This report selects the production process of canned tomatoes in the 'how it's made' channel on the YouTube website as an analysis sample. The produ

Summary

This report selects the production process of canned tomatoes in the 'how it's made' channel on the YouTube website as an analysis sample. The production process we selected for the report is from the unloaded tomatoes to the canning factory to the completion of the canned tomatoes. This report discusses in detail the cost drivers generated in the production activities of canned tomato production and the high-cost production activities and low-cost production activities. In addition, after discussion by our group members, this report lists the fixed costs and variable costs incurred during the production of canned tomatoes, and lists specific examples to discuss the relationship between fixed costs and variable costs. This report uses the activity-based costing approach to demonstrate the relevant cost calculation of each link in the production process of manufacturing canned tomatoes in the form of excel tables, and calculates the contribution margin, gross margin and related operating expenses of 1,000 canned tomatoes. However, this report also focuses on the sustainable development part of management accounting, and provides relevant suggestions to enterprises from the importance of management accounting innovation and cost control. We aim to improve corporate profitability by studying environmental costs and waste reuse.

Question 1

In the process of producing canned tomatoes, we found many cost activities, and we selected four production cost activities and cost drivers to discuss. Firstly, in the process of making canned tomatoes, different machines are used to clean and deliver raw tomatoes to different production and processing links, so in this production cost activity, the cost driver is the working hours of the machine. Secondly, there are different product schedules for the production of canned tomatoes. For example, in this report, we selected three different brands of canned tomatoes, but the cannery as a supplier will process and produce different batches of canned tomatoes in different product forms Brand, so product run is the cost driver in this session. Third, some raw materials or unqualified raw materials inspected according to production arrangements will be moved to the warehouse for storage, and the materials usage is the cost driver of this production cost activity. Finally, because there are production steps in the process of manufacturing canned tomatoes, such as washing and peeling and sealing the canned tomatoes, the products need to be sampled for inspection, and the unsealed or uncleaned and incompletely peeled tomatoes are picked and transported to the other part of factory. On the other hand, the number of inspections of all samples is the cost driver in this session. After our cost analysis of these four production cost activities, we found that material handing is the highest cost activity, and product scheduling is the lowest cost activity. Material handling includes storage costs and transportation costs, and many production and processing links require storage, so the cost of material handling is relatively high. However, the period of product scheduling is relatively fixed. There are three brands of canned tomatoes, so it is not necessary to change the production plan frequently, thus, the cost is relatively low.

Question 2

A variable cost changes in total in proportion to changes in the related level of total activity or volume. Variable costs are constant on a per-unit basis (Horngren et al. 2017). Based on the definition of variable cost, we identify 2 variable costs, raw tomato and labor cost. The raw material tomato will change with the output of canned tomatoes, all of which are variable costs. The wages of workers who produce canned tomatoes also increase or decrease with changes in production, so labor cost is also a variable cost. When the manager wants to save on fixed costs, he could solve this by reducing the purchase of equipment and increasing the number of hired production workers.

Question 3

Fixed costs are unchanged in total over a designated range of the related level of total activity or volume. Fixed costs change inversely with the level of production (Horngren et al. 2017). Through the definition of fixed costs, we identified two fixed costs during the production of canned tomatoes, the rent of the plant and the depreciation of equipment. The rent of the plant and the depreciation of equipment will not increase or decrease due to changes in production. When the manager wants to increase the fixed cost, he can buy more machinery and equipment to replace using labor to produce canned tomatoes, so as to reduce the variable cost.

Question 4

Using the activity-based costing approach, we divided all manufacturing expenses into seven cost activities: purchasing, servicing and maintenance, production scheduling, material handling, manage and administer, packaging and product inspection. The overhead rates for each activity is: $98.54,

$1.33, $124.11, $1.61, $65.03, $0.01, $ 0.18.

Question 5

The operating expense of the Annalisa Tomatoes Diced 400g for 1000 units is $30.63; the operating expense of the Mutti Finely Chopped Tomatoes 400g for 1000 units is $33.27; the operating expense of the Macro Organic Tomatoes Diced 400g for 1000 units is $30.7.

Question 6

The gross margin and the contribution margin of the Annalisa Tomatoes Diced 400g for 1000 units are

$236.17 and $266.26 respectively. Beside, the gross margin and the contribution margin of the Mutti Finely Chopped Tomatoes 400g for 1000 units are $383.53 and $416.26 respectively. Moreover, the gross margin and the contribution margin of the Macro Organic Tomatoes Diced 400g for 1000 units are $886.1 and $916.26 respectively. The gross margin per unit and the contribution margin per unit of the Macro Organic Tomatoes Diced 400g are the highest among these three products, therefore the

company should increase the production of this product.

Question 7

In the process of processing canned tomatoes, a lot of waste is inevitably generated, such as unqualified tomatoes screened by workers, and a lot of tomato peels will be left when producing peeled tomatoes. The disposal of these wastes requires human and material resources, which creates environmental costs. Environmental cost refers to all the expenses needed to solve environmental pollution and ecological damage in a commodity production activity (Chen et al. 2019).

In fact, manufacturers have taken some measures to deal with waste residues, of which the manufacture of household fertilizer is the most common method. However, some researchers (Griffin et al. 2018) believe that the above methods will increase environmental costs, and it is difficult to achieve profitability. If directly composted, natural degradation takes a long time. The manufacture of finished fertilizers consumes a lot of energy to dry the water in the plants, which not only consumes more resources, but also offsets the potential profits. Based on Griffin and others (2018) opinion, manufacturing nano-suspensions will unlock the great potential of these organic wastes. Firstly, it requires a lower standard for raw materials. In other words, basically all the tomato residues can be used, and there will be no waste that is difficult to handle. Secondly, it mainly uses grinding and high- pressure technology, which consumes less energy than drying and extraction, and does not generate new waste. In addition, fertilizers can only be used in agriculture, but nano-suspensions can be used in many industries, such as agriculture, medicine, and cosmetics, which can bring broader market and more economic benefits to the company.

Cost control is to ensure that the cost is within the budget estimate. Many people believe that cost control and business sustainability are contradictory, but some researchers (Nit & tefea 2014) emphasized that the sustainable development of an enterprise does not mean spending more money. On the contrary, cost control is an important tool to help companies achieve sustainable development. We recommend that companies take measures to reduce waste, which is one of the important means of cost control. Firstly, product packaging is the main cause of waste. Dell uses mushrooms, bamboo and other biological fertilizers to make boxes (Horngren et al. 2017), and we can also consider using tomato waste to make cartons for cans. Secondly, the company should record the use of various resources in detail, and regularly analyze whether the actual resource allocation is within the plan. In addition, to encourage internal personnel to propose and implement methods to improve resource efficiency, appropriate rewards are necessary (Nit & tefea 2014). In short, cost control can not only stimulate the creativity of the company's internal staff, but also establish a good company image externally, helping to achieve business sustainability.

Traditional financial accounting only focuses on financial performance, which means that this management method can only measure what happened in the past, and cannot evaluate forward-looking plans (ergi & Kozarevi 2019). It is recommended that the company implement the Balanced Scorecard method as a management model. Balanced Scorecard aims to transform the corporate strategy and vision into a coherent mixture of financial and non-financial performance measurement indicators. It will measure corporate performance from four main aspects: (1) finance; (2) customers; (3) internal process; and (4) learning and growth (Horngren et al. 2017). According to Peterkov and Ludvks (2016) view, there are five steps to implementing the Balanced Scorecard. The first step is to create strategic goals based on the company's needs in different areas. The second step is to explore the relevance of various strategic goals, and we need to consider whether the remaining goals will be affected in the process of achieving certain goals. Next, companies need to choose indicators that not only clearly express their strategic goals, but also provide criteria for evaluating their level of achievement. The fourth step is to determine the target value, which includes clarifying and quantifying the responsibilities of specific personnel. Finally, it is necessary to determine specific strategic measures, such as investment, commodity research and development, and to estimate which important resources need to be allocated to each project. In short, the Balanced Scorecard can reflect the comprehensive operating condition of the company, making performance evaluation to be balanced and improved.

Conclusion

In summary, we analyzed and identified 4 cost drivers, 2 variable costs and 2 fixed costs for the canned tomatoes, and calculate the overhead rates of the different cost activities of canned tomatoes. The total operating expenses of three different brands of 1000 units canned tomatoes were calculated by the activity-based costing method. Compared with the traditional costing method, in addition to the mutti brand, the other two brands use the activity-based costing method to calculate the total operating cost is lower. We also discussed how the company is using waste and cost control, such as using the waste from the production of canned tomatoes into household fertilizers or making nano-suspensions, while reducing costs in terms of cost. In addition, in the aspect of management accounting innovation, the performance evaluation management method of balanced scorecard was discussed to improve company performance.

References List

ergi, F & Kozarevi, E 2019, The Impact of Performance Analysis on the Financial Management an d Control at Public Universities in Bosnia and Herzegovina Federation, Management: Journal of Cont emporary Management Issues, vol. 24, no. 2, pp. 145153, viewed 7 May 2020, <http://search.ebscoho st.com.ezproxy.utas.edu.au/login.aspx?direct=true&db=bsu&AN=141143384&site=eds-live>.

Chen, X, Du, Q, Xiong, X, Zhong, D, Deng, N, Liu, S & Li, Y 2019, Redefinition of Cost-Benefit Effi ciency of Land-Use Projects: Focusing on Environmental Cost, Mathematical Problems in Engineerin g, pp. 114, viewed 7 May 2020, <http://search.ebscohost.com.ezproxy.utas.edu.au/login.aspx?direct=t rue&db=asn&AN=139781694&site=eds-live>.

Griffin, S, Sarfraz, M, Farida, V, Nasim, MJ, Ebokaiwe, AP, Keck, CM & Jacob, C 2018, No time to waste organic waste: Nanosizing converts remains of food processing into refined materials, Journal o f Environmental Management, vol. 210, pp. 114121, viewed 7 May 2020, <http://search.ebscohost.co m.ezproxy.utas.edu.au/login.aspx?direct=true&db=edselp&AN=S0301479717312720&site=eds-live>.

Horngren, CT, Datar, SM, Rajan, MV, Maguire, WAA & Tan, RCW 2017, Cost accounting: a manage rial emphasis, 3rd edition., Pearson Australia, viewed 7 May 2020, <http://search.ebscohost.com.ezpro xy.utas.edu.au/login.aspx?direct=true&db=cat02831a&AN=UTas.b2506955&site=eds-live>.

Nit, CG & tefea, P 2014, Cost Control for Business Sustainability, Procedia - Social and Behavior al Sciences, vol. 124, pp. 307311, viewed 7 May 2020, <http://search.ebscohost.com.ezproxy.utas.edu. au/login.aspx?direct=true&db=edselp&AN=S1877042814020382&site=eds-live>.

Peterkov, J & Ludvk, L 2016, Innovation Management in an Industrial Enterprise with Using Balanc ed Scorecard Method, Proceedings of the European Conference on Management, Leadership & Gover nance, pp. 249254, viewed 7 May 2020, <http://search.ebscohost.com.ezproxy.utas.edu.au/login.aspx? direct=true&db=bsu&AN=117804694&site=eds-live>.

You are to assume that you are a member of a management accounting team within an organization, and you and your team have been tasked with an assignment by the manager. In this role play, the task is to propose and justify business solutions drawing on appropriate accounting theories, techniques, and frameworks. You are required to submit a written report.

You are a management accounting team that have been tasked to conduct a case study analysis critically examining differences between management and cost accounting and propose and justify business solutions drawing on appropriate accounting theories, techniques, and frameworks.

2.0 Key Details

The submission is due on 24th August at 23:59 AEDT.

The rubric for the written report is attached in the Appendix.

3.0 Organization and Business Process Selection

Organization: Tassal Tasmanian Salmon

critically examine differences between management and cost accounting, propose and justify business solutions drawing on appropriate accounting theories, techniques, and frameworks.

4.0 Requirements

Word limit-1500(excludes excel file and table of calculation)

Part A

You are required to choose one company, and gather information (from different resources) to assist you to answer the following question, using an excel file:

Identify the primary product/products [or services].

Identify the variable costs of making the product. Explain - what makes it a variable cost and why? Identify the direct and indirect variable costs. Explain - what makes it a direct or indirect and why?

Identify the fixed costs of making the product. Explain - what makes it a fixed cost and why? Identify the direct and indirect fixed costs. Explain - what makes it a direct or indirect and why?

Identify the overhead costs and choose an appropriate allocation method and allocate base/s to allocate the overhead costs to the cost object. In your report, explain why you choose this specific method and the allocation base/s.

Calculate the breakeven point of the product/s for this year.

If the sales increase by 10%, the fixed cost increase by 10%, and the variable cost decreased by 5%, what will be the new breakeven point and the operating profit next year? Show the calculation.

Assume that the business keeps 10% of the unit sold as ending finished goods inventory. Prepare your income statement using i) the gross margin and ii) contribution margin and discuss the difference in the profit. Discuss at least 3 potential advantages that the manager can gain using the gross margin method, and when.

Part B

The following is a template for the written report.

Cover page

Brief introduction: Introduce the organization

Identify and discuss the supply chain, and the value chain for the selected company.

Identify and discuss the processes that the product/s have to go through.

Discuss your calculations and your results in the excel file, from part A above.

Critically discuss the possibility of how a manager (in this scenario) can decrease (increase) variable costs while increasing (decrease) fixed costs. Discuss how this will affect the companys profitability (refer to the operating leverage topic in Chapter 4)

Critically discuss how the company can improve its overall profitability by creating value for waste and developing full social and environmental costs.

Finally end the report with a conclusion and recommendations. This should be a short paragraph summarizing the key points in the report and provide recommendations to the company on the importance of cost control for business sustainability and social and environmental impact.

you must submit two files; an excel file (Part A) and a report (as a word or pdf file) (Part B).

Please note that the excel file and the written report are directed to the markers. The marker is the person who will mark/grade your assessment. This person is not part of the role play. You have to assume the marker is not familiar with your organization. The excel file should be organized professionally and your written report should include a section that introduces the organization and the related business process. Ensure that your assignment provides comprehensive detail to the marker to gain an indepth understanding of your company and why your report is well-suited to the organization. Your goal is to communicate your report in a clear, coherent and concise manner to the marker. You should demonstrate a deep understanding of the organization and you must demonstrate your knowledge of the management accounting concepts and tools that been taught in the unit up to due date of the assignment.

The above structure provides the basic requirements. you can include more headings and detail if they think it is necessary. It is expected that students should be able to produce a high-quality report.

Students should also provide proper referencing from any sources used in the compilation of their report. Harvard referencing style have to be used to reference also provide the full reference in the reference list at the end of the report (use Harvard Referencing).

The written report must be submitted within 24 August at 23:59. The submission will be processed using Turn-It-In. Reports must be submitted either as Word or PDF.

A rubric for the written report is provided in the Appendix.

Appendix A Group Case Study Rubric

The submission will be assessed for the entire group.

Criteria Outstanding (4) Very Good (3) Good (2) Below standards (1) No evidence shown (0)

Apply management accounting techniques analyse revenue, costs, and profit using Excel tools 25% Demonstrates exemplary ability to calculate costs, with more than 80% of calculations correct. Provides an outstanding analysis based on management and cost accounting principles. Makes comprehensive use of formulae and hyperlinks in compiling worksheet. Information not provided in the case is always accurately referenced in the Excel file. Demonstrates a very good ability to calculate costs, with more than 70% of calculations correct. Provides a very good analysis based on management and cost accounting principles. Mostly uses formulae and hyperlinks in compiling worksheet. Information not provided in the case is, mostly, accurately referenced in the Excel file. Demonstrates good ability to calculate costs, with more than 60% of calculations correct. Provides a generally sound analysis based on management and cost accounting principles. Makes some use of formulae and hyperlinks in compiling worksheet. Information not provided in the case is often inaccurately referenced in the Excel file. Demonstrates an average ability to calculate costs, with more than 50% of calculations correct. Provides an adequate analysis based on management and cost accounting principles. Makes minimal use of formulae and hyperlinks in compiling worksheet. Information not provided in the case is most often not referenced/referenced incorrectly, in the Excel file. Fails to demonstrate an average ability to calculate costs, with less than 50% of calculations correct. Fails to provide an adequate analysis based on management and cost accounting principles. Makes insufficient use of formulae and hyperlinks in compiling worksheet. Information not provided in the case is not referenced at all/very poorly referenced, in the Excel file

Demonstrates knowledge of the organization 10% Demonstrates deep and intimate knowledge of the organization that evidences in-depth research of the organization The knowledge presented demonstrates a keen understanding of the organization however, there were certain aspects that highlighted a lack of in-depth understanding. The knowledge presented was quite general and demonstrates a superficial understanding of the organization. The knowledge presented was extremely general and highly superficial. No knowledge of the organization was demonstrated.

Application of concepts and tools learned in the unit (e.g. cost behaviour and BEP) 10% An expert application of the concepts and tools learned in the unit. An advanced application of the concepts and tools learned in the unit. A proficient application of the concepts and tools learned in the unit. A novice application of the concepts and tools learned in the unit. No application of concepts and tools learned in the unit

Relevance to organisation and critical reflection on proposed solution 10% The proposed solution was extremely relevant to the organization and an excellent critical reflection on proposed solution The proposed solution was highly relevant to the organization and a very good critical reflection on proposed solution The proposed solution was relevant to the organization and a good critical reflection on proposed solution The proposed solution was not relevant to the organization and/or a poor critical reflection on proposed solution The proposed solution was not relevant to the organization and no critical reflection on proposed solution

Assess

social responsibility

and sustainability

issues in the business

context. Critique

and evaluate impact

on specific

situations.

10% The report provides exemplary critical analysis of the potential impact of all the key social responsibility and/or sustainability issues related to the proposed business. The report provides a sound analysis of the potential impact of the majority of the key social responsibility and/or sustainability issues related to the proposed business The report provides a mostly sound analysis of the potential impact of only a few of the key social responsibility and/or sustainability issues related to the proposed business The report provides only a basic, and often vague, discussion of the potential impact of a minimal number of the key social responsibility and/or sustainability issues related to the proposed business The report provides an inadequate/irrelevant discussion, or no discussion, of the potential impact of the key social- responsibility and/or sustainability issues related to the proposed business.

Structure, sources, spelling/grammar, referencing (Harvard Referencing) 10% Very High CCC (Cohesion, Clarity and Conciseness)

No spelling &/or grammar mistakes.

More than 5 current sources, of which at least 3 are peer reviewed journal articles or scholarly books. Sources include both general background sources and specialized sources. Special-interest sources and popular literature are acknowledged as such if they are cited. All web sites utilized are authoritative.

Cites all data obtained from other sources. Harvard Referencing is used in both text and bibliography. High CCC (Cohesion, Clarity and Conciseness)

5 current sources, of which at least 2 are peer-review journal articles or scholarly books. All web sites utilized are authoritative.

Cites most data obtained from other sources. Harvard Referencing is used in both text and bibliography. Moderate CCC (Cohesion, Clarity and Conciseness)

Fewer than 5 current sources, or fewer than 2 or 5 are peer-reviewed journal articles or scholarly books. All web sites utilized are credible.

Cites some data obtained from other sources. Citation style is either inconsistent or incorrect. Low CCC (Cohesion, Clarity and Conciseness)

Unacceptable number of spelling and/or grammar mistakes.

Fewer than 5 current sources, or fewer than 2 of 5 are peer-reviewed journal articles or scholarly books. Not all web sites utilized are credible, and/or sources are not current.

Cites some data obtained from other sources. Citation style is either inconsistent or incorrect.

Does not cite sources.