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AcF 303: Advanced Management Accounting
Michaelmas Term 2015
COURSEWORK ASSIGNMENT
Typing-4-U is an online service that provides word processing and graphic formatting
services to academics and students. The customer emails scans of their handwritten
documents and diagrams to Typing-4-U who then provide accurate, neat and corrected
versions of the documents. The final versions are then downloaded by the customer who
prints the document, or Typing-4-U can courier a hard copy of the document to the customer
for an extra fee. You act as a management consultant to the business and have been asked to
examine a number of issues relating to their costs.
You have collected the following data related to the operations of the business for the year to
31st December 2015;
Month Total Sales
(£’000s)
Staff costs
(£’000s)
Printing costs
(£’000s)
IT maintenance
costs
(£’000s)
January 2015 42.4 12.9 10.3 3.1
February 2015 35.6 12.6 9.7 24.6
March 2015 99.8 14.4 23.2 3.7
April 2015 113.9 15.1 26.8 5.1
May 2015 218.7 36.9 25.2 26.8
June 2015 195.1 21.5 23.9 4.1
July 2015 93.2 14.1 23.6 4.2
August 2015 22.1 12.2 5.4 23.6
September 2015 61.8 13.1 15.2 3.8
October 2015 73.5 13.7 18.7 3.4
November 2015 98.6 14.6 23.6 24.3
December 2015 102.3 15.7 25.8 4.1
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Task One
Typing-4-U is currently preparing its budget for the year to 31st December 2016 and wishes
to produce an equation that describes the behaviour of each of its costs in the form y = a +
bx, where y is the total cost at an activity level of x invoiced sales, a is the fixed cost and b is
the rate of variable cost.
You are required to;
(a) Estimate the fixed and variable elements of each of the three costs (staff, printing and
IT maintenance) from the above data by creating an Excel spreadsheet that;
Calculates the y = a + bx equation for each cost using linear least-squares
regression,
Produces a chart of each relationship including plotting the original data, and
Calculates the coefficient of determination for the cost behaviour equation.
(b) Explain your findings to part (a), giving specific suggestions about why the costs
behave as they do and discussing any significant variations that you have found
between the data and your equation. You should also suggest what additional
information you would require in order to improve the quality of your findings. You
may make whatever assumptions you feel necessary to draw your conclusions but you
should state clearly what these assumptions are.
You should provide a printout of the whole of your spreadsheet including the chart and the
original data. Your answer to part (b) should be no longer than 600 words. This task is
worth 12% of the marks for this module.
Task Two
The company has asked you to make a presentation to the staff liaison committee which
consists of a wide range of employees from the business, most of whom have little
understanding of accounting terminology or practices.
You are required to prepare but not to deliver a Powerpoint presentation to the committee that
addresses the following questions;
Does the classification of costs into variable and fixed really matter for a service
organisation? What are the business and accounting implications of your answer?
You should identify at least two examples from academic or business literature to
illustrate your answer.
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What three key business questions arise for Typing-4-U based on your findings in
Task One? You should identify three issues that the business needs to address from
your earlier analysis and suggest what alternative approaches or solutions the firm
should consider.
You should provide a printout of your slides and notes using the Powerpoint software and
your presentation should consist of no more than six slides in total. You should also provide
a separate bibliography that identifies the sources of your material including the references
required by the first part of the task. This task is worth 13% of the marks for this module and
marks will be awarded for clarity of the presentation and addressing your audience as well as
the quality of your answers to the questions given.
Please note that guidance will be given on this assignment during the tutorials in week 4 but
no additional advice will be given after this time in order to ensure equity for all students on
the course.
Due date
Completed assignments should be submitted by 12noon on the Friday of week 6, Friday 13th
November 2015, in the box next to room C38, Management School. An electronic copy of
your assignment should also be provided by this deadline using the Moodle course page.
Late submission will be penalised.
Feedback
You should expect to receive feedback by the end of the Michaelmas term. If you require
any additional clarifications/explanations after you receive the formal feedback, you are
welcome to contact me directly by email at [email protected] to discuss your
assignment.
Brian Miller
September 2015

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