Accounting 207 Milestone 1 homework

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ACC 207Final Project Milestone OneGuidelines and Rubric

Draft of Costs (Section I)

Overview: Classifying a company’s costs allows for an in-depth analysis of the impact that changes in output have on revenues, costs, and net income or net loss. A cost-volume-profit (CVP) analysis will be completed in order to determine the breakeven point. Relevant costs will be used to prepare a flexible budget. Additionally, an appropriate costing system should be selected and the choice should be substantiated with reasonable rationale. Finally, a memo should be prepared formanagementthatsummarizesthe results of the quantitative analysis and makesrecommendations for an optimal costing system to be ethically used by key decision makers.

For Milestone One, you will use the MDE Manufacturing Budget(Table I)to analyze costs, contribution margin, and breakeven point for the bird feeder divisionof the company. In Tab 1 of your Student Workbook, classify costs as either product or period costs. Briefly explain the difference between the types of costs. Then, analyze the actual costs and,using Tab 2of your Student Workbook,complete a cost-volume-profit analysis to determine how many bird feedersmust be sold at the current cost and sales price level to earn a $10,000profit andhow much the sales price would have to increase to earn a $10,000profit at the same cost and sales volume level. Submit the Student Workbookwith Tabs1and 2completedwith your cost calculations and a 1–2 page Word document that explains the implications ofyour findings and addresses all of the critical elementsin Section I.

Specifically,the following critical elementsmust be addressed:

I. Costs

a) Classify all product and period costs appropriately.

b) Compute a cost-volume-profit analysis. What are the implications of this analysis?

c) Compute contribution margin per unit and contribution margin ratio.

d) Determine the breakeven quantity and the breakeven revenue accurately.

e) Determine if the company is breaking even. What are cost-volume-profit analysis implications on short-term planning?


Tutor Answer

DRSHINAQWA
School: UT Austin

hey buddy find the attached😗

Cost Type
Sales

Details/particulars

Details/particulars

Amount($)

Direct materials:

Plastic
Cedar

37,741
248,160

Labor wages for factory

332,760

Variable costs

Direct labor:
Expenses (direct):
Maintenance and repair –factory
Indirect materials

4,500
2,585

Distribution and selling:
Commission on sales ($2/unit)
Shipping cost

94,000
105,750

Variable cost (total)
Contribution margin
Fixed cost
Admin. Exp:
Rent
insurance
salaries
office depreciation

12,000
5,000
48,000
1,000

utilities
Depreciation

12,000
78,000

Advertising
Total fixed costs

20,000

Factory overheads:

Fixed selling OH:

Net profit/loss

Amount($)
991,700

825,496
166,204

176,000
-9,796

B) CVP analysis
CVP is used to analyze the impact of costs and production volume variations on the Company's profits.
From the cost classification table;
Amount($...

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Review

Anonymous
Excellent job

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