ACC 207 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of a quantitative analysis with a memo to management.
Classifying a
company’s
costs allows for an in-depth analysis of the impact that changes in output
have
on revenues, costs, and net income or net loss. A
cost-
volume-profit (CVP) analysis will be completed in order to determine the
breakeven
point. Relevant costs will be used to prepare a flexible budget. Additionally, an appropriate costing
system
should be selected and the choice should be substantiated with reasonable rationale. Finally, a memo should be prepared
for
management that summarizes the results of the quantitative analysis and
makes
recommendations for an optimal costing
system
to be ethically used by
key
decision
makers.
The project is divided into
three milestones
, which will be submitted at various points throughout the course to scaffold learning and ensure quality final submissions. These milestones will be submitted in
Modules Two, Four,
and
Five.
The quantitative analysis with a memo to management will be submitted in
Module Seven
.
In this assignment, you will demonstrate your mastery of the following course outcomes:
·
Utilizecostbehaviorand
cost
analysistoassistdecision
makers
inplanningandaddingvalue
to
thebusiness
·
Prepareaflexiblebudgetforsupportinginformedmanagerialdecisionmaking
·
Interpret variances for determining the optimal costing
system
to fit an
organization’s
internal accountingneeds
·
Interprettheroleofethicsincostaccountingfordeterminingitsimpactondecisionmaking
Prompt
In this assignment, multiple analyses will be conducted in order to obtain a company’s financial information specific to company costs.
MDE manufactures outdoor garden items such as lawn ornaments and bird feeders. MDE uses a standard costing system to set standards for direct materials, labor, and overhead costs. MDE reviews and revises standards as necessary. Recently, budget variances for bird feeders have caused some concern. You, the company’s cost accountant, have been asked to examine the numbers for the product, explain the variances, and suggest ways to improve performance.
Specifically, the following
critical elements
must be addressed:
You will begin by using the
MDE Manufacturing Budget
(Table I) to analyze costs, contribution margin, and breakeven point for the bird feeder division. You will then analyze the actual costs and complete a cost-volume-profit (CVP) analysis to determine how many bird feeders must be sold at the current cost and sales price level to earn a $10,000 profit and how much the sales price would have to increase to earn a $10,000 profit at the same cost and sales volume level. Use Tabs 1 and 2 of the
Student Workbook
.
I.
Costs
a)
Classify all product and
period costs
appropriately.
b)
Compute a
cost-volume-profit analysis
. What are the implications of thisanalysis?
c)
Compute
contribution m.
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ACC 207 Final Project Guidelines and RubricOverviewThe final p.docx
1. ACC 207 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of a quantitative
analysis with a memo to management.
Classifying a
company’s
costs allows for an in-depth analysis of the impact that changes
in output
have
on revenues, costs, and net income or net loss. A
cost-
volume-profit (CVP) analysis will be completed in order to
determine the
breakeven
point. Relevant costs will be used to prepare a flexible budget.
Additionally, an appropriate costing
system
should be selected and the choice should be substantiated with
reasonable rationale. Finally, a memo should be prepared
for
management that summarizes the results of the quantitative
analysis and
makes
recommendations for an optimal costing
system
to be ethically used by
key
decision
makers.
The project is divided into
three milestones
, which will be submitted at various points throughout the
2. course to scaffold learning and ensure quality final submissions.
These milestones will be submitted in
Modules Two, Four,
and
Five.
The quantitative analysis with a memo to management will be
submitted in
Module Seven
.
In this assignment, you will demonstrate your mastery of the
following course outcomes:
·
Utilizecostbehaviorand
cost
analysistoassistdecision
makers
inplanningandaddingvalue
to
thebusiness
·
Prepareaflexiblebudgetforsupportinginformedmanagerialdecisio
nmaking
·
Interpret variances for determining the optimal costing
system
to fit an
organization’s
internal accountingneeds
·
Interprettheroleofethicsincostaccountingfordeterminingitsimpact
3. ondecisionmaking
Prompt
In this assignment, multiple analyses will be conducted in order
to obtain a company’s financial information specific to company
costs.
MDE manufactures outdoor garden items such as lawn
ornaments and bird feeders. MDE uses a standard costing
system to set standards for direct materials, labor, and overhead
costs. MDE reviews and revises standards as necessary.
Recently, budget variances for bird feeders have caused some
concern. You, the company’s cost accountant, have been asked
to examine the numbers for the product, explain the variances,
and suggest ways to improve performance.
Specifically, the following
critical elements
must be addressed:
You will begin by using the
MDE Manufacturing Budget
(Table I) to analyze costs, contribution margin, and breakeven
point for the bird feeder division. You will then analyze the
actual costs and complete a cost-volume-profit (CVP) analysis
to determine how many bird feeders must be sold at the current
cost and sales price level to earn a $10,000 profit and how much
the sales price would have to increase to earn a $10,000 profit
at the same cost and sales volume level. Use Tabs 1 and 2 of the
Student Workbook
.
I.
Costs
4. a)
Classify all product and
period costs
appropriately.
b)
Compute a
cost-volume-profit analysis
. What are the implications of thisanalysis?
c)
Compute
contribution margin
per unit and contribution marginratio.
d)
Determine the
breakeven quantity
and the breakeven revenueaccurately.
e)
Determineifthecompanyisbreakingeven.Whatarecost-volume-
profitanalysis
implications
onshort-termplanning?
Your next step is to use the
MDE Manufacturing Budget
(Tables I, II, III, IV) to compare the budget and actual costs.
Determine where variances occurred and explain why. Use Tabs
3 and 4 of the
Student Workbook
to present your budgets/variances and Tabs 5 and 6 for all
budget/variance calculations.
5. II.
Prepare andPerform
a)
What are your
fixed costs
? Segregate them in the budgetmodel.
b)
Determine how
variable costs
change as activity measures change. How can this information
beapplied?
c)
Create the
budget model
, ensuring fixed costs are hard coded into the model (variable
costs are stated as a percentage of the relevant activity measures
or as a cost per unit of activitymeasure).
d)
Add
actual activity
measures to the model. Make sure all information is
addedaccurately.
e)
Add the
flexible budget calculations
to the budget model. Make sure all information isaccurate.
f)
Comparethe
flexiblebudget
6. totheactualexpenses.Whatdoesthisinform?Besuretodiscussthefoll
owingvariances:
i.
Static budget variance, including sales volume and flexible
budgetvariances
ii.
Price and efficiency variances for direct materials and
directlabor
iii.
Spending and efficiency variances for variable
manufacturingoverhead
g)
Determine the aspects of the
budgeting process
that are in need of improvement. Justify yourresponse.
h)
Interpret what
budget variances
represent. Should all variances beinvestigated?
You have also been asked to give management a
recommendation on whether the company should switch from
process costing to activity-based costing (ABC). This is an
exploratory discussion, but management would like to know
more about the difference between the two costing systems and
if a different costing system might work better for the company.
III.
Main Costing Systems – Activity-Based Costing vs.
ProcessCosting
7. a)
Identify the
cost allocation system
that would benefit this company most. Justify yourresponse.
b)
Does this cost allocation system meet management planning and
control
goals
?Explain.
c)
What are the
ethical implications
that should be considered with this cost allocationsystem?
d)
Describetheethicalimplicationsof
directcostsversusindirectcosts
.Whatconsiderationsshouldbemadewhenselectingoneofthesetwo?
After all of your calculations and research, you are now ready
to prepare your report.
IV.
Prepare a Memo toManagement
a)
Summarizeyour
quantitativeanalysis
basedonyourfindings(includeanswerstoallquestionsinSectionsI,II
,andIII).
b)
9. Then, analyze the actual costs and, using
Tab
2 of your Student Workbook, complete a cost-volume-
profitanalysis
to
determinehowmanybird
feeders
mustbesoldatthecurrentcostandsalespriceleveltoearna10%profita
ndhowmuchthesalespricewould have to increase
to
earn a 10% profit at the same cost and sales volume level.
Submit the
Student Workbook
with
Tabs
1 and 2 completed with your cost calculations and a 1-2 page
Word
document that explains the implications of your findings and
addresses all of the critical elements in Section I.
This milestone will be
graded
with the Milestone OneRubric.
Milestone Two:
Draft of Prepare and Perform (Section II)
In
Module Four
, you will submit a draft of the prepare and perform section of
the final project. Analyze the budget and actual costs using the
MDE
Manufacturing Budget
(Tables I, II, III, IV). Determine where variances occurred and
why. Submit the
10. Student Workbook
with Tabs 3 and 4 completed with your budgets/variances
calculations and a 1-2page Word document that discusses the
implications of your findings on the company’s financial
considerations. Explain which aspects of MDE’s budgeting
process are in need of improvement and justify your response
using your calculations. Address all critical elements in Section
II. Use Tabs 5 and 6 of the Student Workbook for your budget
and variance calculations.
This milestone will be graded with the Milestone Two Rubric.
Milestone Three:
Draft of Main Costing Systems (Section III)
In
Module Five
, you will submit a draft of your main costing system
recommendations. You have been asked to give management a
recommendation on whether the bird feeder division should
switch from process costing to activity-based costing. This is
just an exploratory discussion, but management would like to
know more about the differences between the two costing
systems and if a different costing system might work better for
the division. Submit a Word document that addresses the
critical elements of Section III.
This milestone will be graded with the Milestone Three Rubric.
Final Submission:
Quantitative Analysis With a Memo to Management
In
11. Module Seven
, submit your quantitative analysis with a memo to management.
It should incorporate all milestones and include Section IV of
the critical elements listed in the Final Project Document.
This submission will be graded with the Final Project Rubric
(below)
.
