Trident ACC310 full course

COST MANAGEMENT; ACCOUNTANT'S ROLE, TERMS, AND PURPOSE

Case Assignment

In this initial case for ACC310, the objective is for the student to become familiar with the management accountant’s role, and the terms and purpose in cost accounting.

The following items will be assessed in particular:

1. The student will discuss the management accountant’s role, and the definition of key terms in cost accounting.

2. Access the Institute of Certified Management Accountants website http://www.imanet.org/ima_home.aspx and discuss the significance of the role of the Management Accountant in the organization. DO NOT simply repeat the description given in the website. Evaluate what is being said about the Management Accountant and then reflect on your own experience by identifying someone in an organization that fulfills the Management Accountant role, in title or practice, and discuss their function within the organization.

3. Access the financial dictionary - Glossary of Accounting Terms, Retrieved from: http://www.ventureline.com/accounting-glossary/ other financial resources; define and discuss the following terms: or

a. Cost object

b. Direct costs

c. Indirect costs

d. Variable costs

e. Fixed costs

f. Cost driver

g. Relevant range

h. Direct materials

i. Raw materials

j. Work-in-process

k. Finished goods

l. Inventoriable costs

m. Period costs

n. Manufacturing overhead

o. Prime costs

p. Conversion costs

q. Idle time

r. Supply chain

s. Value chain

Assignment Expectations

The submission should be 3 to 6 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

When your paper is done, send it in.

COST MANAGEMENT; ACCOUNTANT'S ROLE, TERMS, AND PURPOSE

One of the requirements of all Trident courses is the session long project where students have an opportunity to apply ideas and concepts for the current module to a real world situation.

The goal of the SLP (Session Long Project) in this course is for students to gain a better understanding of the cost accounting tools used to analyze the financial information of organizations. In addition, ethical issues will be posed for the students’ consideration. The primary vehicles to gain that understanding will be articles, problems, and case examples. The preliminary phase of the project is to discuss ethical issues facing management accountants. The student should access the following link http://www.articledashboard.com/Article/Accounting-Enron-Scandal/717741 and read the article concerning Enron’s scandal. Using the current information from background readings or other sources.

The following item will be assessed in particular:

1. Review of the Institute of Management Accountants ethical principles and the relevance of the four standards to the Enron scandal. Discussion paper Enron Scandal.

SLP Assignment Expectations

The submission should be 2 to 4 pages. Discuss the Enron case and include references in APA format.

When your paper is done, send it in.

COST VALUATION SYSTEMS: INVENTORY AND COSTS OF GOODS SOLD/COST OF SALES (SERVICES)

Case Assignment

The objective is for the student to become familiar with the cost estimation systems used to measure inventory and cost of goods sold (cost of sales). The Inventory and Cost of Sales are classified in the asset section of the Balance Sheet and the Statement of Income (Earnings), respectively.

The following items will be assessed in particular:

1. The Beautifully Fabulous Beauty Salon (BFBS) purchases its inventory from a manufacturer in California. BFBS has a high selling product called “Beauty Gloss”. During the year BFBS disclosed the following information concerning the inventory:

January 1, 2015	Beginning Inventory	245 units	$27.00 per unit
March 31, 2015	Purchase of Inventory	360 units	$29.00 per unit
June 30, 2015	Purchase of Inventory	1000 units	$32.00 per unit
September 30, 2015	Sales of Inventory	1447 units

2. Analyze the above data using the LIFO an FIFO methods. Open the following excel spreadsheet (FIFO VS. LIFO ANALYSIS) and fill in the table of BFBS’s Inventory and Cost of Goods Sold (COGS) analysis.

a. In addition to the above data, suppose the number of units available at the beginning of January was 545 and the cost of the March purchase was $31.00 per unit; what would COGS be for September? What would the ending Inventory be for September?

3. The student may use as a review source:

a. Periasamy, P. (2010). Textbook of Financial Cost and Management Accounting, Global Media 2010 (read chaps 14 & 15).

4. Discuss the measurements used to recognize the amounts recorded in the Inventory and Cost of Goods Sold and the impact of Net Income.

5. The student may cut and paste the completed excel spreadsheet into the discussion paper.

Assignment Expectations

The submission should be 2 to 3 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

When your paper is done, send it in.

COST VALUATION SYSTEMS: INVENTORY AND COSTS OF GOODS SOLD/COST OF SALES (SERVICES)

The objective is for the student to become familiar with the various types of organizational structures and the cost accounting methods used to capture the financial data.

The following items will be assessed in particular:

1. Identify and discuss the differences between cost accounting for Manufacturing organizations, Merchandising (Retail) organizations, and Service organizations in respect to purchasing and processing cost to create its product or provide services.

2. Evaluate the Balance Sheet and (Statement of Income) Statement of Earnings of a Manufacturing organization, Merchandising (Retail) organization, and Service organization; based on the Notes to the financial statements, discuss the measurements used and components of the Inventory and Cost of Sales or Costs of Goods Sold of each of the organizations listed below:

a. The Hershey Corporation: https://www.thehersheycompany.com/investors.aspx

b. Google, Inc.: http://investor.google.com/order.html

c. Wal-Mart Stores, Inc.: http://stock.walmart.com/

What estimation method was used to measure Inventory? How does that method affect the Cost of Sales? How does that method affect Net Income (Earnings)?

Assignment Expectations

The submission should be 2 to 3 pages and need to include answers to all the questions listed above. Discuss the results and include references in APA format.

When your paper is done, send it in.

UNIT PRODUCT COST ANALYSIS

Case Assignment

Beautifully Fabulous Beauty Salon manufactures two products, Beauty Gloss and Cocooning Spray. Beauty Gloss is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Cocooning Spray. Beauty Gloss is the more complex of the two products, requiring 2.0 hours of direct labor time per unit to manufacture compared to 1.0 hour of direct labor time for Cocooning Spray. Beauty Gloss is produced on an automated production line.

Overhead currently is applied to the products on the basis of direct labor hours. The company estimated it would incur $510,000 in manufacturing overhead costs and produce 10,000 units of Beauty Gloss and 40,000 units of Cocooning Spray during the current year.

Unit costs for materials and labor are:

	Cocooning Spray	Beauty Gloss
Direct material	$11	$24
Direct labor	6	12

The following items will be assessed in particular:

· Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current year.

· The company is considering the use of activity-based costing as an alternative to its traditional costing method for manufacturing overhead. Data relating to the company's activity cost pools for the current year are given below:

	Estimated	Expected Activity
	Overhead	Cocooning	Beauty
Activity Cost Pool	Costs	Spray	Gloss	Total
Machine setups required	$204,000	800	1,600	2,400
Purchase orders issued	43,500	500	100	600
Machine-hours required	105,000	7,000	10,500	17,500
Maintenance requests issued	157,000	650	850	1,500
	$510,000

3. Using the data above, determine the unit product cost of each product for the current year.

4. What items of overhead cost make Beauty Gloss so costly to produce according to the activity-based costing system? What influence might the activity-based costing data have on management's opinions regarding the profitability of Beauty Gloss?

Assignment Expectations

The submission should be 2 to 3 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

When your paper is done, send it in.

UNIT PRODUCT COST ANALYSIS

The objective is for the student to become familiar with the various types of transactions that will impact the inventoriable and manufacturing overhead costs of the organization.

In Hershey’s 2007 annual report, http://library.corporate-ir.net/library/11/115/115590/items/283950/10K_Hershey[1].pdf, the management made this claim, “A decrease in inventories in 2007 reflecting lower raw material and goods in process inventories resulting from reduced manufacturing requirements and the global supply chain transformation program, in addition to lower finished goods inventories as a result of working capital improvement initiatives, partially offset by an inventory build in anticipation of the relocation of certain manufacturing processes under the global supply chain transformation program”

The following items will be assessed in particular:

1. Using Hershey’s inventory cost disclosed in the 2007 annual report, analyze and discuss the effect of the below economic events (a through j) on the financial statements: assume Hershey is a manufacturing firm that uses job-order costing. At the end of the 2007 year, the company's inventory balances were as follows:

Raw Materials	$199,460,000
Work (goods) in process	$ 80,282,000
Finished goods	$407,058,000

2. The company applies overhead to jobs using a predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that it would work 27,000 machine-hours and incur $189,000 in manufacturing overhead cost. The following transactions were recorded for the 2008 year:

a. Raw materials were purchased, $412,000.

b. Raw materials were requisitioned for use in production, $418,000 ($390,000 direct and $28,000 indirect).

c. The following employee costs were incurred: direct labor, $157,000; indirect labor, $70,000; and administrative salaries, $207,000

d. Selling costs, $99,000.

e. Factory utility costs, $13,000.

f. Depreciation for the year was $103,000 of which $95,000 is related to factory operations and $8,000 is related to selling and administrative activities

g. Manufacturing overhead was applied to jobs. The actual level of activity for the year was 26,000 machine-hours.

h. The cost of goods manufactured for the year was $747,000.

i. Sales for the year totaled $1,097,000 and the costs on the job cost sheets of the goods that were sold totaled $732,000.

j. The balance in the Manufacturing Overhead account was closed out to Cost of Goods Sold.

You can assume that all transactions with employees, customers, and suppliers were conducted in cash.

SLP Assignment Expectations

The submission should be 2 to 3 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.

When your paper is done, send it in.

ANALYSIS OF PROFITABILITY AND CAPITAL BUDGETING

Case Assignment

This case has two separate parts.

Part I

Beautifully Fabulous Beauty Salon (BFBS) manufacturer has two stores. The most recent monthly Income Statement for BFBS.

		Total	Store I	Store II
	Sales	$2,000,000	$1,200,000	$800,000
	Less variable expenses	1,200,000	840,000	360,000
	Contribution margin	800,000	360,000	440,000
	Less traceable fixed expenses	400,000	220,000	180,000
	Segment margin	400,000	140,000	260,000
	Less common fixed expenses	300,000	180,000	120,000
	Net operating income	$ 100,000	$( 40,000)	$140,000

BFBS is considering closing Store I. If Store I is closed, one-fourth of its traceable fixed expenses would continue unchanged. Also, the closing of Store I would result in a 20% decrease in sales in Store II. BFBS allocates common fixed expenses on the basis of sales dollars.

The following items will be assessed in particular:

1. Prepare a new monthly income statement for the company if Store I is closed.

2. Evaluate and discuss the impact of the decision of closing Store I.

3. Include in your discussion the relevance of traceable and common fixed expenses.

Part II

Beautifully Fabulous Beauty Salon manufactures two products, Beauty Gloss and Cocooning Spray. Beauty Gloss is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Cocooning Spray. Beauty Gloss is produced on an automated production line. Due to the forecast of economic growth, the BFBS is considering purchasing a new machine costing $40,000. The machine will have 10 years of useful life and a salvage value of $6,000. Using the straight-line depreciation method, the original machine cost will be depreciated over 10 years not considering the salvage value in the calculation of the depreciation. The new machine will generate $15,000 in annual net cash flows throughout its useful life (ordinary annuity). To maintain the machine it will require additional working capital of $3,000, which would be released at the end of the useful life. The company's tax rate is 40% and its discount rate is 10%. Present value tables can be accessed at the following link: http://highered.mcgraw-hill.com/sites/0072994029/student_view0/present_and_future_value_tables.html

The following items will be assessed in particular:

1. Prepare a NPV table based on the information given and using the table BFBS Cost Analysis format. The student may use Periasamy, P. (2010). Textbook of Financial Cost and Management Accounting, Global Media 2010 (read chaps 27-29) as a review source.

2. Analyze the data in the NPV table.

3. Discuss the decision that should be made concerning the investment in the new machine.

As an example, review the spreadsheet below:

		Cash	Tax Effect	After-Tax	11%	PV of
Description	Year(s)	Flow	30%	Cash flows	Factor	Cash Flow
New machine cost	Now	($500,000)		-500,000	1.0000	($500,000)
Controls and software	Now	-80,000		-80,000	1.0000	-80,000
Salvage of old machine	Now	12,000	0.70	8,400	1.0000	8,400
New annual cost savings	1 to 12	78,500	0.70	54,950	6.4924	356,755
Depreciation tax shield	1 to 12	-45,000	0.30	-13,500	6.4924	-87647.4
Salvage value of machine	12	20,000	0.70	14,000	0.2858	4,002
Net present value						($298,490.4)

When your discussion paper and spreadsheet analysis are done, upload them.

Assignment Expectations

It is important to answer the questions above. The discussion should be four to six pages and written in a clear and concise manner. Support your discussion with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved.

When your paper is done, send it in.

ANALYSIS OF PROFITABILITY AND CAPITAL BUDGETING

This SLP has two separate parts.

Part I

The objective of Part I is for the student to become familiar with the cost-volume-profit analysis as a tool used for decision making.

Review the “Consolidated Statements of Income” In Hershey’s 2007 annual report (ignore all figures below net income, such as, per share information). Using the spreadsheet below fill in requirements 1 through 4 in the spreadsheet using the following data:

1. Units Sold

a. 2005 – 100,000,000 units

b. 2006 – 100,400,000 units

c. 2007 – 200,000,000 units

2. Variable Manufacturing Costs Percentage – 45% of Cost of Sales

3. Variable Marketing Costs Percentage – 15% of Cost of Sales

4. Fixed Costs Percentage – 40% of Cost of Sales

LENGTH: spreadsheet

The following items will be assessed in particular:

I. Instructions

a. Double Click on “Requirement 1”on the spreadsheet

b. Scroll down through the spreadsheet; you should see four (4) requirements

c. Fill in the spreadsheet with your analysis answers

d. Cut and Paste or save your completed spreadsheet into an excel file

e. Upload the excel file.

Part II

The objective of Part II is for the student to become familiar with the budget concepts as a tool used for decision making. There are primarily two types of Budgets; strategic and operational. Strategic budgets are more long term planning; operational budgets are short term. Either budget follows a process of compilation and revision. Revision is caused by feedback from those who are responsible for implementing the budget. The budget compilation process begins with developing a Master Budget. The Master Budget includes the operational and financial plans of the organization. Budgets are used to coordinate, communicate, and motivate managers and employees. Since this course is focused on managerial analysis, we will couch our discussion in the operational budget process.

The following items will be assessed in particular:

1. Review the analysis of the “Consolidated Statements of Income” in Hershey’s 2007 annual report completed in the Part I. In a 2 to 3 page written report, using the data requirements in 2 and 3 of Part I, create a hypothetical operational budget for 2008.

2. Evaluate and discuss the assumptions you made to compile the hypothetical operation budget. The changes made should take into consideration the “What if?” in the requirement 4 section.

SLP Assignment Expectations

It is important to answer the questions above. The discussion should be four to six pages and written in a clear and concise manner. Support your discussion with references in APA format. You are encouraged to use Excel or other compatible spreadsheet when computations are involved.

When your paper is done, send it in.