Business Finance - Management Week 7 Assignment- Account for Managment Decision Making

Account for Management Decision making

Week 7 Learning Resources

Break- Even Decision Making

It is essential that companies understand when they will start to be profitable. Finding the point at which revenue is equal to costs is called the break-even point. For example, a company that sells motorcycles needs to know how many must be sold each month to cover all costs. It is only after that number is sold that the company will start to make a profit.

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  Why it mattersLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-why-it-matters

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  3.1 explain contribution margin and calculate contribution margin per unit, contribution margin ratio, and total contribution marginLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-1-explain-contribution-margin-and-calculate-contribution-margin-per-unit-contribution-margin-ratio-and-total-contribution-margin

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  3.2 calculate a break-even point in units and dollarsLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars

· Gallo, A. (2014, July 2).  A quick guide to breakeven analysis .  Harvard Business Review Digital Articles , 2–5. http://hbr.org

· Likierman, A. (2020, January–February).  The elements of good judgment .  Harvard Business Review ,  98 (1), 102–111.

· Walden University, LLC. (2021).  Break-even accounting [Video]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024).  Break-even point    Download Break-even point [PDF]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024).  How to calculate break-even point    Download How to calculate break-even point [PDF]. Walden University Canvas. https://waldenu.instructure.com

Week 7 Assignment: Accounting Tools and Measures for Decision Making—Part 4

Prepared by: Replace this text with your name.

Date: Replace this text with the submission date.

Walden University

MBAX 6050: Accounting for Management Decision Making

Break-Even Point

Replace this text with introductory information. Add or remove headings as necessary.

[Heading]

Insert your calculations of the break-even point from Excel. Add or remove headings as necessary. For information on inserting data from Excel into Word, refer to the following: Microsoft. (n.d.). Insert a chart from an Excel spreadsheet into Word. https://support.microsoft.com/en-us/office/insert-a-chart-from-an-excel-spreadsheet-into-word-0b4d40a5-3544-4dcd-b28f-ba82a9b9f1e1

[Sub-Heading]

Replace or remove this text. Add or remove headings as necessary.

References

[Please delete this note before submitting your Assignment. For more information about formatting your reference list, please visit the following site: https://academicguides.waldenu.edu/writingcenter/apa/references .]

Include appropriately formatted references to support your Assignment. Refer to the Assignment guidelines for further information on the requirements.

Page 5 of 15

Account for Management Decision Making

Week 7 Assignment Instruction

Account Tools and Measures for Decision Making- Part 4

For this Assignment, you will continue in your role as consultant to the Better Chair Company. During the past 3 weeks, you have completed two reports for the company’s leadership on various accounting tools and measures that impact decision making. This week, the focus of your final report will be the use of break-even analysis.

In addition to the requirements that follow, be sure to incorporate references to appropriate academic sources, such as those found in this week’s Learning Resources or those in the Walden Library.

To prepare for this Assignment:

· Download Week 7 Part 1 Assignment Template.

· Download Week 7 Part 2 Assignment Template. 

· Your instructor will provide part of the data to complete the calculations for this week’s Assignment. To access that information, refer to  Doc Sharing .

Submit your completed business report and accompanying Excel file. Your report should be 2–3 pages in length (excluding title page and references) and should address the following:

Break-Even Point

The final area you have been asked to evaluate is related to the company’s feasibility to produce a new product, an ottoman. The management team wants to understand the quantity and sales needed for this product to be profitable. To determine this, you decide to conduct a break-even analysis to calculate the number of ottomans, and the total sales needed for the company to break even. In  Doc Sharing , your Instructor will provide you with a scenario for The Better Chair Company to use for this part of the Assignment.

To complete this part, address the following:

· Using the Week 7 Part 2 Assignment Template and the data provided by your Instructor in the  Doc Sharing  area, calculate the number of sales per month (i.e., the number of ottomans and total dollar amount) the company will need to make in order to break even.

· Note: In addition to submitting your work in Excel, include your calculations within your report by copying and pasting the information from Excel.

· Synthesize the results of your calculations to determine the feasibility of the company to make a profit based on the sales & marketing projections and recommend solutions to the management team that would help to ensure profitability for the ottoman project.

· Summarize how understanding and utilizing break-even analysis can impact managerial decision making.

Account for Management Decision making

Week 7 Learning Resources

Break- Even Decision Making

It is essential that companies understand when they will start to be profitable. Finding the point at which revenue is equal to costs is called the break-even point. For example, a company that sells motorcycles needs to know how many must be sold each month to cover all costs. It is only after that number is sold that the company will start to make a profit.

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  Why it mattersLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-why-it-matters

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  3.1 explain contribution margin and calculate contribution margin per unit, contribution margin ratio, and total contribution marginLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-1-explain-contribution-margin-and-calculate-contribution-margin-per-unit-contribution-margin-ratio-and-total-contribution-margin

· Franklin, M., Graybeal, P., & Cooper, D. (2019).  3.2 calculate a break-even point in units and dollarsLinks to an external site. . In  Principles of accounting, volume 2: Managerial accounting . OpenStax. https://openstax.org/books/principles-managerial-accounting/pages/3-2-calculate-a-break-even-point-in-units-and-dollars

· Gallo, A. (2014, July 2).  A quick guide to breakeven analysis .  Harvard Business Review Digital Articles , 2–5. http://hbr.org

· Likierman, A. (2020, January–February).  The elements of good judgment .  Harvard Business Review ,  98 (1), 102–111.

· Walden University, LLC. (2021).  Break-even accounting [Video]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024).  Break-even point    Download Break-even point [PDF]. Walden University Canvas. https://waldenu.instructure.com

· Walden University, LLC. (2024).  How to calculate break-even point    Download How to calculate break-even point [PDF]. Walden University Canvas. https://waldenu.instructure.com