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ACCT2019 Group Assignment
Semester 2, 2024
Scope: This assignment requires students, as a group, to carry out an analysis of the case study Gwissy
Vegan Creations (described in this document) and submit an executive report. This assignment
requires students to demonstrate their:
Ability to identify and critically apply relevant management accounting concepts and
techniques to practical business contexts and make recommendations with a focus on the
usage of qualitative and quantitative information.
Weighting: 20%
Due date: 11:59 pm, 11 October 2024
Submission: The assignment file must be saved and submitted in PDF document format.
Please submit in Canvas under the ‘Assignments’ section.
Only ONE member from each group has to submit the group assignment.
Your assignment PDF file should include the cover page, report and appendices.
You will need to complete a Peer Evaluation form.
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Gwissy Vegan Creations
You and your team have been working as Management Accountants for Gwissy Vegan Creations
(Gwissy), a medium-sized business that mass-manufactures vegan soy chicken of large cartons
consisting of 25 packs. Each carton is a unit, and they are directly sold to supermarkets and whole food
stores, targeting health-conscious consumers and those seeking sustainable food options. With the
increasing popularity of vegan and plant-based protein alternatives, including soy chicken, Ada Mame
(the CEO of Gwissy) feels that the business is going to experience stiff competition in the near future
from both established brands and emerging start-ups. The rise of new competitors, each offering
innovative plant-based alternatives and novel recipes, has created a sense of urgency within Gwissy.
Ada Mame recognizes that staying ahead requires more than just meeting consumer expectations – it
demands setting new benchmarks for product quality and innovation.
A key aspect of quality for vegan soy chicken, as found by market research, is that the product should
not taste “vegan” – a description often associated with blandness or an unconvincing imitation of
meat. Given that Gwissy’s target consumer base includes not only vegans but also flexitarians,
consumers overall expect a product that closely mimics the taste and texture of real chicken while
also being nutritious. Achieving this quality aspect while keeping costs down however has been a
constant strain on the product design team. They find that achieving a convincing chicken-like taste
without using any animal products is rather difficult if not completely impossible, and the cost of
alternate materials really dictates the quality and eventual taste of the product.
As a result, there has been a constant search for a wide range of novel ingredients and ingredient
combinations by the product design team. A long list of ingredients and respective ingredient- suppliers from around the world have been collated by R&D team. Ingredients include plant proteins
derived from peas, wheat, soybeans, and legumes, as well as seasonings, natural flavour enhancers,
binding agents and texturisers. Each ingredient type offers different textures and flavours, which must
be carefully balanced. This process is further complicated by the need to ensure that the ingredients
are sustainably sourced and non-GMO – criteria that are increasingly important to Gwissy's target
consumers. However, these same criteria together with the need to weigh quality, costs and supplier
reliability narrows down the pool of viable suppliers. The R&D team has been trying to construct an
optimal combination of suppliers in collaboration with the product design team, striving to balance
flavour, texture, and cost. This collaboration has become a critical factor in the product development
process, as any changes in the ingredient mix can significantly impact the product’s taste and cost
structure. However, the challenge lies not only in sourcing ingredients that can replicate the taste and
texture of chicken but also in managing the costs associated with these ingredients.
To be ahead of competition, Gwissy has also determined that the manufacturing labour-force is a key
part of the final quality profile of the vegan soy chicken. The product design team has enforced that
while they are able to come up with various soy chicken recipe formulas and taste profiles – it is the
quality-checking skills, eye-for-detail and ‘gut instincts’ of the manufacturing labour-force together
with well-maintained state-of-the-art equipment that ultimately ensure how ‘genuine’ the vegan soy
chicken will actually taste. The product design team has emphasised that even the most meticulously
formulated recipe can fall short without the skill and expertise of the manufacturing workforce. The
manufacturing process for vegan soy chicken is complex, requiring precision, attention to detail, and
an intuitive understanding of the intricacies of plant-based food science. A misstep in any of these can
compromise a whole batch of vegan soy chicken. Moreover, the business has implemented rigorous
quality control measures at every stage of the production process. From the selection and inspection
of raw ingredients to the final packaging of the product, every step is meticulously monitored to
ensure consistency and quality.
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The business is currently at a crossroads. With new competitors entering the market, Gwissy must
decide on the best strategy to maintain and expand its market position. After months of testing-and- trialling ways of achieving the ‘perfect’ product, the newest version of the vegan soy chicken is now
available in the market and time has come for your team to prepare a performance report (with details
you extracted from past records) for the product for the current month. Your team has worked very
hard and prepared data for a report that is to be presented to management in 2 days’ time.
Unfortunately, a misstep by a trainee employee has led to the deletion of some of the information
stored by your team. Your team now lacks some of the information you need for presentation. You
find this problem the next day, and now your team must urgently put together all the information
required for your meeting this afternoon. Below is all the information you have retrieved.
Direct
Materials
Direct
Labour
Variable
Overhead
Fixed
Overhead
Standard cost allowed given actual
output
? (? Kgs @
$12 per Kg)
? (2 hours @
$14 per hour)
Flexible overhead budget
? $40,000
Actual cost $189,000
(14,000 Kgs
@ $13.50
per Kg)
? (8,800 hours
@ ? per hour)
? ?
Direct material price variance ?
Direct material quantity variance $6,000 U
Direct labour rate variance
$8,800 U
Direct labour efficiency variance
$2,800 F
Variable-overhead spending variance
$2,640 U
Variable overhead efficiency variance
$1,200 F
Fixed overhead spending variance
$3,250 U
Fixed overhead volume variance
?
In addition to the above data, your team members have also remembered the following details:
• Production that was planned for the month was 500 units (cartons) more than the actual
production.
• All direct materials purchased were completely used for production.
• There were no beginning or ending inventories of direct materials or finished goods.
• Overheads (both fixed and variable) are applied on the basis of direct-labour hours. The fixed
overhead rate is $4.00 per hour.
• Selling price per unit (carton) was $95.
• 45% of variable cost is indirect labour; 25% is for electricity; and 30% is for repairs and
insurance. 60% of fixed costs accounts for factory rent and the remaining accounts for
depreciation and miscellaneous expenses. This percentage remained the same for both
budgeted and actual expenses.
1. In order to redo your presentation, you need to be able to find out information on sales,
production planned in units (cartons), actual number of units (cartons) produced, actual fixed
overheads, total standard time allowed for direct-labour, actual rate for direct labour,
standard direct material quantity per unit (cartons), direct-material price variance, applied
fixed overhead, fixed overhead volume variance and determine the profit/loss for vegan soy
chickens. Once you have this information:
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• You have to prepare a PowerPoint presentation to clearly show the performance for the last
month (including analysing the budget of the month and the actual performance).
• Ada Mame wants you to explain potential causes behind all the variances and what could be
done to reduce variances occurring in the future.
2. You also need to prepare a complete set of all operating budgets for the next month keeping
in mind that sales have reduced, and it is difficult to find experienced labour force. You expect
the following for the next month:
(1) Compared to last month’s actual unit sales, a reduction in sales by 5% is expected but
an increase in selling price from $95 to $102.
(2) An increase in direct material price by $0.50 per Kg (this increment will be on top of
the actual direct material price from last month). A decrease in direct material
quantity by 0.25 Kg per unit (carton) (this decrease will be on top of the budgeted
direct material quantity from last month).
(3) You would like to maintain a finished goods inventory of 300 units (cartons) for the
end of next month.
(4) You would also like to keep direct materials inventory in stock for the end of next
month. This amount should be 20% of materials required for next month’s sales (note
again that sales are expected to go down by 5% compared to last month’s actual
sales). This is because you expect delays in imports of raw material required for
production.
(5) An increase in direct labour cost per hour by 10% (this increment will be on top of the
actual direct labour cost from last month). A decrease in direct labour hour per unit
(carton) by 2.5% (this decrease will be on top of the budgeted direct labour hours per
unit from last month).
(6) Variable overheads budgeted is still based on direct labour hours and is expected to
be $5.4925 per hour. You predict that variable overhead will consist of:
Indirect labour $15,000
Electricity $14,000
Repairs and Insurance $20,000
(7) Total Fixed overhead is also still based on direct labour hours and remains the same
as last month. The fixed overhead rate is expected to be $4.48 per hour. Fixed
overhead is predicted to consist of:
Factory rent $25,000.
Depreciation & Miscellaneous expenses $15,000
• Ada Mame would like your and your team’s specific evaluations of each of the predictions made
for next month. Ada Mame is also wondering to what extent the above changes will be
good/reasonable for the business and what other changes should be made.
• In constructing the budget for next month, what do you think would be the issues with some of
the prediction methods you have used? Based on the information given in the case study and
through information you find through basic research, how realistic or unrealistic is the budget
for next month and why?
3.
Overall, Ada Mame is worried about the budgets for next month and wants your team to
conduct a CVP analysis as well to know how they would perform next month in terms of the
sales price, volume of sales, fixed and variable costs and the effects of these on their overall
profits. Ada Mame wants you to calculate and analyse the results of the following (based on the
budgeted figures you derive for the next month):
(1) The new contribution margin and the break-even point in units and in revenue.
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(2)
The sales required (in units and in revenue) to earn a profit of $25,000. Ignore income tax.
(3) Ada Mame is planning to aggressively campaign the newest version of the vegan soy chicken at a
number of food fairs that will be held in the city. She expects that the total cost of having stalls and
other related expenses will be $8,000. Due to the product’s exposure at the fairs, Ada Mame expects
that sales will increase by 2% (that is, on top of the 5% decrease that they are already foreseeing for
next month). Please advise if Gwissy should go ahead with this venture.
(4) Ada Mame would also like your team to calculate and analyse the degree of operating leverage
and the margin of safety percentage at sales of 4,275 units (cartons), under the following two options:
(i) Increase budgeted variable costs by 10% and reduce budgeted fixed costs by 15%.
(ii) Increase budgeted fixed cost by 10% and maintain variable cost at the budgeted levels.
4. After the data deletion mishap, Gwissy is now thinking of implementing SAP ERP software and
wants your team to analyse its usefulness in developing flexible budgets at Gwissy in the future.
Ada Mame wants you and your team to identify 2 to 3 core key capabilities of SAP and explain
how those specific capabilities can help implement flexible budgeting at Gwissy and add value to
the firm’s cost management strategy.
5. As a last concern, due to the rising popularity and potential of Generative AI, Ada Mame is keen
on leveraging AI technologies to enhance financial planning and analysis. Ada Mame is
particularly interested in using AI to:
i) Create dynamic budgets that can be adjusted in real-time based on changing business
conditions, and
ii)
Simulate various scenarios to evaluate their financial impact. Ada Mame particularly wants to
analyse budget variances and identifying patterns and anomalies.
Using your projected budgets for next month, Ada Mame wants you to collaborate with AI tools such
as ChatGPT, Bing Chat or Copilot to forecast revenues and expenses for the 12 months following next
month. You need to document the process, from prompts/queries that were provided to the AI tool
(and the reasonings behind those prompts/queries) to interpretation of how realistic/unrealistic the
results from the AI tool were. Your main goal here is to assess the effectiveness, practicality and
reliability of the AI-generated results specifically for Gwissy. To this end, Ada Mame wants you to
include the following information:
- Methodology: A brief justification of the chosen AI tool/s for this specific task, and detailed
steps on how the AI tool was implemented.
- Results and Discussion: Critical evaluation of the results and their specific implications for
Gwissy.
- Conclusion: The main key insights, specific challenges and recommendations for how Gwissy
could effectively utilise AI for future analysis.
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Instructions
Based on all the information analysed, you now need to prepare an executive report in PowerPoint
format for the case study business (note: you are not doing a live presentation; you are submitting a
thorough and detailed PowerPoint only for Gwissy management to read). Your PowerPoint report
should contain the following:
a. Executive summary – A summary of the report including background, analysis, major findings,
recommendations and limitations (so that an executive reading the report will have enough details to
attend and participate at a meeting even if they have not read the rest of the report in detail). Please
note, an executive summary needs to identify priorities, rationale, key assumptions and give insights
into the analysis performed in a succinct and impactful way.
b. Background/context – A full description of all important issues and their background that are
relevant to the case study and your findings.
c. Analysis – All detailed analytical/critical insights and observations generated in light of the results
obtained. Calculations and tables of figures should not be included here (please do so in the
appendices), with this section referencing the appropriate appendices.
d. Findings – Details and justifications of all your key findings/discoveries/insights from the analyses
(this should not be a paraphrasing of the analyses). Draw out broader findings/realisations that come
out of your analyses. Take care to recognise and describe any assumptions or where additional data
may be necessary to further understand the situation.
e. Recommendations – Details and justifications of your recommendations in line with what you have
deduced in your analysis and findings. Your recommendation may include the need for further specific
forms of analysis/research/data on identified issues. Please ensure that your recommendations are
reasonable/justifiable and directly address the case and/or the analyses undertaken above. Your
recommendations should be specific (to the case study business) and detailed.
f. Implementation plan – A plan that highlights specific/concrete actions to be taken in order to
implement any proposed changes based on the findings and recommendations. This should not be a
paraphrasing of the recommendations.
g. Limitations – Details of specific limitations from the analyses, limitations in the
ways/methods/choices as undertaken by the case study business, any missing information, and any
specific assumptions made (and the implications of those assumptions), etc. You can also take note of
the limitations underlying the data, calculations and the case study context. Please avoid stating
generic limitations of management accounting concepts/techniques (eg: budgeting, variance analysis,
etc).
h. SAP Integration – Provides a clear identification of the relevant core capabilities of SAP software
and explains specifically how these capabilities will help the case study business. The main focus of
this section is to outline the usefulness of SAP software as a tool for the concerns/interests/motivation
of the case study business and how SAP can add value to the business's specific goals/strategies.
i. AI evaluation – Provides a justification of an appropriate AI tool/s, including detailing the
reasoning/rationale behind how the AI tool was used. The main focus of this section should be a critical
evaluation of the AI-generated outputs, assessing their effectiveness, practicality and reliability (and
therefore their specific implications) for the case study business. Also includes a summary of key
insights, specific challenges and recommendations for how the case study business can leverage AI
effectively for future analyses.
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j. Appendices – All other relevant supporting materials such as detailed calculation work (that has
been referenced in the body of the report). There should be NO new material or important material
in the appendices.
Please make sure to see the Marking Guide for further details.
1. Important note: While your calculations are important, the assignment will be assessed largely for
critical thinking, depth, creativity and application of relevant analysis techniques. Please do not
describe/list your calculation results anywhere within the body of your report – doing so is
inappropriately simplistic.
2. Report: The report must meet the purpose of providing details for a manager with sufficient time
to sit and read the report. As you are not doing a live presentation (i.e., your PowerPoint will be read
only), the texts written within the PowerPoint needs to be detailed and thorough, but also succinct
and to-the-point. The slides should not be overcrowded. The body of the report must not exceed 15
PowerPoint slides in total (10 for the normal report, 1 for suitability of SAP and 4 for the AI
evaluation). This slide-count excludes the title page, the appendices, the cover page and the peer
evaluation form.
3. Formatting and writing style that you MUST comply with:
⚫ Slide size – Widescreen (16:9)
⚫ Font style – Verdana
⚫ Font size – 16 (except for headings, for which you can use a maximum size of 30)
⚫ Line spacing – 1.0
⚫ You MUST use PowerPoint to write your report (and NOT Google slides or any other similar
applications)
⚫ The executive summary has a limit of 1 slide only.
⚫ Sufficiently informative and detailed dot-points are encouraged throughout the report.
⚫ You are strongly encouraged to be specific and detailed, but also concise in your writing
style. Please make sure that each slide is clear and well-organised. Please do not waste space
on stating the obvious or including tedious calculations or including definitions of
management accounting terminologies or providing simplistic and obvious
reasonings/interpretations of your calculations. Remember that management would normally
require as much information as would be required to help them make informed decisions, so
avoid providing unnecessary information. To reflect this, your writing should be sufficiently
detailed and informative but not verbose.
⚫ The title page will not be counted towards your PowerPoint slide limit.
4. Appendices: You are encouraged to provide all supporting calculations in the appendices. The
appendices can be in Word document format or in Excel. The appendices should be no longer than
ten (10) A4 pages. Please attach the appendices at the end of the report. The appendices will not be
counted towards your PowerPoint slide limit.
5. Cover page: Please provide a separate cover page for your assignment submission (with student
names, SIDs and email addresses). Only ONE submission to be submitted by each group. Cover pages
can be found in Canvas. The cover page will not be counted towards your PowerPoint slide limit.
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6. Peer evaluation: Each group is required to sign and attach 1 peer evaluation form with the
assignment. For example: If you are in a group of three – members #1 and #2 will jointly decide the
contribution of member #3; members #2 and #3 will jointly decide the contribution of member #1;
members #1 and #3 will jointly decide the contribution of member #2. You will not be required to
evaluate your own contribution.
Each member should be aiming for 100% contribution. Contributions of 80% and below warrants
investigation by the Unit Coordinator and a potential penalty for all group members, whether
deemed to have contributed or not. In other words, if you have a non-contributing group member it
is your responsibility to get that individual to contribute as this is a group task. The peer evaluation
page will not be counted towards your PowerPoint slide limit.
7. Use of AI Tools: You may use AI tools such as ChatGPT, Bing Chat or Copilot for use in the AI
evaluation section of the report. You are not permitted to use AI tools to complete the normal report
part of the assignment, otherwise you risk being penalised for academic dishonesty. Please adhere to
the following guidelines:
▪ Do not enter confidential, personal, copyrighted or otherwise sensitive information into any AI
tool.
▪ If you use these tools, you must be aware of their limitations, biases and propensity for
fabrication.
▪ Do not rely on the accuracy of outputs. You remain responsible for your work. This means you
must independently verify and edit AI-generated content to ensure the integrity, accuracy and
suitability of the output.
For guidance on how to approach the use of AI, please refer to the AI in Education Canvas site.
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