ACCT 2126: Management Accounting and Business

Group Assignment

Group no: ……………..…Tutorial Day………..………… Tutorial Time ……..…………

Group Member ID

Walker Books Profit Planning

This Group assignment is for 40 marks that accounts for 20% of your total assessment.

Read the following questions and:

Write a report on the profit planning for Walker Books. The report should address the following FOUR questions. Note: Reference all secondary sources (both in-text and reference list required)

Use the excel spread sheet templates provided for your calculations. Submission of assignment: You MUST submit both spread sheet and the report. Email spread sheet to your lecturer Submit Report to Turnitin. Each group will only need to submit ONE report to Turnitin. Include this

page in your report. Due Date: Friday 11 December, 3.00 pm. Word limit: 1500 words

QUESTION 1 3 marks What is a profit plan? Discuss TWO objectives of profit planning process in relation to Walker Books.

QUESTION 2 12 marks

a) What product segment(s)/category (ies) should be dropped, if any?b) Discuss main reasons for this decision. Your discussion may include both internal and external factors

that could influence this decision. c) Explain what happens to the fixed costs associated with the dropped product segment(s) /category

(ies).d) Discuss the implications of your decision on the financial performance of Walker Books. Use relevant

calculations to support your discussion.

P.T.O

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20%

QUESTION 3 16 marks

Using the Children’s Book Profit plan spread sheet for 2015:

a) Choose THREE line items from the Income Statement and discuss the significance of each item, assumptions taken, changes in each line item and their impact on other line items and net income.

b) Choose ONE line item from Balance Sheet and discuss the significance of the item, assumptions taken, changes in the item and its impact on other line items and Free Cash Flow.

QUESTION 4 9 marks

a) Determine the number of units to be sold for each of the five categories (exclude the Back list category) of the Children’s Book segment to break even. Show breakeven quantity (number of units) and break even sales.

b) Explain the results from a) above and discuss how the management of Walker Books might use this information in their decision making process.

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