ITo: Managerial Accounting Entrepreneurs From: Bartlett Investment Group LLC. Date: Spring 2023 Subject: Project #1 Bartlett Investment Group wants to invest capital in your business. Create a new product or enhance an existing product that will be protable in its market. You can create something entirely new, or use an existing company and add a new product. Be creative, and have fun with this! You could do anything from starting your own cookie business, to creating a new baseball bat, to creating a new usell tool, the possibilities are endless. Do something that interests YOU! Note you must select a tangible product and not a service company. The project must be typed and submitted in word/excel format. No handwritten projects will be accepted. Memo: Create a 12 page narrative in memo format that describes your product, the costs to make your product, and how your product will be protable. ['75 points) Note narrative format is similar to how this project is addressed. You should have a to, from, date, and subject line. Your narrative should be in typed paragraph form and not merely bullet points answering the prompt below. Below are details to address in your memo: 1. Describe your product . What is your product? . How much are you going to sell your product for? . How many units do you want to sell for your rst year of operations? . What makes your product di'erent? . Who will your consumer be? . How will you market! sell your product? g. Who are your competitors? 2. Discuss how you will dene your product cost in terms of direct materials, direct labor, and manufacturing overhead costs. How much is your product going to cost to make for each of these product costs? Remember the concepts & terms learned in Chapters 2 & 3. a. What are the direct materials needed to make the product? i. List out all of the items needed to make your product ii. How much do your direct materials cost? b. How much direct labor will you need to make your product? i. How many employees will you need to make the product? How many estimated hours does it take to make the product? ii. How much is your total direct labor cost? c. What is your manufacturing overhead costs to make the product? i. List examples of manufacturing overhead that you would incur to make your product. ii. How much does your manufacturing overhead cost? d. What is the total cost to make the product (Total DM, DL, and MOH)? i. Based on your cost to make your product, and your selling price is your product protable? e. Discuss different activities in the value chain and how these activities add value to your product. i. Research & Development, Design, Production, Marketing, Distribution, and Customer Service Note for any area that requires you to give a number, it is ok to give your best estimate. You can research costs and then give your best estimate for the cost of DM, DL, and MOH. Income Statement: Create an estimated annual income statement for your rst year of operations which shows the prot or loss for your product (25 points 1. An excel template has been provided for your input. 1. Use your best estimates (you estimate the numbers) 2. Show calculations for direct materials used, cost of goods manufactured, and cost of goods sold. a. Your calculations should tie to what you have outlined in your memo b. Your cost of goods sold should be the number of units you hope to sell multiplied by your total product cost. 3. Calculate your income statement. a. Your revenue should be the total units sold for the rst year of operations multiplied by your selling price. b. Your cost of goods sold will carry over from the \"Calculation tab." c. Identify and list (estimate) what your operating expenses will be. Note Make sure to not double count your product costs that are part of your cost of goods sold as operating expenses. Expenses are part of cost of goods sold if it is direct materials, direct labor, or manufacturing overhead. Do not double count expenses in both areas! This project is due on Wednesday 3122 . : I ' Use your best estimates to create an annual income statement for Year 1 for your product. Make sure to calculate direct materials, cost of goods manufactured, and cost of goods sold on the Calculations tab {25 points) INSERT YOUR COMPANY NAME Income Statement As ofDecember 31, 2022 Hints: Sales Revenues Should be selling price x units sold for first year of operations Less: Cost of Goods Sold From Calculations Tab Gross Prot I I I Operating Expenses Should be all of your expenses out side of your manufacturing costs. Remember, operating expenses are not part of your product cost. Total Operating Expenses Net income I Note Make sure not to double count expenses that are part of your cost of goods sold as operating expenses. All of your direct materials, direct labor, and manufacturing overhead will be part of Cost of Goods Sold. Everything else will be an operating expense. Make sure you revisit whether expenses are considered direct materials, direct labor, or manufacturing overhead I A B C D I Use your best estimates to calculate Direcl Materials Used. Cost of Goods Manufactured. and Cost of Goods Sold for your product. : = Fill in the Blank . Calculation of Direct Materials Used Hints: . (Analyze Raw Materials Account) Beginning Balance should be zero since you're : Beginning Raw Materials Inventory 0 just starting the business. What is the cost of the direct materials needed 9 _ _ Plus: Purchases of Direct Materials. Freightin. Duties I" make 5"\" \"\"1\"\" WM '3 \"'3 q\"\"\"'\" 3'0\" will need? : DM quantity x DM cost 0 Materials Available for Use 0 Do you want to have ending raw materials on 1 Less: Ending Raw Materials Inventory hand? 2 Direct Materials Used 0 3 4 Calculation of Cost of Goods Manufactured 5 (Analyze WIP Inventory) 6 Beginning Balance should be zero since you're 1 Beginning WIP Inventory 0 just starting the business. 3 Plus Manufacturing Costs Incurred: 9 Direct Materials Used 0 From your DM calculation above How many employees will you need to make the product? How much lime does it take to make the product? What is the cost per hour? 0 Direct Labor Employees x time x employee rate What other indirect costs will there be to make the product? Things that you need but can't trace 1 Manufacturing Overhead directly back to the product? 2 Total Manufacturing Costs to Account For t} 3 Less: Ending WIP Inventory Do you want to have any ending WIP on hand? 4 Cost of Goods Manufactured l} 5 5 Calculation of Cost of Goods Sold 1 (Analyze Finished Goods Inventory) 8 Beginning Balance should be zero since you're 9 Beginning Finished Goods Inventory 0 just starting the business. 0 Plus: Cost of Goods Manufactured l} 1 Cost of Goods Available for Sale 0 Do you want to have any ending inventory on 2 Less: Ending Finished Goods Inventory hand?