Product Costing(Lesson 3-5)[60 points]Be sure you have received approval from MP1 –Product Approvalbefore beginningthis assignment

MP2–Product Costin" rel="nofollow">ing(Lesson 3-5)[60 poin" rel="nofollow">ints]Be sure you have received approval from MP1 –Product Approvalbefore begin" rel="nofollow">innin" rel="nofollow">ingthis assignment. You will presentyour prototypein" rel="nofollow">in a discussionthrough Canvasand can usea variety of formats(e.g. text, diagrams, video, etc.)as long as they meet the criteria from MP1 of the assignment.Feel free to ask questions and comment on other prototypes.This is a discussion.MP3–Cost Reflection(Lesson 5)[30 poin" rel="nofollow">ints]You will need to write a 2-3 page paper coverin" rel="nofollow">ing the followin" rel="nofollow">ing:1.Show how the actualcost of a sin" rel="nofollow">ingle unit of product was determin" rel="nofollow">ined.2.Items to be in" rel="nofollow">included in" rel="nofollow">in the manufacturin" rel="nofollow">ing overhead account3.Identify the type of costin" rel="nofollow">ing that will be used(i.e. job costin" rel="nofollow">ing orprocess costin" rel="nofollow">ing, traditional or activity-based costin" rel="nofollow">ingfor assignin" rel="nofollow">ing overhead costs)4.Trends in" rel="nofollow">in the in" rel="nofollow">industry that you should be aware of5.Primary competitors6.Concerns goin" rel="nofollow">ing forward if the project was developedand sold as part of a busin" rel="nofollow">iness.MP4–CVP Analysis (Lesson 6)[10 poin" rel="nofollow">ints]Now that you have determin" rel="nofollow">ined the unit cost to produce your product, identify which costs are fixed and which are variable. Determin" rel="nofollow">ine what you feel would be the sellin" rel="nofollow">ing price per unit of ACC 2020 –Managerial Accountin" rel="nofollow">ing|Page 3of 6your product. In determin" rel="nofollow">inin" rel="nofollow">ing the sellin" rel="nofollow">ing price, consider what the sellin" rel="nofollow">ing price of a competitor’s product would be. Now calculate the breakeven poin" rel="nofollow">int usin" rel="nofollow">ing only production costs(material, labor, and overhead). Assume that you are goin" rel="nofollow">ing to start a busin" rel="nofollow">iness sellin" rel="nofollow">ing your product. You anticipate that you will in" rel="nofollow">incur the followin" rel="nofollow">ing costs in" rel="nofollow">in your first year of production:Sellin" rel="nofollow">ing expenses $ 50,000 plus 10% of sales revenueAdmin" rel="nofollow">inistrative expenses$150,000 plus 15% of sales revenueCalculate the breakeven poin" rel="nofollow">int in" rel="nofollow">in units and sales dollarsusin" rel="nofollow">ing ALL costs –manufacturin" rel="nofollow">ing and non-manufacturin" rel="nofollow">ing costs.Determin" rel="nofollow">ine how many units you must sellin" rel="nofollow">in order to earn a profit of $75,000.Assumin" rel="nofollow">ingthat you actually sell 50% more units past the breakeven poin" rel="nofollow">int. What is your margin" rel="nofollow">in of safety? What is your operatin" rel="nofollow">ing leverage?How is CVP analysis used to help you plan for the future of your busin" rel="nofollow">iness?MP5–CVP Budgetin" rel="nofollow">ing(Lesson 7)[40 poin" rel="nofollow">ints]After your first year of operations, you decide that you need to prepare a budget for year 2. Rather than produce the product yourself, you have decided to outsource the production. You will purchase the completed product from the new manufacturer and sell the product, but you will contin" rel="nofollow">inue to manage the busin" rel="nofollow">iness. Assume the followin" rel="nofollow">ing in" rel="nofollow">information and assumptions to help you prepare your budget:1.As of December 31 (the end of the prior quarter), the company’s general ledger showed the followin" rel="nofollow">ing account balances:DebitsCreditsCash 48,000Accounts receivable224,000Inventory60,000Buildin" rel="nofollow">ings and equipment (net)370,000Accounts payable93,000Common Stock500,000Retain" rel="nofollow">ined earnin" rel="nofollow">ings109,000Totals702,000702,0002.Actual sales for December and budgeted sales for the next four months are as follows:December (actual)$280,000January $400,000February$600,000March$300,000April$200,000 ACC 2020 –Managerial Accountin" rel="nofollow">ing|Page 4of 6a.Sales are 20% for cash and 80% on credit. All payments on credit sales are collected in" rel="nofollow">in the month followin" rel="nofollow">ing sale. The accounts receivable at December 31 are a result of December credit sales.b.The company's gross margin" rel="nofollow">in is 40% of sales. (In other words, cost of goods sold is 60% of sales.)c.Monthly expenses are budgeted as follows: salaries and wages, $27,000 per month: advertisin" rel="nofollow">ing, $70,000 per month; shippin" rel="nofollow">ing, 5% of sales; other expenses, 3% of sales. Depreciation, in" rel="nofollow">includin" rel="nofollow">ing depreciation on new assets acquired durin" rel="nofollow">ing the quarter, will be $42,000 for the quarter.d.Each month's endin" rel="nofollow">ing in" rel="nofollow">inventory should equal 25% of the followin" rel="nofollow">ing month's cost of goods sold.e.One-half of a month's in" rel="nofollow">inventory purchases is paid for in" rel="nofollow">in the month of purchase; the other half is paid in" rel="nofollow">inthe followin" rel="nofollow">ing month.f.Durin" rel="nofollow">ing February, the company will purchase a new copy machin" rel="nofollow">ine for $1,700 cash. Durin" rel="nofollow">ing March, other equipment will be purchased for cash at a cost of $84,500.g.Durin" rel="nofollow">ing January, the company will declare and pay $45,000 in" rel="nofollow">in cash dividends.h.Management wants to main" rel="nofollow">intain" rel="nofollow">in a min" rel="nofollow">inimum cash balance of $30,000. The company has an agreement with a local bank that allows the company to borrow in" rel="nofollow">in in" rel="nofollow">increments of $1,000 at the begin" rel="nofollow">innin" rel="nofollow">ing of each month. The in" rel="nofollow">interest rate on these loans is 1% per month and for simplicity we will assume that in" rel="nofollow">interest is not compounded. The company would, as far as it is able, repay the loan plus accumulated in" rel="nofollow">interest at the end of the quarter.Required:Usin" rel="nofollow">ing the data above, complete the followin" rel="nofollow">ing statements and schedules forthe first quarter:3.Schedule of expected cash collections:JanuaryFebruaryMarchQuarterCash sales$ 80,000Credit sales224,000Total cash collections$304,0004.Merchandise Purchase Budget:JanuaryFebruaryMarchQuarterBudgeted cost of goods sold$240,000*$360,000Add desired endin" rel="nofollow">ing in" rel="nofollow">inventory90,000+Total needs330,000Less begin" rel="nofollow">innin" rel="nofollow">ing in" rel="nofollow">inventory60,000Required purchases$270,000*$400,000 sales x 60% cost ratio = $240,000.+$360,000x 25% = $90,0005.Schedule of expected cash disbursements for merchandise purchases:JanuaryFebruaryMarchQuarterDecember purchases $ 93,000$93,000January purchases 135,000135,000270,000February purchases-- ACC 2020 –Managerial Accountin" rel="nofollow">ing|Page 5of 6March purchases--Total cash disbursements for purchases$228,0006.Cash budget:JanuaryFebruaryMarchQuarterBegin" rel="nofollow">innin" rel="nofollow">ing cash balance$48,000Add cash collections304,000Total cash available352,000Less cash disbursements:Purchase of in" rel="nofollow">inventory228,000Sellin" rel="nofollow">ing/admin" rel="nofollow">in expense129,000Purchase of equipment--Cash dividends45,000Total cash disbursements402,000Excess (deficiency) of cash(50,000)Fin" rel="nofollow">inancin" rel="nofollow">ing:Etc.7.Prepare an absorption costin" rel="nofollow">ing in" rel="nofollow">income statement for the quarter endin" rel="nofollow">ing March 31 as shown in" rel="nofollow">inSchedule 9in" rel="nofollow">in the chapter.8.Prepare a balance sheet as of March 31.9.List and briefly describe the reasons why you feel you need a budget to operate your busin" rel="nofollow">iness.MP6–Performance Measures(Lesson 9)[40 poin" rel="nofollow">ints]After two years of operatin" rel="nofollow">ing your busin" rel="nofollow">iness, you have determin" rel="nofollow">ined that you are not sure how successful your busin" rel="nofollow">iness is. In order to address this concern, you have decided that you need to identify a strategy for your busin" rel="nofollow">iness and to develop a performance measurement system to determin" rel="nofollow">ine if your busin" rel="nofollow">iness is successful.1.Describe a busin" rel="nofollow">iness strategy that you feel would be best to make your busin" rel="nofollow">iness successful. The topic of strategy was in" rel="nofollow">introduced in" rel="nofollow">in your text on page 11 and is also discussed on pages 432-437. You may also want to do some simple in" rel="nofollow">internet research on the topic of strategy.Once you have described the strategy you would employ, explain" rel="nofollow">in why you feel your strategy will work.2.Prepare a Balanced Scorecard similar to Exhibits9-3and 9-4from your text.For eachof the four groups of performance measures (fin" rel="nofollow">inancial, customer, in" rel="nofollow">internal busin" rel="nofollow">iness processes, learnin" rel="nofollow">ing and growth), you should identify 2-3 performance measures (use Exhibit 9-4 as a guide). Your balanced scorecard must reflect and support your strategy.3.Prepare a cause-and-effect chart similar to Exhibit 9-5. Your cause-and-effect chart must reflect and match your balanced scorecard.