Southern New Hampshire University ACC 207 Final Project Guidelines and RubricOverviewThe final project for this course is the creation of a quantitative analysis with a memo to management.Classifying a companys 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 costvolume-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:· Utilize cost behavior and cost analysis to assist decision makers in planning and adding value to the business· Prepare a flexible budget for supporting informed managerial decision making· Interpret variances for determining the optimal costing system to fit an organizations internal accounting needs· Interpret the role of ethics in cost accounting for determining its impact on decision makingPromptIn this assignment, multiple analyses will be conducted in order to obtain a companys 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 companys 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. Costsa) Classify all product and period costs appropriately.b) Compute a cost-volume-profit analysis. What are the implications of this analysis?c) Compute contribution margin per unit and contribution margin ratio.d) Determine the breakeven quantity and the breakeven revenue accurately.e) Determine if the company is breaking even. What are cost-volume-profit analysis implications on short-term planning?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.II. Prepare and Performa) What are your fixed costs? Segregate them in the budget model.b) Determine how variable costs change as activity measures change. How can this information be applied?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 activity measure).d) Add actual activity measures to the model. Make sure all information is added accurately.e) Add the flexible budget calculations to the budget model. Make sure all information is accurate.f) Compare the flexible budget to the actual expenses. What does this inform? Be sure to discuss the following variances:i. Static budget variance, including sales volume and flexible budget variancesii. Price and efficiency variances for direct materials and direct laboriii. Spending and efficiency variances for variable manufacturing overheadg) Determine the aspects of the budgeting process that are in need of improvement. Justify your response.h) Interpret what budget variances represent. Should all variances be investigated?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. Process Costinga) Identify the cost allocation system that would benefit this company most. Justify your response.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 allocation system?d) Describe the ethical implications of direct costs versus indirect costs. What considerations should be made when selecting one of these two?After all of your calculations and research, you are now ready to prepare your report.. IV. Prepare a Memo to Managementa) Summarize your quantitative analysis based on your findings (include answers to all questions in Sections I, II, and III).b) Report the parts of the budgeting process that are in need of improvement. Provide suggestions to improve those parts.c) Report overall improvement recommendations to management. Consider the ethical implications when communicating sensitive information.
.ACC 207 MDE Manufacturing Budget: Bird Feeder I. Sales and Manufacturing Expenses: Budget and Actual(2014)You will use this table to complete Milestones One and Two.Budget ($)Actual ($)Sales1,050,000991,700ExpensesMaterials Cedar225,000248,160Materials Plastic37,50037,741Factory Worker Labor300,000332,760Materials Indirect3,0002,585Factory Depreciation78,00078,000Factory Utilities12,00012,000Factory Maintenance and Repairs5,0004,500Shipping ($2.25/each)112,500105,750Sales Commissions ($2.00/unit sold)100,00094,000Office Rent12,00012,000Advertising20,00020,000Liability insurance5,0005,000Office Depreciation1,0001,000Office Salaries48,00048,000Total Expenses959,0001,001,496 II. Contribution Margin: Static Budget and Actual Results (2014)You will use this table to complete Milestone Two.Actual ResultsStatic Budget AmountUnits Sold47,00050,000Revenues ($)991,7001,050,000Manufacturing Costs ($)Variable621,246565,500Fixed94,50095,000Gross Margin275,954389,500 III. Standard Variable Manufacturing Costs (2014)You will use this table to complete Milestone Two.Static Budget CostsStandard InputDirect Materials: Cedar225,0003.0 ft/unitDirect Materials: Plastic37,5001.0 ft/unitDirect Manufacturing Labor300,0000.5 hrs/unitVariable Manufacturing Overhead3,0000.3 ft/unit IV. Actual Variable Manufacturing Costs (2014)You will use this table to complete Milestone Two.Actual CostsActual InputDirect Materials: Cedar248,1603.2 ft/unitDirect Materials: Plastic37,7411.1 ft/unitDirect Manufacturing: Labor ($)332,760.60 hr/unitVariable Manufacturing Overhead2,5850.25ft/unit
