hands on assignment

BUS 108 Winter 2016 Dr. Asish Satpathy

Hands on Assignment #1

The purpose of this group project is to help you integrate the managerial accounting concepts we cover in class and apply them to a real-world business setting. This project contains three phases. In the first phase (HOA#1), you will analyze the costs and come up with a cost formula for your business. In the second (HOA#2] and the third phases [HAO#3], you will make sales forecast, conduct cost-volume-profit analyses, prepare budgeted financial statements, and come up with strategies to improve the profitability of your business. After you complete all phases of this project, you will have good understanding of how managerial accounting tools can help managers run a business.

Group Policy:

This project is to be done in groups of four students. No individual work will be accepted. Collaboration Policy: You CANNOT discuss any portion of this project with anyone outside of your group other than the instructor/TA for this course. Any exchange of information with anyone other than the instructor for this class, whether orally, in writing, or electronically, will be considered a violation of the academic dishonesty policy of this class.

Project Description:

Your group will assume the role of a consulting company. Select a real company (small business) that certainly has elements of product manufacturing, operations and usage of technology for daily operations and overall management for the business. Spend some time with the owner/manager of the company to understand their cost structure. During your interview, get an idea about the number of products they are projecting to sell per month for the year 2016 to estimate the net profit.

Example: A small boutique at the Riverside Mall that buys plain T-shirts and imprint custom pictures from its customers or images exclusively designed by several famous artist. It sells those custom t-shirts directly to its customers upon receipt of the orders via company’s website.

Report: [total 33 points]

Deliverable: One excel file with all the calculations and one word file with report [maximum three pages] per group.

1. Describe briefly about the company you selected for your project and explain what product they manufacture for their customer. It is important that you only focus on one product line if the company is making many products. [5 points]

Detailed list and classification of costs: Please show and explain your computations in an understandable excel format. No points will be given if no explanations are provided.

2. What and how much of their costs are variable costs? List the manufacturing and non-manufacturing variable cost items and present each of them in cost per product basis. [5 points]

3. What and how much of their costs are fixed costs? List the manufacturing and non- manufacturing fixed cost items and present each of them in cost per month basis [5 points]

BUS 108 Winter 2016 Dr. Asish Satpathy

4. Show a cost breakdown with “number of products” and “total cost” as two columns for each month of the year 2016. The “number of products” could be an estimated forecast number based on the feedback you receive from the manager/owner during your interview. [5 points]

5. Write out their yearly cost formula in Y = mX + b format using a regression analysis. Explain the results you get from your analysis. [5 points]

6. Based on the number of products they sell at a certain price per year, estimate the company’s projected net annual profit for the year 2016 for the product line of your study. [5 points]

7. Conclude your report with a brief explanation on your experience in the phase one of the project. [3 points]