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ACG3357 Rasmussen Accounting CVP and Break-Even Analysis

ACG3357 Rasmussen Accounting CVP and Break-Even Analysis

ACG3357 Rasmussen Accounting CVP and Break-Even Analysis

READ FIRST – This is the second part of a course project. I have attached Module 2 (the first part of the project), as you will need the information in there.)

This week you will analyze and classify the costs of your cookie company and evaluate contribution margin.

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Review your Project Submission from Module 02 (see the attached powerpoint) where you developed a cost card for your cookie and made a list of potential overhead costs.
Create an Excel spreadsheet as outlined below. Be sure that your completed spreadsheet has answers to all the questions below.

  1. In a table, on the first tab of the spreadsheet, classify your costs as variable, fixed, or mixed. Note: Now that you have a more robust understanding of costs you may need to add some overhead costs to your list. Think about both the ecommerce costs as well as the production facility costs.
  2. On the second tab of your Excel spreadsheet, prepare a high-low analysis of your electric costs using the following data. What is your fixed cost of electricity? What is the variable cost of electricity?
Month Kilowatt Hours Used Electric Costs
January 1866 $230
February 1439 $202
March 1146 $197
April 1046 $190
May 996 $182
June 1760 $225
  1. On the third tab of your spreadsheet prepare a daily contribution margin income statement based on your cost card from Module 01. Note: You must make some realistic assumptions about your fixed costs, sales level, and selling and administrative costs. Be sure to list all your assumptions. What is the contribution margin ratio for your cookie?
  2. On the fourth tab of your spreadsheet, calculate the break-even in number of cookies per day. What is the break-even in sales dollars each day? How many cookies must you sell to earn a daily profit of $100? Does this seem realistic?

 

UNFORMATTED ATTACHMENT PREVIEW

Forming a Company Samantha Crocker Rasmussen College Introduction ▪ The discussion will focus on establishing a cookie company. The company has to operate in a particular locality. The new business needs to come up with a recipe and cookie specifications. It also needs to decide on a costing system. The business has to defend the choice of location and prove that the business concept will offer tangible returns in the long run. The business has to identify the overhead costs and come up with a flow chart to indicate the movement of costs in the business. COMPANY NAME Halls Cookies • Halls Cookies will major in the sale of organic and healthy cookies through office and home deliveries. • The company intends to take advantage of the increased demand for organic food stuffs through the use of organic ingredients (Mazzacano & Falzon, 2015)