MARKING SCHEME

Course: Top-up BA in International Business / Accounting and Finance for International Business

Module title: MANAGEMENT ACCOUNTING FOR BUSINESS DECISION

Module code: 384ACC

Coursework

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I/ COURSEWORK DESCRIPTION:

ASSIGNMENTS TOPIC: COST REPOT OF LUKE LTD.

Luke Ltd specializes in custom manufacturing of fine furniture, accessories and decorations.
Headquartered in Ho Chi Minh City, its 100% foreign-owned factory led by British and American
businessmen, and staffed by some of the finest craftsmen and craftswomen working in Vietnam today.
Luke specialize in manufacturing sustainable North American timbers into fine furniture.

Luke works side by side with clients during the pre-production process. The company begin with a
clients raw materials drawings, renderings, and pictures and through close collaboration; the
company develop the clients product in Auto CAD and/or Solid Works 3D renderings. After design
approval, produce a prototype, which can send air freight, or the client may inspect onsite. Finally,
upon client approval, the company run production.

At Luke, uses pair modern machinery and advanced adhesives with time-tested traditional
woodworking techniques. Luke start with superior grades of hardwoods harvested from sustained and
managed forests; dry the timbers in kilns to correct moisture levels; run those timbers through
precision machinery; assemble the product by hand, then package to high standards. The entire process
is monitored by a strict in-house quality control program that begins with the receipt of client order.

Recently Luke Ltd. developed new product line using of latest technology. Its a single product which
passes through 2 departments, Moulding and Finishing.

All work is commenced in Moulding department, from which all output is immediately transferred to
Finishing department. In the Finishing department, materials are added only at 1 point, that is, when
processing is 25% complete.
In the Finishing department, conversion costs are incurred uniformly throughout the process.
Overhead is allocated on the basis of 150% of direct labor cost.

Work in process, 1 Oct (60,000 units, 30% complete), cost of which includes:
Department - Moulding costs $1,200,000
Department - Finishing direct materials $960,000
Department - Finishing direct labor $108,000
Department - Finishing overheads $

During the month of Oct, 210,000 units were completed and transferred to finished goods inventory.
Units transferred in from Moulding in Oct were charged at $22.00 per unit. Finishing departments
costs in Oct were:
Materials added $3,795,000
Direct labor $1,540,000
Overheads $?
At the end of the month, 80,000 units were still in process in Finishing. These were estimated to be
35% complete.
Requirements of the project (1500-2000 words)
You are newly appointed as an Assistant Management Accountant at Luke Ltd. and your Managing
Director assigned you following tasks:
Task 1. Prepare the Finishing Department production cost report for the month of Oct 2014 using
(round up to 2 decimal place)
(i) Weighted Average method
(ii) FIFO method
Task 2. Prepare another cost report with assume that the direct materials costs of Finishing
Department in the current month increased by 18%. What is the new direct materials cost per
equivalent unit and costs of units completed and transferred out using
(i) Weighted Average and
(ii) FIFO method?
Task 3. Explain the concept of non-value-added activities and give an example of such activities to
your Managing Director. Explain to him, why a new product costing system might be required when a
company fails to win a contract bid although the company might have set a low margin for the bid.
When implementing ABC / ABM, explain how human behavior might affect its success or failure.
(Word limit: 500).
MARK ASSESSMENT

Assessment criteria Mark percentage Grade

Format of reports: Task 1 & Task 2 10% 10/100
Task 1: Cost report 30% 30/100
(i) Weighted Average 15% 15/100
(ii) FIFO method 15% 15/100
Task 2: Cost report 30% 30/100
 (i) Weighted Average 15% 15/100
(ii) FIFO method 15% 15/100
Task 3: Non value added activities 20% 20/100
Writing skill in English, references, tables, etc. 10% 10/100
Total 100% 100/100

PLAGIARISM WARNING!!!

Coursework assignments should not be copied in part or in whole from any other source,
except for any clearly marked up quotations. Students found copying from internet or other sources
will get zero marks and may be excluded from the university.

THE END OF COURSEWORK