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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