ACCOUNTING

Final Project Managerial Accounting

© 2015. Any unauthorized reproduction or distribution of this material is prohibited without express written permission. Students are expected to maintain the integrity of the assignment by refraining from reproducing or posting the assignment or their completed work where it can be viewed by current or future students.

COURSE OBJECTIVES

Upon successful completion of this course, the student will be able to:

1. Evaluate how managerial accounting relates to business decision-making

2. Apply cost estimation, analysis, and planning techniques for an organization

3. Assess budgets and financial documents in organizational planning, controlling, and

decision-making

BACKGROUND INFORM ATI ON

In today’s economy, businesses are forced to make financial decisions that can have a direct

impact on operations and the ability to successfully compete in the marketplace. This is why it is

imperative for a business to prepare certain forms for analysis, especially in managerial

accounting.

PROJECT INSTRUCTIONS

For this project, you will create the accounting portions of a business plan using an assortment

of tools presented in the course. You will select a business that is of interest to you or that you

would like to start. You may use an existing business as long as you concisely discuss its

founding process. Your paper should be in APA format and include at least one quality

reference (suggested length: 10-15 pages).

Note: Wikipedia, blogs, and social media do not qualify as academic resources.

To start, write 1-2 pages that describe:

 Why you selected this business

 Some basic information about the business’s market, location, and competition

 Why you think this business would be profitable

 How your financial decisions will affect the business

After this introductory portion, you will create the financial plan. Requirements for your final

project are as follows:

1. Startup Cost Analysis

In this section, you will include a detailed list of how much it will cost to start the

business. This should include most, if not all, of the following: cost of property, buildings,

Final Project Managerial Accounting

© 2015. Any unauthorized reproduction or distribution of this material is prohibited without express written permission. Students are expected to maintain the integrity of the assignment by refraining from reproducing or posting the assignment or their completed work where it can be viewed by current or future students.

machinery, equipment, planning, legal fees, consulting fees, and one year of operational

costs.

2. Cost/Benefit Analysis

In this section, you will perform an analysis of the advantages and disadvantages of the

business. Determine if your business is a sound investment decision

(justification/feasibility) by conducting a SWOT analysis, and compare the total expected

cost (disadvantages) of each against the total expected benefits (advantages) to see

whether the benefits outweigh the costs and by how much.

3. Breakeven Analysis

In this section, you will perform a basic breakeven analysis. Estimate basic variable and

fixed costs that will accrue in operations, and then compare this to how much revenue

(units that need to be sold) is needed to cover these costs. This should include your

basic operational costs (e.g. salaries, rent, utilities, product costs, etc.). Be sure to

include calculations and a graph showing your breakeven analysis.

4. Cost-Volume-Profit (CVP) Analysis

In this section, you will perform a CVP analysis and investigate the outside factors that

may influence your breakeven point. Identify 2-4 qualitative factors that can vary

between your base case (the breakeven analysis) and changes to this base case. You

also need to weigh the pros/cons of each of the outside factors. These outside factors

can include changes of location, changes in competition, or changes in outside market

factors (e.g. stock market, oil prices, commodities, or anything that can affect revenue

for your business). Be sure to include calculations and graphs for CVP analysis.

5. Pro-Forma Financial Statements

In this section, you will create pro-forma financial statements in which you will estimate

the financial operations of your business. This will include a pro-forma income

statement, pro-forma statement of cash flows, and a pro-forma balance sheet. For each

of these, project out for three years (all three years can be listed on one statement).

Although these values are estimations, they can help predict how successful the

business will be.

6. Discussion

Based on the results of your analyses, discuss whether the business will be as profitable

as you first expected. Briefly explain why (or why not) and what can be done to improve

the possible outcome.

Final Project Managerial Accounting

© 2015. Any unauthorized reproduction or distribution of this material is prohibited without express written permission. Students are expected to maintain the integrity of the assignment by refraining from reproducing or posting the assignment or their completed work where it can be viewed by current or future students.

PROJECT SUBMISSION

1. A title page is not required for project submissions. Because evaluators do not see student

names when reviewing student work, it is important that students not include any personal

identifiers in their project submissions.

2. If your project requires a video, you should post the video to a free video hosting site

like www.youtube.com, www.photobucket.com, or another free web hosting site. The

following website maintains a list of video hosting sites: http://www.videohostings.com. In

the written materials that you submit as part of the assignment, you should include the title

of the video and a link for the evaluator to use to grade your submission. Please make sure

that the privacy settings on your video are set to allow third parties to view it.

3. When you are ready, click on the Upload Files button in the Project tab of your course to

submit your assignment. Your project should be graded within 7 days. Please contact your

instructor if this is not the case.

4. Your assignment will not be returned to you, so keep a copy for your files.