only, i.e., the executive summary

and the report together will be a total of 10 slides. Please also include a title slide in PowerPoint

with student names and SIDs (this cover slide will not be counted as one of your 10 slides).

You are encouraged to be detailed but also succinct in your writing style (do not waste space

on stating the obvious or including tedious calculations or including definitions of management

accounting terminologies). Also remember that management would normally require as much

information as would be required to help them make informed decisions, while at the same

time they would not prefer information overload. To reflect this, the slides should be

sufficiently detailed and informative but not be over-crowded with words and/or diagrams;

sufficiently informative dot-points are encouraged. Each slide must be self-explanatory, with

proper headings and sub-headings. Make sure to see the Marking Guide for further details.

3. Appendices: You are encouraged to provide all supporting information (including

calculations) in the appendices. The appendices do not need to be in PowerPoint format – you

may use Word or Excel. The appendices should be no longer than ten (10) A4 pages. Please

attach the appendices at the end of the PowerPoint report.

4. Cover page: Please provide a separate cover page for your assignment submission (with

student names, SIDs and email addresses). Only one submission required per group. Cover

pages can be found in Canvas.

5. Peer evaluation: Each group is required to sign and submit one (1) peer evaluation form

that needs to be attached to their assignment. For example, if you were in a group of three –

members #1 and #2 would jointly decide the contribution of member #3; members #2 and #3

would jointly decide the contribution of member #1; members #1 and #3 would jointly decide

the contribution of member #2. You will not be required to evaluate your own contribution.

Each member should be aiming for 100% contribution. Contributions of 80% and below

warrants investigation by the Unit Coordinator and a potential penalty for all group members,

whether deemed to have contributed or not. In other words, if you have a non-contributing

group member it is your responsibility to get that individual to contribute, and hence this being

a group task – you risk being penalised as well.


Part B: SAP component (Individual)

Your submission should have:

Your SAP User account, i.e., learn-### & student SID in every page header.

A cover page with your name, student ID and learn-### number.

A first page that includes a table of master data elements (G/L accounts, cost centres,

cost elements, activity types, statistical key figures etc.), document numbers or

allocation cycle numbers generated by the system and codes for your allocation cycles.

Appropriate screen shots of: i) display of actual distribution/assessment basic list after

final run with cycle number displayed on screen, ii) direct activity allocation document

display screen with details of cost centres and allocated values clearly shown, and iii)

actual/plan/variance cost centre reports for your cost centre group (GG###) for the

current year and for each of your cost centres for the current year. You can place two

screenshots in each page, and make sure they are visible (you must crop out

unnecessary areas of the screenshots for better visibility).

One single PDF document with pages not exceeding 20 (including cover page) must

be submitted. Penalties apply if the screenshots are illegible or missing, the values are

incorrect, if the submission exceeds the page limit, and if the assignment does not have

identifying information.

Please note that you must first decide which master data, which transactions and which

allocation methods are required to reflect the scenario and determine the reports required.

You should then create relevant master data elements in the system (in client 413) using

the SAP username (learn-###) assigned to you in workshops, perform transactions and

produce reports.

For the assignment, you should use the server M29 and client 413 (a different client)

with your SAP username learn-###. An initial password for the new client 413 will be

communicated through a separate Canvas announcement after the second SAP

workshop.

Hint 1: SAP is a real-time accounting system, so you must use 01.01.2022 to 31.12.2022

for creating all your master data, today’s date for all postings, and current year for all your

allocations and reports. In other words, even though the data (actual and budgted costs) in

this assignment relates to 2021, you must deem them as figures for 2022 (which is the

current real year) for the purpose of mapping in SAP.

Hint 2: Considering the limits on authorisations, complexity of the software, a focus on

user perspective in workshops, and the real-time nature of the accounting system, it is easier

and efficient to create new master data and transactions if mistakes are made, rather than

correcting the errors. Please note, if errors are made either in the creation of master data or

in performing transactions, they CANNOT simply be deleted, and the errors will therefore

carry into the final cost centre reports. Marks are proportionate to correct mapping of the

scenario in SAP including creation of relevant master data, evidence of transactions and

reports, correctness of the methods employed for allocations, and accuracy of the values in

the reports.

Hint 3: For mapping the values and posting transactions in SAP, some of the budgeted and

actual figures are given in the assignment. You are required to calculate other costs based

on the scenario and use them while mapping in SAP.

Table 1 below provides a list of master data codes and Table 2 below provides a list of

generic field values to be used while creating master records and executing transactions in

the SAP system. Failing to use the assigned codes will attract penalties.

Table 1: Master data codes to be used in SAP

Details of master data and

transaction evidence

Master data codes

1 Bank Account 100 ###, 101### etc.

2 A/P Reconciliation account 250###, 251### etc.

3 Expense accounts (possible

twelve account codes to choose

from)

700###, 701##; 710###, 711###; 720###, 721###;

730###, 731###; 750###, 751###; 770###, 771###;

780###, 781###; 790###, 791###; 660###, 661###;

670###, 671###; 680###, 681###; 690###, 691###;

8 Secondary cost elements 810###, 811### etc.

9 Cost centres As indicated in the assignment scenario

10 Cost centre group As indicated in the assignment scenario

11 Assessment cycle A###, A1### etc.

12 Distribution cycle D###, D1### etc.

13 Activity type TS###, TS1### etc.

14 Statistical key figure AR###, AR1###; or EM###, EM1### etc.


Table 2: Generic field values to be used in SAP Master data and transactions


Details of field Field values

Assessment CEle Assessed Costs

AType category – manual entry, manual allocation 1

Activity Unit – Hours HR

Business area BI00

Company code US00

Controlling area /Hierarchy area NA00

Cost centre category H

Country (vendor record) US

Currency USD

Current year 2022

Key fig. cat. (category of statistical key figure) Fixed value or Tot. values (to be

determined)

Payment Terms – Payable immediately due net 0001

Plan version 0

Price Indicator – plan price automatically based on activity 1

Profit centre NA00

Receiver Cost centre group To be determined

Receiver Rule To be determined

Sender Rule Posted amounts

Sorting key (posting date) 001

Stat. Key fig. UnM. (unit measure) M2 (Square metres) or PRS (persons) or

other relevant UnM


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