April 7, 2020

You have just finished your third year of university and are looking for a summer job. You are registered

in an accounting program, and hope to one day earn a professional accounting designation. As you are

job searching, you come across a unique posting:

WANTED: ACCOUNTING SUMMER STUDENT

Details: Want to work at a cool place and be an accountant at the same time? Have JUST the place for

you! We are a group of students starting our own business. We dont have much money, but there

should be enough to pay you enough to party an eat for four months. One day, we all could be rich. As

we are a start-up, we cant give you too much of the scoop. Email us your resume and we might e-mail

you for an interview. Email: info@UBCgraphics.com

April 20, 2020

After meeting with Brinda and Angel, the two co-founders of UBC Graphics (UBCG), you accept the

position willingly. You are excited to help them get their new business off the ground and cant wait to

see the opportunities it will bring.

May 1, 2020

On your first day of work, Angel asks you to review their business proposal, which should give you an

understanding of the business. From your reading, you understand the following:

- Funding: UBCG has just been awarded a grant rom the government to use as start-up funds.

Both Brinda and Angel have received money from family who love the idea and wanted to make

an investment. The total amount of start-up funds is $50,000. Brinda and Angel hope to earn

15% return on their investment.

- The idea: UBCG is an online graphic design business. If a person needs a design, they can post

their detailed request online and the price they are willing to pay for the design. UBCG has three

graphic designers. If there is a designer willing to accept the job, the job will proceed as long as

the price suggested by the customer is reasonable. The customer will receive a soft copy of the

design, as well as a professional printed design. Each design will be printed on high-quality

paper. The number of pages used will depend on the size of the design.

- Your job: As the business gets off the ground, there will be many jobs for you, including

budgeting, forecasting, purchasing, invoicing and financial reporting. However, right now, Brinda

and Angel need to understand the best way to determine whether or not they should accept the

design.

After a discussion with them, you understand that in order to get a company going, they would accept

virtually any job that doesnt result in a loss. The have provided you with a list of expenses (Exhibit 1)

and asked you to develop a process that should be considered whenever a job design is posted to help

determine whether they should accept the job. Brinda and Angel expect that they will have 5,000

designs posted to the website in the first year and intent to produce 3,000. On average, each design will

be printed on two pages of paper.

Required:

Provide Brinda and Angel with the details of your proposed process for them to consider whether to

accept a design job.

Exhibit 1:

Cost Item

Estimated

Totals per

Year

Selected Notes

Printer ink $3,000

Specialty paper 5,000 For 2,500 sheets

Graphic designers wages 120,000 Graphic designers are paid $20/hour

Co-founders wages 20,000 $10,000 each

Accountants wages 5,000

Website 9,000

Shipping 1,000

Total 163,000