1. General informationAs per the course description, this assignment constitutes 30 per cent of the...

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1. General informationAs per the course description, this assignment constitutes 30 per cent of the total assessment in this course and is due in week 9 of the semester.2. PurposeBUACC5933 covers a range of important cost and management accounting topics. The main purpose of this assignment is to provide students with the opportunity to apply andextend their knowledge, skillsand values in connection with selected topics covered during the course.3. RequirementsEach group is to submit responses to each of Topic 1 and Topic 2 as listed below. Each topic will carry a weighting of 15 marks out of the 30 marks available for this assessment task.Topic 1: Case StudyABC is a medium-sized Australian city. The relevant local government is the ABC City Council, which collects rates and provides the usual range of services provided by Australian local governments. In recent years, the ABC City Council has been criticised by ratepayers for the annual rubbish collection and disposal fee that it charges residential property owners. Each residential property is charged $500 to cover the cost of weekly rubbish collection and disposal. At a meeting of the Council, one rate payer stated:Why do we have to pay $500 per year just to have our rubbish collected and disposed of? All someone does is drive around in a truck that picks up the bin and empties it into the truck! How can that cost $500 per house per year? We are all being ripped off! It is obvious that the rubbish collection fee is being used to pay for other things – like the Council’s Arts Festival!One of the Councillors was sympathetic with this view and made the following comment:I agree that we should not be using the rubbish collection fee as a general revenue raising measure. What we should do is find out the exact cost of collecting and disposing of rubbish from a residential address, and then set that as the annual fee. We will then be able to tell ratepayers that they are being charged the exact cost of having their rubbish collected and disposed of, and that ABC City Council makes no profit from providing this service. As a first step, I would like the Management Accountant of ABC City Council to calculate the exact cost of collecting and disposing of rubbish from a residential address for this year. We can then set that as the rubbish collection and disposal fee, and if we receive any criticism from ratepayers we will be able to show them the calculation and prove that we make no profit from providing this service.Assume that you are the Management Accountant of ABC City Council and answer the following questions:ng unable to explain why certain information has been included.

Robert · Accepted Answer

ANSWER 1 
The residential waste comprises many types of items like food waste, plastic, leather, cardboards, 
paper, garden waste, textiles, metal, glass, wooden items, ash, household hazardous waste. The 
contention of the member that it was a simple job to pick the rubbish and empty it into truck for a 
high cost is not genuine. As the cost is not for only transferring into truck but a later 
classification of waste and then put into reusability or destroy as per the applicable 
environmental laws of the State. 
The calculation of exact cost of collecting and disposing of rubbish from a residential address 
shall include the following categories of costs- 
1. Operating costs – It includes all the costs of recurring nature in relation to the collection 
and disposal of such rubbish 
2. Capital Costs – It includes the costs of resources having a useful life exceeding one year. 
Such costs are recovered by charging annual depreciation in the cost statement. 
Depreciation represents allocation of the capital cost over the useful life of the asset. For 
example the cost of the truck used in collection of garbage is to be depreciated over its 
useful life either using the straight line method or written down value method or any 
other acceptable method. 
3. Debt service costs- Whenever debt is involved in financing the operations of the entity, 
the interest cost shall also be involved. Such interest cost is termed as debt service cost. If 
this debt is directly related to any capital cost like purchase of Truck, then it may be 
charged in computing the cost of collecting and disposing the rubbish. 
Following are the illustrative items that will be considered in the cost statement- 
1. Salary of drivers for collection 
2. Salary of labor or helper in collection 
3. Cost of staff equipment like gloves consumed, aprons, boots etc 
4. Diesel or fuel used in the trucks used for collection 
5. Vehicles repair including preventive maintenance and breakdown maintenance 
6. Repair or the trailers 
7. Cost of tyres 
8. Insurance of the vehicle 
9. Licence fees and local taxed 
10. Depreciation of truck 
11. Overheads related to collection 
12.

1. General information As per the course description, this assignment constitutes 30 per cent of the total assessment in this course and is due in week 9 of the semester. 2. Purpose BUACC5933 covers a...

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