Grafton College of Management Sciences

Assignment Brief
BTEC Level 7 Extended Diploma in Strategic Management and Leadership
Module: Managing inancial !rinciples and Techni"ues #$%&'&%%%'7(
Learner )ame: Learner *egistration )um+er:
,nit )um+er: ,nit &-: Managing inancial !rinciples
and Techni"ues
,nit )um+er'Code: D'.%/'/--0
Credit 1alue: &$ credits 2uided Learning 3ours: .%
Assessor'Tutor#s( 4osephine Clar5e 6nternal 1erifier#s( Colm *oche
Assignment 7A Approval Date: /%
th
4une /%&0 Date 6ssued to Learner: /0'%.'/%&0
inal Su+mission Date: %.'%8'/%&0
ormative assessment #progress chec5s( hand in dates9 #&(:-%'%7'/%&0::
$%; of this assessment <ill +e exam +ased9 Exam date: &7'%7'/%&0
,nit Aim
This unit provides the learner with the skills to apply financial principles relevant to strategic management in an
organisational context, including forecasting, capital appraisal, budgeting, financial appraisal and analysis.
,nit introduction
rganisations operate in a very competitive and continually changing environment where effective decision making is
crucial if an organisation is to survive or even be profitable. !n important resource for decision making is financial
information and it is important for managers to be able to interpret, analyse and evaluate this information effectively.
This unit will give learners a foundation in financial principles and techni"ues relevant to the strategic management
process. #t encourages learners to explore the nature of cost$based financial data and information, the impact of the
budgeting process on the organisation, and the development of cost reduction and management procedures and
processes. #t also focuses on the management of these costs through the use of forecasting, appraisal and financial
reporting procedures. ne of the main ob%ectives of this unit is for learners to develop the confidence to apply, analyse
and evaluate financial and cost information.
&earners will develop the ability to %udge the sources, nature, accuracy and completeness of cost$based information
and influence others to make decisions that are based on well$researched options. These important decision$making
skills will be enhanced further through the use and validation of forecasting techni"ues, the consideration of financial
statements and making %udgments on the validity of information sources used in the decision$making process.
&earners will also apply strategies associated with determining sound management information with reference to
sources of funds, the potential investment of resources and the interpretation of financial statements.
&earners will study issues of cost, responsibility and control in the contexts of management accounting and the
management process. This unit gives learners the opportunity to enhance their competency in the construction,
review and evaluation of cost$based financial information, and introduces them to the analysis and control or reduction
of costs in a range of situations.
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Learning outcomes and assessment criteria
In order to pass this unit, the evidence that the learner presents for assessment needs to demonstrate
that they can meet all the learning outcomes for the unit. The assessment criteria determine the
standard required to achieve the unit.
The assessment criteria is a se"uence of steps you will follow to help you achieve the unit assignment.
Learning outcomes Assessment criteria
1. Be able to apply cost concepts to
the decision-making process
1.1 explain the importance of costs in the pricing strategy
of an organisation
1. design a costing system for use !ithin an organisation
1." propose improvements to the
costing and pricing systems used by an organisation
. Be able to apply forecasting
techniques to obtain information
for decision making
.1 apply forecasting techniques to make cost and
revenue decisions in an organisation
. assess the sources of funds available to an
organisation for a specific pro#ect
". Be able to participate in the
budgetary process of an
organi$ation
".1 select appropriate budgetary targets for an
organisation
". participate in the creation of a master budget for an
organisation
"." compare actual expenditure and income to the master
budget of an organisation
".% evaluate budgetary monitoring processes in an
organisation
%. Be able to recommend cost
reduction and management processes
for an organisation
%.1 recommend processes that could manage cost
reduction in an organisation
%. evaluate the potential for the use of activity-based
costing
&. Be able to use financial appraisal
techniques to make strategic
investment decisions for an
organi$ation
&.1 apply financial appraisal methods to analyse
competing investment pro#ects in the public and private
sector
&. make a #ustified strategic investment decision for an
organisation using relevant financial information
&." report on the appropriateness of a strategic
investment decision using information from a post audit
appraisal
'. Be able to interpret financial
statements for planning and decision
making
'.1 analyse financial statements to assess the financial
viability of an organisation
'. apply financial ratios to improve the quality of financial
information in an organisation(s financial
statements
'." make recommendations on the strategic portfolio of an
organisation based on its financial information
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Before =ou get started please read the follo<ing information ver= carefull=9
'roduce a paper that addresses all the tasks in the assignment brief. (ou are encouraged to use diagrams or
tables to illustrate and reinforce your findings. !ny references to academic theory should be correctly cited in$
text and referenced in a bibliography at the end of the report. )please do not copy and paste information*
+ully completed assignment cover page
Title page
Table of contents
#ntroduction
Main body of the report clearly identifying the separate outcomes and assessment criteria
Conclusion and recommendations
,eferences and bibliography
!ppendices only if relevant and necessary
Assignment Content
The assignment brief includes headings relevant to the unit outcomes, read and follow the tasks listed under
each heading and this will make certain that you cover all the outcomes and assessment criteria to achieve the
unit.
Assessment and 2rading
!ll units within the &- Strategic Management and &eadership "ualification are internally assessed. The
"ualifications are criterion referenced, based on the achievement of all the specified learning outcomes. To
achieve a .pass/ a learner must have successfully passed all the assessment criteria.
Assignment Su+mission
!ll assignments must be submitted by the agreed date, via M0&1. !ssignments submitted late, but with
permission, will be marked in the usual way. !ssignments submitted late, without permission, will not be marked
until the end of the year, or the next time the unit is scheduled.
'lease ensure that your assignment is attached to the assignment submission receipt and that you read and
sign the statement confirming authenticity. Check that all relevant fields are completed fully before submission.
Assignment eed+ac5
nce the assessor has marked your assignment, you will receive written feedback, either confirming that you
have met the re"uired standard and grade awarded, or that you have not =et met the standard and what you
need to do to make the necessary improvements. 'lease note that achieved and confirmation of grades is
provisional until signed off by the #nternal 2erifier.
Student 2uide to >riting an Assignment
This is an assignment guide to help support you while completing your 3T1C !ssignments.
#t includes4
!ssignment writing guidance
,eferencing guidance
*ecommended *eading
! reading list will be given to you at the first session unit session.
(ou should also read a good "uality newspaper and5or use relevant internet sites regularly and identify key
influences and recent and relevant research with regard to your sub%ect area. (ou should read topical case
studies and read about national campaigns and government initiatives in your area of interest.
Grafton College of Management Sciences
Assignment Brief
!lease use the headings sho<n +elo< <hen <riting up =our report
Assessment
Criteria
coverage
Assignment Title: Managing inancial !rinciples and Techni"ues
Assignment Description: There are different scenarios provided for each learning outcome and
the learners are expected to demonstrate their kno!ledge and understanding on the tasks
according to the scenario.

Learning Outcome 1: Be able to apply cost concepts to the decision-making process. (1.1
1.! 1."#
Task1
1.1 a) Explain cost centres and cost units.
b) Outline the costs incurred by a school or college and include materials, labour, and
overheads using a diagram
c) Why is it important to analyse costs in different ways, e.g. by element, by function and by
nature?
d) lassify each of the following costs by nature !i.e. fixed, or variable, or semi"variable)#
"raw materials
"factory rent
"telephone
"direct labour, e.g. production wor$ers paid on a piecewor$ basis
"indirect labour e.g. supervisors% salaries
"commission paid to sales staff
&a$ing the costs in turn, explain to a friend, who is about to set up a bicycle manufacturing
business, why you have classified each as fixed, or variable, or semi"variable. 'nswer the
comment, (What difference does it ma$e to my business, they are all types of costs that
have to be paid anyhow.)
e) anyon *anufacturing +imited ma$es furniture for universities in ,reland. &he chairs
have plastic seats, tubular steel legs. &he firm%s management accountant as$s you to help
her classify the manufacturing costs into#
"direct materials
"indirect materials
"direct labour
"indirect labour
"direct expenses
"indirect expenses
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&he costs to be classified are#
Cost Classification (write your answer)
&ubular steel
-actory supervisor%s salary
Wages of employee operating the moulding
*achine which produces the chair seats
Wor$s canteen assistant%s wages
.ates of factory
/ower to operate machines
-actory heating and lighting
0ire of special machinery for one special
order
ost of oil for the moulding machine
1epreciation of factory machine
1epreciation of office e2uipment
1.3 1esign a costing system for use within an organisation. &he following figures relate to the
accounts of 0ughes +imited, a manufacturing business, for the year ended 41 1ecember
3513#
.aw materials used in the factory 116,645
.ent and business rates 17,875
-actory wages 119,41:
-actory power 4,63:
-actory heat and light 1,16:
-actory expenses and maintenance 8,5;:
Office salaries and wages 7;,4:5
'dvertising 11,56:
Office expenses 4,;45
1epreciation of factory plant and machinery 4,93:
<ales revenue 837,4:5
a) /repare a total costs statement for the year which shows#
"/rime cost
"production cost
"total cost
1.4 a)1iscuss any assumptions that you ma$e and state if you need further information from the
company.
b) /repare a profit statement for the year !on the assumption that all goods manufactured have
been sold).
c) =ive detailed explanation of 'bsorption and marginal costing and their benefits. =ive
detailed explanation of '> costing and its benefits.
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Learning Outcome !: Be able to apply $orecasting techni%ues to obtain in$ormation $or
decision making. (!.1 !.!#
Task !
/9& Appl= forecasting techni"ues to o+tain information for decision ma5ing in an
organisation9
Months ,nits Cost #?(
,nits Cost
4anuar= &%@%%% &$@$%%
e+ruar= &$@%%% &.@/--
March &/@7$% &8@&8.
April &-@/.8 &A@&/$
Ma= A@/$. &&@&$A
4une &%@--$ &$@&&7
3igh #e+( B CCCCCC units 3igh cost B ?CCCCCCC
Lo< #Ma=( B CCCCCC units Lo< cost B ?CCCCCCC
Difference B CCCCCCunits Difference B ?CCCCCC
Cost per unit B CCCCC'CCCCCC
B ?CCCCCC
Total cost B ixed cost D varia+le cost per unit E varia+le cost
CCCCCC B 9C D CCCCCC E CCCCC
CCCCCC B 9C D CCCCCCCCC
CCCCCCF CCCCCC B 9C
ixed cost B ?CCCCCCCC
Therefore the forecast cost for the month of 6uly is 777777 units would be 8777777.
&9 Based on a ta+le of total costs and activit= levels@ determine the high and lo< activit= levels9
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+oo$ at the production level and total costs to identify the high and low activity levels. ?eon
ompany%s highest production level occurred in *ay, when the company produced 1,455 units at a
total cost of @137,555. &he lowest production level occurred in Aanuary, when the company produced
Bust 655 units costing @;4,555.
,se the high and lo< activit= levels to compute the varia+le cost per unit9
&o figure out the variable cost per unit, divide the change in total cost by the change in activity#
&9 igure out the total fixed cost9
Total cost B #1aria+le cost per unit x ,nits produced( D Total fixed cost
&he high"low method focuses only on two points# the highest and lowest activity levels. When using
this method, don%t get confused by activity levels between these two points, even if their costs are out
of the bounds of the costs of the highest and lowest activity levels.
2.2 Assess the sources of funds available to an organisation for a specific project such as an
expansion project. You can choose any company and write about them.
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Learning Outcome ": Be able to participate in the budgetary process o$ an organisation.
Task "
".1 &elect appropriate budgetary targets $or an organisation
<uggest the types of budgets prepared in an organisation which can be useful to a company li$e
Craft. Dse the case study from class to assist you in answering this.
.! "valuate budgetary monitoring processes in a company. #sing an organisation with
which you are familiar$
" outline the budgetary control system that is used
"explain how significant variances are identified
&his outcome re2uires an investigation into the budgetary control system used by the
organisation. &he control system might well be lin$ed to a standard costing system. &wo aspects
of the organisation should be investigated#
"the method of identifying variances
"the corrective action that is ta$en !examples could be given of the use of control limits and
management by exception.
Grafton College of Management Sciences
Learning Outcome ': Be able to recommend cost reduction and management processes
$or an organisation. ('.1 '.!#
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Task '
9.: ,ecommend processes that could manage cost reduction in an organisation
9.; 1valuate the potential for the use of activity$based costing and calculate the following
3la<<ers &imited manufactures high "uality training chairs. The manager of the company is
considering next year/s production and has asked you to help with certain financial
decisions.
The following information is available4
=holesale selling price )per pair* 8>?
0irect materials )per pair* 8;>
0irect labour )per pair* 8;;
verheads )fixed* 8;>>,??? per year
The company is planning to manufacture @>,??? pairs of trainers next year.
a) alculate the absorption cost per pair of trainers
b) alculate the marginal cost per pair of trainers
c) alculate the profit statement.
(." Gutline the importance of a post audit appraisal for a compan= <ith specific regards to
investment decisions9 Base this on the exam "uestion from $9&@ $9/ using the figures9
Assessment Criteria
Student )ame:
Learning Gutcomes
To achieve a !ass grade the
evidence must sho< that the learner
is a+le to:
Learning Gutcomes
To achieve a !ass grade the
evidence must sho< that the
learner is a+le to:
1. Be able to apply cost
concepts to the
decision-making
process.
(Learning Outcome 1#
:.: )xplain the importance of costs in
the pricing strategy of an organisation
. Be able to apply
forecasting
techniques to obtain
information for
decision making.
(Learning Outcome !#
;.: *pply forecasting techniques to
obtain information for decision
making in an organisation.
:.; +esign a costing system for use
!ithin an organisation.
;.; *ssess the sources of funds
available to an organisation for a
specific pro#ect
1." +iscuss any assumptions that you
make and state if you need further
information from the company.
". Be able to participate
in the budgetary
process of an
organi$ation.
(Learning Outcome "#
@.: select appropriate budgetary targets
for an organisation
%. Be able to recommend
cost reduction and
management processes
for an organisation.
(Learning Outcome '#
%.1 recommend processes that
could manage cost reduction in an
organisation
@.; participate in the creation of a cash
and master budget for an organisation
%. evaluate the potential for the
use of activity-based costing.
"." ,repare a forecast balance sheet
".% )valuate budgetary monitoring
processes in a company
&.. Be able to use
financial appraisal
techniques to make
strategic investment
decisions for an
organi$ation.
(Learning Outcome (#
&.1 apply financial appraisal methods to
analyse competing investment pro#ects.
'. Be able to interpret
financial
statements for planning
and decision
making.
(Learning Outcome )#
'.1 -alculate appropriate liquidity,
profitability, efficiency and
investment ratios for both .11
and .1
&. make a #ustified strategic
investment decision for an
organisation using relevant financial
information
'. -omment briefly on the
company(s financial performance
for the year to "1 /arch .1
&." report on the appropriateness of a
strategic investment decision using
information from a post audit
*ppraisal
Assessment and 1erification Sign Gff record
StudentsH confirmation of authenticit=9 Sign and Date for 6nterim and inal Assessment
I confirm that this is my own work.
Student Signature4 0ate4
!ssessor Signature4 0ate4
Student Signature4 0ate4
!ssessor Signature4 0ate4
+inal Anit Grade !chieved4 'ass5+ail
1erification of Assessment Gutcomes
Have the learning
outcomes been met?
(es
Bo
Is the evidence?
Sufficient
,eliable
2alid
!uthentic
Is feedback given
to the student?
(es
Bo
Are the overall
assessment decisions
reliable?
(es
Bo
Comments
#nternal 2erifier Signature4
) if sampled*
0ate4
Standards 2erifier Signature4
)if sampled*
0ate4
NB: Please ensure that all student feedback is recorded on the standard GCM form and attached to the assignment brief
before !resenting for internal verification