Think of a product that you would like to create and sell! Be as creative as you would like! Similar to the TV show, Shark Tank, you will convince the Board of Directors why your product is profitable and good investment. As a group, you will establish a manufacturing proposal with all related tables and budgets as your project on a multi-page, formulated, interconnected Excel sheet including the following tabs:

SET 1: Cost Basics

A well-developed multi-tab interrelated Excel sheet.

Cost Basis

Table 1: Material cost per unit

Table 2: Labor cost per unit

Table 3: Assets (Equipment and their annual straight-line depreciation)

Table 4: Overhead

Table 5: Selling and Administrative Variable costs Fixed costs

Table 6: Fix and Variable Costs (Combine Table 4 and 5; remember to add DM and DL to the calculation of the variable cost) Variable Costs DM (From Table 1) DL (From Table 2) Variable OH ( From Table 4) Variable S&A ( From Table 5)

Fixed Costs Fixed OH (From Table 4) Fixed S&A (From Table 5) Total Fixed Costs (This will be used for CVP analysis) SET 2: Cost Volume Profit Analysis Estimated Selling Price

• Contribution Margin
• Break-Even Points in Dollars and Units
• Profit Planning (Target sales in Dollars and Units, to be used in sales budget) (Note: Target income should be almost equal to the net income in the Budgeted Income Statement)
• Margin of Safety

SET 3: The Master Budget for four quarters

• Sales Budget
• Production Budget
• Ending Inventory Budget
• Selling & Administrative Expense Budget
• DM Budget
• DL Budget
• MOH Budget
• Cash Budget
• Budgeted Income Statement
• Budgeted Balance Sheet

Memorandum

A memorandumusually known as a memois a document that is most commonly used for internal communication between coworkers or members of a department.

Each issue in a memorandum needs one paragraph. Be sure to include an introductory paragraph and a conclusion paragraph. Do not write unnecessary information in the memorandum. You should write only about requested issues and use a profitability ratio to emphasize your point.

In our case, the Board of Directors is concerned about the product's budgeted year profitability. You need to write a memo to the Chair of the Board of Directors about their concern based on your prepared budgeted Income Statement results and the proposed product profitability.