Managerial Accounting

Managerial Accounting

Part A (20 marks)
Management Accounting Information
Read this article by clicking here: Transformation delivers results for Sky New Zealand (asx.com.au)
and answer the following questions:
1. Identify five specific management accounting concepts discussed in class that Sky New
Zealand applied in their company. Just list them, do not discuss. (5 marks)
2. Discuss three ways Sky New Zealand have used management accounting to successfully
achieve its revenue growth and cost transformation goals, leading to impressive financial
targets and increased shareholder value. Include examples. (12 marks)
3. Provide two lessons management accountants can gain from studying Sky New Zealand ‘s approach
and practices. (3 marks) MLA.

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Managerial Accounting

Part B (17 marks)
Aussie Gears Pty Ltd is a leading manufacturer of specialized gears used in high-performance
automotive and aerospace applications. The company prides itself on precision engineering and
innovative designs, which have earned it a strong market position. As part of its ongoing efforts to
refine its costing methods, Aussie Gears is reassessing its approach to allocating manufacturing
overhead.
The company currently uses a traditional costing system, applying overhead based on machine hours.
However, management is considering switching to an activity-based costing (ABC) system to better
understand the true costs associated with its products.
For the month of July, the following data is available:
• Total Budgeted Overhead Cost: $360,000
• Total Machine Hours: 60,000 hours
HI5017 Group Assignment T2 2024

Managerial Accounting

The data for July production is as follows:
Production Data:
High-Precision Gear Heavy-Duty Gear
Production Units 15,000 3,000
Direct Materials Cost per Unit $80.00 $100.00
Direct Labor Cost per Hour $20.00 $20.00
Direct Labor Hours (in total) 20,000 5,000
Machine Hours (in total) 45,000 15,000

Managerial Accounting

Overhead cost pools Overhead cost Total activity Activity Consumption
High-Precision
Gear
Heavy-Duty
Gear
Machine setup $ 120,000 2,000 setup hours 1,200 800
Quality Control $ 150,000 4,000 quality control hours 2,500 1,500
Factory Maintenance $ 90,000 60,000 machine hours 45,000 15,000
Required: (Round off answers to 2 decimal places)
1. Calculate the unit manufacturing costs for each product using the traditional costing system based
on machine hours. Show all calculations. (5 marks)
2. Calculate the unit manufacturing costs for each product using the activity-based costing (ABC)
system. Show all calculations. (8 marks)
3. Write a memo to the CEO recommending the most appropriate costing system which best reflects
the cost of the product. Justify your recommendation with relevant data from your calculations. (4
marks)