Page 1 of 3 ACC/ACF2200 Introduction to Management Accounting 2016-S2 Assignment Mal Ltd Mal Ltd. is a producer and importer of freshly cut flowers based in the country side village of Tagus. It has made a name for from its gerberas, roses, carnations, and tulips, although the portfolio includes a range of itself other products. Tulips and some special flowers are imported from the Netherlands. Products are sold at its premises to florists, in the trade market to wholesalers and retailers, and directly to a large retail chain. The market for fresh flowers is very competitive, with significant pressure over prices. There is high seasonality in supply (e.g. spring and early summer) and demand (e.g. valentine day, mother's day, Christmas). When there is a significant mismatch between those supply and demand, prices can fluctuate widely, from 'rock bottom' prices that do not cover production costs to 'sky high' prices that make very generous profit margins. In addition to price, the market values highly product freshness, reliability of supply, speed of delivery, and range products available (including colour variations). The company owns part of its productive land and part of it is on a long-term land lease. All production of flowers is carried out in a series of greenhouses to Sunflower built and fully owns. Flower production facilities (greenhouses) are fitted with temperature and humidity control equipment that automatically opens the greenhouses to air circulation when temperature is too high and heats it up when the temperature is too low. The company uses its own two tractors to plough the land and to haul trailers. The trailers carry fertilizers, seedlings for planting, and occasionally pesticides to the greenhouses. The plants, seedlings, shrubs, and bulbs planted by Mal are mostly imported to ensure the highest quality, productivity, and diversity of colour variations. The trailers also carry freshly cut flowers back from the greenhouses to the processing and packing facility (as well as the green waste that is sent to a local dump). After processing and packaging, products are kept in one of three refrigeration units to prolong the life of flowers.Page 2 of 3 Mal currently employs 70 full-time staff, which represents the double of its size just four years ago. The company's manager and founder, Mr Peter Long, is an entrepreneur with twenty years of work experience in the sector but no training in management. He is directly assisted by his wife, Mrs Nancy Long, who manages the sales office and inventories. Like her husband, she has no formal training in management, but she is extremely energetic and outstanding in dealing with customers, a true asset to the company. Mal has a dedicated team of three salespersons working in the office at its premises, one accountant, two distribution employees, one foremen and one forewoman. The remaining employees work in the production, processing, and packaging of flowers, making flower production a labour- intensive activity. During peak times of production, part-time employees are hired on a need basis and on-going staff is paid for overtime work. All of the company's employees are paid a fixed salary, plus any extras from overtime work. The main building where the company operates houses the all administrative staff, the sales office, a product display area, the processing and packaging facility, and the refrigeration units. Workers are moved to and from the company's the main building, as well as between greenhouses, using two fully owned mini-vans. The company also uses its own fleet of three trucks (with cooling) to distribute products to customers and to take production to the trade market. The company's growth has created difficulties to Mr Long in ensuring the timely payments to employees and suppliers. He is also finding a bit overwhelming to have a feel for how the company is doing, now that the scale of operations has grown to an unprecedented level. At the moment, there is no formal planning in the company; only rough estimates of revenues and the main cost items are prepared by Mr L o n g in his paper notebook. The company's accountant role has been that of dealing with financial accounting matters and ensuring the company meets its legal tax obligations. Another issue that Mal currently faces is the management of sales of products in short supply. These products cannot be sold to the first customer that comes through the door, but rather they need to be meticulously managed so that the orders from regular customers can be at least partially satisfied. Mrs Long noted that the salespersons, who have been informally assigned to specific customers, frequently lacked an appreciation for this issue in their eagerness to meet their assigned customer's requirements. No doubt Mal wanted a proactive sales team, but the sales push needed to be directed to products in good supply, not for those that can "sell for themselves".Page 3 of 3 Required: 1. Conduct some research to explain the value of cost classifications for Mal Ltd. and how this may assist Mr and Mrs Long in improving their decision-making processes. 2. Conduct some research into costing techniques that Mal Ltd. might find useful. Based on this research and using the detail in the case, choose a specific technique (or set of techniques) that you believe would be most suitable. Describe specifically how your chosen technique(s) could be used by providing tangible examples of how they would operate within Mal Ltd. It should be clear from these examples how Mal would determine a product cost for their products. Also, briefly describe why you consider your chosen technique(s) to be superior to other techniques. (Please note: you are not required to actually calculate any costs here, just outline how costing could be done differently. Therefore, you may wish to provide a table or diagram outlining the operation of your proposed costing technique(s). 3. Using the detail in the case, describe how your chosen method of calculating product cost will be beneficial within Mal Ltd. and have relevance to management. Word Limit: 1,200 words Page Limit: 6 pages Please note: This word and page limit includes any tables, diagrams, figures or appendices that are used. Exceptions to the word and page limit are the cover page, table of contents, and reference list. Referencing: Please use APA style referencing1. Submission: You are required to submit your assignment to Turnitin via Moodle. Please e-mail your assignment coversheet to your tutor (the coversheet is available on Moodle).There is no requirement for hard copy submission. Turnitin is a text-matching software that checks a student's written work against electronic texts on the internet, published works (such as journal articles and books), and assignments submitted to Turnitin by other students. In order to gain access to the Turnitin submission dropbox you must first complete an 'Academic Integrity' quiz on Moodle. The link to the dropbox will be available once you score full marks in the quiz – you can attempt the quiz as many times as is necessary. To prepare for the quiz, you should complete all of the modules at the following link: http://www.monash.edu/library/skills/resources/tutorials/academicintegrity It is likely that you may require to make some assumptions when answering the questions. You are strongly encouraged to go through the 'Guidelines on Assignment Submission' on Moodle before you start working on the Assignment. 1 http://guides.lib.monash.edu/citing-referencing/apa