23 May DETERMINE AN OPTIMAL COST ALLOCATION METHOD BASED ON THE RELEVANT COSTS.
ACC 550 Final Project Guidelines and Rubric
Overview
The final project for this course is the creation of a quantitative analysis that includes an Excel spreadsheet, accompanied by a memo to management.
Accountants provide management with the logistics of the business that are crucial for daily operations and a company’s overall success. In any business, it is of
the utmost importance to be aware of all finances and internal processes. Cost accountants focus solely on the internal processes of a business and are tasked
with eliminating any unnecessary costs in order to maximize profits.
In this assessment, you have been tasked with conducting a quantitative analysis that looks into the internal processes of a company. Based on your analysis, you
will formulate recommendations to management that aim to improve internal processes and increase profits for the company.
The project is divided into three milestones, which will be submitted at various points throughout the course to scaffold learning and ensure quality final
submissions. These milestones will be submitted in Modules Three, Five, and Seven. Your final submission will occur in Module Nine.
In this assignment, you will demonstrate your mastery of the following course outcomes: Apply cost-volume-profit (CVP) analysis based on cost classification for planning and control of internal accounting processes within an organization
Assess cost and revenue allocation methods for providing relevant information to decision makers
Select the optimal inventory management method for meeting the needs of an organization
Evaluate cost accounting performance and planning tools for their impact on business operations Prompt
Conduct a quantitative analysis of a company’s internal processes using the Hampshire Company Case Study document. Your analysis will consist of completing
the Hampshire Company Spreadsheet and will be accompanied by a memo to management.
Specifically, the following critical elements must be addressed:
I. Cost-Volume-Profit Analysis
Cost-volume-profit (CVP) analysis is a useful tool for informing short-term economic planning within an organization. In this section, a CVP analysis
will be conducted and used to inform business decisions and recommendations.
A. Perform a CVP analysis based on cost classifications.
B. Explain how a CVP analysis can assist management with short-term economic planning. Support your response with examples from your
CVP analysis.
C. Accurately compute the break-even quantity and break-even revenue. D. Determine whether the company is breaking even. What are the CVP analysis implications on planning?
II. Inventory Management
Inventory management serves to minimize the cost to maintain inventory and maximize returns. In this section, the company’s financial data will be
reviewed in order to determine the optimal inventory management system.
A. Determine an optimal cost allocation method based on the relevant costs.
B. Describe how this method should be used by decision makers to fulfill their responsibilities. Support your response with examples.
C. What are the pros and cons of implementing the just-in-time (JIT) inventory system? Do the pros outweigh the cons for this company?
D. Explain how the just-in-time (JIT) inventory system can benefit this organization. Defend your response.
E. Identify the inventory management method you recommend, and explain why this method will benefit the company. III. Benchmarking
In this section, benchmarking will be reviewed. Benchmarking can be implemented in various ways depending on a company’s circumstances. Your
company has decided to implement benchmarking and would like you to research and recommend the most effective approach.
A. What is the advantage to benchmarking in terms of improving companies’ performance? Support your response.
B. Identify possible approaches to benchmarking. Describe each.
C. Which benchmarking method should management adopt and why? IV. Alternative Costing Method
There are various costing methods available for companies to implement. As a company grows, it may become beneficial to consider an alternate
costing method.
A. Identify an alternative costing method that could benefit this company, and describe the main characteristics of that method.
B. What should a company look for when trying to determine whether they should adopt such a system?
C. Should the company adopt this alternative costing method? Defend your response. V. Memo to Management
Your memo to management should serve as a summary of your quantitative analysis, reviewing the key points and recommendations that you feel
management should be aware of.
A. Describe the overall findings of your analysis, including key elements that management should be aware of.
B. Make a recommendation to management based on your cost accounting analysis that will enhance business planning.
C. Recommend a performance tool to management based on your cost accounting analysis that will improve business operations. You may use the following resources to help you prepare your memo to management: Purdue OWL: Memos contains information related to formatting a memo,
and Purdue OWL: Sample Memo presents a sample of a memo that you can use as a guide when you format the memo for the final project. If you would like a refresher course on using various features of Excel, sign in to Atomic Learning and type “Excel” in the search box. This will provide you with
options to select the specific level of training that you need (intro, intermediate, or advanced) and the specific version of Excel that you have (e.g., 2011 or 2013).
The trainings are broken down into small, meaningful chunks. Therefore, you should be able to find specific topics at each level that will meet your needs. Milestones
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