BFA612 Cost and Managment Accounting
Task:
Objectives of the Assignment:
The objectives of this assignment are to assist in developing effective skills which are crucial to gaining employment and ongoing career success. These skills include:
1.Critical reasoning and analytical skills; Analyse the revenue, costs and variances for Scenarios case studies to provide answers to specific questions.
2.Knowledge of industry; Research, interpret and apply management accounting techniques and theories specific to Scenarios.
3.Written communication skills: Use interpersonal skills to provide recommendations in the form of a business report.
4.Social responsibility skills; Identify social responsibility and sustainability issues in the business context.
5.Teamwork & leadership skills; Apply teamwork skills to analyse Scenarios. Develop a cohesive team structure and reflect on roles of self and peers.
Required
a)You are required as a group to provide estimates/answers, for each option, for the following questions using an excel file (Reference all material taken from other sources):
1.What is the cost of the property? (Consider both possibilities: market price and market price + 10% as it is currently a sellers' market). Will Denise need a home loan? If so, for how much, and at what interest rate? [hint: use the realestate.com website]
2.Will she have any other costs to pay, in addition to the purchase price? If so, what they are, and how they are calculated. (hint: use the realestate.com website]
3.How much will the annual local council rates and insurance cost? (estimate that these may rise by a maximum of 5%)
4.What is the cost of setting up the accommodation (e.g. renovations, landscaping, decorating and furnishing costs and any Eco-friendly additions)? Will she need a loan for this? If so, for how much, and at what interest rate?
5.Estimate the number of rental nights (remember the effect of Covid-19). You will need to check if there is any limit on the number of nights an Airbnb in Hobart can be rented out. For example, in London, a property cannot be let out on Airbnb for more than 90 nights, in total, per year.
6.Will Denise be required to apply for an Airbnb permit? Why/why not? If she does, where will she need to apply for it, and how much will it cost?
7.What are the estimated operating costs: water, power, internet, food for guests' breakfasts, cleaning, depreciation, rates, insurance, tax, … etc.? (estimate these by taking into consideration any existing or planned Eco-friendly elements of the property)
8.Calculate the competitive price that Denise should consider.
9.Calculate the annual profit, using the variable costing system.
10.Calculate the breakeven point for the project? Calculate the investment Payback period, NPV, and IRR.
