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.

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 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 organization’s internal accounting needs  Interpret the role of ethics in cost accounting for determining its impact on decision making 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 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 Perform a) 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 variances ii. Price and efficiency variances for direct materials and direct labor iii. Spending and efficiency variances for variable manufacturing overhead g) 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 Costing a) 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 Management a) 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. Milestones Milestone One: Draft of Costs (Section I) In Module Two, you will submit a draft of the costs section of the final project. Use the MDE Manufacturing Budget (Table I) to analyze costs, contribution margin, and breakeven point for the bird feeder division of the company. In Tab 1 of your Student Workbook, classify costs as either product or period costs. Briefly explain the difference between the types of costs. Then, analyze the actual costs and, using Tab 2 of your Student Workbook, complete a cost-volumeprofit analysis to determine how many bird feeders must be sold at the current cost and sales price level to earn a 10% profit and how much the sales price would 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 One Rubric. 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 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 Module Seven, submit your quantitative analysis with a memo to management. It should incorporate all milestones and include ection IV of the critical elements listed in the Final Project Document. This submission will be graded with the Final Project Rubric (below). Deliverables Milestone Deliverable Module Due Grading One Draft of Costs (Section I) Two Graded separately; Milestone One Rubric Two Draft of Prepare and Perform (Section II) Four Graded separately; Milestone Two Rubric Three Draft of Main Costing Systems (Section III) Five Graded separately; Milestone Three Rubric Final Submission: Quantitative Analysis With a Memo to Management Seven Graded separately; Final Project Rubric (below) Final Project Rubric Guidelines for Submission: The calculations for your quantitative analysis should be submitted in final form in the Student Workbook. Your findings and memo to management should be 8 to 10 pages in length (plus a cover page and references) and must be written in APA format. Use double spacing, 12-point Times New Roman font, and one-inch margins. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Exemplary Proficient Needs Improvement Not Evident Value Costs: Period Costs Classifies all product and period costs appropriately (100%) Classifies all product and period costs but not all classifications are appropriate (55%) Does not classify product and period costs (0%) 4.9 Costs: CVP Analysis Meets “Proficient” criteria and identification demonstrates a nuanced understanding of the potential implications (100%) Computes a cost-volume-profit analysis and identifies the implications of the analysis (85%) Computes a cost-volume-profit analysis but does not identify the implications of the analysis (55%) Does not compute a cost-volumeprofit analysis (0%) 4.9 Costs: Contribution Margin Computes the contribution margin per unit and contribution margin ratio (100%) Computes the contribution margin per unit but not the contribution margin ratio (55%) Does not compute the contribution margin per unit (0%) 4.9 Costs: Breakeven Quantity Determines the breakeven quantity and the breakeven revenue accurately (100%) Determines the breakeven quantity and the breakeven revenue but contains issues related to accuracy (55%) Does not determine the breakeven quantity and the breakeven revenue (0%) 4.9 Costs: Implications Meets “Proficient” criteria and supports claims with specific examples (100%) Determines if the company is breaking even and identifies the implications of cost-volume-profit analysis on short-term planning (85%) Determines if the company is breaking even but does not identify the implications of costvolume-profit analysis on shortterm planning (55%) Does not determine if the company is breaking even (0%) 4.9 Prepare and Perform: Fixed Costs Identifies fixed costs and segregates them in the budget model (100%) Identifies fixed costs but does not segregate them in the budget model (55%) Does not identify fixed costs (0%) 4.9 Prepare and Perform: Variable Costs Meets “Proficient” criteria and description is supported with relevant examples (100%) Determines how variable costs change as activity measures change and describes how this information can be applied (85%) Determines how variable costs change as activity measures change but does not describe how this information can be applied (55%) Does not determine how variable costs change as activity measures change (0%) 4.9 Prepare and Perform: Budget Model Creates a budget model and fixed costs are hard coded into the model (100%) Creates a budget model but fixed costs are not hard coded into the model (55%) Does not create a budget model (0%) 4.9 Prepare and Perform: Actual Activity Adds actual activity measures to the model accurately (100%) Adds actual activity measures to the model but contains errors related to accuracy (55%) Does not add actual activity (0%) 4.9 Prepare and Perform: Flexible Budget Calculations Accurately adds the flexible budget calculations to the budget model (100%) Adds flexible budget calculations to the budget model but contains errors related to accuracy (55%) Does not add flexible budget calculations to the budget model (0%) 4.9 Prepare and Perform: Compare Flexible Budget Meets “Proficient” criteria and interpretation is well-supported with examples (100%) Compares the flexible budget to the actual expenses, including key variances specified, and interprets what this informs (85%) Compares the flexible budget to the actual expenses but omits key variances or does not interpret what this informs (55%) Does not compare the flexible budget to the actual expenses (0%) 4.9 Prepare and Perform: Budgeting Process Meets “Proficient” criteria and explanation is well-supported and logical (100%) Determines the aspects of the budgeting process that are in need of improvement and justifies response (85%) Determines the aspects of the budgeting process that are in need of improvement but does not justify response (55%) Does not determine the aspects of the budgeting process that are in need of improvement (0%) 4.9 Prepare and Perform: Budget Variances Meets “Proficient” criteria and demonstrates a nuanced understanding of the importance of variances (100%) Interprets what budget variances represent and determines if all variances should be investigated (85%) Interprets what budget variances represent but does not determine if all variances should be investigated (55%) Does not interpret what budget variances represent (0%) 4.9 Main Costing Systems: Cost Allocation System Meets “Proficient” criteria and justification is qualified with specific examples (100%) Identifies the cost allocation system that would benefit this company most and justifies response (85%) Identifies the cost allocation system that would benefit this company most but does not justify response (55%) Does not identify a cost allocation system (0%) 4.9 Main Costing Systems: Goals Meets “Proficient” criteria and explanation is well-supported and logical (100%) Determines if cost allocation system meets management planning and control goals and explains response (85%) Determines if cost allocation system meets management planning and control goals but does not explain response (55%) Does not determine if cost allocation system meets management planning and control goals (0%) 4.9 Main Costing Systems: Ethical Implications Meets “Proficient” criteria and explanation demonstrates a nuanced understanding of potential ethical implications (100%) Identifies ethical implications that should be considered with recommended cost allocation system (85%) Identifies ethical implications that should be considered but implications do not align with recommended cost allocation system (55%) Does not identify ethical implications (0%) 4.9 Main Costing Systems: Direct Costs Versus Indirect Costs Meets “Proficient” criteria and description demonstrates a nuanced understanding of potential ethical implications (100%) Describes the ethical implications of direct costs versus indirect costs and determines what considerations should be made when selecting one (85%) Describes the ethical implications of direct costs versus indirect costs but does not determine what considerations should be made when selecting one (55%) Does not describe ethical implications (0%) 4.9 Prepare a Memo to Management: Quantitative Analysis Meets “Proficient” criteria and uses industry-specific language to establish expertise (100%) Summarizes quantitative analysis based on findings (85%) Summarizes quantitative analysis but analysis is not based on findings (55%) Does not summarize quantitative analysis (0%) 4.9 Prepare a Memo to Management: Need of Improvement Meets “Proficient” criteria and suggestions are appropriate and logical (100%) Reports the parts of the budgeting process that are in need of improvement and provides suggestions to improve those parts (85%) Reports the parts of the budgeting process that are in need of improvement but does not provide suggestions to improve those parts (55%) Does not report the parts of the budgeting process that are in need of improvement (0%) 4.9 Prepare a Memo to Management: Recommendations Meets “Proficient” criteria and recommendation demonstrates a nuanced understanding of potential ethical implications (100%) Reports improvement recommendations that consider ethical implications (85%) Reports improvement recommendations but recommendations do not reflect consideration of ethical implications (55%) Does not report improvement recommendations (0%) 4.9 Articulation of Response Submission is free of errors related to citations, grammar, spelling, syntax, and organization and is presented in a professional and easy-to-read format (100%) Submission has no major errors related to citations, grammar, spelling, syntax, or organization (85%) Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas (55%) Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas (0%) 2 Total 100%

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