(
DRAFT
)
Assessment 2 : Appendix B – Learning and development session plan
Session objectives
Timeframe
Activity
Teaching or assessment strategy or approach to achieve session objectives
Tools/resources
Assessment 2 : Appendix B – Performance data
Summary of initial training outcomes
Description
Outcome
Target
Number of employees trained in new sales model
367
4,000
Number of employees trained in sustainability practices
270
4,000
Average assessment score of trainees completing the training
90%
80%
Manager observation of trainees’ skills on-the-job (use of the new sales model; knowledge of sustainability practices)
Randomised observations show that 45% of trainees apply some features of the sales model they were trained in and there is some use or mention of sustainability practices
80%
Revenue per trained salesperson/month
$20,000
$35,000
Customer awareness of sustainability practices
68% of customers are aware of sustainability practices
95% aware
Customer experience satisfaction ratings
67% of customers report being satisfied with their Australian Hardware shopping experience
95% satisfied
Interviews with employees and level 1 feedback
Interviews with sales employees immediately after training found that sales employees:
· reported that they enjoyed training very much
· had thought the training and assessment would be much more difficult than it turned out to be
· found the ten question multiple choice assessment easy and convenient
· are not sure if they would be able to apply knowledge in face-to-face dealings with customer.
Interviews with managers
Interviews with line managers yielded the following general observations:
· Employees displayed initial enthusiasm after the training
· Employees are generally unable to transfer learning to actual interaction with customers, for example:
· sales staff do not mention sustainability as important differentiator for Australian Hardware
· sales staff do not follow sales model and forget to ask customers about their specific needs and possible future needs.
Assessment 2 : Appendix B – Training strategy and schedule
Training objectives
Actions
Timeframe
Activity: (training/assessment, coaching or other support, monitoring)
Teaching or assessment strategy or approach to achieve training objectives
Resources:
Trainer
(number 1–30)
Managers
Assessment 2 : Appendix B – Service agreement
1. Service Agreement
Service Agreement dated: 3 January 2014Between
Train Your Way Up
Service Agreement Sponsor – Director of studies for Train Your Way Up, Jan PowersAnd
Australian Hardware Human Resources
Service Agreement Sponsor – Susan Black, Human Resources General Manager
2. Scope of services
Sales training to upskill sales staff in the new sales model:
1. Greet the customer.
2. Proactively ask questions to identify the customer’s needs.
3. Present possible solutions and discuss sustainable or environmentally friendly options where relevant.
...
(DRAFT)Assessment 2 Appendix B – Learning and de.docx
1. (
DRAFT
)
Assessment 2 : Appendix B – Learning and development
session plan
Session objectives
Timeframe
Activity
Teaching or assessment strategy or approach to achieve session
objectives
Tools/resources
2. Assessment 2 : Appendix B – Performance data
Summary of initial training outcomes
Description
Outcome
Target
Number of employees trained in new sales model
367
4,000
Number of employees trained in sustainability practices
270
4,000
Average assessment score of trainees completing the training
90%
80%
Manager observation of trainees’ skills on-the-job (use of the
new sales model; knowledge of sustainability practices)
Randomised observations show that 45% of trainees apply some
features of the sales model they were trained in and there is
some use or mention of sustainability practices
80%
Revenue per trained salesperson/month
$20,000
$35,000
Customer awareness of sustainability practices
68% of customers are aware of sustainability practices
95% aware
Customer experience satisfaction ratings
3. 67% of customers report being satisfied with their Australian
Hardware shopping experience
95% satisfied
Interviews with employees and level 1 feedback
Interviews with sales employees immediately after training
found that sales employees:
· reported that they enjoyed training very much
· had thought the training and assessment would be much more
difficult than it turned out to be
· found the ten question multiple choice assessment easy and
convenient
· are not sure if they would be able to apply knowledge in face-
to-face dealings with customer.
Interviews with managers
Interviews with line managers yielded the following general
observations:
· Employees displayed initial enthusiasm after the training
· Employees are generally unable to transfer learning to actual
interaction with customers, for example:
· sales staff do not mention sustainability as important
differentiator for Australian Hardware
· sales staff do not follow sales model and forget to ask
customers about their specific needs and possible future needs.
Assessment 2 : Appendix B – Training strategy and schedule
Training objectives
Actions
Timeframe
4. Activity: (training/assessment, coaching or other support,
monitoring)
Teaching or assessment strategy or approach to achieve training
objectives
Resources:
Trainer
(number 1–30)
Managers
Assessment 2 : Appendix B – Service agreement
1. Service Agreement
Service Agreement dated: 3 January 2014Between
Train Your Way Up
Service Agreement Sponsor – Director of studies for Train Your
Way Up, Jan PowersAnd
Australian Hardware Human Resources
5. Service Agreement Sponsor – Susan Black, Human Resources
General Manager
2. Scope of services
Sales training to upskill sales staff in the new sales model:
1. Greet the customer.
2. Proactively ask questions to identify the customer’s needs.
3. Present possible solutions and discuss sustainable or
environmentally friendly options where relevant.
4. Close sale and facilitate transaction.
5. Follow up to maintain customer relationship, gather feedback
and lay foundation for repeat business.Service specifications
The table below describes the services to be provided under this
Services Agreement.
Service
Scope
Sales model training
4,000 employees
Training on sustainability policy and relevant products
4,000 employees
3. Fees and payment terms
The schedule below details the fees and payment terms for the
services provided under this agreement.
Service
Fee
Payment term
Total costs of training delivery
$2,000,000
Paid on completion of training by the fourth quarter of FY
2014–15
4. Service level targets
Services provided under this agreement will be measured
against the following performance standards and timeframes.
Service
6. Performance standard and timeframe
Sales model training
4,000 employees by the end of the fourth quarter of FY 2014–15
Training on sustainability policy and relevant products
4,000 employees by the end of the fourth quarter of FY 2014–15
Average assessment score
80%
5. Monitoring and reporting
Services will monitored according to the following reporting
schedule.
Service
Report
Timing
Sales model training
Summary of training completion
Completed by the end of the fourth quarter of FY 2014–15
Training on sustainability policy and relevant products
Summary of training completion
Completed by the end of the fourth quarter of FY 2014–15
Average assessment score
Assessment records
Completed by the end of the fourth quarter of FY 2014–15
6. Dispute resolution
In the event that either party needs to raise a dispute the
following process must be followed:
7. Signatures
I agree to the terms and conditions of this agreement.
Signed for and on behalf of Australian hardware HR
Australian Hardware, HR general manager
S Black
In the presence of witness
David Ouspensky
7. Signed for and on behalf of Train Your Way Up
Train Your Way Up, Director of Training
Jan Powers
In the presence of witness
David Ouspensky
Issue identified
Service Agreement Sponsor from both parties to
discuss issue and agree resolution
In the event that Service Agreement Sponsors cannot agree on a
resolution the issue is to be escalated to mediation
Service Agreement Sponsor from both parties
to be notified of issue
(
Page |
32
9. Costing System
Traditional, volume-based product-costing systems are usually
based on a single volume-based driver, such as direct labor
hours, or machine hours. We will use the Patio Grill Company
to demonstrate how volume based costing would be
accomplished. Patio Grill manufactures three product lines, all
high-end gas barbeque grills. The three products the company
manufactures are:
STD – Standard Grills
DEL – Deluxe Grills and
ULT – Ultimate grills.
The basic data upon which the traditional costing system was
based is shown. (LO 5-1)
Traditional, Volume Based
Costing System
Reviewer (R) - Slide 4 NN
Deleted the extra space after the dollar sign and before the
value ($4,896,000).
This spreadsheet shows the calculation of the product cost for
each of the three grill lines. Overhead is applied to the
products at the rate of $24 per direct-labor hour. Notice that all
of the plant’s budgeted manufacturing overhead is lumped
together in one single cost-pool. This total budgeted overhead
amount of $4,896,000 is then divided by the total budgeted
direct labor hours of 204,000. This results in the $24.00 per
direct-labor hour that will be used to allocate overhead to all of
10. the products. The Patio Grill Company’s labor-hour-based
product-costing system is typical of many manufacturing
companies that use a traditional volume-based costing system.
(LO 5-1)
Traditional, Volume-Based
Product-Costing System
With these product costs, Patio Grill established target selling
prices (Cost × 120%).
496.00 x 1.20
5-*
Now that Patio Grill has estimated the production cost per unit,
the target selling price can be set.
The company’s pricing policy has been to set a target price for
each grill equal to 120 percent of its full product cost.
The estimated unit cost is multiplied by 1.20 to arrive at the
target selling price. (LO 5-1)
Learning Objective 5-2 Explain how an activity-based costing
system operates, including the use of a two-stage procedure for
cost assignment, the identification of activity cost pools, and
the selection of cost drivers.
5-*
Reviewer (R) - Slide 6
Changed the word 'identificaiton' to read 'identification.'
11. Learning Objective 5-2. Explain how an activity-based costing
system operates, including the use of a two-stage procedure for
cost assignment, the identification of activity cost pools, and
the selection of cost drivers.
Activity Based Costing System (ABC)
ABC systems follow a two-stage procedure to assign overhead
costs to products.
Stage One
Identify significant activities and assign overhead costs to each
activity in proportion to resources used.
Stage Two
Identify cost drivers appropriate to each activity and allocate
overhead to the products.
5-*
Activity-based costing (ABC) systems follow a two-stage
procedure to assign overhead costs to products.
Assigning overhead to product costs is a difficult process.
Begin by identifying the major activities. The first stage
identifies significant activities in the production process and
assigns overhead costs to each activity in accordance with the
cost of the organization’s resources used by the activity.
After assigning overhead costs to activity cost pools in stage
one, cost drivers appropriate for each cost pool are identified in
stage two. Overhead assigned to activities are called “cost
pools.” The overhead costs are allocated from each activity
cost pool to each product line in proportion to the amount of the
cost driver consumed by the product line.
12. This process will be demonstrated in the next set of slides. (LO
5-2)
Learning Objective 5-3 – Explain the concept of cost levels,
including unit-level, batch-level, product-sustaining-level, and
facility-level costs.
5-*
Learning Objective 5-3. Explain the concept of cost levels,
including unit-level, batch-level, product-sustaining-level, and
facility-level costs.
Overhead Costs
Total budgeted cost = $4,896,000
Activity
Cost
Pools
Machinery
cost pool
$1,242,000
Setup
cost pool
$210,000
Engineering
cost pool
$130,000
Facility
13. cost pool
$2,300,000
Unit-
Level
Batch-
Level
Product-
Sustaining-
Level
Facility-
Level
Identification
of Activity
Cost Pools
5-*
Reviewer (R) - Slide 9
Top middle text box: Changed the value '$3,894,000' to read
'$4,896,000' (see page 175 on pages, Hilton 11e).
Middle left text box: Changed the value '$1.242.000' to read
'$1,242,000.'
Patio Grill identified eight activity cost pools, which fall into
four broad categories: unit-level, batch-level, product-
sustaining-level and facility-level.
The activity at the unit level must be applied to each unit
produced.
The activity at the batch level must be performed one time for
each batch that goes into production.
14. The product-sustaining activities are required to support the
entire product line, but not needed for each unit or batch.
Facility-level activities are required in order for the entire
production process to occur. (LO 5-3)
Purchasing
cost pool 300,000
Material-Handling
cost pool $340,000
Quality-Assurance
cost pool $110,000
Packaging/Shipping
cost pool $264,000
Machinery
cost pool
$1,242,000
Setup
cost pool
$210,000
Engineering
cost pool
$130,000
Facility
cost pool
$2,300,000
Unit-
Level
Batch-
Level
Product-
Sustaining-
Level
Facility-
Level
15. 5-*
Reviewer (R) - Slide 10
Top left text box: Changed the value '$1,212,600' to read
'$1,242,000.'
Reviewer (R) - Slide 10 NN
Added a comma after the word 'assurance.'
For Patio Grill, only the machinery cost pool is at the unit-
level.
There are five cost pools at the batch-level: setup, purchasing,
material-handling, quality assurance, and the packaging and
shipping cost pool.
The engineering cost pool is at the product-sustaining-level and
the facility cost pool is at the facility level. (LO 5-3)
Learning Objectives 5-4 – Compute product costs under an
activity-based costing system.
5-*
Learning Objective 5-4. Compute product costs under an
activity-based costing system.
Machinery Cost Pool
Total budgeted cost = $1,242,000
Activity
cost
16. pool
STAGE ONE – Machinery Cost Pool
Various overhead
costs related
to machinery
5-*
Patio Grill estimated the costs of maintenance, lubrication,
depreciation, electricity, computer support, and calibration.
These costs are added together.
The sum is the machinery cost pool budgeted cost. (LO 5-4)
Budgeted Machinery Costs $1,242,000
Budgeted Machine Hours 230,000
$5.40/hour
STAGE TWO – Machinery Cost Pool
=
=
5-*
Reviewer (R) - Slide 13 NN
Fourth sentence: Changed the word 'and' to read 'an.'
Patio Grill selected machine hours for the cost driver, since a
product that uses more machine hours should bear a larger share
of machine-related costs.
The budgeted machinery costs are divided by the budgeted
number of machine hours to arrive at the machinery cost pool
rate of $5.40 per hour.
Then, for each barbecue grill, the machinery cost pool rate is
multiplied by the number of machine hours per grill. Finally
the cost for each grill type is divided by the number of units
17. produced to arrive at an activity cost for each grill type. In our
example, the STD grill cost per unit is $54. The DEL grill cost
per unit is $64.80 and the ULT grill cost per unit is $91.80. (LO
5-4)
ABC Pool Cost Calculations –
First 4 activities
We would then continue to follow the same process for
computing the cost per set up – but this time the cost driver is
the number of production runs. For example, the Activity cost
pool for the set ups is $210,000 and the number of expected
production runs is 200. This comes out to a pool rate of $1,060
per production run. This amount is applied to each type of grill.
Take a moment to look at the spreadsheet and make sure you
understand how to compute each activity rate, and then how to
apply it to each type of grill that the company manufactures.
(LO 5-4)
ABC Pool Cost Calculations –
Last 4 activities
Reviewer (R) - Slide 15 NN
Changed the name 'Daily' to read 'Patio.'
Added the learning objective '(LO 5-4).'
18. Here is the spreadsheet showing the computations for the last
four activities of the Patio Grill Company. (LO 5-4)
Product Cost from ABC
These are the new product costs when ABC is used.
5-*
Reviewer (R) - Slide 16 NN
Changed the name 'Daily' to read 'Patio.'
Now Patio Grill has new product costs for each barbecue.
It is the sum of the costs for direct materials, direct labor, and
all of the accumulated overhead costs based on our ABC
analysis. Note that the direct materials and direct labor costs are
NOT AFFECTED by the use of either the traditional or ABC
costing method…only the manufacturing overhead will be
different. (LO 5-4)
Learning Objective 5-5 – Explain why traditional, volume-based
costing systems tend to distort product costs.
5-*
Learning Objective 5-5. Explain why traditional, volume-based
costing systems tend to distort product costs.
Distorted Product Costs
Both original and ABC target selling prices are based on (Cost
19. × 120%).
5-*
Using the existing target pricing policy, the unit cost based on
ABC costing is multiplied by 1.20 to arrive at the ABC target
selling price.
What has happened at Patio Grill? The essence of the problem
is that the traditional, volume-based costing was overcosting the
high-volume product lines – STD and DEL and undercosting the
complex, relatively low-volume product line – ULT. In other
words, the high-volume products basically subsidized the low-
volume line. The ABC costing system revealed this problem by
more accurately assigning overhead to the three product lines.
(LO 5-5)
5-*
Reviewer (R) - Slide 19 OBSERVATION
I think the art work presented on this slide should be updated
for Hilton 11e.
In this analysis, the cost per unit under ABC costing is deducted
from the traditional costing unit cost.
The difference is referred to as a cost distortion per unit.
The problem with cost distortion is more evident when the cost
distortion per unit is multiplied by the number of units
produced.
When the costs are understated, so is the selling price. Take a
moment to look at the summary of the cost distortion effects.
(LO 5-5)
20. Two Key Points
A large proportion of non-unit-level activities
A unit-level cost driver, such as direct labor, machine hours, or
throughput, will not be able to assign the costs of non-unit-level
activities accurately.
Product diversity
When the consumption ratios differ widely between activities,
no single cost driver will accurately assign the resulting
overhead costs.
5-*
To summarize, each of the following characteristics will
undermine the ability of a volume-based product-costing system
to assign overhead costs accurately.
A large proportion of non-unit-level activities; and Product
diversity. When the consumption ratios differ widely between
activities, no single cost driver will accurately assign the
resulting overhead costs.
When either of the above characteristics is present, a volume-
based product-costing system is likely to distort product costs.
(LO 5-5)
Learning Objective 5-6 – Explain three criteria for selecting
cost drivers.
5-*
Learning Objective 5-6. Explain three criteria for selecting cost
drivers.
21. Cost Drivers
A characteristic of an event or activity that results in the
incurrence of costs. In selecting a cost driver, we must consider
. . .
Degree of
Correlation
Cost of
Measurement
Behavioral
Effects
5-*
A cost driver is a characteristic of an event or activity that
results in the incurrence of costs. In activity-based costing
systems, the most significant cost drivers are identified. Then a
database is created, which shows how these cost drivers are
distributed across products. Three factors are important in
selecting appropriate cost drivers.
The first is the degree of correlation. The concept of an
activity-based costing system is to infer how each product line
consumes the activity by observing how each product line
consumes the cost drive, that is, how closely the two are
correlated. The closer the correlation, the more accurate the cost
assignments will be.
Designing any information system entails cost-benefit trade-
offs. The more activity cost pools there are in an activity-based
costing system, the greater will be the accuracy of the cost
assignments. However, more activity cost pools also entail more
cost drivers, which results in greater costs of implementing and
maintaining the system.
22. Information systems have the potential not only to facilitate
decisions but also to influence the behavior of decision makers.
This can be good or bad, depending on the behavioral effects. In
identifying cost drivers, an ABC analyst should consider the
possible behavioral consequences. Dysfunctional behavioral
effects are also possible. (LO 5-6)
Learning Objective 5-7 – Discuss several key issues in activity-
based costing, including data collection and storyboarding.
5-*
Learning Objective 5-7. Discuss several key issues in activity-
based costing, including data collection and storyboarding.
COLLECTING ABC DATA
INTERVIEWS AND PAPER TRAILS - The information for
ABC systems initially comes from interviews with employees in
the support departments and a review of each department’s
records.
STORYBOARDING - A procedure used to develop a detailed
process flow chart, which visually represents activities and the
relationships among activities.
MULTIDISCIPLINARY ABC PROJECT TEAMS – To gather
information from all facets of an organization’s operations, it is
essential to involve personnel from a variety of functional
areas. A typical ABC project team includes ACCOUNTING,
FINANCE, PRODUCTION, OPERATIONS, ENGINEERS,
MARKETING, etc.
5-*
The information used in ABC systems initially comes from
extensive interviews with key employees in each of the
23. organization’s support departments and a careful review of each
department’s records.
Storyboarding is a procedure used to develop a detailed process
flowchart, which visually represents activities and the
relationships among the activities.
A storyboarding session identifies the key activities involved in
each department.
These activities are written on small cards and placed on a large
board in the order they are accomplished.
After several storyboarding sessions, a completed storyboard
emerges, recording key activity information vital to the ABC
project. (LO 5-7)
Learning Objective 5-8 – Explain the concepts of activity-based
management and two-dimensional ABC.
5-*
Learning Objective 5-8. Explain the concepts of activity-based
management and two-dimensional ABC.
Activity-Based Management
5-*
Using activity-based costing (ABC) information to support
organizational strategy, improve operations, and manage costs
is called activity-based management or ABM. (LO 5-8)
24. Activity-Based Management (ABM)
Activity-based costing establishes relationships
between overhead costs and activities so that
we can better allocate overhead costs.
Activity-based management focuses
on managing activities to reduce costs.
5-*
Activity-based costing establishes relationships between
overhead costs and activities so that we can better allocate
overhead costs.
Activity-based management focuses on managing activities to
reduce costs. (LO 5-8)
Two-Dimensional ABC and
Activity-Based Management
5-*
One way to describe the relationship between ABC and ABM is
in terms of a two-dimensional activity-based costing model.
The activities, which are the center of the model, are the focal
point of ABC and ABM. (LO 5-8)
Two-Dimensional ABC and Activity-Based Management
5-*
25. The vertical element of the model is the cost assignment view of
an ABC system.
Cost assignment in an ABC system uses a two-stage cost
allocation to assign the costs of resources to the firm’s cost
objects. (LO 5-8)
Two-Dimensional ABC and
Activity-Based Management
5-*
The horizontal element of the model is the process view of an
ABC system.
The emphasis now is on the activities themselves, the various
processes by which work is accomplished in the organization.
The left-hand side is the activity analysis.
This is the identification and description of the activities
conducted in the enterprise.
Activity analysis also identifies the root causes of activities, the
events that trigger activities, and the linkages among activities.
The right-hand side is the evaluation of activities through
performance measures.
It is these processes of activity analysis and evaluation that
comprise activity-based management. (LO 5-8)
Elimination of Non-Value-Added Costs
Non-value-added activities
Necessary
26. Unnecessary
Activities
Reduce or
Eliminate
Continually Evaluate
and Improve
5-*
An important goal of activity-based management is to identify
and eliminate non-value-added activities and costs.
Non-value-added activities are operations that are either (1)
unnecessary and dispensable or (2) necessary, but inefficient
and improvable.
Non-value-added costs, which result from such activities, are
the costs of activities that can be eliminated without
deterioration of product quality, performance, or perceived
value. (LO 5-8)
Using ABM to Eliminate Non-Value-Added Activities and Costs
Identify Activities.
Identify Non-Value-Added Activities.
Understand Activity Linkages, Root Causes, and Triggers.
Establish Performance Measures.
Report Non-Value-Added Costs.
Specify
parts
Select
27. vendor
Receive
parts
Produce
goods
Inspect
finished
goods
Rework
defective
products
5-*
There are five steps that provide a strategy for eliminating non-
value-added costs in both manufacturing and service industry
firms. Step 1 identifies all of the organization’s significant
activities. The resulting activity list should be broken down to
the most fundamental level practical.
In step 2, the non-value-added activities are identified. Three
criteria for determining whether an activity adds value are as
follows:
• Is the activity necessary?
• Is the activity efficiently performed?
• Is an activity sometimes value-added and sometimes non-
value-added?
In identifying non-value-added activities, it is critical to
understand the ways in which activities are linked together (step
3). The following chain of activities provides an example:
The rework of defective units is a non-value-added activity. The
rework is triggered by the identification of defective products
during inspection. The root cause of the rework, however, could
lie in any one of a number of preceding activities. Perhaps the
part specifications were in error. Or an unreliable vendor was
28. selected. Maybe the wrong parts were received. Or the
production activity is to blame. A set of linked activities (such
as that depicted above) is called a process. Sometimes activity
analysis is referred to as process value analysis (PVA).
By continually measuring the performance of all activities, and
comparing performance with benchmarks, management’s
attention may be directed to unnecessary or inefficient activities
(step 4).
Non-value-added costs should be highlighted in activity center
cost reports (step 5). By identifying non-value-added activities,
and reporting their costs, management can strive toward the
ongoing goals of process improvement and elimination of non-
value-added costs. (LO 5-8)
Using ABM to Eliminate Non-Value-Added Activities and Costs
Inspection time
Process time
Storage time
Move time
Waiting time
5-*
One approach that cost-management analysts find helpful in
identifying non-value-added activities is to categorize the ways
in which time is spent in a production process.
In most manufacturing operations, time is spent in the five
ways. (LO 5-8)
Learning Objective 5-9 – Explain and execute a customer-
profitability analysis.
29. 5-*
Learning Objective 5-9. Explain and execute a customer-
profitability analysis.
Customer Profitability Analysis
Customer profitability analysis uses
activity-based costing to determine
the activities, costs, and profit associated
with serving particular customers.
5-*
Customer-profitability analysis uses activity-based costing to
determine the activities, costs, and profit associated with
serving particular customers.
If managers have a good understanding of which customers are
generating the greatest profit, they can make more-informed
decisions about customer service. (LO 5-9)
Customer Profitability Analysis
Orders
small
quantities
Orders
frequently
Often
30. changes
orders
Required
special
packaging
Demand
fast
service
A costly customer
5-*
Many factors can result in some customers being more
profitable than others.
Customers that order in small quantities, order frequently, often
change their orders, require special packaging or handling,
demand faster delivery, or need special parts or engineering
design generally are less profitable than customers who demand
less in terms of customized services. (LO 5-9)
Customer Profitability Analysis
A company may use these customer
related costs to help determine the
profitability of each customer.
5-*
Sheet1Customer-Related ActivitiesCost Driver BaseCost Drive
RateOrder processingPurchase orders$ 150Sales contacts
31. (phone calls, faxes, etc.)Contacts100Sales
visitsVisits1,000Shipment processingShipments200Billing and
collectionInvoices160Design/engineering change ordersDesign
changes4,000Special packagingUnits packaged40Special
handlingUnits handled60
÷
Sheet2
Sheet3
The first step is to produce an activity based cost analysis of
certain customer-related costs that could affect a customer’s
profitability.
Recall that ABC analysis relies on a cost hierarchy with cost
levels, such as unit-level, batch-level, product-line-level,
customer-level, and facility- or general-operations-level costs.
In this use of activity-based costing, the cost management team
will focus on the customer-related costs.
A company may then use these costs to determine the
profitability of each customer. (LO 5-9)
Customer Profitability Analysis
75% of actual operating income
50% of actual operating income
25% of actual operating income
5-*
Reviewer (R) - Slide 38 OBSERVATION
I think the artwork presented on this slide should be updated for
Hilton 11e.
Chart10.0880.1730.2550.3340.4110.4890.5650.630.6990.7630.8
260.8840.9350.9821.0291.0481.0561.0511.0281
32. Operating Income
Cumulative Operating Income as a % of Total Operating Income
Customer Profitability
Sheet1Customer-Related ActivitiesCost Driver BaseCost Drive
RateCustomerOperating IncomeOrder processingPurchase
orders$ 15018.8%Sales contacts (phone calls, faxes,
etc.)Contacts100217.3%Sales visitsVisits1,000325.5%Shipment
processingShipments200433.4%Billing and
collectionInvoices160541.1%Design/engineering change
ordersDesign changes4,000648.9%Special packagingUnits
packaged40756.5%Special handlingUnits
handled60863.0%969.9%1076.3%1182.6%1288.4%1393.5%149
8.2%15102.9%16104.8%17105.6%18105.1%19102.8%20100.0%
1
÷
Sheet100000000000000000000
Operating Income
Cumulative Operating Income as a % of Total Operating Income
Customer Profitability
Sheet2
Sheet3
A graphical portrayal of the complete customer-profitability
analysis is called a customer-profitability profile.
It is a common and useful way of presenting a customer-
profitability analysis to management. (LO 5-9)
Learning Objective 5-10 – Understand and discuss how activity-
based costing is used in service-industry organizations.
5-*
Reviewer (R) - Slide 39
33. Changed the word 'organizaitons' to read 'organizations' and
added a period after the word 'organizations.'
Learning Objective 5-10. Understand and discuss how activity-
based costing is used in service-industry organizations.
ABC Costing in the Service IndustryThe overall objectives of
ABC in service firms are no different than they are in
manufacturing companies. Identify the activitiesCreate activity
cost poolsIdentify activity cost driversFollow similar steps
discussed in chapter
We conclude this chapter with the important point that activity-
based costing has found widespread usage in the service
industry as well as in manufacturing. Some service
organizations that have utilized ABC costing are Air France,
American Airlines, American Express, and Bank of America
just to name a few. (LO 5-10)
End Chapter 5
5-*
Chapter 5: Activity-Based Costing and Management
Learning Objective 5-1. Compute product costs under a
traditional, volume-based product-costing system.
Traditional, volume-based product-costing systems are usually
based on a single volume-based driver, such as direct labor
hours, or machine hours. We will use the Patio Grill Company
to demonstrate how volume based costing would be
accomplished. Patio Grill manufactures three product lines, all
34. high-end gas barbeque grills. The three products the company
manufactures are:
STD – Standard Grills
DEL – Deluxe Grills and
ULT – Ultimate grills.
The basic data upon which the traditional costing system was
based is shown. (LO 5-1)
This spreadsheet shows the calculation of the product cost for
each of the three grill lines. Overhead is applied to the
products at the rate of $24 per direct-labor hour. Notice that all
of the plant’s budgeted manufacturing overhead is lumped
together in one single cost-pool. This total budgeted overhead
amount of $4,896,000 is then divided by the total budgeted
direct labor hours of 204,000. This results in the $24.00 per
direct-labor hour that will be used to allocate overhead to all of
the products. The Patio Grill Company’s labor-hour-based
product-costing system is typical of many manufacturing
companies that use a traditional volume-based costing system.
(LO 5-1)
Now that Patio Grill has estimated the production cost per unit,
the target selling price can be set.
The company’s pricing policy has been to set a target price for
each grill equal to 120 percent of its full product cost.
The estimated unit cost is multiplied by 1.20 to arrive at the
target selling price. (LO 5-1)
Learning Objective 5-2. Explain how an activity-based costing
system operates, including the use of a two-stage procedure for
cost assignment, the identification of activity cost pools, and
the selection of cost drivers.
Activity-based costing (ABC) systems follow a two-stage
procedure to assign overhead costs to products.
Assigning overhead to product costs is a difficult process.
Begin by identifying the major activities. The first stage
identifies significant activities in the production process and
35. assigns overhead costs to each activity in accordance with the
cost of the organization’s resources used by the activity.
After assigning overhead costs to activity cost pools in stage
one, cost drivers appropriate for each cost pool are identified in
stage two. Overhead assigned to activities are called “cost
pools.” The overhead costs are allocated from each activity
cost pool to each product line in proportion to the amount of the
cost driver consumed by the product line.
This process will be demonstrated in the next set of slides. (LO
5-2)
Learning Objective 5-3. Explain the concept of cost levels,
including unit-level, batch-level, product-sustaining-level, and
facility-level costs.
Patio Grill identified eight activity cost pools, which fall into
four broad categories: unit-level, batch-level, product-
sustaining-level and facility-level.
The activity at the unit level must be applied to each unit
produced.
The activity at the batch level must be performed one time for
each batch that goes into production.
The product-sustaining activities are required to support the
entire product line, but not needed for each unit or batch.
Facility-level activities are required in order for the entire
production process to occur. (LO 5-3)
For Patio Grill, only the machinery cost pool is at the unit-
level.
There are five cost pools at the batch-level: setup, purchasing,
material-handling, quality assurance, and the packaging and
shipping cost pool.
36. The engineering cost pool is at the product-sustaining-level and
the facility cost pool is at the facility level. (LO 5-3)
Learning Objective 5-4. Compute product costs under an
activity-based costing system.
Patio Grill estimated the costs of maintenance, lubrication,
depreciation, electricity, computer support, and calibration.
These costs are added together.
The sum is the machinery cost pool budgeted cost. (LO 5-4)
Patio Grill selected machine hours for the cost driver, since a
product that uses more machine hours should bear a larger share
of machine-related costs.
The budgeted machinery costs are divided by the budgeted
number of machine hours to arrive at the machinery cost pool
rate of $5.40 per hour.
Then, for each barbecue grill, the machinery cost pool rate is
multiplied by the number of machine hours per grill. Finally
the cost for each grill type is divided by the number of units
produced to arrive at an activity cost for each grill type. In our
example, the STD grill cost per unit is $54. The DEL grill cost
per unit is $64.80 and the ULT grill cost per unit is $91.80. (LO
5-4)
We would then continue to follow the same process for
computing the cost per set up – but this time the cost driver is
the number of production runs. For example, the Activity cost
pool for the set ups is $210,000 and the number of expected
production runs is 200. This comes out to a pool rate of $1,060
per production run. This amount is applied to each type of grill.
Take a moment to look at the spreadsheet and make sure you
understand how to compute each activity rate, and then how to
apply it to each type of grill that the company manufactures.
(LO 5-4)
Here is the spreadsheet showing the computations for the last
four activities of the Patio Grill Company. (LO 5-4)
Now Patio Grill has new product costs for each barbecue.
It is the sum of the costs for direct materials, direct labor, and
all of the accumulated overhead costs based on our ABC
37. analysis. Note that the direct materials and direct labor costs are
NOT AFFECTED by the use of either the traditional or ABC
costing method…only the manufacturing overhead will be
different. (LO 5-4)
Learning Objective 5-5. Explain why traditional, volume-based
costing systems tend to distort product costs.
Using the existing target pricing policy, the unit cost based on
ABC costing is multiplied by 1.20 to arrive at the ABC target
selling price.
What has happened at Patio Grill? The essence of the problem
is that the traditional, volume-based costing was overcosting the
high-volume product lines – STD and DEL and undercosting the
complex, relatively low-volume product line – ULT. In other
words, the high-volume products basically subsidized the low-
volume line. The ABC costing system revealed this problem by
more accurately assigning overhead to the three product lines.
(LO 5-5)
In this analysis, the cost per unit under ABC costing is deducted
from the traditional costing unit cost.
The difference is referred to as a cost distortion per unit.
The problem with cost distortion is more evident when the cost
distortion per unit is multiplied by the number of units
produced.
When the costs are understated, so is the selling price. Take a
moment to look at the summary of the cost distortion effects.
(LO 5-5)
To summarize, each of the following characteristics will
undermine the ability of a volume-based product-costing system
to assign overhead costs accurately.
A large proportion of non-unit-level activities; and Product
diversity. When the consumption ratios differ widely between
activities, no single cost driver will accurately assign the
resulting overhead costs.
When either of the above characteristics is present, a volume-
based product-costing system is likely to distort product costs.
38. (LO 5-5)
Learning Objective 5-6. Explain three criteria for selecting cost
drivers.
A cost driver is a characteristic of an event or activity that
results in the incurrence of costs. In activity-based costing
systems, the most significant cost drivers are identified. Then a
database is created, which shows how these cost drivers are
distributed across products. Three factors are important in
selecting appropriate cost drivers.
The first is the degree of correlation. The concept of an
activity-based costing system is to infer how each product line
consumes the activity by observing how each product line
consumes the cost drive, that is, how closely the two are
correlated. The closer the correlation, the more accurate the cost
assignments will be.
Designing any information system entails cost-benefit trade-
offs. The more activity cost pools there are in an activity-based
costing system, the greater will be the accuracy of the cost
assignments. However, more activity cost pools also entail more
cost drivers, which results in greater costs of implementing and
maintaining the system.
Information systems have the potential not only to facilitate
decisions but also to influence the behavior of decision makers.
This can be good or bad, depending on the behavioral effects. In
identifying cost drivers, an ABC analyst should consider the
possible behavioral consequences. Dysfunctional behavioral
effects are also possible. (LO 5-6)
Learning Objective 5-7. Discuss several key issues in activity-
based costing, including data collection and storyboarding.
The information used in ABC systems initially comes from
extensive interviews with key employees in each of the
organization’s support departments and a careful review of each
department’s records.
39. Storyboarding is a procedure used to develop a detailed process
flowchart, which visually represents activities and the
relationships among the activities.
A storyboarding session identifies the key activities involved in
each department.
These activities are written on small cards and placed on a large
board in the order they are accomplished.
After several storyboarding sessions, a completed storyboard
emerges, recording key activity information vital to the ABC
project. (LO 5-7)
Learning Objective 5-8. Explain the concepts of activity-based
management and two-dimensional ABC.
Using activity-based costing (ABC) information to support
organizational strategy, improve operations, and manage costs
is called activity-based management or ABM. (LO 5-8)
Activity-based costing establishes relationships between
overhead costs and activities so that we can better allocate
overhead costs.
Activity-based management focuses on managing activities to
reduce costs. (LO 5-8)
One way to describe the relationship between ABC and ABM is
in terms of a two-dimensional activity-based costing model.
The activities, which are the center of the model, are the focal
point of ABC and ABM. (LO 5-8)
The vertical element of the model is the cost assignment view of
an ABC system.
Cost assignment in an ABC system uses a two-stage cost
allocation to assign the costs of resources to the firm’s cost
objects. (LO 5-8)
The horizontal element of the model is the process view of an
ABC system.
The emphasis now is on the activities themselves, the various
40. processes by which work is accomplished in the organization.
The left-hand side is the activity analysis.
This is the identification and description of the activities
conducted in the enterprise.
Activity analysis also identifies the root causes of activities, the
events that trigger activities, and the linkages among activities.
The right-hand side is the evaluation of activities through
performance measures.
It is these processes of activity analysis and evaluation that
comprise activity-based management. (LO 5-8)
An important goal of activity-based management is to identify
and eliminate non-value-added activities and costs.
Non-value-added activities are operations that are either (1)
unnecessary and dispensable or (2) necessary, but inefficient
and improvable.
Non-value-added costs, which result from such activities, are
the costs of activities that can be eliminated without
deterioration of product quality, performance, or perceived
value. (LO 5-8)
There are five steps that provide a strategy for eliminating non-
value-added costs in both manufacturing and service industry
firms. Step 1 identifies all of the organization’s significant
activities. The resulting activity list should be broken down to
the most fundamental level practical.
In step 2, the non-value-added activities are identified. Three
criteria for determining whether an activity adds value are as
follows:
• Is the activity necessary?
• Is the activity efficiently performed?
• Is an activity sometimes value-added and sometimes non-
value-added?
In identifying non-value-added activities, it is critical to
41. understand the ways in which activities are linked together (step
3). The following chain of activities provides an example:
The rework of defective units is a non-value-added activity. The
rework is triggered by the identification of defective products
during inspection. The root cause of the rework, however, could
lie in any one of a number of preceding activities. Perhaps the
part specifications were in error. Or an unreliable vendor was
selected. Maybe the wrong parts were received. Or the
production activity is to blame. A set of linked activities (such
as that depicted above) is called a process. Sometimes activity
analysis is referred to as process value analysis (PVA).
By continually measuring the performance of all activities, and
comparing performance with benchmarks, management’s
attention may be directed to unnecessary or inefficient activities
(step 4).
Non-value-added costs should be highlighted in activity center
cost reports (step 5). By identifying non-value-added activities,
and reporting their costs, management can strive toward the
ongoing goals of process improvement and elimination of non-
value-added costs. (LO 5-8)
One approach that cost-management analysts find helpful in
identifying non-value-added activities is to categorize the ways
in which time is spent in a production process.
In most manufacturing operations, time is spent in the five
ways. (LO 5-8)
Learning Objective 5-9. Explain and execute a customer-
profitability analysis.
Customer-profitability analysis uses activity-based costing to
determine the activities, costs, and profit associated with
serving particular customers.
If managers have a good understanding of which customers are
generating the greatest profit, they can make more-informed
decisions about customer service. (LO 5-9)
42. Many factors can result in some customers being more
profitable than others.
Customers that order in small quantities, order frequently, often
change their orders, require special packaging or handling,
demand faster delivery, or need special parts or engineering
design generally are less profitable than customers who demand
less in terms of customized services. (LO 5-9)
The first step is to produce an activity based cost analysis of
certain customer-related costs that could affect a customer’s
profitability.
Recall that ABC analysis relies on a cost hierarchy with cost
levels, such as unit-level, batch-level, product-line-level,
customer-level, and facility- or general-operations-level costs.
In this use of activity-based costing, the cost management team
will focus on the customer-related costs.
A company may then use these costs to determine the
profitability of each customer. (LO 5-9)
A graphical portrayal of the complete customer-profitability
analysis is called a customer-profitability profile.
It is a common and useful way of presenting a customer-
profitability analysis to management. (LO 5-9)
Learning Objective 5-10. Understand and discuss how activity-
based costing is used in service-industry organizations.
We conclude this chapter with the important point that activity-
based costing has found widespread usage in the service
industry as well as in manufacturing. Some service
organizations that have utilized ABC costing are Air France,
American Airlines, American Express, and Bank of America
just to name a few. (LO 5-10)
Customer-Related Activities Cost Driver Base
Cost Drive
Rate
Order processingPurchase orders150$
Sales contacts (phone calls, faxes, etc.)Contacts100
Sales visitsVisits1,000
43. Shipment processingShipments 200
Billing and collectionInvoices 160
Design/engineering change ordersDesign changes 4,000
Special packagingUnits packaged 40
Special handlingUnits handled 60
Customer Profitability
0.0%
25.0%
50.0%
75.0%
100.0%
125.0%
1234567891011121314151617181920
Cumulative Operating Income as a % of Total
Operating Income
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 1 of 7
BSBHRM512 Develop and manage performance management
processes
44. Assessment Task 2- Case Study and Role Play
Part A
Please review the following scenario and answer the questions
that follow.
You are the Human Resources General Manager at Australian
Hardware. You have recently planned the implementation of
integrated performance management processes.
You will now need to plan and deliver manager training to
assist
managers to implement performance management.
Your training will need to be consistent with any processes you
developed in Assessment Task 1 as well as being consistent
with
Australian Hardware policies and procedures. For example, if
you
outlined a process of biannual performance review in
Assessment
Task 1, your training session should not present information
that is
contradictory to the biannual review process.
Manager training is to be implemented nation-wide. As a first
step,
45. you will plan and deliver pilot manager training to the
Wollongong
managers.
The learners include:
● mangers aged 25–50 years
● managers who like to observe others before doing
● managers who have requested lots of activities.
You will then need to support managers to performance manage
employees in accordance with organisational policies and
procedures.
Finally, you will need to continually evaluate the effectiveness
of
processes against objectives for performance management.
1. Use the ‘Learning and development session plan’ template
provided on Moodle in
Appendix B to plan training for Wollongong managers.
Remember to plan
objectives for the training and to monitor success against
objectives (plan to
conduct some form of test or evaluation of the training).
Remember to plan
strategies for winning the support of managers for implementing
processes. You
will plan a 20–30 minute session that:
46. a. briefly outlines the main features of the performance
management process,
such as:
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 2 of 7
i. regular monitoring of performance
ii. identification of performance gaps
iii. providing feedback
iv. managing talent
b. focuses on one of these four aspects of the process and give
examples,
introduce tools, or demonstrate skills
c. addresses storage of performance management documentation
in
47. accordance with recordkeeping policy
d. Allows adequate time for managers to practice and to provide
feedback.
2. Deliver training through role play, making sure to:
a. outline the main features of the performance management
process (as listed
in the previous step)
b. meet the needs of your learners
c. be consistent with processes you outlined in Assessment Task
1 and with the
Australian Hardware policies and procedures
d. use a range of facilitation methods to cater for differences in
learning style
Part B
Please review the following scenario and answer the questions
that follow.
A manager contacts HR with the following enquiry:
Hi
One of my sales staff is consistently late, displays poor attitude
and
has performed below agreed level on his last two performance
appraisals. The employee does not agree with the rating I have
given
him, however.
I have tried clarifying targets and coaching. Nothing seems to
work.
48. Maybe I’m just not delivering feedback in the right way. It’s
hard not
to be frustrated and I do get angry sometimes. Actually, I feel
let
down and hurt because I have tried to develop the potential I
once
saw in this employee.
This terrible situation is now affecting team morale.
What should I do next? I think I might need to let the employee
go.
Audrey Wu
Housewares Manager, Wollongong
1. Write an email to Audrey Wu, Wollongong’s Housewares
Manager to:
a. outline positive approaches in giving feedback and coaching.
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 3 of 7
b. outline appropriate intervention options
49. c. outline a process for dispute resolution
d. outline the process for terminating the employee in case
intervention is
unsuccessful
e. outline the process for recordkeeping to ensure adherence to
policies and
legislative requirements.
Ensure you refer to any relevant policies and legislation,
including specific reference
to anti-discrimination, privacy and industrial relations
legislation.
Part C
1. Prepare a 1 page written reflection in which you:
a. self- evaluate your own performance
b. evaluate the effectiveness of existing performance
management processes,
particularly in terms of:
i. the level of guidance for dealing with underperforming staff
ii. their ability to help managers achieve the short- and long-
term strategic
aims of the organisation
c. Recommend timeframes for regular evaluation of
performance management
50. processes.
Your reflection should be in a report format. Remember to
evaluate processes in light of
your knowledge of the characteristics of learning organisations
and the broader role of
HR in achieving business objectives.
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 4 of 7
Part D
Please review the following scenario and answer the questions
that follow.
You are the Human Resources General Manager at Australian
Hardware.
51. Three months of pilot training has been delivered by an external
training provider to sales staff, and you are reviewing the
effectiveness of the training that has been provided so far. Data
gathered so far indicates the training is failing to meet targets.
You will need to develop strategies and a training schedule to
ensure
that the provider, Train Your Way Up, delivers effective
training. You
will also need to renegotiate the implementation of training with
Train Your Way Up.
Consider the following training requirements agreed to by
senior
management team and HR at Australian Hardware.
● 4,000 sales staff to be trained, including the following
characteristics:
○ an average of seven sales people per product team
○ four product teams per store
○ 138 stores
● 30 trainers required
52. ● only one person from each team may be trained at any one
time
● sessions require one-day, face-to-face training
● staff need to be completely up-skilled and performing to
targets within six months.
First, however, you will need to prepare a report for the senior
management team to explain the results and your planned
actions,
one of which is to ensure line managers participate in regular
monitoring and support of employees to apply sales training on
the
job.
1. Review the performance data in Appendix B of this
assessment task and prepare a
1–2 page report for the senior management team detailing:
a. training outcomes
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
53. Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 5 of 7
b. your interpretation of the performance data
c. interventions you will undertake to rectify issues
Support your planned interventions with reference to Australian
Hardware as a
learning organisation and addressing performance gaps to
achieve specific
organisational objectives and broader long-term goals.
2. Using the ‘Training strategy and schedule’ template in
Appendix B, develop a
training strategy and schedule to be used by Train Your Way Up
to deliver future
training. Take particular care to include activities to ensure that
line managers
monitor the employee’s application of sales training. Prepare to
discuss strategies
in negotiations with training supplier in order to incorporate
these into a revised
54. agreement.
3. Arrange with your assessor to renegotiate service agreement
with training supplier.
4. Renegotiate training agreement with training supplier. Using
the previously
negotiated agreement provided in Appendix B and your planned
training strategy
and schedule (which you completed in step 5) as a basis,
renegotiate the
agreement with the supplier.
Ensure you modify the agreement in Appendix B, ‘Training
strategy and schedule’
template and include a schedule for monitoring against
objectives.
Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
55. Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 6 of 7
Observation Checklist – Assessment 2 : Part A Role play
Student name
Unit code and
name
BSBHRM512 - Develop and manage performance management
processes
Course code and
title
BSB51918 Diploma of Leadership and Management
Did the student:
Check (X) Comments
Yes No How did the student demonstrate
this?
management focus areas
56. provide feedback or manage
talent using appropriate
methods or activities as
described in session plans.
demonstrations to satisfy
learning styles/ needs,
including:
a) demonstrating the task/activity
before requiring managers to
practice
b) Providing lots of activities.
designed to achieve objectives,
i.e., activities have a valid
relationship to objectives
57. Crown Institute of Business and Technology Pty Ltd ABN 86
116 018 412 National Provider No: 91371 CRICOS Provider
Code: 02870D
North Sydney Campus: 116 Pacific Highway North Sydney
NSW 2060 P: +612 9955 0488 F: 02 9955 3888
Sydney CBD Campus: Level 5, 303 Pitt St Sydney NSW 2000 P:
+612 8959 6340 F: 02 9955 3888
Canberra Campus: Suite 1, Level 4, 40 Cameron Avenue,
Belconnen ACT 26 17 P: +612 6253 5184
BSBHRM512 Assessment Task 2 - v 3.3 Page 7 of 7
plan
procedures in training session,
for example refer to secure
storage, completeness, and
potential access by employees.