The purpose of this group project is to help you integrate the managerial accounting concepts we cover in class and apply them to a real-world business setting. This project contains two phases.
In the first phase, you will analyze your costs and come up with a cost formula for your business.
In the second phases, you will make sales forecast, conduct cost-volume profit analyses, prepare budgeted financial statements, and come up with strategies to improve the profitability of your business. After you complete all phases of this project, you will have good understanding of how managerial accounting tools can help managers run a business.
This project is to be done in groups …show more content…
[e] Laser paper: You will buy several reams of laser paper to print promotion flyers, etc. Each ream costs $20 and contains 200 sheets of 8.5×11 laser paper.
6) Wrapping paper and box: Each T-shirt costs about $0.20 to wrap and box. Wrapping and boxing are not considered as manufacturing.
7) You will hire three fellow students as part-time workers. They not only help you operate the machine, but also help fold, wrap and box T-shirts. Sometimes, three of them work at the same time. But, sometimes they don’t because of their different class schedules. On average, printing
10 shirts will take one labor hour. Folding and packaging 20 shirts also will take about one labor hour. You will pay each of your workers $8 per hour. Folding and wrapping are not considered as manufacturing.
8) You (the owners) do all the selling and administrative work by yourselves. You will pay yourselves a total of $12,000 per year (to be divided among all owners).
9) To protect your business from legal obligation, you will purchase a liability insurance that will cost you $3,600 per year.
10) You will hold four end-of-quarter parties to promote sales of your t-shirts. Each party costs you about $1,000.
(1) Give your company an