ACC 207 Final Project Guidelines and Rubric Overview The final project for this course is the creation of a quantitative analysis with a memo

ACC 207 MDE Manufacturing Budget: Bird Feeder I. Sales and Manufacturing Expenses
June 28, 2019
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.
June 28, 2019

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 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 formanagement that summarizes the results of the quantitative analysis and makes recommendations for an optimal costing system to be ethically used by keydecision makers.The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality finalsubmissions. These milestones will be submitted in Modules Two, Four, and Five. The quantitative analysis with a memo to management will be submitted inModule 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 makingPromptIn 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, thecompany’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 willthen 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 salesprice 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. Use Tabs 1and 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 andexplain 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 activitymeasures 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 costingsystem 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.MilestonesMilestone 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, contributionmargin, 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-volumeprofitanalysis 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 wouldhave 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 costcalculations 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 milestonewill 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 MDEManufacturing Budget (Tables I, II, III, IV). Determine where variances occurred and why. Submit the Student Workbook with Tabs 3 and 4 completed with yourbudgets/variances calculations and a 1-2page Word document that discusses the implications of your findings on the company’s financial considerations. Explainwhich aspects of MDE’s budgeting process are in need of improvement and justify your response using your calculations. Address all critical elements in SectionII. 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 whetherthe bird feeder division should switch from process costing to activity-based costing. This is just an exploratory discussion, but management would like to knowmore about the differences between the two costing systems and if a different costing system might work better for the division. Submit a Word document thataddresses the critical elements of Section III. This milestone will be graded with the Milestone Three Rubric.Final Submission: Quantitative Analysis With a Memo to ManagementIn Module Seven, submit your quantitative analysis with a memo to management. It should incorporate all milestones and include ection IV of the criticalelements listed in the Final Project Document. This submission will be graded with the Final Project Rubric (below). DeliverablesMilestone Deliverable Module Due GradingOne Draft of Costs (Section I) Two Graded separately; Milestone One RubricTwo Draft of Prepare and Perform (Section II) Four Graded separately; Milestone Two RubricThree Draft of Main Costing Systems (Section III) Five Graded separately; Milestone Three RubricFinal Submission: Quantitative AnalysisWith a Memo to ManagementSeven Graded separately; Final Project Rubric (below)Final Project RubricGuidelines for Submission: The calculations for your quantitative analysis should be submitted in final form in the Student Workbook. Your findings and memo tomanagement 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 NewRoman 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 ValueCosts: Period Costs Classifies all product and periodcosts appropriately (100%)Classifies all product and periodcosts but not all classifications areappropriate (55%)Does not classify product andperiod costs (0%)4.9Costs: CVP Analysis Meets “Proficient” criteria andidentification demonstrates anuanced understanding of thepotential implications (100%)Computes a cost-volume-profitanalysis and identifies theimplications of the analysis (85%)Computes a cost-volume-profitanalysis but does not identify theimplications of the analysis (55%)Does not compute a cost-volumeprofitanalysis (0%)4.9Costs: ContributionMarginComputes the contribution marginper unit and contribution marginratio (100%)Computes the contribution marginper unit but not the contributionmargin ratio (55%)Does not compute thecontribution margin per unit (0%)4.9Costs: BreakevenQuantityDetermines the breakevenquantity and the breakevenrevenue accurately (100%)Determines the breakevenquantity and the breakevenrevenue but contains issuesrelated to accuracy (55%)Does not determine the breakevenquantity and the breakevenrevenue (0%)4.9Costs: Implications Meets “Proficient” criteria andsupports claims with specificexamples (100%)Determines if the company isbreaking even and identifies theimplications of cost-volume-profitanalysis on short-term planning(85%)Determines if the company isbreaking even but does notidentify the implications of costvolume-profitanalysis on shorttermplanning (55%)Does not determine if thecompany is breaking even (0%)4.9Prepare andPerform: FixedCostsIdentifies fixed costs andsegregates them in the budgetmodel (100%)Identifies fixed costs but does notsegregate them in the budgetmodel (55%)Does not identify fixed costs (0%) 4.9Prepare andPerform: VariableCostsMeets “Proficient” criteria anddescription is supported withrelevant examples (100%)Determines how variable costschange as activity measureschange and describes how thisinformation can be applied (85%)Determines how variable costschange as activity measureschange but does not describe howthis information can be applied(55%)Does not determine how variablecosts change as activity measureschange (0%)4.9Prepare andPerform: BudgetModelCreates a budget model and fixedcosts are hard coded into themodel (100%)Creates a budget model but fixedcosts are not hard coded into themodel (55%)Does not create a budget model(0%)4.9Prepare andPerform: ActualActivityAdds actual activity measures tothe model accurately (100%)Adds actual activity measures tothe model but contains errorsrelated to accuracy (55%)Does not add actual activity (0%) 4.9Prepare andPerform: FlexibleBudgetCalculationsAccurately adds the flexiblebudget calculations to the budgetmodel (100%)Adds flexible budget calculationsto the budget model but containserrors related to accuracy (55%)Does not add flexible budgetcalculations to the budget model(0%)4.9Prepare andPerform: CompareFlexible BudgetMeets “Proficient” criteria andinterpretation is well-supportedwith examples (100%)Compares the flexible budget tothe actual expenses, including keyvariances specified, and interpretswhat this informs (85%)Compares the flexible budget tothe actual expenses but omits keyvariances or does not interpretwhat this informs (55%)Does not compare the flexiblebudget to the actual expenses(0%)4.9Prepare andPerform: BudgetingProcessMeets “Proficient” criteria andexplanation is well-supported andlogical (100%)Determines the aspects of thebudgeting process that are in needof improvement and justifiesresponse (85%)Determines the aspects of thebudgeting process that are in needof improvement but does notjustify response (55%)Does not determine the aspects ofthe budgeting process that are inneed of improvement (0%)4.9Prepare andPerform: BudgetVariancesMeets “Proficient” criteria anddemonstrates a nuancedunderstanding of the importanceof variances (100%)Interprets what budget variancesrepresent and determines if allvariances should be investigated(85%)Interprets what budget variancesrepresent but does not determineif all variances should beinvestigated (55%)Does not interpret what budgetvariances represent (0%)4.9Main CostingSystems: CostAllocation SystemMeets “Proficient” criteria andjustification is qualified withspecific examples (100%)Identifies the cost allocationsystem that would benefit thiscompany most and justifiesresponse (85%)Identifies the cost allocationsystem that would benefit thiscompany most but does not justifyresponse (55%)Does not identify a cost allocationsystem (0%)4.9Main CostingSystems: GoalsMeets “Proficient” criteria andexplanation is well-supported andlogical (100%)Determines if cost allocationsystem meets managementplanning and control goals andexplains response (85%)Determines if cost allocationsystem meets managementplanning and control goals butdoes not explain response (55%)Does not determine if costallocation system meetsmanagement planning and controlgoals (0%)4.9Main CostingSystems: EthicalImplicationsMeets “Proficient” criteria andexplanation demonstrates anuanced understanding ofpotential ethical implications(100%)Identifies ethical implications thatshould be considered withrecommended cost allocationsystem (85%)Identifies ethical implications thatshould be considered butimplications do not align withrecommended cost allocationsystem (55%)Does not identify ethicalimplications (0%)4.9Main CostingSystems: DirectCosts VersusIndirect CostsMeets “Proficient” criteria anddescription demonstrates anuanced understanding ofpotential ethical implications(100%)Describes the ethical implicationsof direct costs versus indirect costsand determines whatconsiderations should be madewhen selecting one (85%)Describes the ethical implicationsof direct costs versus indirect costsbut does not determine whatconsiderations should be madewhen selecting one (55%)Does not describe ethicalimplications (0%)4.9Prepare a Memo toManagement:QuantitativeAnalysisMeets “Proficient” criteria anduses industry-specific language toestablish expertise (100%)Summarizes quantitative analysisbased on findings (85%)Summarizes quantitative analysisbut analysis is not based onfindings (55%)Does not summarize quantitativeanalysis (0%)4.9Prepare a Memo toManagement:Need ofImprovementMeets “Proficient” criteria andsuggestions are appropriate andlogical (100%)Reports the parts of the budgetingprocess that are in need ofimprovement and providessuggestions to improve thoseparts (85%)Reports the parts of the budgetingprocess that are in need ofimprovement but does notprovide suggestions to improvethose parts (55%)Does not report the parts of thebudgeting process that are in needof improvement (0%)4.9Prepare a Memo toManagement:RecommendationsMeets “Proficient” criteria andrecommendation demonstrates anuanced understanding ofpotential ethical implications(100%)Reports improvementrecommendations that considerethical implications (85%)Reports improvementrecommendations butrecommendations do not reflectconsideration of ethicalimplications (55%)Does not report improvementrecommendations (0%)4.9Articulation ofResponseSubmission is free of errors relatedto citations, grammar, spelling,syntax, and organization and ispresented in a professional andeasy-to-read format (100%)Submission has no major errorsrelated to citations, grammar,spelling, syntax, or organization(85%)Submission has major errorsrelated to citations, grammar,spelling, syntax, or organizationthat negatively impact readabilityand articulation of main ideas(55%)Submission has critical errorsrelated to citations, grammar,spelling, syntax, or organizationthat prevent understanding ofideas (0%)2Total 100%

 
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