ACCTG321: Strategic Management Accounting

Individual Assignment 2025 

Building an Iron Foundation: Lehigh Steel

Learning objectives

· Prepare and interpret management accounting information to support the implementation and evaluation of an organization’s strategic objectives.

· Apply a structured approach to analyse complex, case-based accounting problems.

· Communicate accounting analyses and justified recommendations in written and verbal forms.

Due date:  Wednesday 30 April, Midday NZT

There are three submissions for this assignment, all due at the same due date. Submit each to the relevant sections under Canvas via: Assignments > Individual Assignment

· Spreadsheet: Submit your spreadsheet with ABC analyses here.

o Format the spreadsheet with tabs according to assignment instructions below.

o Name your file as [LASTNAME]-[UPI], e.g. Smith-dsmi007.xlsx

· Video: Submit your recording here.

o Maximum THREE minutes. 

· Report – ABC analysis: Submit your report on ABC analysis here.

o Maximum THREE A4 pages. 12 point font, 1.15 paragraph line spacing

o The page limit excludes the assignment cover sheet, tables, figures, appendices, and references.

o Include the Cover Sheet on Canvas at the front of your file. Access the Cover Sheet via Canvas > Cover Sheet. For your signature, you can either 1) type your full name and UoAID; 2) print, sign, and scan, or 3) include an electronic signature.

If you have any problems submitting your assignment, email [email protected] – before the due date for the assignment.  

Lehigh Steel: Supplementary information for assignment

Note: This information extends the Lehigh Steel case study used in the course. You can disregard the “The Case for TOC” section of the case for this assignment.

You are a junior management accountant working at Lehigh Steel and have been assigned to work with Bob Hall on his arrival from Armco Steel to develop new management accounting tools at Lehigh Steel. You both report to the CFO, Jack Clark, who has commissioned the development of an Activity-Based Costing (ABC) model to help Lehigh Steel formulate its strategic direction.

The two of you quickly fell into a productive working relationship and Bob has taken you under his wing as a mentee to help you develop your management accounting skills. It has been three months since Bob has joined, and you have been following Bob’s instructions about what data to collect to be able to do an ABC analysis. During a recent working lunch, Bob says to you:

“I think we’re just about ready! You’ve been superb at working people across the business to collect all the information that we’d need for our initial ABC analysis. I see a lot of potential in you to apply your skills beyond just direct numerical analysis. As you may have gathered, being a good management accountant is more than just crunching the numbers. In all our meetings, you’ll have seen there are all sorts of worries, concerns, and issues that managers bring up whenever we ask them about cost information and how they use it.

Here’s what I’ve learned, and what I’m going to challenge you to learn. We’ve been asked to create an ABC analysis, yes. But – and it’s a big but – unless we know the problems we are trying to solve there isn’t any point in us doing the work. I’ve been in too many meetings where my team will have prepared a lot of calculations only for them to be thrown back and asked to be reworked for not being relevant.

So here’s the task for you. I’ve identified three managerial roles across the organisation who would be using our information. I want you to anticipate what information they would find helpful. Then, I need you to reflect on what we know about the industry, the company, and our data to provide some initial insights for them.”

Bob provides you with the following three roles to consider:

· Production Manager: Works with the factory and is responsible for weekly scheduling and oversight for all steps in the production. They work with each station’s manager to discuss what products to prioritise.

· Sales Manager: Responsible for coordinating a sales team who seek out prospective customers. Their teams are busy post-recession and need to review their customer strategy.

· CEO: Leads the longer-term strategy for Lehigh Steel. Their executive team are analysing which market segments to invest in for the long term.

He then continues, explaining a further consideration:

“Another lesson I’ve learned, a more technical one this time, is that we don’t have to include all costs in our analysis. This isn’t about cooking the books or manipulating the reports. What I mean by that is depending on the managerial perspective we want to take, different parts of the business become more, or less, relevant in the analysis.

For the ABC analysis, I want you to implement it two ways. First, using all of the activities we’ve identified. Second, I want you to pick only the costs that are likely to be truly variable, excluding non-variable, non-production specific costs. This will let us think about… you know what? Don’t worry about that at this time. Start with this and we will pick it up next time we meet.”

Eager to prove yourself you begin your work on the analysis.

Required:

Prepare two activity-based costing (ABC) analyses based on the information provided in the Lehigh Steel case and the supplementary information (above). Your analysis should cover:

· Full ABC analysis: Use the ABC approach given in the case study to prepare the ABC analysis.

o Note this is a partial ABC analysis where Stage 1 (allocating resource costs to activities) has already been done for you. You will be doing the Stage 2 calculations to allocate activity costs to cost objects.

o Your analysis needs to show the activities, their drivers, driver rates, and how the costs are allocated to the five sample cost objects. The five sample cost objects are i) Alloy: Condition Round, ii) Conversion: Roller Wire, iii) Die Steel: Chipper Knife, iv) Die Steel: Round Bar, and v) High Speed: Machine Coil.

· Alternative ABC analysis: Adapt the ABC analysis from above by identifying and removing non-variable, non-production costs.

o For each of the activities in the full ABC analysis, classify and briefly justify whether they are variable, non-variable, and/or non-production.

Use this analysis to complete the following three submissions:

a) Spreadsheet of your ABC analyses

Prepare a spreadsheet for Bob covering the following.

· A diagram showing the structure of your ABC analysis. This diagram should show what information is used for the full ABC analysis and what is used for the alternative ABC analysis.

· Your two ABC analyses, including the relevant data, your calculations, and your results for your analysis. You may refer to the TenAlpina and Mail Management spreadsheet examples to assist your organisation.

· Format your spreadsheet with the following tabs.

o Information: List your name, email, and UPI. Explain the purpose of the spreadsheet. Describe the tabs in this file (i.e. Diagram, Calculations, and Results).

o Diagram: Your ABC diagram along with a brief note explaining the elements in the diagram. If you have hand-drawn your diagram, you can insert this as a scan or photo.

o ABC: The relevant data and your calculations for the ABC analysis as described in the case, organised neatly. Consider using colour, headings, borders, and explanatory notes.

o Alt ABC: Your adapted ABC analysis that identifies and removes non-variable, non-production costs. Again, consider using colour, headings, borders, and explanatory notes. Provide your classifications and brief justifications here.

o Results: On a separate tab, present the results you consider most important from your analysis. 

b) Video overview explaining the diagram and your analysis

Prepare a video for Lehigh Steel managers covering the following.

· Explain the structure of your ABC analysis. Your video should help the company understand your 1) ABC diagram and 2) the structure of your calculations.

· Maximum length for the video is three minutes. Address your video to Lehigh Steel managers. Bob recommends that the tone of your explanation be friendly and business-casual. You will be marked down if you appear to be reading from a pre-written script.

c) Report covering issues, key results, and recommendations

Prepare a report for Bob covering the following.

· An overall problem statement that provides a backdrop understanding about the Lehigh Steel case. Your discussion should cover:

o Concern: Why isn’t management making as much money as they want to?

o Setting: What is going on in the company that is leading to the problem?

o Accounting: How ABC analysis can help address the problem compared with Lehigh Steel’s standard costing system.

o Support your problem statement using relevant facts.

· A set of specific problem statements and ABC results for the three types of manager identified (production manager, sales manager, and CEO). Your discussion can consider:

· Focus: What types of decisions do these managers make? In what way do these decisions contribute to the overall success of Lehigh Steel?

· Context: What about the Lehigh Steel context makes these specific types of decisions challenging? This can refer to industry factors, factors specific to Lehigh Steel, and/or interactions or conflicts with other departments.

· Prepare a separate table of key results for each type of manager. This needs to emphasise the results that they would find helpful for their decisions. Briefly explain how the ABC analyses would help these managers. Do not provide all your calculations, only what you consider the key results. These tables are excluded from your page limit.

· Note that you can provide overlapping/similar information for the three types of manager. The goal is to recognise how these different types of managers might use the ABC information.

Instructions for preparing video and uploading to Canvas

· Your recording should include your voice, the webcam visual of you while you are presenting, and the spreadsheet material (diagram and analysis).

· A common option is to use Zoom and Share Screen. You can use other recording software or a smartphone to record your video.

· Zoom will convert your recording into an mp4 file. Upload this file to Canvas under Assignments > Individual Assignment – Video.

· The Learning Hub Resources (below) offers further guidance for preparing a video.

This Canvas guide outlines how to submit and/or record a video to Canvas. https://community.canvaslms.com/t5/Student-Guide/How-do-I-submit-a-media-file-as-an-assignment-submission/ta-p/279

Learning Hub Resources

The following resources may be useful in preparing your assignment:

· Writing for business context: https://www.learninghub.ac.nz/writing-for-business-contexts/ 

· Concise writing: https://www.learninghub.ac.nz/writing/academic-style/concise-writing/ 

· Producing a video: https://www.learninghub.ac.nz/video/

Referencing: Appropriate academic referencing should be used if relying on source documentation to support statements included in your report.