International issues in Management Accounting - Accounting Assignment

Internal Code: MAS3003

International issues in Management Accounting

Scenario:  Congratulations on your appointment as trainee management accountant for Mercury Australasia Ltd. A diversified FMCG (Fast Moving Consumer Goods) sector manufacturing company Mercury were recently purchased by Sino Production Co, a large a multi-national Chinese firm which originated in Shanghai. Mercury is now are a wholly-owned subsidiary of Sino Production. This is Sino Productions first acquisition of a business based in a Western democratic country. You are based at the firm’s Australian operations head office in Sydney, however your graduate year training will include working in a variety of management accounting roles across the various product divisions that Mercury Australasia operates across Australia and New Zealand. As part of your role with Mercury Australasia Ltd you will be expected to provide advice around strategic and operational issues to management and production teams as well as develop management accounting solutions for reporting within the group. Questions:  Question 1 International issues in Management Accounting . Resources to assist students to conduct research and answer this question will be provided in the subject Interact site at the start of the session. This question relates specifically to the subject’s 3rd and 5th learning outcomes. The purchase of Mercury Australasia by Sino Production has recently been completed and the Accounting and Finance Group at Mercury’s Sydney head office are expecting a visit from the CFO (Chief Financial Officer) of Sino Production Ltd. Mr Zhang Yong Xian. Ahead of his trip Mr Zhang has requested a briefing be provided about the differences that can be expected between Chinese and Western approaches to management of costs, budgeting, and staff. You have been asked to provide a draft of such a briefing to the CFO of Mercury Australasia, Hannah Murray. Hannah has provided some points she would like addressed in your 600 to 750 word draft response. (i) Identify potential differences in approaches to management accounting between Chinese firms and Australasian firms. (ii) Research the role of ‘Guanxi’ in Chinese business and identify how this practice will fit in with a Western ethical approach to accounting. (iii) Review the concept of ‘power-distance’ as a cultural phenomenon and how the difference approaches undertaken by Australia/New Zealand managers compared to Chinese managers. Question 2 Process Costing This question relates to learning material and objectives from Topic Module 5. A worked example of a service department cost allocation is available in the Model Solutions folder in Tutorial Material in the Resources section of the subject Interact site. This question specifically addresses the subject’s 1st and 4th learning outcomes. Saturn Olive Oil Co is a subsidiary of Mercury Australasia based in Cobram Victoria and produces a range of olive oil products. Olives are purchased from sub-contract olive plantation farmers in an around Cobram. The olives are cold pressed and the oil processed and filtered before bottling and sold to a variety of wholesale and retail vendors under several different brand names. The following data relates to the production of Saturn Olive Oil during the month of February 2017. At the start of February there was 75,000 litres of product in process. All materials are added at the start of the process and conversion costs are incurred evenly throughout whole of the process. During February 2,250,000 litres were commenced and costs incurred during the month were $1,525,000 for Direct Materials and $9,999,500 on Conversion. Question 3 Service Cost Allocation This question relates to learning material and objectives from Topic Module 6. A worked example of a process costing allocation is available in the Model Solutions folder in Tutorial Material in the Resources section of the subject Interact site. Question4 Comprehensive Manufacturing Budget This question builds on prior studies and relates to learning material and objectives from Online Modules 1, 2 and 3. Links to specific resources provided for this question relating to Manufacturing Budgets and Excel spreadsheets can be found in the Online Topic Modules and are also available in the Resources section of the subject interact site in the Excel Resources folder. Question 5 Strategic Management Accounting Case Study This question builds on prior studies of Cost Volume Profit (CVP) analysis and relates to learning material and objectives from Online Modules 1 and 2.(For assistance on this question you are advised to undertake the case study from Mars Petcare which is provided online (with solution) in Topic Module 2 as the Reflection Task).