CVP Analysis

ACC 550 Milestone Two Guidelines and Rubric Overview: The final project for this course is the creation of a quantitative analysis that includes an Excel spreadsheet accompanied by a memo to management. Accountants provide management with the logistics of the business that are crucial for daily operations and a company’s overall success. In any business, it is of the utmost importance to be aware of all finances and internal processes. Cost accountants focus solely on the internal processes of a business and are tasked with eliminating any unnecessary costs in order to maximize profits. For the final project, you have been tasked with conducting a quantitative analysis that looks into the internal processes of a company. Based on your analysis, you will formulate recommendations to management that aim to improve internal processes and increase profits for the company. Prompt: For this milestone, submit a draft of the inventory management and benchmarking sections of the final project (Sections II and III, respectively), including all the critical elements listed below. Refer to the Hampshire Company Case Study document, as this provides details on how to complete this milestone. All calculations for your quantitative analysis should be completed in the Hampshire Company Spreadsheet. You will provide a rough draft of your qualitative analysis in a Word document. Specifically, the following critical elements must be addressed:

II. Inventory Management Inventory management serves to minimize the cost to maintain inventory and maximize returns. In this section, the company’s financial data will be reviewed in order to determine the optimal inventory management system.

A. Determine an optimal cost allocation method based on the relevant costs. B. Describe how this method should be used by decision makers to fulfill their responsibilities. Support your response with examples. C. What are the pros and cons of implementing the just-in-time (JIT) inventory system? Do the pros outweigh the cons for this company? D. Explain how the just-in-time (JIT) inventory system can benefit this organization. Defend your response. E. Identify the inventory management method you recommend, and explain why this method will benefit the company.

III. Benchmarking

In this section, benchmarking will be reviewed. Benchmarking can be implemented in various ways depending on a company’s circumstances. Your company has decided to implement benchmarking and would like you to research and recommend the most effective approach.

A. What is the advantage to benchmarking in terms of improving companies’ performance? Support your response. B. Identify possible approaches to benchmarking. Describe each. C. Which benchmarking method should management adopt and why?

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Guidelines for Submission: The written portion of this submission must be a three- to four-page Word document with 12-point Times New Roman font, double spacing, and one-inch margins. Sources should be cited according to APA style. Use the Hampshire Company Spreadsheet to submit your calculations as an Excel file.

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 Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value

Inventory Management: Relevant Costs

Determines an optimal cost allocation method based on the relevant costs

Determines an optimal cost allocation method, but determination is not based on the relevant costs

Does not determine an optimal cost allocation method

11

Inventory Management:

Method

Recommends how the method should be used by decision makers to fulfill their responsibilities and supports response with examples

Recommends how the method should be used by decision makers to fulfill their responsibilities but does not support response with examples

Does not recommend how the method should be used by decision makers

11

Inventory Management: Pros and Cons

Identifies the pros and cons of implementing JIT and describes whether the pros outweigh the cons for this company

Identifies the pros and cons of implementing JIT but does not describe whether the pros outweigh the cons for this company

Does not identify the pros and cons of implementing JIT

11

Inventory Management:

Inventory System

Explains how the JIT inventory system can benefit the organization and defends response

Explains how the JIT inventory system can benefit the organization but does not defend response

Does not explain how the JIT inventory system can benefit the organization

11

Inventory Management:

Inventory

Identifies the inventory management method recommended and explains why this method will benefit the company

Identifies the inventory management method recommended but does not explain why this method will benefit the company

Does not identify the inventory management method that is recommended

11

Benchmarking: Advantage

Identifies an advantage of benchmarking and supports response

Identifies an advantage of benchmarking but does not support response

Does not identify an advantage of benchmarking

11

Benchmarking: Approaches

Identifies different approaches to benchmarking and describes each

Identifies different approaches to benchmarking but does not describe each

Does not identify different approaches to benchmarking

11

Benchmarking: Benchmarking

Method

Determines which benchmarking method management should adopt and justifies response

Determines which benchmarking method management should adopt but does not justify response

Does not determine which benchmarking method management should adopt

11

Articulation of Response

Submission has no major errors related to citations, grammar, spelling, syntax, or organization

Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

12

Earned Total 100%