Required: This assignment comprises two parts as follows:
Part 1: Work in teams (groups) of 3 members (you must obtain your lecturer's approval for a different number) to complete the case study using the excel spreadsheet program as noted in the details of assignment.
You need to submit one excel file for question 1. You will also need to submit 1 file to Turnitin for questions 2 to 4. Only the group/Team leader should submit these files, otherwise penalties will apply. Clearly label each file with the group leaders' student number and name. Include clearly in both files the student names and numbers of each team member.
Word Limit: 1000 words for written questions 2 - 4.
Part 2: Individual self-reflection on team work; as noted in part 2 below. Each student will need to submit a self-reflection document separately.
PART 1: Technical competency
CASE STUDY USING EXCEL SPREADSHEET
EzyTax is a tax accounting firm offering an income tax preparation service for small businesses and individuals. The firm charges individuals $149 per return and small businesses are charged $399.
Individual returns are normally relatively straightforward to process and the firm uses the ATO's free etax software to prepare and submit the returns. The individual returns do not tend to vary much in the workload required to complete them.
The processing of small business tax returns is more complex and requires a specific software package that the EzyTax has purchased for an annual licence fee of $25,000 plus $2.50 for each return processed. Processing of business returns varies as to the workload each one requires.
The manager of the firm, Martine Matilda, is concerned that last year only a small profit was made despite the volume of work being higher than ever. She commented: "We are good tax accountants for our clients but we don't seem to be keeping our own house in order!"
To help improve the situation Matilda decided to recruit a dedicated management accountant with a proven track record, Katrine Pedersen.
On her first day in the job, Matilda tells Pedersen "I want you to get to the bottom of our recent poor profitability but I do not want you to buy in any expensive 'solutions' which may quickly become out of date and are still prone to error. Also any new systems must be understandable to staff and clients, whom we must justify our price to."
One of the first concerns Pedersen has is that EzyTax's pricing is not optimal. She has noticed that whilst the firm has been extremely busy with a record number of 9,000 small business returns last year, they have had relatively few individual returns (3,000). Katrine has also done some basic market research where she has found other tax agents charging individuals as little as $100 for a basic return.
As a starting point, Pedersen decides to use an Activity Based Costing ("ABC") approach to help assess the cost of preparing each type of return. From the firm's timesheet and other records she is able to access the following information for the previous year:
|
Activity
|
Cost
|
|
Interview client
|
$1,615,000
|
|
Obtain Missing data
|
$800,000
|
|
Input data
|
$390,000
|
|
Verify return with client
|
$875,000
|
|
Rectify errors after ATO query
|
$40,000
|
|
Submit return
|
$50,000
|
Other information Pedersen collected is:
- On average each individual takes 20 minutes to interview and each business takes 2 hours. Last year a total of 19,000 hours were spent interviewing clients.
- Follow-up conversations to obtain missing data relates to business returns only.
- Data input took a total of 9,750 hours, with it taking an average of 15 minutes for an individual and 1 hour for a business.
- Verification of the return with the client took an average of 10 minutes for individuals and 55 minutes for small businesses.
- There were 1,065 returns requiring rectification and only 22 of these were for individuals.
- Submission time was approximately the same across all returns.
1. Use ABC to estimate the cost of an individual and a business return. Make clear any assumptions you have made.
Hint - For the activities which apply to both products, such as "interview client", your initial analysis may look like this:
|
Activity
|
Cost
|
Driver
|
Annual quantity of driver
|
Cost driver rate
|
|
Interview client
|
$1,615,000
|
No of interview hours
|
19,000
|
$85,0000
|
Then you may apply this to the products as below:
|
|
Cost driver rate
|
Individual
|
Business
|
|
Interview client
|
$85,000
|
$28.33
|
$170.00
|
2. How might these estimates help explain the poor profitability experienced last year and what implications do they have for the firms' pricing policy?
3. Explain the advantages and disadvantages of ABC, relating your discussion to EzyTax.
4. Katrine uses the ABC approach based on the above data as a 'starting point'. Can you suggest any other ways of altering the firm's costing and pricing policies which will be more beneficial to EzyTax?
Points to follow when creating your team excel workbook:
1. Create your excel workbook for the assignment - It is best to create one workbook and name each worksheet in the workbook with the question number, instead of creating many different files for each question. This will create consistency in submission and only one file per team per assignment will need to be submitted
2. Naming the workbook and worksheets - Name the workbook with a student name in the group and their number and save under this name. Name the worksheet in the workbook with the question number.
3. Each question must begin on a fresh worksheet not continued from the previous question.
4. Minutes of the meeting must be attached for group assignment separate on a word document.
5. Cover page for assignment - make sure you have a cover page with a list of the student names and numbers in the team.
6. Use the excel formulas in your worksheet. Do not use calculators to arrive at the answer.
Team Meetings-
The team should have a minimum of three meetings (the team may have as many meetings as they need to) and should maintain minutes of those meetings which should be included with the team assignment as an attachment. The minutes of meetings should (at the very least) contain -
1) Where and when the meeting was held
2) People present; absent; apologies
3) What was discussed, any disagreements/conflicts, points that were agreed on;
4) The follow up action relating to each member of the team;
5) Any other relevant matters, anything else that is significant to the successful completion of the assignment.
PART 2: Professional Competency Skills
Individual Reflection on Team work
Word count: 750 words
Aim: The content task in this assignment is completed in teams. It is important that you reflect on this experience to learn about the ways in which teams work and the ways that you work in teams.
Refer to the content in the power point presentation on team work and check management and communication text books for further detail on team communication. Your reflection should incorporate the information from your reading as you will use relevant theory to critically reflect on your team experience.
What You Need to Do:
1. Refer to the content in the powerpoint presentation and communication text books on teamwork
2. Read the guide below on reflective writing style
3. Check the marking rubric to see how marks are allocated for this assignment
4. Incorporate relevant theory to critically reflect on your experience. Ensure you include the information under all of the headings listed above. Ensure you reference a minimum of three sources
5. Edit your work carefully to ensure it is well written and error free. If you would like any help with this, see Academic Success Centre staff.
Task: Write your reflection on the team experience. Your reflection must incorporate the following headings.
- Group description e.g. members (use pseudonyms), meetings (e.g. times, locations, attendance)
- My role
- Others' roles
- Group stages
- Conflict in group and, if applicable, how the conflict was resolved
- Leadership and decision making in the group
- Ways that the group experience worked well and ways it could have been improved.