Identify the likely major costs associated with the ongoing operations of Global Therapeutics

/in /by

The report is to be 2,000 ? 2,500 words in length and presented in a standard business report format comprising an:

Executive summary
Table of contents
Introduction
Body
Conclusion.
(marks available for academic writing: 10 Marks)

This assignment requires individual research. The links below are provided to get you started on your research. Please note you may be required to register to access the materials.
www.globalreporting.org/network/regional-networks/gri-focal-points/focal-point-australia/Pages/default.aspx
www.globalreporting.org/information/sustainability-reporting/Pages/default.aspx

Part B (20 Marks)

It was recently reported that Blackmores had acquired Byron Bay firm Global Therapeutics for $23 million. This acquisition was part of Blackmores? strategy to increase their share of the Chinese herbal medicine market.

Required:

Identify the likely major costs associated with the ongoing operations of Global Therapeutics (2 Marks).
Estimate the cost behaviour (fixed, variable or otherwise) of each of the major costs identified above in part 1 (2 Marks).
Given your understanding of the cost behaviour of the major costs associated with the ongoing operations of Global Therapeutics, critically evaluate whether the use of break-even analysis would be a useful and reliable screening tool for Blackmores as they assessed the desirability of the Global Therapeutics acquisition (6 Marks).
Develop a balanced scorecard that could be used to evaluate the success of Global Therapeutics. For each perspective, identify two objectives and include a range of financial and non-financial measures and goals. Discuss the key features of your scorecard and the reasons behind your chosen measures (10 Marks).

Part C (10 Marks)

In 2015, Blackmores opened its first flagship Retail Store in Bondi. The following discussion presents information in regards to a hypothetical new concept in which Blackmores will fit-out their new flagship store with a ?Recharge Bar?. Through this bar, customers will be able to purchase protein shakes, power-up vitamin juices and recharge bars. The following table presents sales mix, selling price and cost per unit forecasts for these three product lines.

Protein Shakes
Power-up Vitamin Juices
Recharge Bars
Expected Annual Sales (units)
15,000
15,000
7,000
Selling price
$7.80
$9.50
$5.60
Ingredient cost
$3.10
$3.60
$2.75
Packaging cost
$0.35
$0.35
$0.05

Staffing and facilities related costs associated with running the Recharge Bar are expected to total $117,000 per annum. The installation of the Recharge Bar is expected to increase the firm?s marketing costs by $28,000 per annum.

Required:

Calculate the number of protein shakes, power-up vitamin juices and recharge bars that will need to be sold to:
break-even, and
achieve an after-tax profit of $150,000 (provide workings) (3 Marks).
Prepare a memo which suggests a number of possible strategic initiatives that Blackmores could implement in relation to the Recharge Bar concept to enhance the break-even point and/or annual profit. These initiatives could impact the firm?s sales mix, selling prices, variable or fixed costs. Provide workings which illustrate how your proposed initiatives could influence the break-even point and forecast profit (7 Marks).

Rationale
Assessment Task 2 is designed to assess your understanding of the learning outcome ?Explain and evaluate the concepts behind the management decision processes associated with the efficient allocation of business resources? covered by Topics 5, ?Social and Environmental Accounting?, and Topic 6, ?Management Accounting and Professional Ethics?.

Marking criteria

CRITERIA High Distinction (HD) 85% to 100% Distinction (DI) 75% to 84% Credit (CR) 65% to 74% Pass (PS) 50% to 64%
Description of key features of the Super Retail Group and overview of the environmental and social impacts (positive and negative) from the firm?s operations.
Overview is comprehensive, covering all key features of the firm and the firm?s social and environmental impacts. Overview is comprehensive, covering most of the key features of the firm and the firm?s social and environmental impacts. Overview is moderately comprehensive, identifying the major facets of the firm and the firm?s social and environmental impacts. Overview is adequate, identify major facets of firm and the firm?s social and environmental impacts with minimal depth.
Use gap analysis as an accounting and finance concept to interrogate financial and non financial data in an annual report and other sources. Interpret the results of the gap analysis and discuss any alterations in information that might result. Gaps in information presented are identified and evaluated with reasoning for their inclusion or exclusion, supported by valid references. Elements of the framework are evaluated with reference to how they are used in guiding the inclusion or exclusion of information. Gaps in information presented are identified and discussed with reasoning for their inclusion or exclusion, supported by valid references. Elements of the framework are analysed with reference to how they are used in guiding the inclusion or exclusion of information. Identifies gaps in reporting of company activities with reference to the Sustainability Reporting Framework. Interprets results with comparison of possible alterations in reporting of information. Identifies gaps in reporting of company activities with reference to the Sustainability Reporting Framework. Some attempt to interpret results with description of possible alterations in reporting of information.
Evaluate the usefulness of compliance with the Sustainability Reporting Framework as a decision making tool for stakeholders Discusses how the tool benefits investors and stakeholders, supporting their reasoning with valid arguments, fully referenced. Discusses the usefulness of compliance with the framework with explanation of how it is used to benefit stakeholders in the decision making process, fully referenced. Describes and explains the usefulness of compliance with the framework, fully referenced. Explains how compliance with the framework assists as a decision making tool for investors and stakeholders, fully referenced.