Master of Professional Accounting

TACC 607 Managerial Accounting

Term 1, 2020

(30 March 2020 – 12 June 2020)

Lecturer: Dr Gerry LI

Individual Assignment

(Due on 31 May 2020 by 11:59 pm)

Read carefully the following Case information before planning to write the Report

Fantastic Sky Tours Pty Ltd is a small sightseeing tour company in Sydney that specialises in aerial tours of the New South Wales area. Until recently, the company had not had an accounting department. Routine bookkeeping tasks, such as billing, had been handled by a person who had littleformaltraininginaccounting.Asthebusinessbegantogrow,however,theownerrecognised the need for more formal accounting procedures. Miranda Jenkins, a CPA, was recently hired as the new management accountant, and she has the authority to hire anassistant.

Duringherfirstweekonthejob,Mirandawasgiventheperformancereportonthenextpage.The report was prepared by Robert Smith, the company’s manager of Aircraft Operations, who was planning to present it to the owner, David Lowry, the nextmorning.

‘Look at these favourable variances for fuel and so forth,’ Robert pointed out as he showed the report to Miranda. ‘My operations people are really doing a great job.’

Laterthatday,Mirandalookedattheperformancereportmorecarefully.Sheimmediatelyrealised that it was improperly prepared and would be misleading to the company’sowner.

See next page: Performance Report prepared by the manager of Aircraft Operations