代写BUSINESS 114 Accounting for Decision Making SEMESTER TWO 2023代做Python语言

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BUSINESS 114

Accounting for Decision Making

SEMESTER TWO 2023

QUESTION 1 – Balance Sheet, Income Statement, and Financial Statement Analysis

DiveMasters Pro, a New Zealand company which sells diving goods and provides diving services for enthusiasts of all experience levels, has recently completed operations for the month of September 2023. The balance sheet at the end of August 2023 is shown below.

DiveMasters Pro – Balance Sheet as at 31 August 2023

Assets		Liabilities & Owner’s Equity
Current Assets:		Current Liabilities:
Cash	$75,300	Accounts Payable	$6,500
Accounts Receivables	$19,850	Non-Current Liabilities:
Inventory	$26,700	Bank Loan (5.5% pa)	$46,000
Non-Current Assets:		Owners’ Equity:
Boat	$14,000 $135,850	Capital	$83,350 $135,850

The events listed below occurred during the month of September 2023:

1 DiveMasters Pro purchased some inventory (diving gear) for a total of $15,000, with half paid in cash and the remaining half on credit.

2 DiveMasters Pro received $500 from a customer who books a diving excursion that will take place next month (i.e., October 2023).

3 DiveMasters Pro issued an invoice to the University of Auckland Diving Club for $4,500 for a delivery of diving gear. The goods sold (being inventory) cost $3,000. The full $4,500 payment will be received at the end of the year.

4 DiveMasters Pro takes out an investment by transferring $5,000 cash to a 6-month term deposit, which accrues interest at an annual rate of 6%, compounded monthly. The accumulated interest will be paid with the principal amount upon investment maturity.

5 The business paid 50% of the outstanding accounts payable from August in cash.

Required:

(a) For each transaction provided above, analyse the impact on the financial statements by providing the following information and as per the table below:

• Name of the account impacted by the transaction – select the appropriate account name from the drop-down menu: various account names.

• The change in the account - use the drop-down menu to indicate whether there is an increase, decrease, or no impact on the account.

• The type of account – select one of the following from the drop-down menu: Non-Current Asset, Non-Current Liability, Current Asset, Current Liability, Revenue, or Expense.

• The specific financial statement affected by the transaction – select one of the following from the drop-down menu: Income Statement or Balance Sheet.

• The monetary amount involved in each transaction - type in the amount for the transaction.

	Account Name	Increase; Decrease; No impact	Type of Account	Financial Statement	Amount
1
2
3
4
5

(13 marks)

(b) What is the balance of the Capital account after the above five transactions and the owner draws out $500 cash for personal use at the end of the month? Show all workings. (2 marks)

(c) When analysing a firm’s financial performance, a common way is to compare the firm’s performance with that of its industry peers. The gathered financial information of DiveMasters Pro and its industry peers is as follows:

Ratio	DiveMasters Pro	Industry
Return on Equity (ROE)	13.13%	13.14%
Return on Assets (ROA)	3.75%	8.76%
Debt ratio (%)	75.02%	30.45%

In light of the provided financial ratios, evaluate how DiveMasters Pro is doing relative to its industry peers regarding profitability to investment and financial risk. (2 marks – 100 words maximum)

(d) Taking into account DiveMasters Pro ratios and Balance Sheet, do you think the company should invest the $5,000 into the 6-month term deposit (transaction 4) or would it be more prudent to utilize this amount towards reducing the bank loan? (Note: there is no need to do any calculations). (2 marks – 100 words maximum)

(e) Why is it important to compare financial ratios against appropriate benchmarks? In addition to comparing against industry peers, identify one alternative way that DiveMasters Pro can employ to gauge its financial performance using financial ratios. (2 marks – 100 words maximum)

(Total for Question 1: 21 marks)

QUESTION 2 – Cost Understanding

Nebula Enterprises is a leading manufacturer of a high-quality game console called Orion. With the rising popularity of augmented reality (AR) games, the company plans to introduce a new AR accessory called Vega in 2023. Alongside this, their marketing manager, Alex, is considering a promotional campaign offering a free VR headset with each purchase of the Vega product to boost sales in the initial months.

The following information has been provided:

	Current Product (Orion)	New Product (Vega)
Sales (units)	90,000	110,000
Selling price per unit ($)	250	220
Variable cost per unit ($)	225	180
Total fixed costs ($)	1,000,000	1,300,000

If the promotional campaign proceeds, there will be an additional fixed cost of $150,000 and each VR headset will incur a cost of $10 per unit for the company.

Required:

(a) (i) Calculate the breakeven point in revenue for the Orion and Vega products, respectively,

based on the 2023 data and without the new promotional campaign. (Round your answer to two decimal places, if required). (2 marks)

(ii) Calculate the profit for the Orion product based on the given data. (1 mark)

(iii) Calculate the profit for the Vega product based on the given data, without the promotional campaign. (1 mark)

(iv) Calculate the additional total costs associated with the promotional campaign for the Vega product. (1 mark)

(v) Calculate the profit for the Vega product when the promotional campaign is implemented, considering the costs from (iv). (1 mark)

(vi) Compare the profits before and after introducing the Vega product with its promotional campaign. Discuss Nebula Enterprises’ financial performance post-launch in light of your findings. (2 marks – 100 words maximum)

Nebula Enterprises, renowned for its in-house production, is considering an offer from a manufacturer in Country Z, recently scrutinised for poor labour standards, to produce its Vega product (i.e., outsource production) rather than to manufacture it themselves. The manufacturer in Country Z proposes: (i) a production cost of $165 per unit for the Vega product with a minimum order of 80,000 units, and (ii) a charge of $5 per unit for shipping costs. Accepting this offer would nullify Nebula Enterprises’ variable costs related to manufacturing the Vega product themselves. Moreover, this would also allow Nebula Enterprises to lease part of their manufacturing facility, generating $12 per Vega unit sold in revenue.

(i) Determine the net financial impact of accepting the manufacturer in Country Z’s offer versus if Nebula Enterprises manufactures the Vega product themselves in-house. Briefly discuss which option is the best. (Ignore the promotional costs). (5 marks)

(ii) Discuss two potential reputational risks that Nebula Enterprises might face if they decide to outsource the production of the Vega product to the manufacturer in Country Z. (2 marks – 100 words maximum)

(Total for Question 2: 15 marks)

QUESTION 3 – Performance Measurement

ClearWater Ltd is known for its bottled natural spring water. Their premium offering, AquaPure, is marketed as being sourced from pristine mountain springs, a claim that appeals to a significant segment of customers who prefer pure and untouched water sources. Every month, they forecast to bottle and sell around 20,000 units of AquaPure.

However, of late, unsettling rumors have been circulating, suggesting that ClearWater Ltd might be compromising its commitment to quality. Allegedly, some batches of AquaPure are being sourced from non-spring sources, raising questions about the authenticity of ClearWater Ltd’s claims and potentially misleading its dedicated customer base.

In August, amidst these rumors, the company’s anticipated and actual costs were as follows:

	Anticipated Costs for each AquaPure unit	August Actual Production 18,000 units
Direct Materials	$1.00 (Bottle and Label)	$18,500
Direct Labour	0.5 hours at $10.00 hourly	9,000 hours, costing $90,000
Variable Manufacturing Overhead	0.5 hours at $5.00 hourly	$85,000
Fixed Manufacturing Overhead	$50,000	$48,000
Total Actual Costs		$241,500

Required:

(a) Calculate the budgeted cost of producing a single AquaPure unit.

	Cost ($)	Workings
Direct materials
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
Total budgeted cost for one unit

(3 marks)

(b) Calculate the total flexed budget cost for AquaPure units in August.

	Cost ($)	Workings
Direct materials
Direct labour
Variable manufacturing overhead
Fixed manufacturing overhead
Total flexed budget costs

(3 marks)

(i) From an ethical standpoint, evaluate the potential implications of the rumors regarding ClearWater Ltd’s water sourcing. What are the broader moral ramifications of potentially misleading customers about the purity and source of AquaPure? (2 marks – 100 words maximum)

(ii) Analyse how these rumors and the ethical concerns they raise might influence ClearWater Ltd’s costs, sales, and overall brand reputation. What potential financial repercussions could ClearWater Ltd face if these rumors are validated? (2 marks – 100 words maximum)

(d) Balanced Scorecard Perspectives and Corrective Measures:

(i) Using the balanced scorecard approach, identify which two perspectives are most jeopardized by these rumors. How might these perspectives be adversely affected by the circulating speculations? (2 marks – 100 words maximum)

(ii) Suggest appropriate measures and actions ClearWater Ltd should undertake for damage control. How can the company ensure transparency in the future to rebuild trust with its stakeholders? (2 marks – 100 words maximum) (Total for Question 3: 14 marks)