Microsoft Word – Group Assignment case study Final – Munna’s final revision Version
ACCT2019 Group Assignment
Semester 1, 2023
Instructions for Parts A & B
Scope: There are two parts in this assignment. Part A is a group assessment and Part B is an
individual assessment. Part A requires students, as a group, to carry out an analysis of the case study
(Mattusito Nature Clinic – described in this document) and submit an executive report in PowerPoint
format. Part B requires each student to map the Mattusito Nature Clinic case study data in the SAP
accounting system and complete several transactions and reports and submit a document. This
assignment requires students to demonstrate their:
i) Ability to identify and apply relevant management accounting concepts and techniques
to practical business contexts and make recommendations with a focus on the usage of
qualitative and quantitative information.
ii) Specialist SAP software skills by mapping the business scenario in SAP, determination of
relevant master data and transactions, their creation and/or execution and producing
relevant reports from the SAP accounting system.
Weighting: Part A – Case analysis – Group (15%)
Part B – SAP component – Individual (15%)
Due date: 4pm, 5 May 2023, AEDT
Submission: • Two files should be submitted. One for Part A & one for Part B.
• Both files must be saved and submitted in PDF document format.
• Please submit in Canvas in the two folders in the ‘Assignment’ section:
i) Part A – Case analysis – Group
ii) Part B – SAP Component – Individual
Your Part A PDF file should include the cover page, PowerPoint report, appendices and the peer
evaluation form. Only ONE member from each group needs to submit Part A.
IMPORTANT INFORMATION ON ACADEMIC INTERGITY
You are not permitted to use artificial intelligence (AI) tools, such as ChatGPT, to generate any part of
your responses. AI tools cannot be relied upon to generate responses and their undeclared use will be
reported as a major breach of policy for investigation. Part A and Part B responses must be in your
own words.
Mattusito Nature Clinic is a large naturopathic clinic located in scenic Katoomba, treating patients with
Indian traditional methods and medicines. It has qualified resident physicians, therapists, health
centre, dispensary, yoga and meditation centre, restaurant, and service staff. Mattusito provides
authentic natural treatments for various diseases, including whole‐body detox advising (which
included guidance on herbal medication and remedies), dietary advising, yoga and meditation
therapy, and therapeutic massages with medicated oils.
The clinic has been in business for the last 30 years and has been a source for promoting medical
tourism in the Blue Mountains region. The patients at the clinic are diagnosed and treated using the
latest technology. A holistic and thorough treatment plan is drawn up for each patient by expert
physicians, and subsequently all therapies in the treatment plan are carried out for patients by
qualified therapists. The clinic keeps a constant focus on providing quality, efficacious care, and an
equitable price.
The clinic has been using a simple costing system to allocate variable service overheads based on the
number of patient days in a year. This allocation system worked for them as they only had treatment
plans that consumed a similar nature and level of resources. Five years ago, they introduced Chinese
traditional methods and medicines to treat patients. These treatments included tai chi and qigong
therapies, advising on herbal medicines, dietary advising, acupuncture and cupping therapy and
Chinese therapeutic massages (tui na).
Early last year, after doing some research, the clinic started combining both Indian and Chinese
treatments to provide hybrid treatment plans for a variety of ailments and found encouraging
results in their patients. Hybrid treatment plans are something they have been meaning to provide
considering that medical tourism has been attracting a lot of people to not just Mattusito, but to a
variety of other health clinics in the Blue Mountains region. Mattusito would be one of the first to
offer a hybrid plan. The clinic also hoped that the economies of scope advantages of providing
hybrid treatments would help in cutting costs, and a new service offering would increase patient
numbers and thereby revenues. Fortunately, Mattusito was well‐prepared to provide the hybrid
treatment plans as several of their physicians and therapists were already multi‐skilled in several
naturopathic practices.
Recently, however, Mattusito has been having a range of concerns. Some of Mattusito’s patients
have started complaining about being charged higher fees. This was particularly concerning as a big
part of the clinic’s success was due to its loyal client base. Mattusito was well‐aware that price was a
major consideration for its clients, as Medicare did not cover treatments provided at naturopathic
clinics. The clinic now needs help deducing which customer category/ies are complaining most. Even
though the clinic has been getting more patients utilising their traditional (non‐hybrid) treatments,
the clinic’s profits did not seem to increase accordingly. So, Muttusito’s CEO Mr Alan Smith felt that
it was time to examine the consumption of overhead resources by the different treatments and
respective patients more closely, and explore the reasons for stagnant profits. He has hired your
team of Management Accountants to examine the clinic’s costs and help develop a new costing
structure that will help to understand the accuracy of costs of both traditional (non‐hybrid) and
hybrid treatments.
Before your team starts their work, Muttusito’s administration team lets you know that they divide
the clinic’s treatments into three sections: Indian, Chinese and Hybrid. They have also done some
pre‐work for your team. Foreseeing the potential implementation of activity‐based costing, they
have provided you with a breakdown of the clinic’s yearly costs and cost drivers.
Table A: Activity cost pools, costs, cost drivers and quantities
Quantity of cost driver used by:
Activity cost‐
Cost driver Costs Indian
Consulting and
Physician hours $1,260,000 3 hrs per
2.5 hrs per
Massages Total therapist hours in a
$543,500 9,900 11,600 2,504
Acupuncture
and cupping
No. of patients utilising
the service
$350,000 0 1,040 840
meditation
No. of patients utilising
the service
$450,400 1,000 0 850
Dispensary Total units of herbal
remedies/medicines
available in inventory for
$617,400 29,160 25,900 27,260
Tai Chi and
No. of patients utilising
the service
$525,000 0 1,200 870
In‐patient
(consists of all
therapist costs)
No. of total patient days $1,868,900 7,290 6,475 6,818
Restaurant
running cost
No. of meals & snacks
$401,369 21,870 19,425 20,454
Service staff No. of service staff $970,000 8 7 5
Building rent &
maintenance
Floor space occupied
(square feet)
$1,320,000 50,000 40,000 20,000
Administration
No. of administration
$864,000 10,010 8,008 6,006
Insurance No. of total patient days $950,000 7,290 6,475 6,818
Utilities (water,
electricity, gas)
Floor space occupied
(square feet)
$125,000 50,000 40,000 20,000
depreciation
No. of equipment $30,000 20 20 12
Supplies and
disposable
Total quantity of items
available in inventory for
$514,575 21,870 19,425 20,454
Marketing and
advertising
No. of times advertising
was conducted
$144,000 60 50 70
$10,934,144
Patients utilising the Indian plan stayed on an average for 6 days and were charged $6,000. Patients
utilising the Chinese plan stayed on an average for 5 days and were charged $5,500. Patients utilising
the hybrid plan stayed on an average for 7 days and were charged $8,750. These charges covered
the entire respective treatment plans, medicines from the dispensary, restaurant food and also
accommodation.
The clinic has 8 physicians, 40 therapists, 12 administration staff and 30 service staff. The physicians
and administration staff are full‐time salaried employees. The therapists and service staff are all
hired and paid on an hourly basis. The physicians were only in charge of consultations, all types of
advising and doing follow‐ups with patients. Other than facing clients one‐on‐one, physicians also
spent time writing reports and doing other paperwork. Administration staff, on the other hand, did
all the detailed work involved around coordinating the complex schedules and requirements of
patients. They also did all HR‐related tasks. To keep things organised and structured at the clinic, 5
administration staff were dedicated towards the Indian plan, 4 towards the Chinese plan and 3
towards the hybrid plan.
Even though the clinic has 30 service staff in its roster rotation, in any given week (out of 52 weeks in
a year), a total of 20 service staff are rostered at the clinic – with each staff being rostered to work
variable hours. In a year, service staff carried out a range of miscellaneous activities around the clinic
– with 6,500 service staff hours going towards patients in the Indian plan, 7,000 hours towards
patients in the Chinese plan, and 8,200 hours towards patients in the Hybrid plan. Similarly, with
therapists, although there are 40 multi‐skilled therapists in the roster rotation, a total of 35
therapists are rostered in any week – with each staff working varying hours between 4 and 25 hours.
Therapists conducted all types of therapies that were advised by physicians to the patients. For
activities that were physical (eg: yoga and meditation, tai chi and qigong), therapists were able to
conduct sessions for any number of patients. Increasing or decreasing the number of patients per
activity session did not affect therapists’ ability to conduct these sessions. In a year, 4,794 one‐hour
yoga and meditation sessions are held (with 748 sessions conducted for patients under the Hybrid
plan). Also, in a year, 2,774 one‐hour tai chi and qigong sessions are held (with 2,500 of these
sessions conducted for patients under the Chinese plan). On the other hand, therapists provided
one‐on‐one time for patients when it came to massages of all types and acupuncture and cupping
therapy. All these sessions were one‐hour long for each patient. The following table provides details
of the number of massage and acupuncture and cupping therapy sessions done.
Indian Chinese Hybrid
Massages 5,854 4,640 781
Acupuncture and Cupping 0 4,460 701
The restaurant offered a wide range of organic food options and provided tailored meals and snacks
to patients. The cost of restaurant food was included in the price patients paid. For the dispensary,
the clinic made sure to bulk buy all its herbal remedies and medicines in order to lower the price
they paid per product (for bulk buying, the clinic typically availed an overall saving of $47,000
annually). However, of all the herbal remedies and medicines held in inventory throughout the year,
12.5% (in terms of cost) usually goes to waste as the clinic is not able to dispense all the products
before they expire. About 52.5% of the products (in terms of cost) are actually dispensed to patients
in the year – and out of this figure, 32% relates to patients under the Indian plan, 33% relates to
patients under the Chinese plan and 35% relates to patients under the hybrid plan.
In terms of equipment, many of them were general enough (for example, massage tables and
bamboo mats) that they were used across all the three sections. All equipment together were
estimated to be worth $300,000, with a useful life of 12 years, with no residual value. They were
depreciated using the straight‐line basis. The clinic did not think that it would be efficient to
specifically identify how many patients (from each section) were utilising each equipment. Therefore
in the new costing structure, they would prefer to allocate depreciation expenses as per the number
of patient in each section. Supplies and disposable supplies included a wide range of items, and the
clinic spent a constant amount of $25 on this for each day a patient stayed at the clinic.
Insurance covered the entire physical space of the clinic facility and all equipment together with
future potential liabilities that the clinic might have to face. This expense was a fixed amount and
the insurance contract was renewed and also paid for on a monthly basis. Marketing and advertising
were done several times throughout the year, and were mostly done through social media, Google
Ads, mainstream newspapers and magazines. With each ad, all three treatment plans were
advertised at the same time.
Building rent, maintenance and utilities were all paid for on a monthly basis, and all three costs
remained at a fixed amount. Floor space that directly related to patients and their treatment
included consultation rooms, physical activity rooms, massage rooms, patient stay rooms, outdoor
gardens and other therapy rooms. The three sections had their therapies/activities organised
according to a scheduled timetable (arranged by the administration staff), and so all sections would
end up utilising all the rooms and spaces on specific timeslots each day. Again, the clinic did not
think that it would be efficient for them to specifically identify how many patients (from each
section) were utilising each type of space and each type of utility. So in the new costing structure,
they would prefer to allocate building rent and maintenance to each section in the ratio of total
therapist hours that were spent in the three sections. They would prefer to allocate utilities to each
section in the ratio of the number of total patient days in the three sections.
Upon examining the cost breakdown table given to you by the clinic’s administration team, you and
your team observe quite a range of flaws. Mr Smith is quite concerned about the accuracy and
limitations of their cost structure, so he would like you to succinctly pinpoint all the flaws (and why
they are flaws) and also their specific implications. He would also like you to succinctly pinpoint all
the elements that the clinic’s team did get correct (and how so) and which therefore do not require
any modifications. In regards to this whole matter, he does not want to hear anything that is generic.
Mr Smith would also like you to make corrections to the flaws in the table (that is, prepare a new
table with accurate costs and appropriate cost drivers). Then, based on corrected table, Mr Smith
would like an analysis based on both their existing simple costing system and also an activity‐based
costing system. Specifically, he would like you to correctly calculate the gross profit of each section1,
the gross profit per client in each section, and the gross profit and the net profit of the clinic as a
whole. He wants you to provide a critical analysis of these figures. He would like you to provide an
analysis of whether the price being charged to patients is in line with the direct costs of serving
them, and reasons for differences in gross margin numbers across the three sections.
Based on all the correct figures you have determined, Mr Smith also wants you to prepare a detailed
CVP analysis to show him how each of the sections performed. To help with this task, he wants you
to make a list of variable and fixed costs first. He is very keen to find out how each section is
contributing to the clinic’s profits. He would like to increase the clinic’s total net profit by 10%
(ignoring taxes) and would like to know how many more patients he would need in each ward to
achieve this target. He expects to see no change in the patient mix this year.
Trusting that your team will make all necessary adjustments to the clinic’s costing system, Mr Smith
is now looking forward to the next year. He has therefore delegated your team to prepare a set of
operating budgets for the next year, and he wants you to base them off of the corrected cost table
1 You are meant to exclude only insurance and marketing and advertising costs in this calculation. You can also
see this calculation as the direct cost of serving patients.
that you have generated. He has given the following expectations of changes. Ultimately he would
like to see if, based on the following expectations, the clinic will make a higher profit or not.
Mr Smith wants your team to analyse all the detailed insights that emerge from the budgets. Overall,
he is asking for a critical analysis of the estimates below to check that the clinic is on the right track
in terms of raising above the stagnant profits it has been experiencing.
1. Increase the number of customers by 10% in each of the traditional (non‐hybrid) plans and
by 25% in the hybrid plan. The number of each type of therapy sessions should go up
proportionately. The restaurant running cost will also be influenced in these same
proportions.
2. The above is hoped to be achieved with an extra spending of $100,000 on marketing and
advertising.
3. No changes are expected in terms of the dispensary.
4. A 5% increase is expected for building maintenance and rent.
5. A 3% increase is expected for utilities.
6. No changes in administration expenses, insurance, service staff expense and service staff
hours for each section.
7. Employ 2 more physicians who will be paid the same salary as the existing physicians. The
physician hours required for each patient (in each section) will remain unchanged.
8. Change patient fees according to the new cost structure that you have recommended. Fees
per patient will now be the direct cost of serving patients (as per your ABC calculations for
the current year) plus 95%.
For improved control and efficiencies, Mattusito has decided to implement SAP accounting system
and wants to trial the adoption by using SAP trial version this year before committing to a full‐scale
implementation next year. In the proposed SAP accounting system, Mr Smith would like you to map
the costs and transactions for the year 2023 (current year) as ‘actual’ costs and the 2024 costs as
‘budgeted/planned’ costs. Further, while posting and/or doing cost allocations in the SAP accounting
systems, Mattusito would like you to assume that the yearly costs you calculate for 2023 and 2024 are
the costs for the ‘current month’ and post them accordingly.
For easier administration of its operations and keeping the activity‐based management approach in
mind, Mr Smith has organised the clinic into four departments and wants this to be reflected in SAP.
They are Administration (A###), and each of the three treatment plans as Indian treatment (D###),
Chinese treatment (C###) and Hybrid treatment (H###), and all of them under one single cost centre
group called Mattusito corporate group (MG###).
To make it easier, Mr Smith would like you to consider all the cost elements shown in Table A as
independent for mapping in SAP. After calculating the actual and budgeted costs (that have
considered the improvements on cost drivers), management wants each of these costs to be charged
to appropriate treatment plans i.e. Indian (D###), Chinese (C###) and Hybrid (H###), except the
common costs and building maintenance and rent costs. Mr Smith identifies the costs for utilities,
insurance, administrative expenses, equipment depreciation, marketing and advertising, and supplies
and disposable supplies as common costs and wants them to be charged to the Administration cost
centre (A###).
With regards to building maintenance and rent, Mattusito receives an invoice from a real estate
agency, called ###Bell realty who is responsible for the building maintenance and rent (actual cost as
calculated). This is to be charged to the Administration (A###) cost centre initially and allocated at the
end of the period. For administrative control, Mr Smith would like this cost to be allocated in SAP to
each of the treatment plans – Indian (D###), Chinese (C###) and Hybrid (H###) based on the actual
number of patient days. As administration has no separate patient days, Mr Smith wants you to
assume them to be 2,000 patient days (to make sure some costs are allocated to Administration as
well in the SAP system) and do the allocation accordingly. He wants the cost head ‐ maintenance and
rent to be clearly shown in the individual receiver cost centre reports. The budgeted costs (values
calculated by you for the year 2024 using your proposed cost drivers) towards building maintenance
and rent, however, are to be recorded in the system and charged to individual treatment plans i.e.
Indian (D###), Chinese (C###) and Hybrid (H###).
Except maintenance and rent costs, all the other actual costs (calculated for the current year 2023)
are to be posted directly in the SAP general ledger and charged to appropriate cost centres – i.e.,
Indian (D###), Chinese (C###) and Hybrid (H###) or A###. Similarly, the planned/budgeted costs (i.e.,
costs calculated for the year 2024) are to be recorded in SAP while charging to appropriate cost
In addition, Mr Smith would like these common costs – both the budgeted costs (costs for the year
2024) and actual costs (costs for the year 2023) to be allocated using an appropriate allocation method
that does require the identity to be shown in the receiver cost centre reports. Management policy is
to charge 5% for Administration (A###), 45% for Indian treatment (D###), 40% for Chinese treatment
(C###) and 10% for Hybrid treatment (H###).
Management has engaged a contractor for cleaning and this is treated as a separate department called
Services (S###) department. Management would like to allocate the cost of providing cleaning services
(CS###) based on the service hours. Using an appropriate allocation method, you must allocate these
cleaning service costs. In the current month, this Service department (S###) has provided 1,500, 3,500,
2,000 and 500 hours of service to Indian (D###), Chinese (C###), Hybrid (H###) treatments and
Administration (A###) departments, respectively. The total planned/budgeted activity for cleaning is
7,200 hours per month and the service rate is $100 per hour.
Part A Group:
Based on all the information analysed and the calculations your team has conducted, you need to
prepare a PowerPoint presentation to report to Mr Smith. Your report should contain the following:
a. Executive summary (1 slide limit only) – provides a detailed summary of the report including
background, analysis, major findings, recommendations and limitations (so that an executive reading
the report will have enough detail to attend and participate at a meeting even if he/she has not read
the rest of the report in detail). Please note, an executive summary needs to be thorough, detailed
and succinct.
b. Background – a full description of all the important issues and their background that are relevant
to the case study and your findings.
c. Analysis – provides an overview of all detailed analytical/critical insights generated in light of the
results obtained. Calculations should not be included here (please do so in the appendices), with this
section referencing the appropriate appendices. For example, the corrected cost table, the costing
calculations, the list if variable and fixed costs, the CVP calculations and the budgets you have to
create for this assignment should be placed in the appendices and NOT in the body of the
PowerPoint report. (Note: Do not round intermediary calculations and round your final answers to
the nearest whole dollar)
d. Findings – detail and justify all your key findings/discoveries from the analysis (this should not be
a simple repetition/rephrasing of the analysis). Draw out broader findings that come out of your
analysis. Take care to recognise and describe any assumptions or where additional data may be
necessary to further understand the situation.
e. Recommendations – detail and justify your recommendations in line with what you have said in
your analysis and findings. For example, your recommendations may include the need for further
specific forms of analysis or research on identified issues. Ensure that your recommendations are
reasonable/justifiable/feasible and directly address the case and/or the analyses undertaken above.
Your recommendations should be specific and detailed.
f. Action Items (Next Steps) – map out a plan that highlights specific/concrete actions to be taken in
order to implement any proposed changes based on the findings and recommendations noted. This
should not be a simple repetition/rephrasing of the recommendations.
g. Limitations – detail specific limitations from the analyses such as assumptions made, any missing
information. You can also take note of the limitations underlying the data, calculations and the case
study context.
h. Appendices – include all other relevant supporting material such as detailed calculation work
(that has been referenced in the body of the report). There should be NO new material or important
material in the appendices.
1. Important note: While your calculations are important, the assignment will be assessed largely for
its critical analysis, depth and creativity. Please do not describe/list your calculation results within
the body of your report ‐ this would be too simplistic.
2. Report: You are required to prepare your report using PowerPoint. The report must meet the
purpose of providing details for a manager with sufficient time to sit and read the slides (you will not
be required to present). The body of the report must not exceed 10 PowerPoint slides. The executive
summary has a limit of one (1) slide only, i.e., the executive summary and the report together will be
a total of 10 slides. Please also include a title slide in PowerPoint with student names and SIDs (this
cover slide will not be counted as one of your 10 slides).
You are strongly encouraged to be detailed but also concise in your writing style (do not waste space
on stating the obvious or including tedious calculations or including definitions of management
accounting terminologies or providing simplistic and obvious reasonings/interpretations). Also
remember that management would normally require as much information as would be required to
help them make informed decisions, while at the same time they would not prefer information
overload. To reflect this, the slides should be sufficiently detailed and informative but not be over‐
crowded. Sufficiently informative dot‐points are encouraged. Each slide must be self‐explanatory,
with proper headings and sub‐headings. Make sure to see the Marking Guide for further details.
3. Appendices: You are encouraged to provide all supporting information (including calculations) in
the appendices. The appendices do not need to be in PowerPoint format – you may use Word or
Excel. The appendices should be no longer than ten (10) A4 pages. Please attach the appendices at
the end of the PowerPoint report.
4. Cover page: Please provide a separate cover page for your assignment submission (with student
names, SIDs and email addresses). Only one submission required per group (for the group
assignment). Cover pages can be found in Canvas.
5. Peer evaluation: Each group is required to sign and submit one (1) peer evaluation form that
needs to be attached to the assignment. For example, if you were in a group of three – members #1
and #2 would jointly decide the contribution of member #3; members #2 and #3 would jointly
decide the contribution of member #1; members #1 and #3 would jointly decide the contribution of
member #2. You will not be required to evaluate your own contribution.
Each member should be aiming for 100% contribution. Contributions of 80% and below warrants
investigation by the Unit Coordinator and a potential penalty for all group members, whether
deemed to have contributed or not. In other words, if you have a non‐contributing group member it
is your responsibility to get that individual to contribute, and hence this being a group task – you risk
being penalised as well.
Part B: SAP component (Individual)
Weightage: 15%
Objectives: To assess student’s understanding and skills of mapping the business
scenario of the case study in SAP, perform appropriate cost allocations and
produce reports
Client: 414
SAP Username: learn‐### (assigned to you in workshops).
Initial password: easysap (all small letters)
Submission requirements:
Your submission should have:
Your SAP Username, i.e., learn‐### and student SID in every page header.
A first page that includes your name, student ID, learn‐### number, and a table of master
data elements (G/L accounts, cost centres, cost elements, activity types, statistical key figures
etc.), document numbers and/or allocation cycle numbers