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Explain and evaluate the concepts behind the management decision processes associated efficient

Task This assignment continues our consideration of the case firm, Blackmores. This assignment is broken into three parts and the totals marks available is 100. Part A (70 Marks) In recent years, directors and CEOs of companies have been placing more importance on holistic reporting of company activities rather than simply reporting what is required by the Accounting Standards, the Corporations Act and other legislation. The Global Reporting Initiative (GRI) is an international not-for-profit organisation that has pioneered and developed the world’s most widely used voluntary Sustainability Reporting Framework. In 2013, the fourth iteration of the Sustainability Reporting Framework guidelines were released. These can be accessed via the link below. As explored in Assessment 1, Blackmores is one of Australia’s largest healthcare businesses. Blackmores has been conscious to implement a range of strategic and operational initiatives to enhance the sustainability of their operations and has been moving towards providing greater transparency in regards to their environmental impacts. Required: With specific reference to Section 5.1 of the Sustainability Reporting Guidelines of the GRI, your task is to write a report that: 1. Describes the key features of Blackmores (i.e. size, products, history, locations of operation) and provides an overview of the environmental and social impacts (positive and negative) of the firm’s operations (15 Marks). 2. Applies gap analysis to analyse how fully applying the GRI guidelines might alter the information presented by Blackmores within their Annual Report and within other sources provided through their corporate website (25 Marks). 3. Evaluates whether and how complying with the GRI guidelines would benefit potential investors, shareholders and other stakeholders of Blackmores (20 Marks). 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. 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: 1. Identify the likely major costs associated with the ongoing operations of Global Therapeutics (2 Marks). 2. Estimate the cost behaviour (fixed, variable or otherwise) of each of the major costs identified above in part 1 (2 Marks). 3. 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). 4. 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: 1. Calculate the number of protein shakes, power-up vitamin juices and recharge bars that will need to be sold to: 1. break-even, and 2. achieve an after-tax profit of $150,000 (provide workings) (3 Marks). 2. 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".

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