ACC561 University of Phoenix Cost Volume Profit Analysis Memo

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ACC561

University of Phoenix

Description

Purpose of Assignment **NO PLAGIARISM**

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.

Assignment Steps

Resources: Generally Accepted Accounting Principles (GAAP), U.S. Securities and Exchange Commission (SEC)

Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products.

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.

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.

Show your work in Microsoft® Word or Excel®.

Complete calculations/computations using Microsoft® Word or Excel®.

Format your assignment consistent with APA guidelines.

Unformatted Attachment Preview

Cost-Volume-Profit Analysis Grading Guide ACC/561 Version 7 Accounting Copyright Copyright © 2017 by University of Phoenix. All rights reserved. University of Phoenix® is a registered trademark of Apollo Group, Inc. in the United States and/or other countries. Microsoft®, Windows®, and Windows NT® are registered trademarks of Microsoft Corporation in the United States and/or other countries. All other company and product names are trademarks or registered trademarks of their respective companies. Use of these marks is not intended to imply endorsement, sponsorship, or affiliation. Edited in accordance with University of Phoenix® editorial standards and practices. Cost-Volume-Profit Analysis Grading Guide ACC/561 Version 7 Individual Assignment: Cost-Volume-Profit Analysis 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. Resources Required Generally Accepted Accounting Principles (GAAP) U.S. Securities and Exchange Commission (SEC) Tutorial help on Excel® and Word functions can be found on the Microsoft® Office website. There are also additional tutorials via the web offering support for Office products. Grading Guide Content Met Partially Met Not Met Total Available Total Earned 4 #/4 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. Comments: 2 Cost-Volume-Profit Analysis Grading Guide ACC/561 Version 7 Writing Guidelines Met Partially Met Not Met Total Available Total Earned 2 #/2 6 #/6 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. Assignment Total Additional comments: # Comments: 3
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Explanation & Answer

Attached.

Cost Volume Profit Analysis Memo
Subject: Bargain Shoe Store Promotional Campaign Proposal
I.

Proposal analysis

II.

Decision Made Based on Cost Volume Profit Analysis

III.

Calculation
a. Appendix 1
b. Appendix 2


Running head: INFORMAL MEMO

1

Cost Volume Profit Analysis Memo
Student’s Name
Institutional Affiliation

INFORMAL MEMO

2
Informal Memo

To: Management
CC: Mary Willis; Advertising Manager
From: Business Analyst
Date: 20/09/2017
Subject: Bargain Shoe Store Promotional Campaign Proposal
This memo is written in respect to Mary Willis promotional campaign proposal that has included
a number of changes in the store. Firstly, the enterprise promotional campaign by the advertising
manager suggests for an increment of the display space. Besides, the promotional insight
proposes for an installation of a new lightening system intended to light up the display area in the
entire store. According to Mary, the new insight would increase the fixed cost with an amount of
24,000 dollars from the current fixed amount of 270,000 dollars. Besides, the proposal suggested
a 5 percent decrease in the unit pri...

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