Sample Assignments
Scenario
For the purpose of this assignment you are to assume the role of a junior accountant for a retail group and your line manager is the Regional Director of Finance. The Director of Finance needs to produce a leaflet for some new members of the Board as part of the induction pack. They are experts in a range of business fields but have limited financial knowledge. You have been asked to prepare a first draft of the leaflet.
Activity 1
The leaflet must provide an overview of accounting policies and procedures and:
LO1 Assessment Criteria 1.1 1.2 1.3
Activity 2
At the next meeting of the Board there is an agenda item titled ‘Discussion of financial statements and their usefulness for stakeholder groups’. This will be led by the Regional Director of Finance. You have received an email asking you to produce a draft paper which evaluates the usefulness of financial statements to a range of stakeholder groups.
LO1 Assessment Criteria 1.4
Activity 3
Due to a reduction in sales revenue and a fall in group profits the Board of Directors is investigating inventory management, credit control and current liquidity In order to make meaningful comparisons. Your line manager has asked a few staff in the department to analyse the final accounts of competitors and you have been selected to joint this group.
LO2 Assessment Criteria 2.1 2.2
Activity 4
A number of new managers have been recruited to the retail group who will have responsibility for managing their own budgets. Your line manager has asked you to prepare a presentation on financial procedures for the induction programme. In the presentation and accompanying hand out you must:
LO3 Assessment Criteria 3.1 3.2
Activity 5
The retail group has introduced a new product, and uses a standard cost system. Standard costs for 1,000 kilograms of the new product are:
Requirements | Quantity | Price per kilogram | Total Cost |
Kilograms | £ | £ | |
a | 800 | 0.25 | 200 |
b | 200 | 0.40 | 80 |
c | 200 | 0.10 | 20 |
Input | 1,200 | 300 | |
Output | 1,000 | 200 |
The production of 1,000 kilograms of the new product requires 1200 kilograms of raw materials. Hence the yield is 1,000 / 1,200 or 5/6 of input. Materials records indicate.
Materials | Opening Inventory | Purchases (units) in January | Closing Inventory |
A | 10,000 kilograms | 162,000 @ £0.24 | 15,000 kilograms |
B | 12,000 kilograms | 30,000 @ £0.42 | 4,000 kilograms |
C | 15,000 kilograms | 32,000 @ £0.11 | 11,000 kilograms |
To convert 1,200 kilograms of raw materials into 1,000 kilograms of finished product required 25 hours of labour at £7.25 per hour.
Actual direct labour hours and costs are 3,800 hours at £27,550. Factory overhead is applied on a direct labour hour basis at a rate of £5 per hour (£3 fixed, £2 variable).
Factory overhead is £20,000 with 4,000 direct labour hours. Actual overhead are £22,000, Actual finished production is 200,000 new products.
The standard cost per kilogram of the finished product:
Materials | £0.30 per kilogram |
Labour | £0.12 per kilogram |
Factory overheads | £0.10 per kilogram |
The standard selling price per unit 50% mark up on total cost. The actual selling prices 30% mark up on total cost.
LO3 Assessment Criteria 3.3 3.4.
Activity 6
Your line manager has been pleased with your work to date and has invited you to a meeting with the Marketing Director. She has been researching a number of projects to encourage customers to return to the store. You have been asked to report on the financial viability of the projects.
The costs associated with each project are as follows:
Project 1 | Project 2 | Project 3 | Project 4 | |
£ | £ | £ | £ | |
Initial Cost | 550,000 | 550,000 | 290,000 | 460,000 |
Expected Cash Flow | ||||
Year 1 | 20,000 | 50,000 | 15,000 | 30,000 |
Year 2 | 75,000 | 175,000 | 80,000 | 95,000 |
Year 3 | 125,000 | 200,000 | 120,000 | 150,000 |
Year 4 | 250,000 | 175,000 | 100,000 | 210,000 |
Year 5 | 200,000 | 70,000 | 60,000 | 300,000 |
Table of Discount Factors
Rate percent | ||||||
Year | 4.5 | 5.0 | 5.5 | 6.0 | ||
1 | 0.9569378 | 0.9523810 | 0.9478673 | 0.9433962 | ||
2 | 0.9157300 | 0.9070295 | 0.8984524 | 0.8899964 | ||
3 | 0.8762966 | 0.8638376 | 0.8516137 | 0.8396193 | ||
4 | 0.8385613 | 0.8227025 | 0.8072167 | 0.7920937 | ||
5 | 0.8024510 | 0.7835262 | 0.7651344 | 0.7472582 | ||
LO4 Assessment Criteria 4.1 4.2 4.3
Guidelines for assessors
The assignment submitted by learners must achieve the learning outcomes and meet the standards specified by the assessment criteria for the unit. The suggested evidence below is how learners can demonstrate they have met the required standard.
Task Number | Assessment criteria | Suggested evidence |
1 | LO1
AC 1.1 1.2 1.3 |
The leaflet should be appropriately presented for the intended audience. The learner is expected to use an appropriate presentation format and produce a clear explanation of the purpose of financial records and provide an overview of financial record keeping. The learner is not expected to produce a full set of accounts but may use extracts from accounts to illustrate debit and credit entries or an audit trail from a computerized system. The information must include an overview of Income Statements (profit and loss accounts) and Statement of Financial Position (balance sheets) for different types of ownership. The learner should ensure all technical terms are clearly explained. The learner could consider including a hand out or glossary of terms in the overview. |
2 | LO1
AC 1.4 |
The learner needs to evaluate the key information that financial statements provide for different stakeholders and make a judgement on their use and relevance. |
3 | LO2
AC 2.1 2.2 |
The learner is expected to use an appropriate report format and draw information from the published accounts of the chosen retail group. (Income Statements (profit and loss accounts) and Statement of Financial Position (balance sheets)) As a minimum the learner should calculate liquidity ratios for the last two years. The learner may also consider the debtor and creditor collection periods and stock turnover to support the discussion on improvements to working capital. The learner should clearly state any assumptions made in relation to the data used from company reports. |
4 | LO3
AC 3.1 3.2 |
The learner is expected to use an appropriate presentation format and produce a hand out taking into account the end users. There should be a detailed explanation of the budgetary control process and the difference between management and financial accounting must be clearly explained. The explanations should be supported by illustrations. The learner is not expected to produce a detailed budget statement. |
5 | LO3
AC 3.3 3.4 |
The learner must show full workings of all calculations. All financial statements should be presented in a format that complies with current accounting conventions. The learner should state clearly any assumptions made and clearly distinguish adverse and favourable variances justifying any recommendations. The learner is expected to manipulate the break- even formula and giver a detailed explanation of the results. |
6 | LO4
AC 4.1 4.2 4.3 |
The learner must complete the tasks in order to demonstrate achievement of the LO at the appropriate standards. The learner should use appropriate terminology to meet the needs of a readership who have a non-financial background.
The learner is expected to use a range of investment appraisal techniques and show all stages of any calculations. The learner should be able to use discount factor tables; and calculate exact discount factors using extrapolation. Any decisions made should be supported by clear justification explaining why a particular project has been accepted or rejected. The learner is not expected to discuss all sources of finance but focus on those sources that are relevant and realistic for the project selected. |