In this project, you will be opening your own specialty cookie company to see how product costing methods and changes in production affect business decisions. You will be creating a series
Instructions
Cookie Business
In this project, you will be opening your own specialty cookie company to see how product costing methods and changes in production affect business decisions. You will be creating a series of reports and analyzing the results using the template provided to guide you through the project.The learning objectives of this project are as follows:
- Gain an understanding of product costing (direct materials, direct labor, and overhead).
- Review job order costing.
- Review process costing.
- Make business decisions based on analyzing accounting data.
You will prepare a four- to five-page written report (including spreadsheets) with at least two scholarly sources using the Unit II Project Template . Your report will provide the following information:
Introduction
Part 1: Establish a cookie business selling only one type of specialty cookie with two employees making the cookies.
- Create a name and establish a location for the business.
- Construct a mission statement for the business.
- Decide on the type of cookie you want to make and sell.
Part 2: Develop costing and sales information for 1,000 cookies.
- Estimate and explain the cost per cookie based on job order costing (manufacturing overhead is 30% of direct labor costs). Prepare a job order cost sheet by researching and identifying the top five ingredients and their estimated costs as your direct materials. Research and identify the cost of wages for your two employees as your direct labor. It typically takes two days to make 1,000 cookies.
- Estimate and explain the cost per cookie based on process costing with 40% conversion costs. Identify the top three processes you feel are needed to make the cookies and prepare a production cost sheet for one of those processes.
- Estimate and explain the sales price you plan to set per cookie based on the cost data.
Part 3: Compare and contrast the costing methods used in this project, including which you believe provides the most useful information as a manager.Part 4: Discuss what will happen to revenue if the number of the cookies sold increases or decreases.
Conclusion and Recommendations
Use the Unit II Cookie Project Spreadsheet Templates for your job order, and process costing spreadsheets to be embedded in your case study document.Be sure to use APA formatting throughout and reach out to the Writing Center or the Library for assistance with research, writing, and formatting. Include at least two resources from the CSU Online Library in your report.
Job Order
| <Name of Company Here> | |||||||||
| Job Order Cost Sheet | |||||||||
| Job number: | |||||||||
| Direct Material | Direct Labor | Manufacturing overhead | |||||||
| Ingredients | Total Cost per ingredient | Date | Hours | Rate | Total Cost per employee | Total Cost | |||
| <list 5 ingredients and their costs> | <2 employees> | <30% of Direct Labor Costs> | |||||||
| Total | – 0 | – 0 | |||||||
| Cost Summary | |||||||||
| Direct Materials | – 0 | ||||||||
| Direct Labor | – 0 | ||||||||
| Manufacturing Overhead | – 0 | ||||||||
| – 0 | |||||||||
| Units | 1,000 | ||||||||
| Cost per unit | – 0 |
Process Costing
| <Name of Company Here> | |||||
| Production Cost Report | |||||
| Department: | <Select one department in your cookie making process> | ||||
| Cost: | Material | Labor | Overhead | Trans In | Total |
| Beginning WIP | |||||
| Cost incurred | |||||
| Total | |||||
| Units: | |||||
| Units Completed | |||||
| Equivalent Units (ending WIP) | |||||
| Total | |||||
| Cost per Equivalent unit |
Sheet3
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Title of the Paper Goes Here
Student Name
Institution
ACC 5301 Management Applications of Accounting
Instructor
Date
Abstract
The Abstract is an overview of the paper, written after completion. Other researchers use the abstract to determine if your work will be useful to them. The abstract should include the background, hypothesis or research question, methodology for data collection and analysis, the findings of your research, and conclusions. It should be between 100–150 words. This is done when the paper is complete.
Title of Paper
Remember this part of the paper is double spaced in APA format.
The Introduction should lead readers into the topic and its importance. Introductions typically include the overall topic of the paper, the specific focus of the paper within the larger topic, the main points in the paper, the kind of paper (study, argument, critique, discussion), and the purpose.
Writing tip: The length of the introduction should be in proportion to the length of the paper. Also ask yourself, “With my purpose and my audience, how do I engage my readers best?” In the introduction, you set the tone of the piece, establish your voice, and demonstrate your writing style; be authentic to your purpose and your audience.
Part 1 Establish Cookie Business
Identify the name of your company, location, mission statement for your business, and type of cookie you plan to make. Keep in mind that you are only making one type of cookie for this project.
Part 2 Costing and Sales Information
Analyze and discuss the estimated cost per cookie using job order costing, the estimated cost per cookie using process costing, and the estimated sales price per cookie. Embed your spreadsheets to justify your costs.
Part 3 Compare and Contrast Costing Methods
Analyze and discuss the major differences you see between the types of costing. Which do you believe is more useful for this business, and why?
Part 4 Impact of Increase and Decrease in Sales
Discuss what will happen to revenue if the number of cookies sold increases or decreases.
Conclusions and Recommendations
The Conclusion section should summarize for the readers the topics of importance that led to your final conclusions/analysis regarding this case. Include some specific areas of focus from your analysis to reinforce your conclusion.
References
Include complete references in proper APA format for all of the citations listed in your paper. Be sure to use the library for the required number of sources. Additional sources can be used but should be scholarly. Present your references in alphabetical order.
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