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ACC 202 Final Project Part I & Part II Guidelines and Rubric Complete Solution

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ACC 202 Final Project Part I & Part II Guidelines and Rubric Complete Solution

 

ACC 202 Final Project Part I Guidelines and Rubric

 

 

Overview

To be successful, all businesses must perform periodic assessments to determine the efficiency of operations. Whether you are an owner, a manager, or a front-

line employee, at some time you will be affected by a budget.

 

Preparing a budget and analyzing the results of operations in relation to the budget will help you understand how to use financial information to evaluate the effectiveness of an organization’s operations. The process will also help you determine the reasons operations do not always go as planned and make decisions on changes that might need to be made to make the organization, or just your own department, more efficient.

 

In the Budget Workbook, you will use course-provided information to 1) prepare an operating budget, 2) compare actual operational results to the budgets to determine financial strengths and weaknesses, and 3) make decisions about operational changes that need to be made.

 

To do this, you will prepare an operating budget at the beginning for your company. Your budget will include different products with different costing methods, labor, overhead, and sales projections based on a desired profit margin. You will compare your budget to actual results to determine and analyze variances. This variance analysis will allow you to make decisions about changes that should be made to make your organization more efficient.

 

This assessment addresses the following course outcomes:

 

·

ACC-202-01:

Communicate budget planning to internal stakeholders for strategic planning

·

ACC-202-02:

Apply costing methods to production for supporting budget planning and decision making

 

Prompt

You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make pricing decisions, and analyze the

results of operations to determine if changes need to be made to make the company more efficient.

 

You will be preparing a budget for the quarter July through September 2014. You are provided the following information. The budgeted balance sheet at June

30, 2014, is:

 

 

 

Peyton Approved

 

Budgeted Balance Sheet

 

30-Jun-15

 

ASSETS

 

Cash

 

 

 

 

$42,000

 

Accounts receivable

 

 

259,900

 

Raw materials inventory

 

 

35,650

 

Finished goods inventory

 

 

241,080

 

Total current assets

 

Equipment

 

 

 

$720,000

 

578,630

 

Less accumulated depreciation

 

240,000

 

480,000

 

Total assets

 

 

$1,058,630

LIABILITIES AND EQUITY Accounts payable

 

 

 

 

 

$63,400

 

Short-term notes payable

 

 

24,000

 

Taxes payable

 

 

10,000

 

Total current liabilities

 

 

97,400

 

 

Long-term note payable

 

300,000

Total Liabilities

 

397,400

 

Common stock

 

$600,000

 

 

Retained earnings

 

    61,230

 

 

Total stockholders’ equity

 

 

661,230

 

Total liabilities and equity

 

 

$1,058,630

 

 

 

1.   Sales were 20,000 units in June 2014. Forecasted sales in units are as follows: July, 19,000; August, 21,000; September, 20,000; October, 24,000. The product’s selling price is $17.50 per unit and its total product cost is $14.35 per unit.

2.   The June 30 finished goods inventory is 14,700 units.

3.   Going forward, company policy calls for a given month’s ending finished goods inventory to equal 70% of the next month’s expected unit sales.

4.   The June 30 raw materials inventory is 4,375 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw materials cost $8 per unit.

Each finished unit requires 0.50 units of raw materials. Company policy calls for a given month’s ending raw materials inventory to equal 20% of the next month’s materials requirements.

5.   Each finished unit requires 0.50 hours of direct labor at a rate of $16 per hour.

6.   Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $1.35 per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead.

7.   Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable.

8.   Sales representatives’ commissions are 10% of sales and are paid in the month of the sales. The sales manager’s monthly salary is $3,750 per month.

9.   The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none are collected in the month of the sale).

10. All raw materials purchases are on credit, and no payables arise from any other transactions. One month’s raw materials purchases are fully paid in the

next month.

11. Dividends of $20,000 are to be declared and paid in August.

12. Income taxes payable at June 30 will be paid in July. Income tax expense will be assessed at 35% in the quarter and paid in October.

13. Equipment purchases of $100,000 are budgeted for the last day of September.

 

 

The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.

 

Specifically, the following critical elements must be addressed:

 

1.   Operating Budget

Create an operating budget

a)   Prepare a sales budget. Ensure accuracy of data. [ACC-202-02]

b)   Annotate your sales budget line items. Why have you made the choices you have made? What information informed your decision for each item? [ACC-202-01]

c)    Prepare a production budget. Ensure the accuracy of your data. [ACC-202-02]

d)   Annotate your production budget line items. Why have you made the choices you have made? What information informed your decision for each item? [ACC-202-01]

e)   Prepare a manufacturing budget. Ensure the accuracy of your data. [ACC-202-02]

f)    Annotate your manufacturing budget line items. Why have you made the choices you have made? What information informed your decision for

each item? [ACC-202-01]

g)   Prepare a selling expense budget. Ensure the accuracy of your data. [ACC-202-02]

h)   Annotate your selling expense budget line items. Why have you made the choices you have made? What information informed your decision for each item? [ACC-202-01]

i)    Prepare a general and administrative expense budget using appropriate costing methods. [ACC-202-02]

j)    Annotate your line items. Why have you made the choices you have made? What information informed your decision for each item? [ACC-202-

01]

 

2.   Budget Variance Analysis

The actual quantity of material used was 31,000 with an actual cost of $7.75 per unit. The actual labor hours were 33,000 with an actual rate per hour of

$15.

a)   Develop a variance analysis including a budget variance performance report and appropriate variances for materials, labor, and overhead. [ACC-

202-01]

b)   Annotate each variance. What does the variance tell you? [ACC-202-01]

c)    What needs to be investigated to determine the reason for the variance? Why? [ACC-202-01]

 

Final Project Part I Rubric

Guidelines for Submission: Complete the Final Project Part I Student Worksheet and the Budget Variance Student Worksheet. Your annotation and analysis

should be 5–7 pages, double-spaced, with one-inch margins, 12-point Times New Roman font, and APA format.

 

 

Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review  these instructions.

 

Critical Elements

Exemplary

Proficient

Needs Improvement

Not Evident

Value

Operating Budget:

Sales Budget

[ACC-202-02]

 

Prepares sales budget, and data

is accurate

(100%)

Prepares sales budget, but it

contains some errors

(55%)

Does not prepare a sales budget

 

(0%)

7.5

 

Operating Budget:

Annotate Sales

Budget

[ACC-202-01]

Meets “Proficient” criteria, and

justification is well supported with specific evidence

(100%)

Annotates line items, and

justifies decisions that were made and what informed them (85%)

Annotates line items, but does

not identify decisions that were made and what informed them (55%)

Does not annotate line items

 

 

(0%)

7.5

Operating Budget:

Production Budget

[ACC-202-02]

 

Prepares production budget, and

data is accurate

(100%)

Prepares production budget, but

it contains some errors

(55%)

Does not prepare a production

budget

(0%)

7.5

 

Operating Budget:

Annotate Production

Budget

[ACC-202-01]

Meets “Proficient” criteria, and

justification is well supported

with specific evidence

(100%)

Annotates line items and justifies

decisions that were made and

what informed them

(85%)

Annotates line items, but does

not identify decisions that were

made and what informed them

(55%)

Does annotate line items

 

 

(0%)

7.5

Operating Budget:

Manufacturing

Budget

[ACC-202-02]

 

Prepares manufacturing budget,

and data is accurate

(100%)

Prepares manufacturing budget,

but it contains some errors

(55%)

Does not prepare a

manufacturing budget

(0%)

7.5

 

Operating Budget:

Annotate Manufacturing Budget

[ACC-202-01]

Meets “Proficient” criteria, and

justification is well supported with specific evidence

(100%)

Annotates line items and justifies

decisions that were made and what informed them

(85%)

Annotates line items, but does

not identify decisions that were made and what informed them (55%)

Does not annotate line items

 

 

(0%)

7.5

Operating Budget: Selling Expense Budget

[ACC-202-02]

 

Prepares selling expense budget, and data is accurate

(100%)

Prepares selling expense budget, but it contains some errors

(55%)

Does not prepare a selling expense budget

(0%)

7.5

 

Operating Budget: Annotate Selling

Expense Budget

[ACC-202-01]

Meets “Proficient” criteria, and justification is well supported

with specific evidence

(100%)

Annotates line items and justifies decisions that were made and

what informed them

(85%)

Annotates line items, but does not identify decisions that were

made and what informed them

(55%)

Does not annotate line items

 

 

(0%)

7.5

Operating Budget:

General and

Administrative Expense Budget [ACC-202-02]

 

Prepares general and

administrative expense budget

and utilizes appropriate costing methods

(100%)

Prepares general and

administrative expense budget,

but does not utilize appropriate costing methods

(55%)

Does not prepare general and

administrative expense budget

 

 

(0%)

7.5

 

 

Operating Budget:

Annotate Administrative Expense Budget [ACC-202-01]

Meets “Proficient” criteria, and

justification is well supported with specific evidence

(100%)

Annotates line items and justifies

decisions that were made and what informed them

(85%)

Annotates line items, but does

not identify decisions that were made and what informed them (55%)

Does not annotate line items

 

 

(0%)

7.5

Budget Variance

Analysis: Variance

Analysis

[ACC-202-01]

 

Develops a variance analysis that

includes a budget variance performance report and appropriate variances for materials, labor, and overhead (100%)

Develops a variance analysis that

includes a budget variance report, but variances for materials, labor, and overhead are not appropriate

(55%)

Does not develop a variance

analysis

 

 

 

 

(0%)

7.5

 

Budget Variance

Analysis: Annotate

[ACC-202-01]

Meets “Proficient” criteria and

demonstrates awareness of the role of variances

(100%)

Annotates each variance and

determines what variances inform

(85%)

Annotates each variance, but

does not determine what variances inform

(55%)

Does not annotate each variance

 

 

(0%)

7.5

Budget Variance: Investigation [ACC-202-01]

Meets “Proficient” criteria, and justification is well supported with examples

 

(100%)

Identifies what needs to be investigated to determine the reason for the variance and justifies response

(85%)

Identifies what needs to be investigated to determine the reason for the variance, but response lacks justification (55%)

Does not identify what needs to be investigated to determine reason for variance

 

(0%)

7.5

Articulation of

Response

Submission is free of errors

related to citations, grammar, spelling, syntax, and organization and is presented in a

professional and easy-to-read

format

(100%)

Submission has no major errors

related to citations, grammar, spelling, syntax, or organization

 

 

 

 

(85%)

Submission has major errors

related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas

(55%)

Submission has critical errors

related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas

 

(0%)

2.5

Earned Total

100%

 

ACC 202 Final Project Part II Guidelines and Rubric

 

Overview

To be successful, all businesses must perform periodic assessments to determine the efficiency of operations. Whether you are an owner, a manager, or a front-

line employee, at some time you will be affected by a budget.

 

Preparing a budget and analyzing the results of operations in relation to the budget will help you understand how to use financial information to evaluate the effectiveness of an organization’s operations. The process will also help you determine the reasons operations do not always go as planned and make decisions on changes that might need to be made to make the organization, or just your own department, more efficient.

 

In the budget report, you will use course-provided information to communicate the results of operations to internal parties. This assessment addresses the following course outcomes:

·    Communicate budget planning to internal stakeholders for strategic planning

·    Apply costing methods to production for supporting budget planning and decision making

·    Analyze financial information in identifying opportunities for operational efficiencies

·    Apply ethics within the accounting decision-making process for supporting responsible business activities

 

Prompt

You are a manager for a pet supplies manufacturer. This responsibility requires you to create budgets, make pricing decisions, and analyze the results of

operations to determine if changes need to be made to make the company more efficient.

 

Using the workbooks you created for Final Project Part I, you will make decisions about possible changes that should be made to make the company more efficient. You will look at the possibility of making some components of one product instead of buying them, and you will determine how to evaluate the company as a whole and managers in particular. You will create a report detailing your findings.

 

Specifically, the following critical elements must be addressed:

 

Prepare a Report

a)   Discuss the initial budget process, the variances, and potential reasons for the variances.

b)   Determine changes you think the company should make based on the variance analysis. What will the changes accomplish?

c)    What are the ethical considerations of the changes you have selected? Why are you recommending these particular changes?

d)   Decide whether you continue buying a particular component of one of your products or making the product in-house. Develop a recommendation on the “make” or “buy” decision for the given component. What factors did you consider?

 

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