Developing Financial And Accounting Skills: Bega Cheese

pages Pages: 4word Words: 890

Question :


Write a report aiming to find out the beneficiary impacts of the compliance with the GRI guidelines on the shareholders, investors and the stakeholders of the company, Bega Cheese.  The focus area of this report should be to identify the relevance of the GRI disclosures with the stakeholders of Bega Cheese and to compare the quality practices with Murray Goulburn.

Show More

Answer :

Executive Summary

The report has been developed to show the development of the financial and accounting skills with the special reference to the Bega Cheese. The aim of this report is to find out the beneficiary impacts of the compliance with the GRI guidelines on the shareholders, investors and the stakeholders of the company, Bega Cheese. The report has been processed with the objective to identify the key standard disclosures of the GRI guideline and it relevance to the stakeholders of Bega Cheese. On the completion of the report, the compliance and the relevance with the GRI guidelines or the potential shareholders and investors in Bega Cheese have been evaluated.

Part A


Standing at the age of modernisation and major competitiveness, the taken approach for accounting and finance can become crucial for the organisations. This development of the accounting and financial skills cannot be achieved only through the accounting report but through the holistic reporting. The following report aims to find out the beneficiary impacts of the compliance with the GRI guidelines on the shareholders, investors and the stakeholders of the company, Bega Cheese. The focus area of this report is to identify the relevance of the GRI disclosures with the stakeholders of Bega Cheese and to compare the quality practices with Murray Goulburn. 

Main Body

Provide an overview of the environmental and social impacts of Bega Cheese’s Operations

Business sustainability of Bega Cheese after the adoption of the Corporation Act and other accounting legislations of Australia along with the Global Reporting Initiative, it is necessary to analyse the operation from the environmental and social perspectives. Most importantly, merging policy of Bega Cheese with the US food company, Mondelez International for purchasing Vegemite needs to be discussed from both the social and the environmental impacts on the operations of Bega Cheese.

Environmental impacts

After the acquisition of the US food companies and the inclusions of the Australian Food Acts, it has become necessary for Bega Cheese to focus on the environmental factors or the environmental changes. Especially for the usages of the ingredients by the food and beverage companies, Australian Food Standards have imposed the limitations in alliance with the eco-friendly food manufacturing and the missions for the renewable energy (Environmental Impacts. 2017). The Australian Food Standards are not the factors to be analysed individually from the Accounting Standards because nowadays, Bega Cheese will have to indulge the both in order to make the tax peaks and liability in the business. 

Social impacts

The Bega-Mondelez Deal has worked as the advantageous impact on the social factors in Australia (Vegemite comes home to Australia under Bega-Mondelez deal. 2017). This has helped Bega Cheese to achieve the 90 years of popularity for Vegemite from the Australian society and the social media has been the proofs of these outcomes. Therefore, Bega Cheese could successfully bring the Australian heritage food back in the own country, which has led them to witness the peak in their profitability and sustainability. 

Identify and discuss the four key GRI disclosures and its relevance with the stakeholders of Bega Cheese

The Global Reporting Initiative has developed the voluntary Sustainability Report Framework including the reporting principles and the Standard Disclosures for the implementation. This framework has  been developed in relevance with the interests of the stakeholders of the most of the organisations in alliance with the Global Standards. Among the General Standard Disclosure and the Specific Standard Disclosure, the four key standard disclosures and specific standard disclosures are used globally by the organisations in relevance to the stakeholder’s processes. 

Strategy adopted by the organisation

According to this general standard disclosure, the organisation’s development of the financial and the accounting skills is mostly depended on informing the stakeholders about the strategies of the organisations ( 2017). As the CEO of Bega Cheese has decided to develop the report as per the holistic reporting principles, therefore, it is necessary to disclose the required strategies adopted by the company to the stakeholders. It can be understood that the GRI standard disclosures have enough relevance to their stakeholders. 

Organisational profile 

Along with the strategies of the organisations, it is another major standard disclosure of GRI to disclose the profile of the organisations, so that they can become aware about the governance over the company. 

Approach of the management

It is one of the most important Standard disclosures of GRI for increasing business sustainability and accountability. The stakeholders must be informed by the organisation about the processes or the approaches, adopted by the organisations in a particular area. 

Performance indicators

These are the indicators, disclosed by the companies, to give an account on the environmental, economic and social performances to the stakeholders.

Analysing the Standard Disclosures of the Global Reporting Initiative and the Sustainability Report 2015 of Bega Cheese, it is indicative that they have intended to keep relevance of these standards with their stakeholder disclosure processes ( . 2017). Although the company does not disclose much about the organisational profile, yet they have disclosed most of the information about the strategy, management approach and the performance indicators to their external stakeholders. 

Compare the quality and the depth of environmental performance with Murray Goulburn

The stakeholder’s policy and the Sustainability Report work as the indicators of in-depth competitions between Murray Goulburn and Bega Cheese from the perspective of quality and environmental practices. The available databases are the indicators that Bega Cheese has the potentialities to bit the performance of Murray Goulburn because of its stakeholder’s information or disclosure processes (Bega may lead race for MG. 2017). Even Murray Goulburn had to face the struggle in the face of the competition with Bega Cheese, in spite of being the extraordinary diary firm and having approval of the Australian Security Exchanges. 

Pricing is the major factor to develop intense competitions between Bega Cheese and Murray Goulburn. However, the financial years of 2015 and 2016 have brought the troubles in the profits to both of these companies (Broker reports on merits of Bega-MG merge. 2017). The financial review has identified the sudden reduction in the farmer’s payments and in the Net debt. Murray Goulburn has faced the downfall in the revenue almost $2.7 billion and in the net debt almost 24%, $480 million. 

On the contrary, Bega Cheese has intended to include the policy for the stakeholders along with the staffs to overcome these barriers. Their quality practices have brought to them the lift in the net profit, which is almost 132% means $28.8 million after 30th June of 2016  (Profits, D. 2017). The Chairman of Bega Cheese in the report of Australian Stock Exchange has stated about the more involvement of the external stakeholders such as the politicians.

According to the Diary market of Australia, Murray Goulburn has decided to merge with the business of Bega Cheese after witnessing the market share of Bega Cheese.

Figure 1: Comparison between Bega Cheese and Murray Goulburn

(Source: 2017)

The above figure is indicating the sudden downfall of Murray Goulburn in comparison with the profitability of Bega Cheese. The performance and quality practices of Murray Goulburn and Bega Cheese can also be evident in their net debts, in which Murray Goulburn has been left behind in the competition with Bega Cheese. On one hand, Murray Goulburn is thinking about the employee cutting process, on the other hand, Bega Cheese has adopted the strategy to make the benchmark for the employee retention. 

Most importantly, the raw milk utilisation of Australia can be seen in the production of the cheese or the whey products. 

Figure 2: Raw milk utilisation in Australia

(Source: 2017)

The above utilization of the raw milk in Australia has become evident in the business of Bega Cheese, who are supplying 90% of the raw milk in this sector in comparison with Murray Goulburn.  

Evaluate the beneficiary impacts of the compliance with GRI disclosures on the investors, stakeholders and the shareholders of Bega Cheese

On the adoption of the GRI guidelines, the investment process and pricing process of Bega Cheese have taken a new turn. Most importantly, the Business Sustainability Report of Bega Cheese, according to the GRI guidelines, has helped the company to achieve the potential investors, stakeholders and shareholders along with the strong demand for the milk products. In the year 2015, Bega Cheese has revealed the earning of $12 million profit because of gaining potential investments. Apart from this, the company has won the investment of $21.7 million from the global dairy market.

The impact of the compliance with the GRI disclosure on Bega Cheese can be seen in their increasing shareholder values. Recently, the adoption of the GRI guidelines of Bega Cheese is causing the underperformance in creating the potential shareholders and the stakeholders (Greene, C. 2017).  

Apart from this underperformance, Bega Cheese has become able by indulging the Australian Food Standards and the Accounting Standards, to retain the shareholder values. This has become beneficial for the company to create value for the shareholders and the stakeholders by the implementation of the Standard Disclosure of the GRI guidelines.


The above report is showing that the development of the accounting and the financial skills is not the factor to be assessed only from the accounting perspective but it is the matter of the multi perspectives. With the special reference to the Sustainability reporting of Bega Cheese, the report has achieved the aim and the objectives have been fulfilled. Drawing conclusion to the above report, it can be stated that in compliance with the GRI guidelines, Bega Cheese has been influenced both in the beneficial and in the adverse way for the sustainability in the business.

Part B


Identify the likely major costs associated with the ongoing operations of the Vegemite operation line

The identified major costs associated with the ongoing operations of the Vegemite operation line are as follows:

Labour costs

Labour costs have become the major and the prior costs for the Vegemite operation line by Bea Cheese. It has been reported from the existing resources that Bega Cheese has focused firstly on extending the costs for paying the labours and the employees to bring back the Australian heritage food, Vegemite (Bega likely to spread Vegemite’s cost. 2017). In competition with Murray Goulburn, the management has announced to use the “full price” for ,making the full labour costs.

Material costs

For the establishment of the Vegemite operation line, Bega Cheese has adopted the global trademark right for the maximum usage of the material costs.  The company has intended to bring Vegemite back into the Australian market with the material cost of almost $345 million for this acquisition (Whitley, M. 2017). 

Overhead costs\

Overhead costs exclude the labour and the manufacturing costs and include the maintenance costs. Costs for the manufacturing process also fall in the criteria of the overhead costs. Following the labour costs and the material cost have led Bega Cheese towards saturating the overhead costs of the Vegemite operation line.

Nonmanufacturing costs

These costs include the costs, which are not directly connected with the operation line but these are the inevitable parts of the accounting and financing. Bega Cheese has made these costs by the investments and the sales (Robins, B. 2017).

Estimate the cost behaviour of the major costs

For defining the major costs, it is necessary to assess the cost behaviour associated with it.  Fixed costs, variable costs and mixed costs- these three types of cost behaviour can be defined to identify the major costs of Vegemite operation line. 

Fixed costs are interrelated with the labour costs and the material costs. It can be understood by defining the fixed costs, which do not change within a limit. These costs are always within the operation line even if the production is 0 (Banker & Byzalov, 2014). For the Vegemite operation line of Bega Cheese, these labour costs and the material costs will be constant also in the 0 unit production and the major competitions. The reduction in the fixed costs can only be seen when the production line is  increased as in the operation line of vegemite by Bega Cheese.

Unlike the fixed costs, the variable costs are in the equal proportion with the production level. For the operation line of Vegemite of Bega Cheese, except the labour costs, all other major costs will be changed as per the variable costs because these costs are entirely depended on the level of the production units (Holzhacker, Krishnan & Mahlendorf, 2015).  

Evaluate the usage of the break-even analysis for the new product line

As per the operation line of the new product, Vegemite, of Bega Cheese, break even analysis can be the appropriate screening tool. This tool or the break-even table helps the company to identify their break-even points for covering the costs by monthly or annually sales report. It is necessary and the prior matter for the company to develop the skills of accounting and financing for bringing sustainability in the profits (Chapman, Ferris & Zachary, 2017). 

Bega Cheese can face the limitations by adopting the break-even analysis as the screening tool as it cannot give realistic assumptions on the fixed costs and the selling units. 

Develop the scorecard to evaluate the success of Bega Cheese’s strategy







Data Owner


Increase Net Profit

Net Operating Profit

15% end of year


Increase Project Profitability

Finance Manager

Projects greater than £150k

2 per month


Sales team to work with Industry consultants to promote industry   projects

Sales Director


Improve Customer Satisfaction

Customer satisfaction score

80% average



Support Director

Accounts with Account Managers

50% by year end


Sales Director to assign accounts and balance existing workload

Sales Director

Internal Process


Number of industry templates

1 per month


Assign consultants to development of 1 indusrty template each   per quarter

Managing Consultant

Maximum utilisation

82% month on month



Operations Director

Learning and Growth

People want to work at <company>

Number of CVs received

5 per month


Set up team-training schedule

Training Manager

Employee opinion survey

85% average on six month survey


Conduct an employee opinion survey every six months

HR Director


Number of staff trained in Balanced Scorecard

90% consultants by year end


Balanced scorecard training plan in place

HR Director


All staff to build a management dashboard

100% by year end


Training from Consultants set aside in diary

Managing Consultant

Table 1: Balanced scorecard

(Source: Self-developed)

Briefly discuss the key features of the scorecard and the selection of the measures

The balanced scorecard will help Bega Cheese to display its products from multiple criterion of the organisations. The prior feature of this scorecard is the financial perspective to evaluate equity shares, return on investment and profit margins in the new operation line of Bega Cheese (Bhattacharya, Mohapatra, Kumar, Dey, Brady, Tiwari & Nudurupati, 2014). The main reason to use this feature is to increase the shareholder value for the new production line.

Customer perception is another feature of this balanced scorecard because production of Vegemite is immensely related with the emotion of the Australian regarding the heritage food.

Internal business processes have been include as one of the most important features of this balanced scorecard to measure the sustainability of this new production unit. 

For the continuous assessment of the risks and the advancements in the new production line, the feature of the learning and growth has been included. 

Part C

Calculate the number of Mediterranean, Thai and French Flavour sales of Vegadora




Selling price per unit

 $                           4.50

 $                          4.50

 $                          6.00

Variable costs


 $                           1.00

 $                          1.00

 $                          1.50


 $                           1.50

 $                          1.75

 $                          2.00

   Variable overhead

 $                           0.50

 $                          0.25

 $                          0.75

Total variable cost per unit

 $                           3.00

 $                          3.00

 $                          4.25

Contribution (Selling price - Variable cost per unit)

 $                           1.50

 $                          1.50

 $                          1.75

Profit volume ratio




Fixed costs

   Equipment depreciation

 $                200,000.00


 $                  40,000.00

   Marketing expenses

 $                150,000.00

   Other expenses

 $                  30,000.00

Total fixed costs

 $                           2.63

 $                          3.00

 $                          4.20

 $                420,000.00

Break Even point in sales amount = Fixed costs / Profit volume   ratio

 $                           7.88

 $                          9.00

 $                        14.40

Break Even point in unit= Fixed costs / contribution




Units to be sold

 (Fixed Cost + Estimated Profit) /P/v ratio


Strategies to enhance the annual profit and break-even analysis for the Vegadora production line 

The Vegadora product line is going to be one of the most innovative operation lines for the Vegemite of Bega Cheese. It can show the maximum possibility to the firm to increase the cost effectiveness and the annual profits. For increasing, the annual profits mean to decrease the costs for the business and this requires undertaking the strategies or initiatives in alliance with the business objectives.

Productivity of the staffs

Apart from attracting the maximum ranges of customers, it should be the strategy of Vegadira production line to enhance the productivity of the staffs by using fully the labour costs. Through the Vegadora product, Bega Cheese has the tendency to bring revolutions in the world of cheese and for this, the company needs to enhance the employability skill for the achievement of this goal (Sgroi, Di Trapani, Testa & Tudisca, 2014). It will be beneficial for them to take the production of Vegadora to the international level. 

New product lines

It is necessary for Bega Cheese to do research over the customer choices for the development of the Vegadora production line. This has become beneficial for the company to understand about the adherence of the Australian customers towards the vegemite and the healthy food product Vegadora. Therefore, this survey on the customer choices can give the company a transparent result about the market of Vegadora. 

New customers

As the health, conscious people do not prefer the cheese, the selling of the Vegadora products need to find the new customers. Therefore, it should be the strategy of Bega Cheese to identify the new and the potential customers from the market (Weimer & Vining, 2017). For this, the company needs to identify the extended markets for this new and innovative product.

New markets

The market research needs to be done to determine the new markets and the new areas. This strategy will be beneficial for the company to identify the competitions in the existing market and in the new markets. The potential areas also need to be found out to expand the market for the product line of Vegadora.

Customer service

It is expected from the new product line of Vegadora for indulging the employee training and development. Without the improvement of the customer service, it will not be possible for Bega Cheese to lead the product line of Vegadora to an international level. For this, the labour costs should be increased to train the employees.

Balance in the pricing

A balanced pricing strategy should be implemented for the selling of the new product line of Vegadora. The pricing strategy should not be made in such a way so that the sales are decreased. The scorecard can be used to fix the prices for the goods and the services.

Discounts in the prices

It is expected from the new product line of Bega Cheese to adopt an appropriate promotional strategy. For the food products such as Vegadora, it will be suitable to give discounts on the pricing of the products and the services (Finkler, Smith, Calabrese & Purtell, 2016).

Display the retails

Effective and attractive retail displays are the appropriate strategies to deal directly with the customers and to enhance the annual profits of Bega Cheese. These retail displays will be helpful for the company to attract the customers by retaining the sales value.