BUACC5933 Cost and Management Accounting Group Assignment Semester 1

Cost and Management Accounting

Semester 1, 2026

Group Assignment

Due Date and Time: Week 10, Sunday 24 May 2026, 5:00 PM
Submission: Online group submission via Moodle
Weighting: 25% of final grade (scaled from 50 marks)

Assignment Description and Requirements

• This is a group assignment for groups of 2–3 members. Students are responsible for forming groups and ensuring effective collaboration. Include names and student ID numbers of all members on the cover sheet.
• The assignment consists of three parts and requires an Excel spreadsheet for calculations and a Word report for written responses. Both files must be submitted.
• All sources must be fully referenced using Federation University’s Harvard referencing guidelines. Plagiarism is a serious academic offence.
• Monitor Moodle for updates or announcements.

Submission Instructions

Submit online only via the Moodle Assignment Dropbox. Only one submission per group is required. You will receive email confirmation of submission. Keep backup copies of your work. Work may be checked for collusion or plagiarism using Turnitin or similar tools.

Marking and Group Issues

The entire group receives the same mark. Resolve internal issues promptly through discussion. If unresolved, contact the lecturer in writing before the due date, providing evidence of free-riding or disputes.

Assignment Tasks

Part A (30 marks)

Horizon Furniture Pty Ltd produces two models of office desks: Executive and Standard. The company currently allocates manufacturing overhead using a single plant-wide rate of $100 per machine hour.

Production data:

Activity cost driver data:

Total overhead costs: $8,000,000, categorised as:

• Machine setups: $2,400,000
• Machine processing: $4,800,000
• Product shipping: $800,000

Required:

1. Calculate the unit manufacturing cost for Executive and Standard desks using the current overhead allocation method.
2. Calculate the unit manufacturing cost for both products using activity-based costing. Present calculations in a clear Excel spreadsheet.
3. Determine whether the Standard desk cost is distorted under the traditional method and quantify the per-unit distortion.
4. The current selling price of the Standard desk is $320. Marketing proposes a $35 discount to boost volume. Advise whether this is recommended, with supporting calculations.
5. Discuss the statement: “Traditional volume-based costing will always distort product costs.”

Part B (10 marks)

The owner of Horizon Furniture Pty Ltd is considering a new supplier offering significantly lower material costs for timber components. Initial quality reports indicate the material may be slightly inferior, with isolated customer complaints about stability in similar products elsewhere. The supplier argues that any refund or compensation costs would still yield higher overall profit.

Advise the owner on the appropriate decision regarding this supplier, supporting your response with reference to relevant professional guidelines or cases. (500–600 words)

Part C (10 marks)

Prepare a proposal for Vega Distributors, a wholesale supplier of electrical goods, on the potential benefits and costs of adopting activity-based costing to assess customer profitability. Vega currently uses traditional absorption costing. Customers range from large retail chains (few large orders) to small independent stores (frequent small orders).

1. Suggest appropriate cost pools and activity drivers, explaining your choices.
2. Discuss benefits and implementation costs of ABC, supported by at least two academic sources published 2018–2026. (700–800 words total for Part C)

Total: 50 marks (scaled to 25% of course grade)

Sample Response Excerpt (Part B)

Management accountants must prioritise ethical standards over short-term profit gains. Accepting lower-quality materials risks customer safety and long-term brand damage, even if incidents remain minor. The potential for recalls, legal claims, and reputational harm often exceeds immediate savings. Professional bodies emphasise integrity and credibility in decision-making. For instance, the IMA Statement of Ethical Professional Practice requires members to mitigate credible threats to compliance with standards and disclose known risks (Institute of Management Accountants, 2023). Prioritising profit over safety violates these principles and exposes the company to unsustainable risks.

Suggested References (Harvard style)

• Drury, C. (2021) Management and Cost Accounting. 11th edn. Cengage Learning EMEA.
• Horngren, C.T., Datar, S.M. and Rajan, M.V. (2020) Cost Accounting: A Managerial Emphasis. 17th global edn. Pearson. https://www.pearson.com
• Albers, M. and Augustin, F. (2022) ‘Activity-based costing in the digital era: opportunities and challenges’, Journal of Management Accounting Research, 34(1), pp. 45–67. https://doi.org/10.2308/JMAR-2021-012
• Institute of Management Accountants (2023) IMA Statement of Ethical Professional Practice. Available at: https://www.imanet.org/ethics-center/statement (Accessed: 8 February 2026).
• Tsai, W.H., Shen, Y.S. and Yang, C.C. (2020) ‘An empirical investigation of activity-based costing implementation’, Total Quality Management & Business Excellence, 31(9–10), pp. 1035–1053. https://doi.org/10.1080/14783363.2018.1487623