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ACCY 223 Assignment - Trimester 1 2026

Mighty Mike’s Tulip Farm (MMTF) Case Study 

Weighting: 25%

Due:Thursday 2 April at 3.00 pm.

Marked out of 75 marks

Word Limit: 2000 words (+ 10%) including the executive summary. This does not include the appendices or any references.

The only things that can be in your appendices are the calculations relating to part (b).

Any information in the appendices relating to parts (a) and (c) to (e) will not be marked.

The use of generative AI in this assessment is prohibited.

Background

Mighty Mike’s Tulip Farm (MMTF) is based in Edendale, Southland, in the lower South Island of New Zealand. It is a medium-sized family-owned farm that produces several varieties of tulips to service the domestic retail and international wholesale markets, with tulips being exported to the Netherlands, the United States, and other European/Asian markets. The company’s output, staff numbers, and customer base have steadily grown since it was established.

The owners of MMTF are Mike van Bloemen, the managing director, and his younger cousin Piata van Bloemen, the general farm accountant. Mike and Piata both have Dutch heritage and connections and are proud of what they have achieved with MMTF since 2014. MMTF is segmented into three teams: Sales, Operations, and Support Services. Each of these teams has a manager and several employees.

MMTF’s current strategy is to “Deliver high-quality tulips to our customers while reducing our environmental footprint and supporting the well-being of our local community.” MMTF’s management takes sustainability issues seriously, and they realise that performance in these areas will determine MMTF’s reputation.

Tulip growers sell their produce to international and domestic wholesalers, and retail outlets, including florists, supermarkets, and convenience stores. Tulips are seasonal and need to be picked at the right time and sold reasonably quickly. Tulip bulbs in New Zealand are planted around Anzac Day (25 April), are in full bloom from late September to mid-October, and are harvested in January and February. MMTF produces several million tulips in a season.

All MMTF’s tulip bulbs are sourced from sustainably managed suppliers, and they use organic sprays. MMTF also rotates its tulip-growing fields with local dairy farms to sustainably manage disease. This practice supports the local community and encourages sustainability.

MMTF uses a significant number of vehicles and machinery in their farming operations including tractors, which need to be regularly maintained. A spraying unit is required to deal with some pests, diseases, and weeds, even with an environmentally friendly approach to managing these.

At the last management meeting, the team discussed the current business situation. Although MMTF’s production volume and customer base have steadily grown, the current continued recessionary environment and ‘cost-of-living’ crisis, as well as general international supply chain concerns, are starting to adversely impact the costs MMTF incurs and the number of tulips they sell.  As Piata argues.”

“With the world more uncertain, we need to consider different ways of doing things. Just in the last two weeks, diesel costs have increased by 60c per litre. Now we have to manage diesel price rises!

I am not sure electricity is the answer either – look how much electricity costs have increased over the last year. Even though we are using the same amount of electricity, it's costing us more.

With the ongoing cost of living crisis, some of our customers are reducing tulip purchases or even going out of business – we need to look at our costs again.”

MMTF needs to replace some of its farm vehicles, including its tractors. Piata suggests that, in line with their quality and sustainability strategy and current uncertainty in the economic environment, they should look at both electric and diesel vehicle alternatives.

Farm Vehicle Replacement

Piata and Mike resolve to look at alternatives to the tractor they currently need to replace. Piata collects the following data (Table 1), which is planned to be used in the analysis to help decide which type of tractor (electric or diesel) to purchase. 

Each tractor is expected to travel an average of 8000 kilometres (km) per year (p.a.). Some of this is on public roads. Electric tractors can run for 3 to 10 hours on a single charge, depending on their use. It takes 4 to 5 hours for a full battery charge (standard NZ 230-volt supply). A 75-horsepower (hp) electric tractor can travel between 100 and 150 kilometres per charge, depending on driving behaviour, road and field gradients, and payload.

Depreciation of farm vehicles is straight-line and is 8.5% of the purchase price per annum (p. a). Farm overhead costs are allocated at $10 per direct labour hour used. 1500 direct labour hours are associated with one tractor’s use per year.

Market research indicates that the resale values of diesel and electric tractors differ. These are: electric-powered tractor - 25% of the original purchase price after 10 years, and diesel-fuelled tractor – 50% of the original purchase price after 10 years.

In addition to direct operating costs, Piata plans to incorporate the cost of purchasing carbon credits to offset carbon dioxide emissions. Carbon credits are estimated at $40 per 1,000 kilograms of CO₂ emitted.

Mike has asked Piata for an analysis comparing the electric and diesel tractor alternatives to be available for discussion at the next management team meeting.

At a recent CPA Australia sustainability workshop attended by Piata, one of the key messages was that accounting for sustainability was more than applying just traditional financial accounting rules. Therefore, she intends that her analysis will support strategic investment decisions in the tulip farm while also reflecting MMTF's stated commitment to quality and sustainability.

Piata contacts you (her university friend from her BCom days) and asks you to help her with her analysis. She also asks for advice on future strategies for farm vehicle management.

Required

Write a report to Mike and Piata van Bloemen (owners of MMTF) that:

(a) Describes each of the six steps in the decision processthat you used, including how each step relates to the decision by MMTF regarding which type of tractor to purchase.

Use the 6-step decision-making model in Chapter 11 of the textbook. This is on page. 485 and explained from pages 486 to 490. A summary slide is in the lecture notes.(15 marks)

(b) Calculates theone-year total costs for each of the two alternatives (Electric or Diesel), using the relevant financial information provided in the case.

This answer is best presented in a table format that includes the cost of each alternative.(20 marks)

(c) (i) Explains how you decided what financial information in part (b)was relevant for the decision.

(ii) Identifies whether each piece of financial information used in part (b) is economic, environmentaland/or social financial information.(12 marks)

(d) Discusses the non-financial factors that should be considered when making the final decision as to what type of tractor to purchase to ensure sustainability.(13 marks)

(e) Recommends what type of tractor (electric or Diesel), MMTF should purchase for use in (a) the short term (one-year) and (b) to achieve sustainability and maintain expected quality in the longer term (with reasons for your recommendation(s)).(10 marks)

Marks are also given for the use of an appropriate report structure     (5 marks)

Total75 marks