ACCTG321: Strategic Management Accounting

Individual Assignment 2024

Climbing the mountain: Tenalpina Tools

Learning objectives

· Prepare and interpret management accounting information to support the implementation and evaluation of an organization’s strategic objectives.

· Apply a structured approach to analyse complex, case-based accounting problems.

· Communicate accounting analyses and justified recommendations in written and verbal forms.

· Work collaboratively to debate case problems and synthesise solutions to reflect business strategy, accounting evidence, and human factors.

There are four submissions for this assignment, all due at the same due date. Submit each to the relevant sections under Canvas via: Assignments > Individual Assignment

· Spreadsheet: Submit your spreadsheet with ABC analyses here.

o Format the spreadsheet with tabs according to assignment instructions below.

o Name your file as [LASTNAME]-[UPI], e.g. Smith-dsmi007.xlsx

· Video: Submit your recording here.

o Maximum THREE minutes.

· Report – ABC analysis: Submit your report on ABC analysis here.

o Maximum THREE A4 pages. 12 point font, 1.15 paragraph line spacing

o The page limit excludes the assignment cover sheet, tables, figures, appendices, and references.

o Include the Cover Sheet on Canvas at the front of your file. For your signature, you can either 1) type your full name and UoAID; 2) print, sign, and scan, or 3) include an electronic signature.

· Memo – Team review: Submit your memo on team work here.

o Maximum TWO A4 pages for memo. 12 point font, 1.15 paragraph line spacing

If you have any problems submitting your assignment, email [email protected] – before the due date for the assignment.

Tenalpia Tools: Supplementary information for assignment

Note: This information extends the Tenalpina Tools case study used in the course.

You have been hired as an intern on the administrative team for Tenalpina Tools, following Jeremy Rigby and Giulia Ferrato’s experimentation with alternative costing approaches. Intrigued by the new insights provided by Activity-based Costing (ABC) analysis, they have hired you for a summer internship to assist them with the analyses.

On your first day, Jeremy introduces you to the senior management team at their quarterly planning briefing. The meeting includes Giulia (Founder and CEO), Granby Bolton (Production Supervisor), and Aldonio Perez (Head of Sales and Marketing). During this meeting, Aldonio discusses his aspirations for the growth of the company

“I think we all agree that our titanium technology makes us a leader in the rock climbing equipment industry. While we are only four-years old as a business, we are already making our presence known as the lightest, strongest, and most elegant equipment available. I have a number of additional customers lined up for our products. It is time we increase production and grow. It is time that we climbed the mountain to be at the top of our industry!”

Granby, whom you are learning to be level-headed compared to Aldonio. He initially protests the aim for rapid growth but eventually agrees to scaling up the operations.

“We can do this, yes… yes I believe we can. Our work force is getting more and more skilled, and we do have spare capacity to grow. But before we hire additional staff and buy new machines, I would recommend we do the best with what we already have. Let us start small over February. If things go as well as you say Aldonio, then we can expand the business in March.”

It is now April and Tenalpina Tools has two months of additional production and sales data. Jeremy knows you are seeking a full-time job and so has asked you to conduct an ABC analysis over the period from January to March in order to assess your technical capability and leadership skills. The project is to prepare an Activity-based Costing (ABC) analysis for Tenalpina Tools, report your results, and explain the structure of your analysis.

For your ABC analyses, Jeremy has provided you the following additional information.

· January analyses: Data for this are provided in the Tenalpina Tools case study. Use the ABC approach given in the case study when calculating costs for January, February, and March.

· February: The only changes for February were to prices and production volumes

o The price of Hammers is now $67 per unit. The price of Rock nut sets is now $23 per unit. There has been no change in the price of Pitons.

o Sales volumes for the three product lines are: Pitons 4400 units; Hammers 410 units; and Rock nut sets 2800 units.

· March: Pleased with the growth in the market and confident scale their operations, Aldonio and Granby agree to increase production and further adjust prices.

o The price of Hammers is further increased to $70 per unit. The price of Rock nut sets, a further decrease to $22.50. Again, there is no change in the price of Pitons.

o Sales volumes for the three product lines are: Pitons 4500 units; Hammers 390 units; and Rock nut sets 3400 units.

o To support growth in production, Granby has hired two more labourers. These labourers are paid the same monthly salary as the existing labourers. These two new labourers share their time equally among four workstations: Cold Roll and Cut; Oven & Drop-Forge; Assemble; and Injection Mold.

o Variable Power and Supplies costs for each workstation has increased by 25%.

To assess your technical and leadership skills, Jeremy has given you two additional tasks. First, to conduct an alternative analysis for January. Second, to prepare a memo that describes how you work in teams, your strengths and limitations, and an example of leadership.

· Alternative January analysis: “I’ve been thinking about how we can further improve our ABC model. One of the areas is our Direct Labor analysis. This is a major cost item and it seems too rough an analysis to allocate the cost by the number of laborers at each workstation. After all, they are cross-trained to work at each station and I have seen them help each other out when one station is busy compared to the other.
Can you prepare an alternative version of the January analysis? Instead of allocating Direct Labor cost by the Number of Laborers, can you allocate it by the Labor Minutes used? Use the information in Exhibit 4 of the case study for this.”

· Memo showing leadership skills: “I have been impressed by your work and if it were completely up to me I would give you a job. At the end of the day though, It is Giulia’s decision and she always asks for a written statement from the candidate explaining why she should hire you. Can you prepare a memo of reflection, which I will endorse, that covers the following:

1) What is your work style. and how do you accommodate differences in workstyle. in teams?

2) Give me an example of how you have facilitated collaboration and teamwork.

3) Reflect on areas where you can improve your work, such as technical learning, time-keeping, and responding to setbacks.

Eager to prove yourself you begin your work on the analysis.

Required:

Prepare activity-based costing (ABC) analyses based on the information provided in the Tenalpina Tools case and the supplementary information (above). Your analysis should cover:

· January, February, and March analyses: Use the ABC approach given in the case study, incorporating the additional information. Note that the January analysis was discussed in tutorials. Create separate tabs, named “Jan”, “Feb”, and “Mar” for the January, February, and March analyses, respectively.

· Alternative January analysis: Revise the January analysis using Direct Labor Minutes to allocate Direct Labor costs instead of number of Laborers. Name this tab “Jan – DL”

Use this analysis to complete the following four submissions:

a) Spreadsheet of your ABC analyses

Prepare a spreadsheet for Jeremy covering the following.

· Your ABC analyses, including the relevant data, your calculations, and your results for your analysis. Begin with the TenAlpina Data.xlsx file on Canvas.

· Format your spreadsheet with the following tabs.

o Information: List your name, email, and UPI. Explain the purpose of the spreadsheet. Describe the tabs in this file (i.e. Diagram, Calculations, and Results).

o Four tabs, one for each analysis: The relevant data and your calculations, organised neatly. Consider using colour, headings, borders, and explanatory notes.

§ Jan

§ Feb

§ Mar

§ Jan - DL

o Results: On a separate tab, present the results you consider most important from your analysis.

b) Video overview explaining your Alternative January analysis

Prepare a video for Jeremy covering the following.

· Explain the structure of your Alternative January ABC analysis. Your video should talk through the structure of your calculations, focusing on how you incorporated the alternative analysis of direct labor.

· Maximum length for the video is three minutes. Address your video to Jeremy. He has asked that the tone of your explanation be friendly and business-casual. Note you will be marked down if you appear to be reading from a pre-written script.

c) Report covering issues, key results, and recommendations

Prepare a report for Giulia and Jeremy covering the following.

· A problem statement that summarises the issues raised in the supplementary information and the original Tenalpina Tools case. Your discussion should cover:

o Concern: Why isn’t management making as much money as they want to?

o Setting: What is going on in the company that is leading to the problem?

o Accounting: How your ABC analysis will help address the problem.

o Support your problem statement using relevant facts.

· Summary of key ABC results and the insights they provide to address the problem. Your discussion should cover:

o Table of key results for January to March: Include a table that summarises the main results of your January to March ABC analyses. Do not provide all your calculations, only what you consider the key results. The table is excluded from your page limit.

o Review of the growth strategy: Referring to your problem statement, discuss the insights from the ABC results that reflect on the growth strategy over the months of January to March. Remember that your problem statement includes the challenges in the original Tenalpina Tools case study, not just the supplementary information.

o Cost drivers: Contrast your results for January with the Alternative January analysis. Discuss which analysis you consider more appropriate.

· A discussion of implications of your results for the various departments.

o Tension among business functions: Briefly describe the parts of the ABC analysis that production and sales teams would find useful. You may wish to consider areas such as: time horizon (short- versus long-term); the types of accounting information they would value; likely culture of the department. Page 5 of the Week 1 reading Analysing cases in Acctg321 outlines further considerations.

o Nature of accounting: Briefly describe how accounting analysis (i.e. ABC) can bias the types of results obtained, focusing on how these biases may affect the information received by production and sales. Refer to your ABC analyses (January to March, and alternative January analysis) to support your answer.

d) Memo outlining team review and self-development

Prepare a memo for Giulia to support your application for a full-time role, covering the following.

· Team dynamics and conflict resolution: Outline the ways in which your team works together (e.g. frequency of meetings and division of roles). In your own words, describe the different ways in which you and your team members approach work. Describe a disagreement or difficulty your team faced in working together, and how it was resolved.

· Self-management and resilience: Reflect on your strengths and weaknesses in relation to ACCTG 321. For example, reflect on your confidence in numeric analysis and strategic analysis; general approach to ACCTG 321 study; and how you can improve team interactions. Identify one area or skill you plan to develop further for ACCTG 321 and how you intend to do so.

You may find the Study Skills section of the Learning Hub useful in completing this memo. Refer to the Learning Hub resources (over the page). Students have also found a Myers-Briggs Type Indicator a fun and informative exercise. An example is here available here: https://www.16personalities.com/

In preparing your memo, refer to your experiences working in your team for ACCTG 321. This can refer to material in the Team Case Write-up. However, this memo is focused on your understanding of team dynamics and your self-reflection. We will treat your responses confidentially. Your discussion here will not be shared with other members of your team.

If you are not working in a team for ACCTG 321, briefly describe a past setting where you worked as a team. Refer to these experiences for the Team dynamics and conflict resolution section. You can complete the Self-management and resilience even if you are not part of a team for ACCTG 321.

Instructions for preparing video and uploading to Canvas

· Your recording should include your voice, the webcam visual of you while you are presenting, and the spreadsheet material (diagram and analysis).

· We suggest you use Zoom and Share Screen. You can use other recording software or a smartphone to record your video.

· Zoom will convert your recording into an mp4 file. Upload this file to Canvas under Assignments > Individual Assignment – 2 Minute Video.

· The Learning Hub Resources (below) offers further guidance for preparing a video.

This Canvas guide outlines how to submit and/or record a video to Canvas. https://community.canvaslms.com/t5/Student-Guide/How-do-I-submit-a-media-file-as-an-assignment-submission/ta-p/279

Learning Hub Resources

The following resources may be useful in preparing your assignment:

· Writing for business context:
https://www.learninghub.ac.nz/writing-for-business-contexts/

· Concise writing:
https://www.learninghub.ac.nz/writing/academic-style/concise-writing/

· Producing a video:

https://www.learninghub.ac.nz/video/

· Working in groups and teams:
https://www.learninghub.ac.nz/study-skills/working-in-groups-and-teams/

· Self-management:
https://www.learninghub.ac.nz/study-skills/growth-mindset/

Referencing: Appropriate academic referencing should be used if relying on source documentation to support statements included in your report.

Plagiarism: Ensure you are familiar with the rules on plagiarism (reproduced in the course notes).

· Note that if Turnitin is unable to report a plagiarism score, we will investigate your assignment as if it had plagiarism.

· It is your responsibility to ensure that no one copies your assignment.

· If you consider someone could have accessed your assignment without your permission, you must contact Dr Fred Ng ([email protected]) prior to submission.

· Failure to do so will result in penalties if your assignment is copied.

Take note:

Every year we have a small number of cases where students have given copies of their assignments to friends prior to the due date, on the understanding it will not be copied.

Be aware this is facilitating plagiarism and if your assignment is copied by someone else without your consent you will also be penalised.

Sadly, this happens more often than you would think.

It is your responsibility to protect your work. We strongly encourage you to be careful about sharing any parts of your work with others. This is particularly the case when working in online collaboration environments.

If we find any evidence of copying, policy is that all parties will be penalised, irrespective of who is the original creator of the work.

Assignment evaluation: This rubric shows the areas considered, along with their relative weightings, when marking your assignment.