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(REMEMBER: DELETE EVERYTHING THAT APPEARS IN RED.) Please review the Final Project Part II Rubric (budget analysis) to see how your paper will be scored. Be sure to follow APA format when providing references. If you have questions on APA format, you can check the Purdue OWL website or seek help from the SNHU Writing Center. Notes on APA in a Formal Assignment Set margins to 1 inch all around. Use 12-point Times New Roman font and make sure to double-space. Paragraphs should be at least three to four sentences. Do not include the headings \"Introduction\" and \"Conclusion.\" These are included below to help you lay out your paper. APA format assumes that the introduction begins the paper, the body continues the paper, and the conclusion wraps up the paper, so those headings are not needed. Indent the first line of every paragraph 0.5\". Be careful not to use personal pronouns such as \"I.\" Make sure to delete the Paragraph 1, Paragraph 2, etc. headings as well. Be sure to replace all the text in red on this template with your own writing. (This entire first page can be deleted after you review the suggestions. The paper should begin with your title page that follows.) ACC 202: Final Project Part II Budget Analysis Submission Your Name Southern New Hampshire University (REMEMBER: DELETE EVERYTHING THAT APPEARS IN RED.) Introduction (Delete this heading in your final paper.) In your opening paragraph, very briefly introduce the purpose of your paper. Recall that you will be discussing the budget process, \"make\" or \"buy\" decisions, and nonfinancial performance measures as explained in your rubric instructions. Three or four sentences are sufficient. Paragraph 1 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss the initial budget process. Paragraph 2 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss the budget variances and potential reasons for variances. Paragraph 3 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss any changes you think the company should make based on the variance analysis. What will the changes accomplish? Paragraph 4 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss any ethical considerations of the changes you have selected based on the variance analysis. Why would you recommend these changes? Paragraph 5 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss the considerations involved in deciding whether to buy a particular component of one of your products or make the product in-house. What factors would you consider? What are the ethical considerations? What implications could this decision have? For each option (i.e., to \"make\" or to \"buy\"), how this will impact the efficiencies of your operations? Paragraph 6 (Delete this heading in your final paper.) Using content from your submissions in Final Project Part I and your readings from Chapters 22, 23, and 25 of your Horngren's text, discuss what suggestions you would make for nonfinancial performance measures that the company should adopt. What are the pros and cons of each? What are the ethical considerations of your suggestions? Explain the significance of each. Conclusion (Delete this heading in your final paper.) The conclusion reminds the reader what your paper is about and allows you to make a final point without introducing new information. Three or four sentences are sufficient. References Nobles, T. L., Mattison, B. L., Matsumura, E. M. (2014). Horngren's financial and managerial accounting (4th ed.). Upper Saddle River, NJ: Pearson Education, Inc. Make sure that you provide appropriate citations in APA style. The text is provided as an example and should be kept in the references for your paper. Feel free to add other resources. Remember to cite ALL the sources that you used to write this papernot only here at the end of your paper, but also within the body to add credibility to your statements. References that you have used should be included in alphabetical order by the author's last name. 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 frontline 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 Part II of the final project, you will use the worksheets and budget variance report you created in Part I to prepare a budget analysis communicating key findings to internal parties and suggesting potential changes to improve your organization's performance. 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 and budget variance report you created for Final Project Part I, you will make recommendations about possible changes. 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 budget analysis detailing your findings. Specifically, the following critical elements must be addressed in your analysis: a) Budget Process and Variances 1. Discuss the initial budget process, the variances, and potential reasons for the variances. 2. What are the changes you think the company should make based on the variance analysis? What will the changes accomplish? 3. What are the ethical considerations of the changes you have selected? Why are you recommending these particular changes? b) \"Make\" or \"Buy\": Suppose you were to consider buying a particular component of one of your products or making the product in-house. 1. What factors would you consider in such a \"make\" or \"buy\" decision? 2. What are the ethical considerations of your decision? What implications could this decision have? 3. For each option (i.e., to \"make\" or to \"buy\"), how will this impact the efficiencies of your operation? c) Nonfinancial Performance Measures 1. What suggestions would you make for nonfinancial performance measures that the company should adopt? What are the pros and cons of each suggestion? 2. What are the ethical considerations of your suggestions? Explain the significance of each. Final Project Part II Rubric Guidelines for Submission: Your budget analysis should be approximately 3 pages, double-spaced, with one-inch margins, 12-point Times New Roman font, and APA format. Use the Budget Analysis Template to complete the analysis. 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 Budget Process Exemplary (100%) Meets \"Proficient\" criteria, and reasoning demonstrates awareness of potential business situations Meets \"Proficient\" criteria and demonstrates awareness of implications of making changes Proficient (85%) Discusses the initial budget process and the variances and describes potential reasons for variances Determines changes the company should make based on variance analysis and identifies what will be accomplished by making these changes Budget Process: Ethical Considerations Meets \"Proficient\" criteria, and justification is well-supported with examples Identifies ethical considerations of changes recommended and justifies recommendations \"Make\" or \"Buy\" Meets \"Proficient\" criteria, and claims are supported with evidence Describes factors that should be taken into consideration in a \"make\" or \"buy\" decision Budget Process: Changes Needs Improvement (55%) Discusses the initial budget process and the variances, but does not describe potential reasons for variances Determines changes the company should make based on variance analysis, but does not identify what will be accomplished by making these changes Identifies ethical considerations of changes recommended, but does not justify recommendations Describes factors that should be taken into consideration in a \"make\" or \"buy\" decision, but with errors or gaps in the discussion Not Evident (0%) Does not describe initial budget process Value 11.5 Does not determine changes the company should make 11.5 Does not identify ethical considerations 11.5 Does not describe factors that should be taken into consideration in a \"make\" or \"buy\" decision scenario 11.5 \"Make\" or \"Buy\": Ethical Considerations \"Make\" or \"Buy\": Impact Meets \"Proficient\" criteria and demonstrates a nuanced understanding of the relationship between ethical views and implications Meets \"Proficient\" criteria and demonstrates awareness of business operations Nonfinancial Performance Measures Meets \"Proficient\" criteria, and suggestions incorporate a wellrounded view of the business Nonfinancial Performance Measures: Ethical Considerations Meets \"Proficient\" criteria, and explanation is exceptionally clear and contextualized 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 Identifies ethical considerations and implications of \"make\" or \"buy\" decision Identifies either ethical considerations or implications of decision, but not both Does not identify ethical considerations or implications of decision 11.5 Describes how \"make\" or \"buy\" decision was reached and how it will impact the efficiencies of operation Identifies suggestions for nonfinancial performance measures the company should adopt and lists the pros and cons of each Identifies the ethical considerations of suggestions and explains the significance of each Describes how decision was reached, but does not address how it will impact efficiencies of operation Identifies suggestions for nonfinancial performance measures the company should adopt, but does not list the pros and cons of each Identifies the ethical considerations of suggestions, but does not explain the significance of each Does not describe how decision was reached 11.5 Does not identify suggestions for nonfinancial performance measures the company should adopt 11.5 Does not identify the ethical considerations of suggestions 11.5 Submission has no major errors related to citations, grammar, spelling, syntax, or organization Submission has major errors related to citations, grammar, spelling, syntax, or organization that negatively impact readability and articulation of main ideas Submission has critical errors related to citations, grammar, spelling, syntax, or organization that prevent understanding of ideas Earned Total 8 100% Peyton Approved Budget Variance Report For the Year Ended ... Actual Results Static Budget Direct materials variances Cost/price variance Efficiency variance Total direct materials variance 495,000 528,000 528,000 4,800,000 Direct labor variances Cost /price variance Efficiency variance Total direct labor variance 240,250 240,250 ### 232,500 Variance 33,000 48,000 15,000 7,750 7,750 Favorable/ Unfavorable F U U N U U Labor variance actual cost $ 495,000.00 15 Price variance Efficiency Variance actual quantity 33,000 (48,000) Labor variance 15000 standard cost $ 480,000.00 F U 33,000 U Materials variance actual cost $ 240,250.00 7.75 actual quantity 31,000 standard cost $ 232,500 Price variance Efficiency Variance (7,750) N U Materials variance 7,750 U 16 standard quantity 30,000 7.75 standard quantity 30,000 ACC 202: Final Project Part I Budget Variance Report Submission Derrick Givens Southern New Hampshire University Business entities engage in various activities in a bid to maximize shareholders wealth while minimizing risks associated with business operations. This paper covers an analysis of Peyton Company operating activities effectiveness and efficiency with which such activities are carried out. It is of great significance, that the management of any organization look critically and analytically the daily operations. This is achieved by performance metrics/techniques such budgeting in which performance standards are set and outcomes measured and thus variations identified. Favorable variations are identified and maintain while unfavorable variances critically analyzed and corrected. Of great importance are the techniques used to measure the effectiveness and efficiency with which business entities use their scarce economic resources. The analysis covers various types of variances ranging from quantity to price variances. A variance is the different between an expected and actual result such as between budgeted and actual expenditure. Companies strategically manage operations through setting standards rather benchmarks upon which actual performance is meted. Payton management uses a number of variances that communicate price and quantity activities and thus providing a fundamental basis upon which management decisions are made. The budget variance report reveals that total direct materials variance is unfavorable with a deviation of (15,000) which is a consequent of 33,000 favorable price variance and 48,000 unfavorable variance This means that the company costs of purchasing materials for production is less that the estimated cost rather the set standards. This helps the company to save a great deal of cash. It also means that the company procurement mechanisms are effective and the negotiation skills are sufficient to impact in such a way to the costs of materials. However, the efficiency with the materials bought are utilized is not prudent since efficiency variance is such a negative huge value signifying unfavorable utilization. Direct labor variance entails the price variance and labor efficiency variance. This variance is significant since it tells the company how much cash it spends on labor and the number of hours labor takes and thus measures the actual outcomes from the set standards from which correction can be done depending on whether the variance is favorable or not. The entity can then manage how much it pays for labor even as they check it against the reasonable range or means. From the budget report, the price variance is neutral while efficiency variances unfavorable. This means that the company pays exactly the same prices it has set as the cost standards. It also means that the company spends more hours working on projects than the estimated or budgeted number of hours per activity. Thus, the ultimate total direct labor variance of 7,750 is unfavorable. The company should then device mechanisms to effectively manage labor time and costs as factor of production which adds value to the company and the products. From labor and materials variance sheet, Peyton Approved Budget Variance Report For the Year Ended ... Direct materials variances Actual Static Results Budget Favorable/ Variance Unfavorable Cost/price variance 495,000 528,000 33,000 F Efficiency variance 528,000 4,800,000 48,000 U 15,000 U Total direct materials variance Direct labor variances Cost /price variance 240,250 240,250 Efficiency variance 240,250 232,500 Total direct labor variance N 7,750 U 7,750 U From the student worksheet, I have addressed a number of budgets ranging from sales budget which estimates the amount of revenue the Company expects to collect from sales of finished products during the third quarter of 2015 calendar which is the first quarter of the financial year 2015/2016. Production budget for the quarter reveals an increment in the units to be produced each month of the quarter which impacts on the manufacturing budget containing raw materials budget, direct labor and factory overhead budget. The total number of units to be produced is 60,000. It is apparent from the production budget that the Company maintains on average an ending inventory of $15,400 per month, sales average of $30,000 per month and required units of $35,400. Direct raw materials budget reveal significant details concerning direct materials quantity and prices. On average, total cost of direct materials purchased per month is $70,731.67. Materials to be purchased during the quarter are $27,380 with total material requirement of 36,320 while materials needed 30,000. Given the labor rate, labor dollars has been increasing from July, August and September which gives an average of 160,000. The factory overhead budget reveals the costs associated with manufacturing overhead costs covering both variable and fixed overhead costs. The total overhead budgeted during the quarter is $47,000. The Company selling Expense budget reveal how much the company estimates to incur in terms of day to day operating cost of the sales agents, promotion costs and personal selling costs. The company has capped the budgeted selling expense at an average of $6,150 per month which signifies management of sales persons given fixed commission of 12% per month with an expense of $2,400. The total General and Administrative Expense Budget during the quarter amounts to $44,100 and on average $14,700. The loan on long-term note is constant at $2,700 per month. Critically, the Company needs to investigate a number of factors which affect the budgets and thus the variances analyzed in the worksheets. Such factors include; errors by the budget preparers, changing business conditions, unmet expectations, competition, market prices, advertising costs, tough negotiation in wages, better employees, quality of materials and training . These factors are significant as they influence effectiveness and efficiency of production. Factors which contribute to favorable variances include: fall in market prices, purchase of lower quality materials, skilled buying, better management of materials, higher quality materials, a fall in market labor rates among other factors. However, the opposite factors of these adversely affect both materials and prices. In conclusion, this paper analyses Peyton budgets and variances based on the data given in the instructions. Business entities' management regards variances with such significance so as to be able to effectively and efficiently management business decisions. References Nobles, T. L., Mattison, B. L., Matsumura, E.M. (2014). Horngren's financial and managerial accounting (5th ed.).Upper Saddle River, NJ: Pearson Education, Inc. In, L. & CAT, F. (2017). Potential causes of variances, Comparison of actual and forecast results. Opentuition.com. Retrieved 10 February 2017, from http://opentuition.com/fia/ma1/comparison-of-actual-and-forecast-results-variances/ Budgeting and Variance Analysis - Managerial Accounting at Johnson State College. (2017). Fisher.jsc.vsc.edu. Retrieved 10 February 2017, from http://fisher.jsc.vsc.edu/manacct/wk23_ops_budgeting.html You are a manager for Peyton Approved, a pet supplies manufacturer. This responsibility requires you to create budgets, make 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 2015. You are provided the following information. The Peyton Approved Budgeted Balance Sheet 30-Jun-15 ASSETS Cash Accounts receivable Raw materials inventory Finished goods inventory Total current assets Equipment Less accumulated depreciation Total assets LIABILITIES AND EQUITY Accounts payable Short-term notes payable Taxes payable Total current liabilities Long-term note payable Total liabilities Common stock Retained earnings Total stockholders' equity Total liabilities and equity All assumptions are new and apply to the July through September budget period. 1. Sales were 20,000 units in June 2015. Forecasted sales in units are as follows: July, 18,000; August, 22,000; September, 20,00 price is $18.00 per unit and its total product cost is $14.35 per unit. 2. The June 30 finished goods inventory is 16,800 units. 3. Going forward, company policy calls for a given month's ending finished goods inventory to equal 70% of the next month's e 4. The June 30 raw materials inventory is 4,600 units. The budgeted September 30 raw materials inventory is 1,980 units. Raw unit requires 0.50 units of raw materials. Company policy calls for a given month's ending raw materials inventory to equal 20% 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 unit produced. De fixed factory overhead. 7. Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long 8. Sales representatives' commissions are 12% of sales and are paid in the month of the sales. The sales manager's monthly sa Specifically, the following critical elements must be addressed when creating an Operating Budget by completing the budget te Step 1: Prepare a Sales Budget Complete the Sales Budget on the Budgets tab below by using the information found in the budgeted balance sheet above. Consider assumption 1 when completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a September, 20,000; October, 24,000. The product's selling price is $18.00 per unit and its total product cost is $14.35 per unit. You can find an example of a sales budget in Exhibit 22-5 on page 1324 of the textbook. Step 2: Prepare a Production Budget Complete the Production Budget on the Budgets tab below by using the information found in the budgeted balance sheet abo Consider assumption 1 while completing this critical element: Sales were 20,000 units in June 2015. Forecasted sales in units a September, 20,000; October, 24,000. The product's selling price is $18.00 per unit and its total product cost is $14.35 per unit. Consider assumption 2 while completing this critical element: The June 30 finished goods inventory is 16,800 units. Consider assumption 3 while completing this critical element: Going forward, company policy calls for a given month's ending next month's expected unit sales. You can find an example of a production budget in Exhibit 22-6 on page 1325 of the textbook. Step 3: Prepare a Manufacturing Budget Complete the Manufacturing Budget on the Budgets tab below by using the information found in the budgeted balance sheet three parts: the Raw Materials Budget, the Direct Labor Budget, and the Factory Overhead Budget. Raw Material Budget Consider assumption 4 while completing this critical element: The June 30 raw materials inventory is 4,600 units. The budgete 1,980 units. Raw materials cost $7.75 per unit. Each finished unit requires 0.50 units of raw materials. Company policy calls for inventory to equal 20% of the next month's materials requirements. Consider units to be produced found in the production budget while completing this critical element. Direct Labor Budget Consider assumption 5 while completing this critical element: Each finished unit requires 0.50 hours of direct labor at a rate of Consider units to be produced found in the production budget while completing this critical element. Factory Overhead Budget Consider assumption 6 while completing this critical element: Overhead is allocated based on direct labor hours. The predeter produced. Depreciation of $20,000 per month is treated as fixed factory overhead. Consider units to be produced found in the production budget while completing this critical element. Step 4: Prepare a Selling Budget Complete the Selling Expense Budget. Consider assumption 8 while completing this critical element: 8. Sales representatives' commissions are 12% of sales and are p manager's monthly salary is $3,750 per month. Step 5: General and Administrative Expense Budget Complete the General and Administrative Expense Budget. Consider assumption 7 while completing this critical element: 7. Monthly general and administrative expenses include $12,000 interest on the long-term note payable. The following critical elements must be addressed when performing the Budget Variance Analysis using the Budget Variance W can be found in the Assignment Guidelines and Rubrics folder. 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 Step 1: Complete A. Develop a variance analysis including a budget variance performance report and appropriate variances f Start with the Labor and Materials Variance tab. Standard costs/quantities come from the raw materials budget and the labor budget. Use Exhibits 23-11 on page 1416 and 23-12 on page 1419 in the textbook as guides. After completing the Labor and Materials Variance tab, transfer variances to the Budget Variance Report tab. Congratulations! You have completed the workbook portion of Final Project Part I. To complete the remainder of the Budget Va use the Final Project Part I Budget Variance Report Template. The Budget Variance Report Template can be found in the Assign pricing decisions, and analyze the results of budgeted balance sheet on June 30, 2015, is: $42,000 259,900 35,650 241,080 578,630 $720,000 240,000 480,000 $1,058,630 $63,400 24,000 10,000 97,400 300,000 397,400 $600,000 61,230 661,230 $1,058,630 00; October, 24,000. The product's selling xpected unit sales. materials cost $7.75 per unit. Each finished % of the next month's materials requirements. epreciation of $20,000 per month is treated as g-term note payable. lary is $3,750 per month. emplates found on the "Budgets" tab below. are as follows: July, 18,000; August, 22,000; ve. re as follows: July, 18,000; August, 22,000; finished goods inventory to equal 70% of the above. The manufacturing budget consists of d September 30 raw materials inventory is a given month's ending raw materials $16 per hour. mined variable overhead rate is $1.35 per unit paid in the month of the sales. The sales 0 administrative salaries and 0.9% monthly Worksheet. The Budget Variance Worksheet h an actual rate per hour of $15. for materials, labor, and overhead. ariance Analysis portion of Final Project Part I, ment Guidelines and Rubrics folder. Sales Budget Peyton Approved Sales Budgets July, August, and September 2015 Budgeted Units Jul-15 Aug-15 Sep-15 Total for the first quarter 18,000 22,000 20,000 Budgeted Unit Price 18.00 18.00 18.00 60,000 Production Budget Peyton Appr Production B July, August, and Sep July Next month's budgeted sales Percentage of inventory to future sales 22,000 70% Budgeted ending inventory 15,400 Add budgeted sales 18,000 Required units to be produced 33,400 Deduct beginning inventory (Previous month ending inventory) 16,800 Units to be produced 16,600 Manufacturing Budget - contains raw materials budget, direct labor budget Peyton Approved Raw Materials Budget July, August, and September July Production budget (units) 16,600 Materials requirement per unit 0.5 Materials needed for production 8,300 Add budgeted ending inventory 2,060 Total materials requirements (units) 10,360 Deduct beginning inventory (previous month ending inventory) 4,600 Materials to be purchased 5,760 Material price per unit 7.75 Total cost of direct material purchases $44,640 Peyton Approved Direct Labor Budget July, August, and September July Budgeted production (units) Labor requirements per unit (hours) Total labor hours needed Labor rate (per hour) 16,600 0.5 8,300 16.00 $132,800 Labor dollars Peyton Approved Factory Overhead Budge July, August, and September July Budgeted production (units) 16,600 Variable factory overhead rate 1.35 Budgeted variable overhead 22,410 Fixed overhead 20,000 Budgeted total overhead $42,410 Selling Expense Budget Peyton Approved Selling Expense Budget July, August, and September 2015 July Budgeted sales Sales commission percent Sales commissions expense Sales salaries Total selling expenses $18,000 August Sept. $22,000 $20,000 12% 12% 12% 2,160 2,640 2,400 3,750 3,750 3,750 $5,910 $6,390 $6,150 General and Administrative Expense Budget Peyton Approved General and Administrative Expense Budget July, August, and September 2015 July Salaries $12,000 August $12,000 Sept. $12,000 Interest on long-term note Total expenses 2,700 2,700 2,700 $14,700 $14,700 $14,700 Budgeted Total Dollars $324,000 $396,000 $360,000 1,080,000 Peyton Approved Production Budget , August, and September 2015 August Sept. Total 20,000 24,000 70% 70% 14,000 16,800 46,200 22,000 20,000 60,000 36,000 36,800 106,200 15,400 14,000 46,200 20,600 22,800 60,000 rect labor budget, and factory overhead budget ton Approved 66,000 Materials Budget , and September 2015 August Sept. Total 20,600 22,800 0.5 0.5 10,300 11,400 30,000 2,280 1,980 6,320 12,580 13,380 36,320 2,060 2,280 8,940 10,520 11,100 27,380 7.75 ### $81,530 $86,025 60,000 212,195 ton Approved t Labor Budget , and September 2015 August Sept. 20,600 22,800 0.5 0.5 10,300 11,400 16.00 ### Total 60,000 30,000 $164,800 $182,400 480,000 ton Approved Overhead Budget , and September 2015 August Sept. Total 20,600 22,800 1.35 ### 27,810 30,780 81,000 20,000 20,000 60,000 $47,810 $50,780 141,000 2015 Total $60,000 $7,200 $11,250 $18,450 dget Total $36,000 60,000 $8,100 $44,100 Please i dont have much left for assignment So please you can mail me Salamatmujeeb77@gmail.com