• Prepare a standard REPORT using correct headings, paragraphs, sub-headings etc and correct referencing.
Marks 5%
• Introduce your business and your idea to the bank manager and ensure you state how much you intend to borrow and how you intend to make repayments. State what product you intend to sell based on the ingredients supplied in the assignment brief (section D). State the cost price to produce it and its intended selling price. (max 250 words), Marks 5%
• Explain in your own words the cost structure of your product (using the actual calculations to support your answer) and also provide an explanation regarding which method of pricing you used to arrive at the target selling price and the underlying assumptions to support your figures for breakeven point. Further to this you must explain your figures in your operational budget (and mention your seasonality and demand) and cash budget especially highlighting the credit terms affecting the difference between the two. Use appropriate headings to separate out the various requirements. (max 850 words).
(NOTE: as part of this section, you will need to decide which of the costs given are fixed and which are variable and include the figures you calculated in your appendices) Marks 20%
• Provide a suitable summary of the business report by analysing (commenting on) the figures from your calculations particularly the profit results and whether the product is worthwhile producing based on the figures. (max 250 words).
Marks 10%
• Finally, what are the implications of producing management accounts in such detail(purpose and use of the management accounting information) – include after the conclusion of the report Marks 5%
Section B Appendices to the Business Report: 50% weighting
• Produce a ‘Standard Cost Card’ showing the main costs groups involved and linked to the target selling price.
Marks 10%
• Calculate a breakeven point (show the workings here). Marks 5%
• Prepare a One (1) Year Operational Budget (per month) based on your cost structure and production/sales pattern. Marks 20%
• Prepare a One (1) Year Cash Budget (per month) using the operational budget and credit terms to assist you. Ensure you use the credit terms provided in section D.
Marks 10%
• Prepare a One (1) Year Budgeted Income Statement (totals only) using marginal costing principles (ignore taxation and interest costs) Marks 5%
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