London Churchill College

ASSESSMENT FRONT SHEET

Programme: BTEC Higher National Diploma (HND) in
Business
Unit Number: Unit 9
Unit Title: Management Accounting: Costing and Budgeting
Unit code: R/601/0836
QCF Level: 4
Tutor Name: Sabrina Akbar
Email: sabrina.akbar@londonchurchillcollege.ac.uk

Learners name and statement of authenticity

Learners Name: .. Learners ID: Date handed-in:

I certify that the work submitted for this assignment is my own. Where the work of
others has been used to support my work then credit has been acknowledged.

Signature: . Date:

Key dates

Distribution date: 24/04/2017

Submission date:04/07/2017
Return date: 4 weeks after submission

Introduction
The aim of this unit is to provide learners with the understanding and ability to use
cost information for budgeting and forecasting purposes in the management of
business. This unit looks at the cost information, both current and future, of
businesses. It looks at how cost data is collected, compiled and analyzed, and
processed into information that is useful for business managers. Learners will have
the opportunity to apply these principles to practice.

The unit then deals with budgetary planning and control. It looks at how to prepare
forecasts and budgets and to compare these to actual business results. Learners will
again have practical experience of this. Finally, the unit considers different costing
and budgetary systems and the causes of resulting variances, together with the
possible implications and the corrective action the business will need to take.

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Learning outcomes

On successful completion of this unit a learner will:

LO1. Be able to analyze cost information within a business

LO2. Be able to propose methods to reduce costs and enhance value within a
business

LO3. Be able to prepare forecasts and budgets for a business

LO4. Be able to monitor performance against budgets within a business.

ASSIGNMENT REQUIREMENT:
Learners are encouraged to use a range of companys data to prepare the
following calculations:

LO01

Case 1
Classify different types of cost based on the following company information
Sparky Ltd is a business that employs a number of electricians. The business
undertakes range of work for its customers, from replacing fuses to installing
complete wiring Systems in new houses. In respect of a particular job done by Sparky
Ltd, into which category (direct or Indirect) would each of the following cost elements
fall.
The wages of the electrician who did the job;
Depreciation of the tools used by the electrician;
The salary of Sparky Ltds accountant;
The cost of cable and other materials used on the job;
Rent of the premises where Sparky Ltd stores its inventories
(Learners have to show knowledge of: Types of costs and classification: materials;
labor; overheads; direct and indirect; fixed; variable and semi-variable)

1.1 Classify different types of cost

1.2 Use different costing methods

(Use different costing methods applied in your chosen production/Manufacturing

company. You are required to support your assessment criteria with by

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defining the job costing; batch costing; process costing; contract costing and service
costing)

1.3 Calculate costs using appropriate techniques

(Calculate cost using FIFO, LIFO, AVCO method from the given company data from
case 2)
Case 2
Bike LTD purchased 10 bikes during January and sold 6 bikes, details of which are as
follows:
January 1 Purchased 5 bikes @ $50 each
January 5 Sold 2 bikes
January 10 Sold 1 bike
January 15 Purchased 5 bikes @ 70 each
January 25 Sold 3 bikes
1.4Analyze cost data using appropriate techniques
(Comment on it that how the costing technique effects the income statement and
balance sheet of that company. Calculate the closing stock on the basis of different
costing methods and then comment on the effectiveness of each method.
Costing as basis for pricing and stock valuation: cost plus pricing; marketpricing;
target costing; Data collection and analysis: sampling methods and purpose;
presentation of data e.g. tabular, diagrammatical, graphical; index numbers.
LO02
2.1 Prepare and analyze routine cost reports.
(Create a cost report from data. Cost reports: preparation; comparison with other
data; explanation and implication of variances)
2.2 Use performance indicators to identify potential improvements.
(Performance indicators: monitor and assess to identify potential improvements)
2.3 Suggest improvements to reduce costs, enhance value and quality.
(Quality and value: definitions and interaction; added value; total quality
management)
LO03
3.1 Explain the purpose and nature of the budgeting process
(The budgeting process: purpose; benefits; links with organizational
objectives/strategy; the budget manual; budgets as planning, coordinating,

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motivation and control devices)

3.2 Select appropriate budgeting methods for the organization and its needs
Budgeting methods: incremental; zero-based; fixed and flexible

3.3 Prepare budgets according to the chosen budgeting method from Case-3
(Budget preparation: limiting or key factors; master, subsidiary and functional
budgets; cash budgets; the preparation of sales budget, debtors budgets, creditors
budgets, production costs, raw materials and finished goods budget)
3.4 Prepare a cash budget.
(Prepare a cash budget from the class exercise) Behavioral consequences of budgets:
padding the budget; spending to budget; creative budgets.

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Case - 3

The XYZ company produces three products, X, Y, and Z. For the coming accounting period
budgets
are to be prepared using the following information:
Budgeted sales
Product X 2000 units at $100 each
Product Y 4000 units at $130 each
Product Z 3000 units at $150 each
Standard usage of raw material

Wood (kg per unit) Varnish (litres per unit)

Product X 5 2

Product Y 3 2

Product Z 2 1

Standard cost of raw material $8 $4

Inventories of finished goods

X Y Z

Opening 600u 1000u 800u

Closing 500u 800u 700u

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LO04
Case 4
A company has prepared the following standard cost card:
$ per unit
Materials (4 kg at $4.50 per kg) 18
Labour (5 hrs at $5 per hr) 25
Variable overheads (5 hrs at $2 per hr) 10
Fixed overheads (5 hrs at $3 per hr) 15
Total $68

Budgeted selling price $75 per unit.

Budgeted production 8,700 units

Budgeted sales 8,000 units

There is no opening inventory

The actual results are as follows:
Sales: 8,400 units for
Production: 8,900 units with the following costs:

Materials (35,464 kg) 163,455

Labour (Paid 45,400hrs; worked 44,100 hrs)
224,515
Variable overheads 87,348
Fixed overheads 134,074

4.1 Calculate variances, identify possible causes and recommend corrective action.
(What is Variances in budget? Calculate Variances in your budget: types; analysis;
calculation; possible causes; corrective action)
4.2 Prepare an operating statement reconciling budgeted and actual results
(Reporting: operating statement; reconciliation of budgeted and actual results. show
calculation)
4.3 Report findings to management in accordance with identified responsibility
centers.
(Write a letter to the management identifying the Responsibility centers of variances:
relevance to budgeting; identification of responsibility for variances.)

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In addition to the above PASS criteria, this assignment gives you the opportunity to submit evidence in order to
achieve the following MERIT and DISTINCTION grades
Grade Descriptor Indicative characteristic/s Contextualization
M1 Effective judgments have been
Identify and apply strategies to made
To achieve M1, you need to Identify and
find appropriate solutions Complex problems with more than
apply strategies for various
one variable have been explored
performance indicators.
An effective approach to study and
research has been applied.
M2 Relevant theories and techniques
Select / design and apply have been applied
appropriate methods / techniques A range of methods and techniques
have been applied
A range of source information has
been used
To achieve M2, you need to Design &
The selection of methods and
apply appropriate methods of
techniques/sources has been
budgeting for with correct formats and
justified
techniques for your company data.
The design of methods/techniques
has been justified
Complex information/data has been
synthesized and processed
Appropriate learning
methods/techniques have been
applied.
M3 Communication is appropriate for familiar To achieve M3, you need to Present and
Present and communicate and unfamiliar audiences and appropriate communicate appropriate findings in
appropriate findings media have been used. the Management report letter providing
coherent, logical development of
principles/concepts for the intended
audience.
D1 Conclusions have been arrived at To achieve D1, you need tocritically
Use critical reflection to evaluate through synthesis of ideas and evaluate various cost measurements
own work and justify valid have been justified technique in your chosen
production/Manufacturing company.
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conclusions The validity of results has been

evaluated using defined criteria
Self-criticism of approach has taken
place Realistic improvements have
D2 Autonomy/independence has been
Take responsibility for managing demonstrated To achieve D2 you will need to take
and organizing activities Substantial activities, projects or responsibility for managing and
investigations have been planned, organizing activities throughout the
managed and organized assignment. Provide appropriate table
Activities have been managed of content, proper referencing and
The unforeseen has been demonstrate an effective approach to
accommodated independent research.
The importance of interdependence
has been recognized and achieved.
D3 Ideas have been generated and
Demonstrate convergent /lateral / decisions taken
creative thinking Self-evaluation has taken place
Convergent and lateral thinking has
been applied To achieve D3 you are required to
Problems have been solved Demonstrate creative thinking in your
Innovation and creative through suggestion of cost reduction and justify
throughout the proposed steps.
Receptiveness to new ideas is
evident
Effective thinking has taken place in
unfamiliar contexts.

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Assignment submission instructions

1. Go to the following website: www.turnitinuk.com

2. Click on Create an Account
3. At the bottom of the page you will find a list: Students, Instructor, and
Teaching assistant. Click on Student
4. On the new page you will have to provide this information:
Class ID
Class enrolment password
Your first name
Your last name
Email address
Your password (it must be 6-12 characters long and contain at least one
letter and one number)
Select a secret question and write down your answer

5. Click on I agree Create Profile

6. Done.
a. You are now registered and can enrol into other classes. In order to do
that, click on Enrol in a class. Enter Class ID and Enrolment password
for that subject.
7. Please make sure you download and attach an assignment cover page from
the e-learning. Cover page can be found under Instructions tab of the
student area (e-learning).

If you still have any questions or need any help, please visit our Academic office.

Achievement of a pass, merit and distinction grade

A pass grade is achieved by meeting all the pass criteria defined in the assessment
criteria for each individual unit.
All the assessment criteria and merit grade descriptors need to be completed within
a unit to achieve a merit grade.
All the assessment criteria merit and distinction grade descriptors must be
completed within a unit to achieve a distinction grade.

Plagiarism and Collusion

Any act of plagiarism and collusion will be seriously dealt with according to the
regulations. In this context the definition and scope of plagiarism are presented
below:

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Using the work of others without acknowledging source of information or inspiration.

Even if the words are changed or sentences are put in different order, the result is
still plagiarism (Cortell 2003).

Collusion describes as the submission of work produced in collaboration for an

assignment based on the assessment of individual work. When one person shares
his/her work with others who submit part or all of it as their own work.

Submission work should be Microsoft word files in Turn it in. If submission

is done in picture format, learner may be asked to submit in word format
again for plagiarism check.

Extension and Late Submission

If you need an extension for a valid reason, you must request one using a coursework
extension request form available from the college. Please note that the lecturers do
not have the authority to extend the coursework deadlines and therefore do not ask
them to award a coursework extension.

The completed form must be accompanied by evidence such as a medical certificate

in the event of you being sick.

Support materials
Textbooks
Textbooks
Drury C - Management Accounting for Business (Cengage Learning EMEA, 2009)
ISBN: 9781408017715
Seal W, Gamson H R and Noveen E Management Accounting (McGraw-Hill
Higher Education, 2008) ISBN: 9780077121648
Journals
The financial and mainstream press is a useful source of background
Information, and could provide case studies too.

Harvard Referencing System

We expect students to use the alphabetical or name-date method known as the
HARVARD system. There are two parts in this system:
1. Citation within text or body of the report:
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In this the author's surname and year of publication are cited in the text, e.g. (Bond,
2004).
2. Reference List:
A reference list (of these citations) is included at the end of the assignment, in
alphabetical order by author. The reference list also includes additional details such
as the title and publisher.
A bibliography lists relevant items that you have used in the preparation of the
assignment but not cited in your text. A bibliography should also be in the Harvard
style and the inclusion of such a list shows that you have read widely beyond the
items you have cited.
Examples of citation within text or body of the report:
1. Cormack (1994, p.32-33) states that................

2. ............ This view has been supported in the work of Cormack (1994, p.32-33).

3. Jones (1946) and Smith (1948) have both shown

4. Corporate Author: 1st citation: Royal College of Nursing (RCN), 2007 2nd citation:
RCN, 2007
Examples of listings in reference list:
1. Books with one author:
Redman, P., 2006. Good essay writing: a social sciences guide. 3rd ed. London: Open
University in assoc. with Sage.
2. Books with two, three or four authors:
The required elements for a reference are: Authors, Initials, Year. Title of book.Edition.
Place: Publisher
Kirk, J. &Munday, R.J., 1988.Narrative analysis. 3rd ed. Bloomington: Indiana
University Press. Page 11 of 12 BTEC HND in Business/ Managing Human
Resources/May 2013
3. Books with more than four authors:
For books where there are more than four authors, use the first author only with
surname and initials followed by et al. The required elements for a reference are:
Author, Initials., Year. Title of book.Edition. (only include this if not the first edition)
Place: Publisher

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Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.
4. E-books
For e-books the required elements for a reference are :
Author, Year, title of book. [type of medium] Place of publication: Publisher
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
If available at website: Fishman, R., 2005. The rise and fall of suburbia. [e-book].
Chester: Castle Press.
Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].
5. Journal articles
Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part
number), Page numbers.
Perry, C., 2001. What health care assistants know about clean hands.Nursing Times,
97(22), p.63-64.
6. Newspaper articles
Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before
page numbers of article.
Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3
Sep. p.4-5.
3. Books with more than four authors:
For books where there are more than four authors, use the first author only with
surname and initials followed by et al.
The required elements for a reference are:
Author, Initials., Year. Title of book.Edition. (only include this if not the first edition)
Place: Publisher
Grace, B. et al., 1988. A history of the world. Princeton, NJ: Princeton University Press.
4. E-books
For e-books the required elements for a reference are :
Author, Year, title of book. [type of medium] Place of publication: Publisher
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
If available at website:
Fishman, R., 2005.The rise and fall of suburbia. [e-book]. Chester: Castle Press.
Available at: libweb.anglia.ac.uk / E-books [accessed 5 June 2005].
5. Journal articles

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Author, Initials., Year. Title of article. Full Title of Journal, Volume number (Issue/Part
number), Page numbers.
Perry, C., 2001. What health care assistants know about clean hands.Nursing Times,
97(22), p.63-64.
6. Newspaper articles
Author, Initials., Year. Title of article.Full Title of Newspaper Day and month before
page numbers of article.
Slapper, G., 2005. Corporate manslaughter: new issues for lawyers. The Times, 3
Sep. p.4-5.
7. Journal articles from an electronic source
Boughton, J.M., 2002. The Bretton Woods proposal: an indepth look. Political Science
Quarterly, [online]. 42 (6), Available at: http://www.pol.upenn/articles (Blackwell
Science Synergy) [accessed 12 June 2005].
8. Internet
National electronic Library for Health. 2003. Can walking make you slimmer and
healthier? (Hitting the headlines article) [Online]. (Updated 16 Jan 2005) Available at:
http://www.nhs.uk.hth.walking [accessed 10 April 2005].
The title of a web page is normally the main heading on the page.

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