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1. southern new hampshire university | Accounting homework help
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 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:· 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, 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.

2. 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 ($)
Actual ($) Sales 1,050,000 991,700 Expenses
Materials –Cedar 225,000 248,160Materials –Plastic 37,500

3. 37,741Factory Worker Labor 300,000 332,760Materials –Indirect 3,000
2,585Factory Depreciation 78,000 78,000Factory Utilities12,000 12,000Factory
Maintenance and Repairs 5,000 4,500Shipping ($2.25/each) 112,500
105,750Sales Commissions ($2.00/unit sold) 100,000 94,000Office Rent
12,000 12,000Advertising 20,000 20,000Liability insurance 5,000
5,000Office Depreciation 1,000 1,000Office Salaries 48,000 48,000
Total Expenses 959,000 1,001,496 II. Contribution Margin:
Static Budget and Actual Results (2014) You will use this table to complete Milestone Two.
Actual Results Static Budget Amount Units Sold 47,000
50,000Revenues ($) 991,700 1,050,000Manufacturing Costs ($)
Variable 621,246 565,500Fixed 94,500 95,000Gross Margin
275,954 389,500 III. Standard Variable Manufacturing Costs
(2014) You will use this table to complete Milestone Two. Static Budget Costs
Standard Input Direct Materials: Cedar 225,000 3.0
ft/unitDirect Materials: Plastic37,500 1.0 ft/unitDirect Manufacturing Labor300,000
0.5 hrs/unitVariable Manufacturing Overhead3,000 0.3 ft/unit IV. Actual
Variable Manufacturing Costs (2014) You will use this table to complete Milestone Two.
Actual Costs Actual Input Direct Materials: Cedar 248,160
3.2 ft/unitDirect Materials: Plastic 37,741 1.1 ft/unitDirect Manufacturing:
Labor ($) 332,760 .60 hr/unitVariable Manufacturing Overhead 2,585
0.25ft/unit