Accounting

ASSIGNMENT 4 – PRODUCTION COST (Please see the Grading Guide for the assignment)

Purpose of Assignment 

The materials covered this week distinguish between the different costing methods and provides needed tools for decision making. This case study focuses on determining equivalent units in a production business setting. 

Assignment Steps

Scenario: Davis Skaros has recently been promoted to production manager. He has just started to receive various managerial reports, including the production cost report you prepared. It showed his department had 2,000 equivalent units in ending inventory. His department has had a history of not keeping enough inventory on hand to meet demand. He has come to you, very angry, and wants to know why you credited him with only 2,000 units when he knows he had at least twice that many on hand.

Prepare a maximum 700-word informal memo and explain to Mr. Skaros why his production cost report showed only 2,000 equivalent units in ending inventory. Using a professional tone, explain to him clearly why your report is accurate.

Grading Guide

Content	Met	Partially Met	Not Met	Comments:
Explained to Mr. Skaros why his production cost report showed only 2,000 equivalent Units in ending inventory.
Explained to Mr. Skaros clearly why student’s report is accurate.
The memo is a maximum 700 words in length.
		Total Available	Total Earned
		85	#/85

Writing Guidelines	Met	Partially Met	Not Met	Comments:
The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and punctuation.
		Total Available	Total Earned
		35	#/35

Assignment Total	#	120	#/120
Additional comments:

ASSIGNMENT 5 – COST –VOLUME PROFIT ANALYSIS (Please see the Grading Guide)

Purpose of Assignment 

The Case Study focuses on CVP (Cost-Volume-Profit), break-even, and margin of safety analyses which allows students to experience working through a business scenario and applying these tools in managerial decision making. 

Show your work in Microsoft Word or Excel. 

Complete calculations/computations using Microsoft Word or Excel.   

Scenario: Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $24,000 in fixed costs to the $270,000 in fixed costs currently spent. In addition, Mary is proposing a 5% price decrease ($40 to $38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at $24 per pair of shoes. Management is impressed with Mary's ideas but concerned about the effects these changes will have on the break-even point and the margin of safety.

Assignment Steps

Complete the following: 

· Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used.

· Compute the margin of safety ratio for current operations and after Mary's changes are introduced (Round to nearest full percent).

· Prepare a CVP (Cost-Volume-Profit) income statement for current operations and after Mary's changes are introduced.

Prepare a maximum 700-word informal memo to management addressing Mary's suggested changes. 

· Explain whether Mary's changes should be adopted. Why or why not? Analyze the above information (three bullet points above) and use this information to support your suggestion.

Grading Guide

Content	Met	Partially Met	Not Met	Comments:
Computed the current break-even point in units, and compared it to the break-even point in units if Mary’s ideas were used.
Computed the margin of safety ratio for current operations and after Mary’s changes were introduced (rounded to nearest full percent).
Prepared a CVP (Cost-Volume-Profit) income statement for current operations and after Mary’s changes were introduced.
Explained whether Mary’s changes should be adopted. Why or why not? Analyzed the information (first three rows above) and used the information to support student’s suggestion.
Showed work in Microsoft® Word or Excel®. Completed calculations/computations using Microsoft® Word or Excel®.
The informal memo is a maximum 700 words in length.
		Total Available	Total Earned
		100	#/100

Writing Guidelines	Met	Partially Met	Not Met	Comments:
The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and punctuation.
		Total Available	Total Earned
		30	#/30

ASSIGNMENT -6 MANAGERIAL ANALYSIS (Please see the Grading Guide to complete the assignment)

Purpose of Assignment 

This comprehensive case requires students to evaluate a static budget and prepare flexible budgets to meet managerial needs. Students are required to calculate and analyze variances and discuss how variances are critical to managerial decision making. 

Assignment Steps

Scenario: Green Pastures is a 400-acre farm on the outskirts of the Kentucky bluegrass, specializing in the boarding of broodmares and their foals. A recent economic downturn in the thoroughbred industry has led to a decline in breeding activities, and it has made the boarding business extremely competitive. To meet the competition, Green Pastures planned in 2017 to entertain clients, advertise more extensively, and absorb expenses formerly paid by clients such as veterinary and blacksmith fees.

The budget report for 2017 is presented as an attachment. As shown, the static income statement budget for the year is based on an expected 21,900 boarding days at $25 per mare. The variable expenses per mare per day were budgeted: feed $5, veterinary fees $3, blacksmith fees $0.25, and supplies $0.55. All other budgeted expenses were either semifixed or fixed.

During the year, management decided not to replace a worker who quit in March, but it did issue a new advertising brochure and did more entertaining of clients. 

Develop a 700-to 1050-word examination of the financial statements and include the following based on the static budget report:

· What was the primary cause(s) of the loss in net income?

· Did management do a good, average, or poor job of controlling expenses?

· Were management's decisions to stay competitive sound?

· Prepare a flexible budget report for the year.

· Based on the flexible budget report:

· What was the primary cause(s) of the loss in net income?

· Did management do a good, average, or poor job of controlling expenses?

· Were management's decisions to stay competitive sound?

· What course of action do you recommend for the management of Green Pastures?

Show your work in Microsoft Word or Excel. 

Green Pastures

Static Budget Income Statement

For the Year Ended December 31, 2017

Actual Master Budget Difference

Number of Mares 52 60 8 U

Number of Boarding Days 19,000 21,900 2,900 U

Sales $380,000 $547,500 $167,500 U

Less: Variable Expenses

Feed 104,390 109,500 5,110 F

Veterinary Fees 58,838 65,700 6,862 F

Blacksmith Fees 4,984 5,475 491 F

Supplies 10,178 12,045 1,867 F

Total Variable Expenses 178,390 192,720 14,330 F

Contribution Margin 201,610 354,780 153,170 U

Less: Fixed Expenses

Depreciation 40,000 40,000 -0-

Insurance 11,000 11,000 -0-

Utilities 12,000 14,000 2,000 F

Repairs and Maintenance 10,000 11,000 1,000 F

Labor 88,000 95,000 7,000 F

Advertisement 12,000 8,000 4,000 U

Entertainment 7,000 5,000 2,000 U

Total Fixed Expenses 180,000 184,000 4,000 F

Net Income $21,610 $170,780 $149,170 U

Grading Guide

Content	Met	Partially Met	Not Met	Comments:
Based on the static budget report answered the following questions: What was the primary cause(s) of the loss in net income? Did management do a good, average, or poor job of controlling expenses? Were management’s decisions to stay competitive sound?
Prepared a flexible budget report for the year.
Based on the flexible budget report, answered the following questions: What was the primary cause(s) of the loss in net income? Did management do a good, average, or poor job of controlling expenses? Were management’s decisions to stay competitive sound?
Answered the following question: What course of action does student recommend for the management of Green Pastures?
Showed work in Microsoft® Word or Excel®. Completed calculations/computations using Microsoft® Word or Excel®.
The examination is a minimum 700-to 1050- words in length.
		Total Available	Total Earned
		105	#/105

Writing Guidelines	Met	Partially Met	Not Met	Comments:
The paper—including tables and graphs, headings, title page, and reference page—is consistent with APA formatting guidelines and meets course-level requirements.
Intellectual property is recognized with in-text citations and a reference page.
Paragraph and sentence transitions are present, logical, and maintain the flow throughout the paper.
Sentences are complete, clear, and concise.
Rules of grammar and usage are followed including spelling and punctuation.
		Total Available	Total Earned
		45	#/45

Assignment Total	#	150	#/150
Additional comments: