. Describe how managerial accounting supports management information systems . Utilize managerial accounting techniques and models to support an organization's strategic plan . Explain how managerial accounting is used to make decisions about short-term business opportunities, capital investments, and evaluating operational performance Scenario Your business has been open for a month, and you have prepared an income statement and completed a variance analysis on the data. Now you will meet with investors and a few other internal stakeholders to share your company's progress over the past month and how it has performed with respect to your cost and budget projections. The investors would like to see the thought process behind your financial strategy and how your company has performed in its first month. They have therefore asked you to present a report that includes the costing and income data from your Project Workbook. Directions Submit a detailed report to your potential investors and other stakeholders to explain and defend your costing strategies and to share your business's performance to date. Your report can be in the form of a PowerPoint presentation or a Word document (based on the templates provided in the What to Submit section). In either format, be sure to effectively communicate with your stakeholders by breaking down concepts and using investor-friendly language to build their trust and confidence. If you choose to do a PowerPoint presentation, you'll need to include speaker notes for each slide. 1. Introduction: Provide a short overview of your company and the purpose of this report. A. Business Overview: Name your company and describe its business and your vision for its future. B. Purpose of the Report: Explain the purpose of the report and describe why the information is important. C. Methods and Approach: Explain the management accounting methods you used for generating the information that you are about to share in terms of your adherence to industry standards and the American Institute of Certified Public Accountants (AICPA) code of ethics. 2. Financial Strategy: Review your original business plan and costing strategies. A. Costing System: Justify the use of job order costing for this business. Be sure to compare and contrast the various costing systems you learned about in this course as part of your defense. B. Selling Prices: Share and explain the selling prices you established for each of your products. Be sure to reference your cost-volume profit analysis in your defense. C. Contribution Margin: Share and explain your contribution margin per unit. Be sure to reference your cost-volume-profit analysis in your defense. D. Target Profits: Identify your break-even points for achieving different target profits. Then explain the target profits you selected for each area of your business. Be sure to reference your cost-volume-profit analysis in your defense. 3. Financial Statements: Using the information in the Milestone Two Market Research Data Appendix, assess your financial performance to date. A. Statement of Cost of Goods Sold: Share the statement of cost of goods sold and logically interpret the business's performance against the provided benchmarks. B. Income Statement: Share the income statement and logically interpret the business's performance against the provided benchmarks. C. Variances: Illustrate all variances for the direct labor time and the materials price. D. Significance of Variances: Evaluate the significance of the variances in terms of the potential to impact future budgeting decisions and planning. What to Submit To complete this project, you must submit the following:2 Milestone One - Variable and Fixed Costs 3 4_ 5 Collars Z E Item Variable Cost] Item Item Fixed Costs Hightensile strength nylon webbing S 4.00 Collar maker's salary (monthly) S 2,773.33 10 Polyesten'nylon ribbons S 3.00 Depreciation on sewing machines S 55.00 1_ Buckles made of cast hardware S 0.13 Rent S 250.00 1; Price tags S 1.97 Utilities and insurance S 200.00 11 Scissors, thread, and cording S 400.00 1i Loan payment S 183.33 15 Salary to self S 166.67 13 1.1 1? Total Variable Costs per Collar S 9.10 Total Fixed Costs 5 4,028.33 20 2; 23 Leashes 25 Item Variable Cost/Item Item Fixed Costs 2 Hightensile strength nylon webbing S 6.00 Leash maker's salary {monthly) S 2,773.00 21 Polyesterf'nylon ribbons S 4.50 Depreciation on sewing machines S 55.00 21 Buckles made of cast hardware S 0.16 Rent S 250.00 ? Price tags S 1.44 Utilities and insurance S 200.00 3i Scissors, thread, and cording S 400.00 3i Loan payment S 183.33 3i Salary to self S 166.67 3i 3i _ 33 Total Variable Costs per Leash 5 12.10 Total Fixed Costs 5 4,028.33 39 g 42 Harnesses 44 Item Variable Cost/Item Item Fixed Costs Hightensile strength nylon webbing S 6.00 Harness maker's salary S 2,946.60 1 Polyesterf'nylon ribbons S 4.50 Depreciation on sewing machines S 55.00 Buckles made of cast hardware S 0.06 Rent S 250.00 Price tags S 4.04 Utilities and insurance S 200.00 {g Scissors, thread, and cording S 400.00 5i Loan S 183.33 2 Salary to self S 166.67 E Si 55 57 Total Variable Costs per Harness 5 14.60 Total Fixed Costs 5 4,201.60 2 3 Milestone Two - Contribution Margin Analysis 4 5 6 COLLARS LEASHES HARNESSES 8 Sales Price per Unit 20.00 S 22.00 S 25.00 9 Variable Cost per Unit 9.10 12.10 14.60 11 Contribution Margin $ 10.90 S 9.90 S 10.40 12Milestone Two - Break-Even Analysis COLLARS LEASHES HARNESSES Sales Price 5 20.00 5 22.00 5 25.00 Fixed Costs S 327 S 277 S 260 Contribution Margin S 10.90 S 9.90 5 10.40 BreakEven Units (round up) 30 (327/1090) 28 (277/930) 25 (260/1040) Target Profit 5 300.00 5 400.00 5 500.00 BreakEven Units (round up) 58 [327+300%10.90) 69 [277+400%9.90) 73 [260+500%10.4J0) 20 _ 22 Target Profit 5 500.00 5 600.00 5 650.00 BreakEven Units {round up) 76 (327600961030) 89 {277+600%9.90) 88 {260+650%10.4J0) Milestone Three - Statement of Cost of Goods Sold Beginning Work in Process Inventory Direct Materials: Materials: Beginning dd: Purchases for month of January S Materials available for use Deduct: Ending materials Materials Used Direct Labor Overhead Total Costs Deduct: Ending Work in Process Inventory Cost of Goods Sold 20,000 20,000 4,000 13,000 3,433 3,235 23,253 23,253.33 2 Milestone Three - Income Statement 3 4 5 Revenue: 6 Collars $ 13,200 7 Leashes 12,320 8 Harnesses 12,500 9 10 Total Revenue: 38,020 11 Cost of goods sold 28,258 12 Gross profit 9,762 13 14 Expenses: 15 General and administrative salaries $ 2,450 16 Depreciation 165 17 Rent 750 18 Utilities and insurance 600 19 Scissors, thread, and cording S 1,200.00 20 Loan 550 21 22 Total Expenses S 5,715.00 23 24 Net Income/Loss S 4,046.67 25 26 271 2 Milestone Three - Variance Analysis 3 4 5 Data for Variance Analysis: Budgeted Budgeted Actual Actual (Standard) [Standard] Hourszty Rate 6 Hours/Qty Rate 7 8 Labor 40 S 15.00I 45 16.50 9 10 11 Materials 450 S 9.10 520 19.10 12 13 14 15 Variances for Collar Sales Favorable] 15 Variance Unfavorable 17 Direct Labor Time Variance 18 (Actual Hours Standard Hours) at Standard Rate S 80.00 Unfavorable 19 (454mm 20 Direct Labor Rate Variance 21 (Actual Rate Standard Rate) at Actual Hours 5 22.50 Unfavorable 22 (16.50-16)45 23 Direct Materials QuantityIEfficiency Variance 24 (Actual Quantity - Standard Quantity) at Standard Price 5 546.00 Unfavorable 25 (520460)9.10 26 Direct Materials Price Variance 27 (Actual Price Standard Price) at Actual Quantity 5 5,200.00 Unfavorable 28 (19.10-9.10)52[} 29