BANKING ACADEMY OF VIETNAM

BTEC HND IN BUSINESS (ACCOUNTING)

ASSIGNMENT COVER SHEET
NAME OF STUDENT
REGISTRATION NO.
UNIT TITLE
ASSIGNMENT TITLE
ASSIGNMENT NO
NAME OF ASSESSOR
SUBMISSION DEADLINE

Unit 2: Managing Financial Resources and Decisions

Financial Performance Analysis and Decision Making

2 of 2
Mr. Nguyen Nam Trung, ACCA, MBA

I, __________________________ hereby confirm that this assignment is my own work and not
copied or plagiarized from any source. I have referenced the sources from which information is
obtained by me for this assignment.

________________________________
Signature

_________________________
Date

----------------------------------------------------------------------------------------------------------------

FOR OFFICIAL USE

Assignment Received By:

MFRD A2 QCF Sept 2014 BAV

Date:

Unit Outcomes
Outcome

Evidence for the

criteria

Feedback

Assessors decision
First

Be able to
make
financial
decisions
based on
financial
information

Analyse budgets
and make
appropriate
decisions

3.1

Explain the
calculation of unit
costs and make
pricing
decisions using
relevant
information

3.2

Assess the
viability of a
project using
investment
appraisal
techniques

3.3

Discuss the main

financial
statements

4.1

Compare
appropriate
formats of
financial
statements for
different types of
business

4.2

Interpret financial
statements using
appropriate ratios
and
comparisons,
both internal and
external

4.3

Internal
Verification

Re-

LO3

Be able to
evaluate the
financial
performance
of a
business
LO4

Merit grades awarded

M1

M2

M3

Distinction grades awarded

D1

D2

D3

MFRD A2 QCF Sept 2014 BAV

Outcome

Evidence for the

criteria

Feedback

Assessors decision

Internal
Verification

Assignment
( ) Well-structured; Reference is done properly / should be done (if any)
Overall, youve

Areas for improvement:

ASSESSOR SIGNATURE

DATE

DATE

NAME:.........................................................................................

(Oral feedback was also provided)

STUDENT SIGNATURE
NAME :..............................................................................
FOR INTERNAL USE ONLY
VERIFIED
YES
NO
DATE

: ...........................................................................

VERIFIED BY : ...........................................................................
NAME

: ...........................................................................

MFRD A2 QCF Sept 2014 BAV

SCENARIO
A

BUDGETING DECISIONS

Holyrood Products Ltd makes DVD recorders. The management accountant has
produced the following summary of the companys trading in the year ended 30 June
Year 3:

Sales: 30,000 recorders

375,000
Add: Increase in finished goods stock
16,000
391,000
Deduct:
Direct materials
128,000
Direct labour
96,000
Works and administration overhead
50,000
Selling overhead
20,000
294,000
Trading profit
97,000
The following additional information is available:
a. Works and administration overhead was 64% variable and 36% fixed, the
latter including 2,500 for depreciation of plant surplus to current
requirements.
b. Selling overhead was 75% variable and 25% fixed.
c. For management accounting purposes, finished goods stock is valued at
variable cost excluding selling overhead.
d. There was an increase of 2,000 units in finished goods stock over the year.
The production manager has made the following estimates for the year to 30 June
Year 4 which show that:
a. The excess plant will be utilised for the production of calculators and digital
watches in quantities of 5,000 and 10,000 respectively. The variable costs are:
Calculators
Watches

Direct materials
15,000
10,000
Direct labour
10,000
25,000
Works and administration overhead
2,500
15,000
Selling overhead
4,500
2,250
b. Finished goods stock of DVD recorders will remain unchanged and stocks of
calculators and watches will be built up to 10% of production.
c. Production of DVD recorders will be at the same level as that achieved in the
year to 30 June Year 3.
d. Fixed overhead:
MFRD A2 QCF Sept 2014 BAV

DVD recorders
Works and administration No change
Selling
60% increase

Calculators

8,000*
2,250

Watches

13,500*
6,750

e. Materials costs for DVD recorders will be increased by 1 per unit. Other
variable costs will be held at the level attained in the year ended 30 June Year
3.
The marketing director has advised that each product should be priced so as to
achieve a 25% profit on total cost.
Task

Analyse budgets and make appropriate decisions based on given

information above
(3.1)
Hints: You are required to prepare a statement of budgeted profit for the year ended 30
June Year 4.

COSTING AND PRICING DECISIONS

Holyrood Products Ltd manufactures a product, particulars of which are detailed

below:
Annual Production (Units)
Cost per annum
Material
Other variable cost
Fixed cost
Apportioned Investment ()

40,000
()
100,000
120,000
80,000
300,000

Assume that Holyrood Products Ltd Tax rate is 40% - (a) 20% return on investment;
(b) 6% profit on list sales, when trade discount is 40%.
Task

Explain the calculation of unit costs and make pricing decisions using
relevant information given in the scenario
(3.2)

C. INVESTMENT DECISIONS
MFRD A2 QCF Sept 2014 BAV

Holyrood Products Ltd intends to acquire a new machine costing 50,000 which is
expected to have a life of five years, with a scrap value of 10,000 at the end of that
time. Cash flows arising from operation of the machine are expected to arise on the
last day of each year as follows: (Assume a discount rate of 10 per cent per annum.)
End of year
1
2
3
4
5

10,000
15,000
20,000
25,000
25,000

Task

Assess the viability of a project using investment appraisal techniques

(3.3)
(Hints: Calculate the payback period, the accounting rate of return and the net
present value, explaining the meaning of each answer you produce.)

FINANCIAL PERFORMANCE
Holyrood Products Ltd profit and loss account for the year ended 31 July 2013

Turnover from continuing operations

Cost of sales
Gross profit
Administrative expenses
Operating profit
Net interest payable
Profit on ordinary activities before tax
Tax on profit on ordinary activities
Profit on ordinary activities after tax
Dividends
Retained profit for the year

2013
000
730,913
(621,894)
109,019
(34,036)
74,983
(18,844)
56,139
(19,744)
36,395
(7,434)
28,961

2012
000
601,295
(503,699)
97,596
(27,511)
70,085
(16,517)
53,568
(18,152)
35,416
(6,902)
28,514

Holyrood Products Ltd Balance sheet as on 31 July 2013

MFRD A2 QCF Sept 2014 BAV

2013

MFRD A2 QCF Sept 2014 BAV

2012

Fixed Assets
Tangible assets
Current Assets
Stocks
Debtors due after more than one year
Debtors due after less than one year
Investments
Cash
Creditors due within one year
Net current liabilities
Total assets less current liabilities
Creditors due after one year
Provisions for liabilities and charges
Capital and Reserves
Called-up share capital
Share premium account
Capital redemption reserve
Revaluation reserve
Profit and loss account
Equity shareholders funds

000
773,823
773,823

000
745,041
745,041

9,601
8,448
9,017
301
15,160
42,527
(135,361)
(92,834)
680,989
(299,942)
(62,419)
318,628

8,594
7,682
8,237
203
13,609
38,325
(122,919)
(84,594)
660,447
(292,915)
(57,399)
310,133

4,149
126,739
165
22,439
165,136
318,628

4,292
124,819
23,386
157,636
310,133

Tasks

Discuss the main financial statements (such as income statement,

balance sheet and cash flow statement) of Holyrood Products Ltd
(4.1)

Compare appropriate formats of financial statements for different

types of business (income statement and balance sheet for different types
of business such as sole proprietorship, partnership and limited company)
(4.2)

Interpret financial statements using

comparisons, both internal and external
(4.3)

MFRD A2 QCF Sept 2014 BAV

appropriate

ratios

and

GRADING
Pass

is achieved by meeting all the requirements defined in the assessment

criteria. (Refer page 2 of the assignment brief)

Merit

Identify and apply strategies to find appropriate solutions

(M1)

Characteristics / Possible Evidence Relevant theories and techniques

applied to analyse financial statements against the previous year;
accurate calculation for the unit cost, investment appraisal, and ratios
using the appropriate formulae taking into consideration all the relevant
variables and make financial decisions.
Select and apply appropriate techniques

(M2)

Characteristics / Possible Evidence Apply the relevant theoretical

framework in explaining the differences in the financial statement
formats for different types of business and information needs of
different decision makers; apply range of methods and techniques in
analyze and evaluating the financial performance of the given
businesses as well as comment on the companys performance.
Present and communicate appropriate findings

(M3)

Characteristics / Possible Evidence The work is presented in a

professionally-written report with appropriate structure and timely
submission of work.
Distinction Use critical reflection to evaluate own work and justify valid conclusions
(D1)
Characteristics / Possible Evidence Evaluate and synthesize relevant
theories and techniques to generate and justify valid conclusions based
on financial information and comment on business performance, and
interpretation of financial statements with suitable comparison.
Take responsibility for managing and organising activities

(D2)

Characteristics / Possible Evidence Based on given financial

information make financial decisions using of various techniques to
evaluate business performance are sufficiently discussed by examining
their pros and cons.
Demonstrate convergent, lateral and creative thinking

(D3)

Characteristics / Possible Evidence Detailed and in-depth evaluation

of the company; uses of financial information to make decisions
relating to pricing, investment, budgeting as well as evaluation of
financial performance by linking theory with the scenario.

MFRD A2 QCF Sept 2014 BAV

PRESENTATION
1.

The assignment should have a cover page that includes the assignment title,
assignment number, course title, module title, Lecturer/tutor name and students
name. Attach all the pages of assignment brief/cover sheet with your report and
leave them blank for official use.

2.

Ensure that authenticity declaration has been signed.

3.

This is an individual assignment.

4.

Content sheet with a list of all headings and page numbers.

5.

A fully typed up professionally presented report document. Use 12 point Arial

or Times New Roman script.

6.

Your assignment should be word-processed and should not exceed 3,000

words in length. A CD should be included with references and accompanying
notes.

7.

Use the Harvard referencing system.

8.

Exhibits/appendices are outside this limit.

9.

The assignment should contain a list of any references used in the report.

NOTES TO STUDENTS FOR SUMMISSION

Check carefully the submission date and the instructions given with the
assignment. Late assignments will not be accepted.

Ensure that you give yourself enough time to complete the assignment by the
due date.

Do not leave things such as printing to the last minute excuses of this nature
will not be accepted for failure to hand-in the work on time.

You must take responsibility for managing your own time effectively.

If you are unable to hand in your assignment on time and have valid reasons
such as illness, you may apply (in writing) for an extension.

Failure to achieve a PASS grade will results in a REFERRAL grade being

given.

Take great care that if you use other peoples work or ideas in your
assignment, you properly reference them in your text and any bibliography.

NOTE: If you are caught plagiarizing, the University policies and

procedures will apply.

MFRD A2 QCF Sept 2014 BAV

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