Assessment Type: Individual
Weighting: 50%
Learning Outcomes: ULO 1, 2, 3 and 4
Word Limit: 3,000 words (Written Report)
Time Limit: 10 minutes (Video Presentation)
Due Date: 24th April 2026 – 11.59 pm
All submissions must include a signed Oxford Institute of Higher Education Cover Sheet and be submitted via Moodle. Late submissions will not be accepted, and no further extensions will be granted, as this assessment is equivalent to a final exam.
This assignment consists of two parts: Part A – a report (questions and answers), and Part B – a video presentation.
To ensure academic rigor, please cite at least one academic journal articles and/or the textbook for each terminology, concept or finding that corresponds to your analysis. This means you must cite at least five (5) relevant references. Use Australian Harvard style of referencing for in-text citations as well as the reference list that is organised alphabetically by an author's surname. You are NOT allowed to use any Generative Artificial Intelligence like ChatGPT, Grammarly or any app/software/tool to write your report. Penalties will apply as an Academic Misconduct.
You are required to prepare written responses for the following practical questions. Show all workings and clearly state all assumptions. You also need to interpret your findings supported by appropriate theories. Your report must have standard sections such as coverage, executive summary, table of content and list of references etc
NovaCraft Ltd manufactures a single product called The Apex. The company is deciding between two components from its supplier:
| Component Alpha | Component Beta | |
|---|---|---|
| Variable cost per unit | $18.00 | $13.50 |
| Annual fixed costs | $4,080,000 | $4,896,000 |
NovaCraft's selling price for The Apex is $72.00 per unit, subject to a 5% sales commission. Ignore income taxes.
Required:
a) Calculate the contribution margin per unit if Component Alpha is selected. Show your workings clearly. (1 mark)
b) Calculate the break-even point in units if Component Alpha is selected. (2 marks)
c) Which component would be more profitable if annual sales are 200,000 units? Prepare a comparative profit statement for both options to support your answer. (1 mark)
d) At what level of production would NovaCraft's management be indifferent between Component Alpha and Component Beta, that is, at what volume will the total annual costs of both options be equal? Show all workings. (3 marks)
e) Assume Component Beta requires additional equipment costing $2,400,000, depreciated over 5 years using the straight-line method with zero residual value. How many units must the company sell to earn a target profit of $3,600,000 if Component Beta is selected? (Include the depreciation in your calculations.) (3 marks)
Apex Manufacturing Ltd produces two products: the Standard Model and the Premium Model. The management accountant has compiled the following data for the upcoming annual budget.
Direct material usage per unit:
| Direct Material | Standard Model | Premium Model |
|---|---|---|
| Steel plate (kg) | 3 kg | 6 kg |
| Aluminium rod (kg) | 2 kg | 4 kg |
| Fastener kit (units) | 1 unit | 2 units |
Raw material prices and inventory levels:
| Raw Material | Price | Opening Inventory (1 Jan) | Desired Closing Inventory (31 Dec) |
|---|---|---|---|
| Steel plate | $7.00/kg | 24,000 kg | 28,000 kg |
| Aluminium rod | $4.50/kg | 16,000 kg | 19,000 kg |
| Fastener kit | $3.00/unit | 8,000 units | 10,000 units |
Finished goods inventory (units):
| Product | Opening (1 Jan) | Desired Closing (31 Dec) |
|---|---|---|
| Standard Model | 15,000 | 18,000 |
| Premium Model | 6,000 | 8,000 |
Sales forecast:
| Product | Units | Selling Price |
|---|---|---|
| Standard Model | 70,000 | $110 |
| Premium Model | 35,000 | $200 |
Required:
a) Prepare the production budget (in units) for both the Standard Model and the Premium Model. (1 mark)
b) Prepare the direct materials purchases budget in quantities for all three raw materials. (1 mark)
c) Prepare the direct materials purchases budget in dollars. (1 mark)
d) Prepare a sales budget showing total sales revenue for both products. (1 mark)
e) Explain TWO purposes of budgeting and discuss how budgeting supports the management activities of planning and evaluating business performance. Use examples from Apex Manufacturing Ltd to illustrate your answer. (3 marks)
The following information has been extracted from the financial records of Brightline Services Pty Ltd for the year ended 30 June 20X5:
| Item | 20X5 ($) | 20X4 ($) |
|---|---|---|
| Service revenue | 960,000 | 840,000 |
| Cost of services | 528,000 | 462,000 |
| Selling expenses | 88,000 | 76,000 |
| General and administrative expenses | 64,000 | 58,000 |
| Depreciation expense | 36,000 | 32,000 |
| Interest expense | 12,000 | 10,000 |
| Cash at bank | 48,000 | 36,000 |
| Accounts receivable | 75,000 | 62,000 |
| Inventory | 95,000 | 82,000 |
| Prepaid expenses | 18,000 | 14,000 |
| Total current assets | 242,000 | 198,000 |
| Property and equipment (net) | 580,000 | 530,000 |
| Total assets | 830,000 | 740,000 |
| Accounts payable | 68,000 | 55,000 |
| Other current liabilities | 52,000 | 44,000 |
| Total current liabilities | 120,000 | 99,000 |
| Non-current liabilities | 160,000 | 150,000 |
| Total liabilities | 280,000 | 249,000 |
| Owner's equity — opening | 491,000 | 456,000 |
| Owner's equity — closing | 550,000 | 491,000 |
Required:
a) Prepare a classified income statement for Brightline Services Pty Ltd for the year ended 30 June 20X5. Clearly show gross profit, operating profit, and net profit. (2 marks)
b) Prepare a classified balance sheet for Brightline Services Pty Ltd as of 30 June 20X5, clearly distinguishing between current and non-current items. (1 mark)
c) Calculate the following ratios for 20X5. Show the formula and all workings for each ratio and interpret your findings. (4 marks)
| Ratio | Formula |
|---|---|
| (i) Gross profit percentage | Gross profit / Service revenue |
| (ii) Net profit margin | Net profit / Service revenue |
| (iii) Current ratio | Current assets / Current liabilities |
| (iv) Debt ratio | Total liabilities / Total assets |
| (v) Return on total assets | (Net profit + Interest expense) / Average total assets |
| (vi) Return on owner's equity | Net profit / Average owner's equity |
VisionTech Ltd is evaluating two mutually exclusive capital investment proposals to upgrade its production line. Details are as follows:
| Proposal A | Proposal B | |
|---|---|---|
| Initial investment | $95,000 | $145,000 |
| Useful life | 5 years | 5 years |
| Residual value | $0 | $5,000 |
| Net cash receipts — Year 1 | $32,000 | $48,000 |
| Net cash receipts — Year 2 | $32,000 | $42,000 |
| Net cash receipts — Year 3 | $28,000 | $38,000 |
| Net cash receipts — Year 4 | $22,000 | $32,000 |
| Net cash receipts — Year 5 | $18,000 | $28,000 |
| Required rate of return | 10% | 10% |
Present value factors at 10%:
| Year | PV Factor (10%) | Cumulative PV Factor |
|---|---|---|
| 1 | 0.9091 | 0.9091 |
| 2 | 0.8264 | 1.7355 |
| 3 | 0.7513 | 2.4869 |
| 4 | 0.6830 | 3.1699 |
| 5 | 0.6209 | 3.7908 |
Required:
a) Calculate the Net Present Value (NPV) for each proposal. State, using the NPV decision rule, whether each proposal is acceptable. (1 mark)
b) Calculate the payback period for both proposals. Which proposal recovers its initial investment more quickly? (1 mark)
c) Calculate the Accounting Rate of Return (ARR) for Proposal A. Show all steps. (0.5 marks)
d) Based on your analysis of all three methods, which proposal would you recommend to VisionTech's management and why? Write 2–3 sentences. (1.5 marks)
VisionTech's board is also considering how its capital investment decision connects to its sustainability obligations.
e) Briefly explain the concept of the Triple Bottom Line (TBL) and how it could influence VisionTech's choice between Proposal A and Proposal B. In your answer, identify ONE environmental and ONE social indicator from the Global Reporting Initiative (GRI) that VisionTech should consider. (2 marks)
You are required to present your responses to the questions in a video using presentation slides. The presentation should take 10 minutes with a minimum of 7 slides. The video should be uploaded to Moodle together with the written report.
Presentation Structure:
| Slide | Section | Content |
|---|---|---|
| 1 | Title slide | Unit name, assessment title, your name and student ID |
| 2 | Outline slide | Key points covered and structure of your presentation |
| 3 | Question 1 | CVP analysis, contribution margin, break-even, indifference point |
| 4 | Question 2 | Budget tables, production, materials purchases, sales budget |
| 5 | Questions 3 | Income statement, balance sheet, key ratios, cash flow statement |
| 6+ | Question 4 & Conclusion | Capital investment analysis, recommendation, sustainability, key takeaways |
| Criteria | High Distinction (80–100%) | Distinction (70–79%) | Credit (60–69%) | Pass (50–59%) | Fail (0–49%) |
|---|---|---|---|---|---|
| Main Body (Question and answer) / 30 | Present an outstanding response to the practical questions. Demonstrate an outstanding understanding of all key technical issues. | Present a very good response to the practical questions. Demonstrate a very good understanding of all key technical issues. | Present a good response to the practical questions. Demonstrate a good understanding of most key technical issues. | Present a reasonable response to the practical questions. Demonstrate a reasonable understanding of most key technical issues. | Fail to provide a proper response to the practical questions and/or demonstrate a proper understanding of most technical issues. |
| Report/presentation structure / 10 | Report structure and visual aids summarise key points well. Always simple, consistent and uncluttered. Clearly readable font style and size. No error in formatting or proofreading. | Report structure and visual aids summarise key points. Mostly simple, consistent and uncluttered. Clearly readable font style and size. Few errors in formatting and/or proofreading. | Report structure and visual aids summarise some key points. Usually simple, consistent and uncluttered. Mostly readable font style and size. Some errors in formatting and/or proofreading. | Report structure and visual aids do not summarise all key points. Complex, inconsistent and cluttered. Not always clearly readable font style and size. Many errors in formatting and/or proofreading. | Visual aids do not summarise most key points. Complicated or lacking basic content, inconsistent and/or cluttered. Many errors in formatting, proofreading. |
| Presentation Delivery / 10 | Excellent delivery showed extensive practice and development. All speakers engaged with audience. Displayed clear pronunciation, measured pace, varied intonation and appropriate use of pausing. Audio synched perfectly with visuals. Presentation enhanced by use of body language, including eye contact, gestures, movement and emphasis. No reading of notes. The speaker demonstrated confidence in the material being presented. Signposting directed the presentation. Clear signaling, seamless transitions and timing within guidelines. | Very good delivery showed practice and development. Most speakers demonstrated clear pronunciation, measured pace, varied intonation or appropriate use of pausing. Audio mostly synched with visuals. Effectiveness mostly enhanced by body language, including lack of eye contact, gestures, movement and emphasis. The speaker demonstrated confidence in the material being presented. Very good signposting and transitions between speakers. Timing within guidelines. | Good delivery showed practice and development. Most speakers demonstrated clear pronunciation, measured pace, varied intonation or appropriate use of pausing. Audio mostly synched with visuals. Effectiveness mostly enhanced by body language, including lack of eye contact, gestures, movement and emphasis. The speaker demonstrated confidence in the material being presented. Good signposting and transitions between speakers. Timing within guidelines. | Reasonable delivery showed some practice and development. Some speakers demonstrated clear pronunciation, measured pace, varied intonation or appropriate use of pausing. Audio sometimes synched with visuals. Effectiveness sometimes reduced by distracting body language, including lack of eye contact, gestures, movement and emphasis. The speaker demonstrated lack of confidence in the material being presented. Reasonable signposting, transitions between speakers. Timing slightly outside guidelines. | Poor delivery showed little practice and development. Most speakers did not demonstrate clear pronunciation, measured pace, varied intonation or appropriate use of pausing. Audio did not synch with visuals. Effectiveness often reduced by distracting body language, including lack of eye contact, gestures, movement and emphasis. The speaker demonstrated lack of confidence in the material being presented. |
| Total | 50 |
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