ACC101 Accounting for Decision Making Accounting Assignment Help

Assignment Task

Students are required to:

• Show their ability to understand budgets and the budgeting process and prepare a budget
• Show their ability to understand CVP analysis and prepare calculations
• Demonstrate their understanding of ethics and the importance of ethics in business
• Appraise and utilise financial information for decision making

Question
The Keto Hotel has twenty rooms available for rent. During the month of December its average room rate is expected to be $150 and its room occupancy 85 per cent. Due to the holiday season in January, the room rate is to be increased by 10 per cent, and the occupancy is expected to be 95 per cent. In February, no further room rate increase is planned and occupancy is expected to be 90 per cent.RequiredCalculate the budgeted room revenue for each of the three months (December, January & February). Hint: You could use a table that includes room rate, occupancy rate, # of rooms available, # nights in month to get to your totals. Show your working.(1 mark) Discuss how the management of the Hotel would have estimated the occupancy rate.
Question
John Jones is the financial controller with Pragmatic Solutions Ltd, an entity that sells software products to accounting firms and small businesses. Mr Jones is analysing a number of software packages that focus on budgeting. He needs to select a package he can recommend to his clients. Each software vendor is keen to have their software selected as it will result in a significant increase in sales for their company.Lisa Loh is a salesperson for software company Doonamite Ltd. She has asked Mr Jones to go to Los Angeles to analyse her companys software package properly, and the programming experts there can give him a thorough demonstration. Ms Loh also suggested Mr Jones take his family, so he feels relaxed in a foreign country and can undertake his analysis without worrying about being away from his family. Doonamite Ltd would pick up the expenses for the trip for his whole family.

Question

• Chugga Enterprises operates a single-product entity. Data relating to the product for 2020 were as follows.
• Annual volume 32 000 units
• Selling price per unit $ 60
• Variable manufacturing cost per unit $ 28
• Annual fixed manufacturing costs $ 120 000
• Variable marketing and distribution costs per unit $ 12
• Annual fixed non-manufacturing costs $ 360 000
  

Required

• Calculate the break-even in both dollars and units for 2020.
• Calculate the margin of safety in both units and sales dollars.
• Calculate the profit achieved in 2020 given the annual volume of 32 000 units.
• Changes in marketing strategy are planned for 2021. This would increase variable marketing and distribution costs by $4 per unit, and reduce fixed non-manufacturing costs by $80 000 per year.
• Calculate the units that would need to be sold in 2021 to achieve the same profit as in 2020.
• Would you recommend the change? Explain.

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