Accounting Project
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Attachments in this assignment will include:
Project Workbook to reference to complete the assignment
Market Research Data
Templates to complete the assignment (PowerPoint OR Word Document template is required)
Competencies
In this project, you will demonstrate your mastery of the following competencies:
- Describe how managerial accounting supports management information systems
- Utilize managerial accounting techniques and models to support an organization’s strategic plan
- Explain how managerial accounting is used to make decisions about short-term business opportunities, capital investments, and evaluating operational performance
Scenario
Your business has been open for a month, and you have prepared an income statement and completed a variance analysis on the data. Now you will meet with investors and a few other internal stakeholders to share your company’s progress over the past month and how it has performed with respect to your cost and budget projections. The investors would like to see the thought process behind your financial strategy and how your company has performed in its first month. They have therefore asked you to present a report that includes the costing and income data from your Project Workbook.
Directions
Submit a detailed report to your potential investors and other stakeholders to explain and defend your costing strategies and to share your business’s performance to date. Your report can be in the form of a PowerPoint presentation or a Word document (based on the templates provided in the What to Submit section). In either format, be sure to effectively communicate with your stakeholders by breaking down concepts and using investor-friendly language to build their trust and confidence. If you choose to do a PowerPoint presentation, you’ll need to include speaker notes for each slide.
- Introduction: Provide a short overview of your company and the purpose of this report.
- Business Overview: Name your company and describe its business and your vision for its future.
- Purpose of the Report: Explain the purpose of the report and describe why the information is important.
- Methods and Approach: Explain the management accounting methods you used for generating the information that you are about to share in terms of your adherence to industry standards and the American Institute of Certified Public Accountants (AICPA) code of ethics.
- Financial Strategy: Review your original business plan and costing strategies.
- Costing System: Justify the use of job order costing for this business. Be sure to compare and contrast the various costing systems you learned about in this course as part of your defense.
- Selling Prices: Share and explain the selling prices you established for each of your products. Be sure to reference your cost-volume-profit analysis in your defense.
- Contribution Margin: Share and explain your contribution margin per unit. Be sure to reference your cost-volume-profit analysis in your defense.
- Target Profits: Identify your break-even points for achieving different target profits. Then explain the target profits you selected for each area of your business. Be sure to reference your cost-volume-profit analysis in your defense.
- Financial Statements: Using the information in the Milestone Two Market Research Data Appendix, assess your financial performance to date. (Attached)
- Statement of Cost of Goods Sold: Share the statement of cost of goods sold and logically interpret the business’s performance against the provided benchmarks.
- Income Statement: Share the income statement and logically interpret the business’s performance against the provided benchmarks.
- Variances: Illustrate all variances for the direct labor time and the materials price.
- Significance of Variances: Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning.
What to Submit
To complete this project, you must submit the following:
Investor Report PowerPoint Template (Attached)
Use this template to submit a PowerPoint presentation with speaker notes. Sources should be cited according to APA style.
OR
Investor Report Word Template (Attached)
Use this template to submit an 8- to 10-page Word document. Sources should be cited according to APA style.
[Insert Company Name]
Investor Report
Prepared by [Your Name]
Instructions: Replace all text in brackets with your own information.
1
Introduction
[Outline your company’s business and your vision for its future.]
2
Introduce the company and its business. What is your vision for the future of the business? What do you hope to achieve? Where do you see the company in five years or ten?
2
Purpose
[Explain the purpose of this report and what you hope to convey about the company and its financials.]
3
[What do you plan to communicate, and why should your investors pay attention? In other words, try to persuade your investors that the accounting information you are about to share is important.]
3
Methods and Approach
[Explain some management accounting methods and how your report and the data it represents adheres to industry standards and the AICPA code of ethics.]
4
[Explain some management accounting methods you used to determine your costing strategy, evaluate your financial information, etc., and explain how your methods of generating information adhere to industry standards and AICPA’s code of ethics. In other words, why should your investors trust that you are delivering accurate financial data and that your decision-making process has been ethical?]
4
Financial Strategy
5
5
Costing System
[Outline why the job order costing system works best for the business.]
6
[Explain in detail the use of job order costing for this business. Why is it suited for your business? Be sure to compare and contrast the various costing systems you learned about in this course as part of your defense.]
6
Selling Prices
[List the selling price you chose for each product.]
7
[Explain and defend the selling prices that you established for each product. Why did you choose these selling prices? Be sure to reference your cost-volume-profit analysis in your defense]
7
Contribution Margin
[Copy and paste your completed table from the “Contribution Margin Analysis” tab of your Project Workbook.]
8
[Share and explain your contribution margin per unit. How did you arrive at these numbers? Be sure to reference your cost-volume-profit analysis in your defense. ]
8
Target Profits
[Copy and paste the completed table from the “Break-Even Analysis” tab of your Project Workbook.]
9
[Specify the break-even points you determined for achieving different target profit levels. Then, explain and defend the target profits you selected for each area of your business. Be sure to reference your cost-volume-profit analysis in your defense.]
9
Financial Statements
10
10
Statement of Cost of Goods Sold
[Copy and paste your table from the “COGS” tab of your completed Project Workbook.]
11
[Compare the actual cost of goods sold over the last month and evaluate the company’s performance against the budgeted benchmarks. Are the numbers close to what you expected? Interpret the performance and explain what happened.]
11
Income Statement
[Copy and paste your table from the “Income Statement” tab of your completed Project Workbook.]
12
[Based on your income statement, logically interpret the business’s performance against the provided benchmarks. Did the company do as well as expected? Explain what happened.]
12
Variances
[Copy and paste your table from the completed “Variances” tab of your Project Workbook.]
13
[Illustrate the variances observed between the planned and actual values for the direct labor time and the direct materials price for collars. What changed?]
13
Significance of Variances
[Share a summary of your variance analysis. Were the variances favorable or unfavorable?]
14
[Evaluate the significance of the variances. Are the variances favorable or unfavorable? What does it mean? Explain whether and how your evaluation will affect your budgeting and planning decisions for the next month or quarter.]
14
References
[Include any references cited in your paper in full APA format. Don’t forget to include in-text citations as well.]
15
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Report for [Company Name]
Investor Report for [Company Name]
[Your Name]
[Company Name] 1
Southern New Hampshire University
Introduction
[Outline your company’s business and your vision for its future.]
[Introduce the company and its business. What is your vision for the future of the business? What do you hope to achieve? Where do you see the company in five years or ten?]
Purpose
[Explain the purpose of the report and what you hope to convey about the company and its financials.]
[What do you plan to communicate, and why should your investors pay attention? In other words, try to persuade your investors that the accounting information you are about to share is important.]
Methods and Approach
[Explain some management accounting methods you used to determine your costing strategy, evaluate your financial information, etc., and explain how these methods support the mission and vision of the company.]
[Briefly describe how your report and the data it represents adheres to industry standards and the AICPA code of ethics. In other words, why should your investors trust that you are delivering accurate financial data and that your decision-making process has been ethical?]
Financial Strategy
[In this section, review your original business plan and costing strategies. Remove this note before you submit your paper.]
Costing System
[Outline why the job order costing system works best for your business. Explain in detail the use of job order costing for this business. Be sure to compare and contrast the various costing systems you learned about in this course as part of your defense.]
Selling Prices
[List the selling price you chose for each product.]
[Explain and defend the selling prices you established for each product. Why did you choose these prices? Be sure to reference your cost-volume-profit analysis in your defense]
Contribution Margin
[Copy and paste your completed table from the “Contribution Margin Analysis” tab of your Project Workbook.]
[Share and explain your contribution margin per unit. How did you arrive at these numbers? Be sure to reference your cost-volume-profit analysis in your defense.]
Target Profits
[Copy and paste the completed table from the “Break-Even Analysis” tab of your Project Workbook.]
[Specify the break-even points you determined for achieving different target profit levels. Then, explain and defend the target profits you selected for each area of your business. Be sure to reference your cost-volume-profit analysis in your defense.]
Financial Statements
[This section is designed to have you assess your financial performance to date. Remove this note before you submit your paper.]
Statement of Cost of Goods Sold
[Copy and paste your table from the “COGS” tab of your completed Project Workbook.]
[Compare the actual cost of goods sold over the last month and evaluate the company’s performance against the budgeted benchmarks. Are the numbers close to what you expected? Interpret the performance and explain what happened.]
Income Statement
[Copy and paste your table from the “Income Statement” tab of your completed Project Workbook.]
[Based on your income statement, logically interpret the business’s performance against the provided benchmarks. Did the company do as well as expected? Explain what happened.]
Variances
[Copy and paste your table from the completed “Variances” tab of your Project Workbook.]
[Illustrate the variances observed between the planned and actual values for the direct labor time and the direct materials price for collars. What changed?]
Significance of Variances
[Share a summary of your variance analysis. Were the variances favorable or unfavorable?]
[Evaluate the significance of the variances. Are the variances favorable or unfavorable? What does it mean? Explain whether and how your evaluation will affect your budgeting and planning decisions for the next month or quarter.]
References
[Include any references cited in your paper in full APA format. Don’t forget to include in-text citations as well.]
Instructions
| Southern New Hampshire University | |||||||||||
| College of Continuing Education (COCE) | |||||||||||
| ACC202 – Managerial Accounting | |||||||||||
| MILESTONE 1 (Due in Module 2) | MILESTONE 2 (Due in Module 4) | MILESTONE 3 (Due in Module 5) | |||||||||
| 1. | 1. | 1. | |||||||||
| Name | Choose a price range and calculate: | Create a Cost of Goods Manufactured Schedule | |||||||||
| Location | Grooming | ||||||||||
| Vision | Day Care | ||||||||||
| Mission | Boarding | ||||||||||
| 2. | 2. | 2. | |||||||||
| Identify the following: | Calculate the break-even units | Create an Income Statement | |||||||||
| Direct Materials | Grooming | Revenue will be provided end of week 4 | |||||||||
| Diret Labor | Day Care | ||||||||||
| Manufacturing Overhead | Boarding | ||||||||||
| Period Costs | Calculate the break-even for target profits | ||||||||||
| 3. | Grooming | 3. | |||||||||
| Day Care | |||||||||||
| Calculate the Variable & Fixed Costs for: | Boarding | Calculate for the Grooming line: | |||||||||
| Grooming | Direct Labor Time Variance | ||||||||||
| Day Care | Direct Labor Rate Variance | ||||||||||
| Boarding | Direct Materials Efficiency Variance | ||||||||||
| Direct Materials Price Variance |
ACC202 – MANAGERIAL ACCOUNTING
Company Profile
/xl/drawings/drawing1.xml#CompanyProfile
Variable & Fixed Costs
/xl/drawings/drawing1.xml#VariableFixedCosts
Cost Classification
/xl/drawings/drawing1.xml#CostClassification
Contribution Margin
/xl/drawings/drawing1.xml#ContributionMargin
Break-Even Analysis
/xl/drawings/drawing1.xml#BreakevenAnalysis
COGM Schedule
/xl/drawings/drawing1.xml#COGMSchedule
Income Statement
/xl/drawings/drawing1.xml#COGMSchedule
Variances
/xl/drawings/drawing1.xml#Variances
Instructions Milestone 1
/xl/drawings/drawing1.xml#InstructionsMilestone1
Instructions Milestone 2
/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%202′!InstructionsMilestone2
Instructions Milestone 3
/xl/drawings/drawing1.xml#’Instructions%20-%20Milestone%203′!InstructionsMilestone3
Instructions – Milestone 1
| Southern New Hampshire University | ||||
| College of Continuing Education (COCE) | ||||
| ACC202 – Managerial Accounting | ||||
| INSTRUCTIONS FOR MILESTONE 1 (Due Week 2) | ||||
| IMPORTANT NOTE: | ||||
| Make sure to completely review the Rubric for Milestone 1 | ||||
| Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) | ||||
| ITEMS TO COMPLETE FOR THIS MILESTONE (Blue Tabs): | ||||
| GENERAL | ||||
| You plan to open a pet services business that will offer dog grooming, day care and boarding | ||||
| COST CLASSIFICATION | ||||
| Accurately classify all of your costs (direct material, direct labor, manufacturing overhead, period costs) | ||||
| Fixed & Variable cost designation is provided | ||||
| VARIABLE & FIXED COSTS | ||||
| Determine your per unit cost per dog for grooming, day care and boarding | ||||
| OPERATIONAL & COST INFORMATION: | ||||
| For simplicity, base all calculations using 30 days in each month | ||||
| OPERATIONAL DATA | ||||
| Grooming: | ||||
| The Groomer can groom 5 dogs a day, 5 days a week | ||||
| Each grooming takes 1.5 labor hours | ||||
| Day Care: | ||||
| The Day Care can house 10 large dogs and 12 small dogs daily. | ||||
| Day Care is offered 6 days a week | ||||
| Boarding: | ||||
| There are 12 kennels (single dog only). | ||||
| Boarding (kennel services) is offered every day | ||||
| Facilities: | ||||
| The Grooming facility is 200 square feet | ||||
| The Boarding facility is 2,500 square feet | ||||
| The Day Care facility is 1,500 square feet | ||||
| General: | ||||
| Loan for start-up costs – monthly payment of $420; in effect immediately; limited cash and loan funding – used angel investors | ||||
| Modest monthly draw of $600 a month for first year; should be divided evenly amoung the services (grooming, day care, boarding) | ||||
| SALARY & HIRING DATA | ||||
| Groomer (Allison) – $12.00 an hour, 40 hours a week | ||||
| Day Care Attendant (Beverly) – $9.00 per hour, based on need | ||||
| Receptionist (Cathie) – $8.50 per hour, 30 hours a week | ||||
| Kennel Attendant (Ben) – $11.50 per hour, based on need | ||||
| OTHER COST DATA | ||||
| Grooming: | ||||
| Dog Grooming Arm – $300 | . | |||
| Grooming Table – $900 | ||||
| Grooming Tub – $2,800 | ||||
| Clippers – $136.99; can be used for 100 grooms | ||||
| Shampoo – $103.96 per 5-gallon pail; can be used for 100 grooms | ||||
| Salon Tuff Capri Mobile Carry Cart – $90 | ||||
| Scissors (7 inch straight) – $194.99; used for 200 grooms | ||||
| Scissors (ear and nose) – $7.49; used for 200 grooms | ||||
| Day Care: | ||||
| Fencing for Day Care area – $1,249 | ||||
| Fencing Installation – $1,000 | ||||
| Toys – $3.29 per 6 pack; one toy will last for two dogs in day care per day | ||||
| Rubberized Flooring for Day Care – $3,800 | ||||
| Boarding: | ||||
| 12 Kennels; Depreciation is $80 per month | ||||
| General: | ||||
| Food & Water bowls – $3.59 per unit | ||||
| Day Care – two bowls last for every 75 dogs that attend daycare | ||||
| Boarding – two bowls last for every 100 dogs boarded; two bowls per kennel | ||||
| Grooming – each bowl lasts for 20 grooms and you need 4 bowls at all times | ||||
| Towels – $34.99 per 12 pack | ||||
| Day Care – 12 towels for every 25 dogs | ||||
| Boarding – 12 towels for every 40 dogs | ||||
| Grooming – 2 towels for every groom per day | ||||
| Heating System – $10,000; Depreciation is $83 per month; Allocate based on square footage | ||||
| Rent – $650 per month; Allocate based on square footage | ||||
| Utilities / Insurance – $600 per month; Allocate based on square footage | ||||
| Cage Bank – $2,200 per set of 5 | ||||
| Dryer – $1,250 | ||||
| Cleaning Products | ||||
| Odoban – $14.55 per gallon; Each area wil dilute 1 oz to 1 gallon of water; Allocate based on square footage | ||||
| Simple Green – $15.66 per gallon; Each area will dilute 1 oz to 1 gallon of water; Allocate based on square footage | ||||
| . |
ACC202 – MANAGERIAL ACCOUNTING
HOME
Cost Classification
| Milestone One – Cost Classification | ||||||
| INSTRUCTIONS: | ||||||
| Putting an X in the appropriate spot, classify the costs as: Direct Material, Direct Labor, Overhead, or Period Costs. | ||||||
| The Fixed and Variable cost classifications have been provided for you. | ||||||
| Item/Cost | Direct Material |
Direct Labor |
Overhead | Period Costs | Fixed | Variable |
| Salary – Collar maker | × | x | ||||
| Salary – Leash maker | × | x | ||||
| Salary – Harness maker | × | x | ||||
| Salary – Receptionist | × | × | ||||
| High-tensile strength nylon webbing | × | x | ||||
| Polyester/nylon ribbons | × | x | ||||
| Buckles made of cast hardware | × | x | ||||
| Depreciation on sewing machines | × | x | ||||
| Rent | × | x | ||||
| Utilities and insurance | × | x | ||||
| Scissors, thread, and cording | × | x | ||||
| Price tags | × | x | ||||
| Office supplies | × | × | ||||
| Other business equipment | × | × | ||||
| Loan payment | × | x | ||||
| Salary to self | × | x | ||||
&8ACC202 – MANAGERIAL ACCOUNTING
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Contribution Margin Analysis
| Milestone Two – Contribution Margin Analysis | |||||||
| COLLARS | LEASHES | HARNESSES | |||||
| Sales Price per Unit | $ 28.00 | $ 30.00 | $ 35.00 | Selling price chosen per collar is 28, per leash is 30, and per harness is 35 | |||
| Variable Cost per Unit | 9.10 | 12.10 | 14.60 | VC per unit per collar=the total VC initially calculated in the VC and FC sheet=9.1;Vc PER Leash is equal to the total VC per leash calculated in the fixed cost and variable costsection=12.1, VC per harness is the total Vc PER HARNESS calculated in the VC and FC tab=14.6 | |||
| Contribution Margin | $ 18.90 | $ 17.90 | $ 20.40 | Contribution margin per collar =sales price (28)- Variable costs(9.1)= 18.9 | |||
| Contribution margin per leash= sales price(30-12.1)=17.9 | |||||||
| Contribution margin per harness =sales price per harness(35-14.6)= 20.4 | |||||||
&8ACC202 – MANAGERIAL ACCOUNTING
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Variable and Fixed Costs
| Milestone One – Variable and Fixed Costs | ||||||||||||
| Collars | ||||||||||||
| Item | Variable Cost/Item | Item | Fixed Costs | |||||||||
| High-tensile strength nylon webbing | $ 4.00 | Collar maker’s salary (monthly) | $ 2,773.33 | High tensile nylon = 12/3=4 | Collar maker’s salary = 40hours×16×4.33 Weeks=2771 | |||||||
| Polyester/nylon ribbons | $ 3.00 | Depreciation on sewing machines | $ 55.00 | polyester nylon =9/3=3 | Depreciation = 165/3= 55 | |||||||
| Buckles made of cast hardware | $ 2.00 | Rent | $ 250.00 | Buckles made of cast hardware = 0.5×4=2 | Rent = 500/1500 squarefootage=0.33×750 = 250 | |||||||
| Price tags | $ 0.10 | Utilities and insurance | $ 200.00 | Utilities and insurance = 600/1500×500 = 200 | ||||||||
| Scissors, thread, and cording | $ 400.00 | Scissors, thread and coding = 1200/3=400 | ||||||||||
| Loan payment | $ 183.33 | |||||||||||
| Salary to self | $ 166.67 | |||||||||||
| Total Variable Costs per Collar | $ 9.10 | Total Fixed Costs | $ 4,028.33 | Total variable costs per collar =4+3+2+0.1=9.1 | Total fixed costs per collar =2773+55+250+200+400+183+167= 4028.33 | |||||||
| Leashes | ||||||||||||
| Item | Variable Cost/Item | Item | Fixed Costs | |||||||||
| High-tensile strength nylon webbing | $ 6.00 | Leash maker’s salary (monthly) | $ 2,773.33 | High tensile strength=12/2 = 6 | Leash makers salary = 40 hours×16 per hour × 4.33 weeks = 2773.33 | |||||||
| Polyester/nylon ribbons | $ 4.50 | Depreciation on sewing machines | $ 55.00 | Polyester nylon = 9/2 = 4.5 | Depre ciation on sewing machines = 165/3 = 55 | |||||||
| Buckles made of cast hardware | $ 1.50 | Rent | $ 250.00 | Buckles made of cast hardware = 3×0.5 =1.5 | Rent = 500/1500 multiplied by750 = 250 | |||||||
| Price tags | $ 0.10 | Utilities and insurance | $ 200.00 | price tags are already given as 0.1 | Utilities and insurance = (600/1500)×500=200 | |||||||
| Scissors, thread, and cording | $ 400.00 | Scissors thread and coding = 1200/3 = 400 | ||||||||||
| Loan payment | $ 183.33 | Loan payment = 550/3 = 183.33 | ||||||||||
| Salary to self | $ 166.67 | Salary to self = 500/3 = 166.666 | ||||||||||
| Total Variable Costs per Leash | $ 12.10 | Total Fixed Costs | $ 4,028.33 | Total Vc per leash= 6+4.5+1.5+0.1 = 12.1 | Total FC per leash = 2773+55+250+200+400+183+167 = 4028.3 | |||||||
| Harnesses | ||||||||||||
| Item | Variable Cost/Item | Item | Fixed Costs | |||||||||
| High-tensile strength nylon webbing | $ 6.00 | Harness maker’s salary | $ 2,946.40 | High tensile strength nylon= 12/2 = 6 | Harness makers salary = 40 hours×17per hour×4.333 = 2946.4 | |||||||
| Polyester/nylon ribbons | $ 4.50 | Depreciation on sewing machines | $ 55.00 | Polyester ribbopns =9/2 =4.5 | Depreciation on sewing machine = 165/3 = 55 | |||||||
| Buckles made of cast hardware | $ 4.00 | Rent | $ 250.00 | Buckles made of cast hardware = 8×0.5 = 4 | Rent = 500/1500, answer multiplied by 750 = 250 | |||||||
| Price tags | $ 0.10 | Utilities and insurance | $ 200.00 | Price tags are already given =0.1 | Utilities and insurance = 600/1500 answer multiplied by 500 = 200 | |||||||
| Scissors, thread, and cording | $ 400.00 | Scissors,thread and coding = 1200/3 = 400 | ||||||||||
| Loan | $ 183.33 | Loan = 550/3 = 183.33 | ||||||||||
| Salary to self | $ 166.67 | Salary to self = 500/3 = 166.666 | ||||||||||
| Total Variable Costs per Harness | $ 14.60 | Total Fixed Costs | $ 4,201.40 | Total VC per herness =6+4.5+4+0.1= | Total FC per herness = 2946+55+250+200+400+183.33+166.67 = 4201.4 | |||||||
&8ACC202 – MANAGERIAL ACCOUNTING
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Instructions – Milestone 2
| Southern New Hampshire University |
| College of Continuing Education (COCE) |
| ACC202 – Managerial Accounting |
| INSTRUCTIONS FOR MILESTONE 2 (Due Week 4) |
| IMPORTANT NOTE: |
| Make sure to completely review the Rubric for Milestone 2 |
| Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) |
| ITEMS TO COMPLETE FOR THIS MILESTONE (Green Tabs): |
| GENERAL |
| Use data from Milestone 1 in your analysis |
| CONTRIBUTION MARGIN ANALYSIS |
| Select a price for each service (grooming, day care, boarding) |
| Determine the variable cost from the Variable_Fixed tab for each service |
| Calculate the contribution margin for each service based on your sales price and the variable cost for that service |
| BREAK-EVEN ANALYSIS |
| Determine the fixed cost from the Variable_Fixed tab for each service |
| Fixed & Variable cost designation is provided |
| Calculate the break-even units (round up) for each service |
| Calculate the break-even units (round up) for suggested target profit levels for each service |
ACC202 – MANAGERIAL ACCOUNTING
HOME
Break-Even Analysis
| Milestone Two – Break-Even Analysis | ||||||||||
| COLLARS | LEASHES | HARNESSES | ||||||||
| Sales Price | $ 28.00 | $ 30.00 | $ 35.00 | |||||||
| Fixed Costs | 4,028.33 | 4,028.33 | 4,201.40 | Fixed costs = the calculated fixed costs of each item i.e collar, leash and harness in the FC and VC sheet =4028,4028,and 4201 respectively | ||||||
| Contribution Margin | $ 18.90 | $ 17.90 | $ 20.40 | |||||||
| Break even units =FC/contribution margin for example BE for Collars =(4028/18.9)=213.14, for leash =4028/17.9=225; for harness =4201/20.4=206 | ||||||||||
| Break-Even Units (round up) | 213 | 225 | 206 | |||||||
| Target Profit | $ 300.00 | $ 400.00 | $ 500.00 | |||||||
| Break-Even Units (round up) | 229 | 247 | 230 | Break even units=(Target profit+fixed costs)/contribution margin for collar B E =(300+4028)/18.9=229; FOR LEASH BE =(400+4028)17.9=247.4; for harness BE=(500+4201)/20.4=230 | ||||||
| Target Profit | $ 500.00 | $ 600.00 | $ 650.00 | |||||||
| Break-Even Units (round up) | 240 | 259 | 238 | BEP = (target progit+FC)/Cont margin; | ||||||
| Bep for collars=(500+4028)/18.9=239.59, BE for leash =(600+4028.33)/17.9=258.57; BE for harness =(650+4201)/20.4=237.8 | ||||||||||
| BE for leash=(600+4028.33)/17.9=258.57 | BE for leash=(600+4028.33)/17.9=258.58 | BE for leash=(600+4028.33)/17.9=258.59 |
&8ACC202 – MANAGERIAL ACCOUNTING
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Instructions – Milestone 3
| Southern New Hampshire University |
| College of Continuing Education (COCE) |
| ACC202 – Managerial Accounting |
| INSTRUCTIONS FOR MILESTONE 3 (Due Week 5) |
| IMPORTANT NOTE: |
| Make sure to completely review the Rubric for Milestone 3 |
| Use the data from this Milestone and begin working on your final presentation due in Milestone 4 (Week 7) |
| ITEMS TO COMPLETE FOR THIS MILESTONE (Purple Tabs): |
| GENERAL |
| Use data from Milestone 1 and Milestone 2 in your analysis |
| Revenue data needed for the Income Statement will be provided at the end of Module 4 |
| COST OF SERVICES PROVIDED SCHEDULE |
| Use the data at the top of the schedule to complete the report |
| INCOME STATEMENT |
| Use the data at the top of the schedule to complete the report |
| Use the data from your Cost of Services Provided Schedule |
| VARIANCES |
| Use the data at the top of the schedule to calculate the following: |
| Variance |
| Favorable / Unfavorable |
ACC202 – MANAGERIAL ACCOUNTING
HOME
COGS
| Milestone Three – Statement of Cost of Goods Sold | ||||
| Beginning Work in Process Inventory | $ – 0 | |||
| Direct Materials: | ||||
| Materials: Beginning | 0 | |||
| Add: Purchases for month of January | $ 20,000 | Purchases are given in the word document as 20000 | ||
| Materials available for use | 20,000 | Materials available=the purchased materials | ||
| Deduct: Ending materials | 4,000 | Ending materials=20000-(80%*20000)=4,000 | ||
| Materials Used | 16,000 | Materilas used =Beginning mtrls(20000)-Ending materials(4,000)=16,000 | ||
| Direct Labor | 8493 | Direct labor is given in the word document as 8493 | ||
| Overhead | 3,765 | Overhead costs are given in the word document as 3765 | ||
| Total Costs | $ 28,258 | Total costs=Material used+direct labor+overhead)=16000+8493+3765=28258 | ||
| Deduct: Ending Work in Process Inventory | 0 | ending work in progress is zero as indicated in word file | ||
| Cost of Goods Sold | $ 28,258 | Cogs is equal to beginning inventory+total costs-ending inventory=0+28258-0=28258 | ||
&8ACC202 – MANAGERIAL ACCOUNTING
HOME
Income Statement
| Milestone Three – Income Statement | ||||
| Revenue: | Revenue =sales price*No of units per day*No of days (20) | |||
| Collars | $ 12,880 | Revenue for collar= 28*23*20=12880 | ||
| Leashes | 10,800 | Revenue for leash=30*18*20=10800 | ||
| Harnesses | 14,000 | Revenue for harness=35*20*20=14000 | ||
| Total Revenue: | $ 37,680 | Total revenue=12880+10800+14000)= 37680 | ||
| Cost of goods sold | 28,258 | cogs is equal to the cogs calculated in the cogs tab=28258 | ||
| Gross profit | $ 9,422 | Gross profit =Revenue-COGS =(37680-28258)=9422 | ||
| Expenses: | ||||
| General and administrative salaries | $ 1,950 | General and administrative salaries=to the amount given in word document for receiptionist=1950 | ||
| Office supplies | 200 | Office supplies given is 200 | ||
| Other business equipment | 150 | Other business equipment given is 150 in the word file | ||
| Total Expenses | $ 2,300.00 | Total expenses=1950+200+150= 2300 | ||
| Net Income/Loss | $ 7,122.00 | Net Income=Gross profit(9422)-Total expenses(2300)=7122 | ||
&8ACC202 – MANAGERIAL ACCOUNTING
Variances
| Milestone Three – Variance Analysis | Budgeted standard rate is the original rate that a collar make was paid in milestone one which was 16.00 | |||||
| Budgeted standard hours/quantity is the original hours which was 8 mulitiplied by 20 days=160 | ||||||
| Actual rate is the rate being paid now which increased to 16.5 | ||||||
| Data for Variance Analysis: | Actual hours/quantity is the hours that a collar maker has wo work which is 9*20=180 | |||||
| Budgeted (Standard) Hours/Qty |
Budgeted (Standard) Rate |
Actual Hours/Qty |
Actual Rate |
|||
| Labor | 160 | $ 16.00 | 180 | $ 16.50 | ||
| Actual quantity= units sold*number of days=23*20=460; using the number of units sold that was used in the income statement, which was 23 | ||||||
| Budgeted standard quantity, considering sixty more were sold for this month so for the previous month=(460-60)=400 | ||||||
| Materials | 400 | $ 9.10 | 460 | $ 10.00 | Budgeted standard material for collar is the total variable costs calculated for collar which was 9.1 | |
| Actual rate for collar is the new direct material for collar given as 10.00 in the word document | ||||||
| Variances for Collar Sales | ||||||
| Variance | Favorable/ Unfavorable |
|||||
| Direct Labor Time Variance | Direct labor time variance=(180-160)*16=320 | |||||
| (Actual Hours – Standard Hours) x Standard Rate | $ 320.00 | Unfavorable | Direct labor time variance is unfavorable because actual labor hours are higher than standard hours | |||
| Direct Labor Rate Variance | ||||||
| (Actual Rate – Standard Rate) x Actual Hours | $ 90.00 | Unfavorable | Direct labor rate variance=(16.5-16)*180=90 | |||
| Direct labor rate variance is unfavorable because actual rates are higher than the standard rate | ||||||
| Direct Materials Quantity/Efficiency Variance | ||||||
| (Actual Quantity – Standard Quantity) x Standard Price | $ 546.00 | Unfavorable | Direct material quantity=(460-400)*9.1=546 | |||
| Direct material quantity variance is unfavorable becvause the actual materials used are more than the standard quantity. | ||||||
| Direct Materials Price Variance | ||||||
| (Actual Price – Standard Price) x Actual Quantity | $ 414.00 | Unfavorable | Direct material price variance= (10-9.1)*460=414 | |||
| Direct materials price variance is unfavorable because the actual price of materials used is greater than the standard price. | ||||||
&8ACC202 – MANAGERIAL ACCOUNTING
Milestone Two: Market Research Data
You have conducted some market research for style and size of products you want to use to launch your business. The market research has indicated the following sales price ranges will be optimal for your area depending on style of products you choose to sell:
Collars
With pricing at $20 per collar, you can expect to sell 30 collars per day.
With pricing at $24 per collar, you can expect to sell 25 collars per day.
With pricing at $28 per collar, you can expect to sell 20 collars per day
Leashes
With pricing at $22 per leash, you can expect to sell 28 leashes per day.
With pricing at $26 per leash, you can expect to sell 23 leashes per day.
With pricing at $30 per leash, you can expect to sell 18 leashes per day.
Harnesses
With pricing at $25 per harness, you can expect to sell 25 harnesses per day.
With pricing at $30 per harness, you can expect to sell 22 harnesses per day.
With pricing at $35 per harness, you can expect to sell 20 harnesses per day.
Additionally, you will need to compare your break-even points for the following target profits for each area of your business to determine your prices:
Collars
Break-even
$300 target profit each month
$500 target profit each month
Break-even
$400 target profit each month
$600 target profit each month
Harnesses
Break-even
$500 target profit each month
$650 target profit each month
Remember that all break-even and target points must be in whole units (we cannot sell a partial unit). Round up when calculating partial units to ensure costs are covered.
Excel tip – use
ROUNDUP function
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