ACCT-346 Course Project – Bravo Baking Company

acct_346_project_-_bravo_baking_company_temp_file.xlsx

Course Project

  

Details

This course has a six-part project with deliverables due in six of the eight weeks.

The course project takes a new company through hypothetical scenarios to reinforce the TCOs. By using a single entity, in a variety of business situations, you will see the practical application of a number of managerial accounting concepts taught in this course.

 

You will have access to an interactive Excel Template in Doc Sharing to complete your work in proper format. Each week’s Assignment page will tell you which portion of the template you need to complete for that week.

You will have Dropbox deliverables in Weeks 1, 2, 3, 5, 6, and 7. Point values do vary in that Week 1 is worth 10 points, Week 2 is worth 30 points, and the remaining Weeks (3, 5, 6, and 7) are 40 points apiece.

Instructions

6

0

with the production and sales of speciality breads.

Lo

“

Available

vs. Period Costs

10

0.00

0.00

40 0.00

40 0.00

40

.00

20.00

ACCT 3

4

Student Name

Bravo Baking Company began operations in May of 2

0

1

The company has experienced a good market demand for its high protein, low carbohydrate product called “

Hi

–

Hi-Lo’s success has required that Bravo continue to make only this one product, however, Bravo’s customers,

the local retailers, have been asking for more specialty breads from the company. The decision to expand will be made

in the coming weeks.

Weekly Assignments: Complete the assigned Tab each week.

In each worksheet there are several Green colored cells. These cells must be filled in with your response.

Due

Points

Points Earned

Tab1)

Product

Week 1

0.00

Tab 2)

Cost of Goods Manufactured Schedule

Week 2

30

Tab 3) Break Even Analysis

Week 3

40

Tab 4) Incremental Analysis

Week 5

Tab 5) Capital Budgeting

Week 6

Tab 6) Variance Analysis

Week 7

20

200

Total

Tab 1 ProductPeriod

ACCT 346
Student Name

: From the list below, identify if the cost item is a “Direct Cost” or “Indirect Cost” by typing “Direct” or “Indirect” in the appropriate box.

Table B

0 Flour used in baking bread 0

0 Factory Supervisor Salaries 0

0 Bakers wages 0

0

0

0

0

0 Utilities used in the factory 0

0

0

0

0

0 Paper wrappers for bread 0

0 Depreciation on bake ovens 0

0

0

0

0

Factory Insurance 0 Factory Insurance 0
0 Points 0.00 0

For Tables A : From the list below, identify if the cost item is a “Product Cost” or “Period Cost” by typing “Product” or “Period” in the appropriate box.	10 points	For	Table B
	Table A	Enter either “Product” or “Period”	Enter either “Direct” or “Indirect”
	Flour used in baking bread
			Factory Supervisor Salaries
			Bakers wages
		Rent for Executive Offices			Factory Insurance
		Sales Commissions		Rent for Factory
			Utilities used in the factory
		Advertising costs	Cleaning Bake Ovens
	Delivery truck costs	Insurance on Factory
	Paper wrappers for bread
					Depreciation on bake ovens
Eggs, salt, water used for baking	Eggs used for baking
		Interest on bank loan	Small amounts of salt used

Tab 2 COGM&COGS

ACCT 346
Student Name

Cost of Goods Manufactured Schedule 0

used in baking bread

0

Factory Supervisor Salaries

Materials

Bakers wages

0

Rent for Executive Offices

0

Sales Commissions

0

0

Utilities used in the factory

0

0

Advertising costs

0

0

Delivery truck costs

00

0

Depreciation on bake ovens 500

Interest on bank loan 250

0

Beginning Inventory Materials

Depreciation on bake ovens 0

0

Ending Inventory Materials

0

0

0

0

Other Overhead costs 1200

0

0

6000

0

Rent for Factory 7500
Beginning Finished Goods Inventory 0
Beginning Work In Process

Materials
Beginning Inventory Materials $0 Try Again
Plus: Purchases $0 Try Again
Materials Available $0 Try Again

$0 Try Again

Materials Used $0 Try Again
Direct Labor $0 Try Again
Overhead
Factory Rent $0 Try Again
Depreciation on bake ovens $0 Try Again
Utilities used in Factory $0 Try Again
Other Overhead costs $0 Try Again
Total Overhead $0 Try Again
Total Manufacturing Costs $0 Try Again
Total Work in Process $0 Try Again
Less: Ending Work in Process $0 Try Again
Cost of Goods Manufactured $0 Try Again

0

0

Cost of Goods Sold Schedule 0
Points 0.00 0

Use the information provided below to prepare the Cost of Good Manufactured Schedule:Bravo had the following costs as of Dec 31, 2010. Enter the correct values in the Green shaded cells.

(TCO 2)

30 points

Table C

Materials

Beginning Work In Process

20,000

$32,000

Beginning Inventory Materials

36,000

Plus: Purchases

1000

Materials Available

500

Less:

Ending Inventory Materials

1200

Materials Used

250

Direct Labor

Overhead

Factory Rent

10,000

Beginning Work in Process

8000

Utilities used in Factory

400

Other Overhead costs

Inventory Purchases

2

6000

Total Overhead

Ending Work in Process

2500

Total Manufacturing Costs

Total Work in Process

Beginning Finished Goods Inventory

7500

Less: Ending Work in Process

Ending Finished Goods Inventory

Cost of Goods Manufactured

Complete only the Green cells. Values in Red are from the schedule above.

Cost of Goods Sold Schedule

$0

Try Again

Less: Ending Inventory Materials

Goods Available for Sale

Less: Ending Finished Goods Inventory

Tab 3 CVP

ACCT 346
Student Name

Table A

0.00

Factory Supervisor Salaries

0.00

Bakers wages 2.29

0.00

Rent for Executive Offices

0.00

Sales Commissions

Utilities used in the factory

Advertising costs 1000

how many units must it sell?

0.00

400

0.00

Depreciation on bake ovens

Interest on bank loan 500

0.00

0.00

Points 0 0.00

Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs. (TCO 4)			40	Points
Units produced	14,000
Part I Enter your solution in the green cells for each of the following:
Variable	Fixed	Using the costs from Table A compute
Materials used in baking bread			2.29	A) Breakeven units (rounded to 2 decimal places)
0.12	B) Break-even sales dollars
C)		Contribution Margin
3,000	D) Contribution Margin Ratio (%)
3500
0.50	Part II Complete the following requirements
A) If Bravo requires a profit of				$5,000
Delivery truck depreciation	B) What is the total revenue from A above?
0.07	C) If Bravo actually sells 8,000 units
1) What is the margin of safety in Dollars?
2) What is the margin of safety percentage?
Total Costs	$5.26	$8,400.00
Price Charged per unit	$7.89
Total				Correct
Hint: use spreadsheet formulas to compute your answers

Tab 4 Incremental Analysis

ACCT 346
Student Name

Product Hi-Lo

Total

$6,360

Contribution Margin $27,030 $12,720 $6,360 $46,110

$5,000 $5,000 $5,000

$2,850

$5,000

$2,500

Bravo wants to know the effect on Net Income if it decides to discontinue the Fruit & Nuts product.

Product Hi-Lo Whole Grain Fruit & Nuts Total

Revenues 0
Variable product costs 0
Variable Selling & Administrative costs 0
Contribution Margin 0
Fixed Product Costs 0
Fixed Selling and Administrative Costs 0
Allocated Common Costs 0
Net Income 0
Points 0 0

Bravo Baking Co has expanded its product line to include several other specialty breads. The operating results for the last quarter are provided below.	(TCO 7)	40 Points
	Whole Grain		Fruit & Nuts
	Revenues	$67,575	$31,800	$15,900	$115,275
	Variable product costs		$27,030		$12,720			$6,360		$46,110
	Variable Selling & Administrative costs	$13,515	$3,180	$23,055
	Fixed Product Costs	$15,000
	Fixed Selling and Administrative Costs	$5,700		$2,850	$11,400
	Allocated Common Costs		$2,500	$10,000
	Net Income	$11,330	$2,370	-$3,990	$9,710
	Required:
If Bravo eliminates Fruit & Nuts 50% of fixed costs can be avoided.
Prepare and incremental analysis showing the Net Income Effect of eliminating the Fruit & Nuts product.
What woud you advise Bravo to do?
Using the Table below, compute the Net Income for Bravo Baking after eliminating the Fruit & Nuts product.

Tab 5 Capital Budgeting

ACCT 346
Student Name

40 Points

0

0

0

0

0

0

Points 0 0

Bravo Baking Co is considering replacing an older freezer with a larger unit to freeze some of its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell an more bread each year. From these additional sales
the after tax cash flow is expected to be $4,000. In addition to more sales, the new freezer will save $1,200 in electricity each year.	TCO 9
However, the new freezer will cost an additional $2,000 each year for maintenance. The cost of the new unit is $25,000 and it is
expected to last 10 years. The salvage value at the end of its life is $6,000. The old unit is fully depreciated and can be disposed at cost.
Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should Bravo purchase the freezer?
Use the format below to complete the NPV computations:
(Note: Use PV Tables on pages 342 and 343. Also, be sure to show costs as negative values)
Cash Flow	PV Factors	PV Amounts
Cost of new refrigeration unit
After tax cash flow
Annual electricity savings
Additional annual maintenance costs
Amount collected from disposal of unit
Net present value

Tab 6 Variance Analysis

ACCT 346

Student Name 40 Points

per unit

Standard Cost

)

2.29 .5 lbs

* $9/hr)

.25 hrs

Overhead

Total

Required:

–

= 0.00

/

>

Fav

Try Again Correct 0 1

= ( – ) *

=

Unf

Try Again Correct 0 1

= ( – ) *

=

Unf

Correct 0 1

= ( – ) *

= Fav/Unf

Correct Points 20 0 1
4

TCO 10
Bravo Baking uses standard costing to analyze its performance. The data below is provided for your use in determining Bravo’s variances.
	Standard Cost	Cost /Unit	Amount/Unit
Material Cost (Ingredients) (	.5 lbs	$4.58
Direct Labor(	.25 hrs	2.25	$9.00
0.57
5.11
During the month, Bravo sold 9,000 loaves of bread and used 4,650 pounds of ingredients. Also during the month, Bravo
purchased 5,000 pounds of ingredients at a cost of $22,500. Employees worked a total of 2200 hours and actual labor costs were $19,998
Part a. Compute the material price and quantity variance.
Material Price Variance				=
			= (				) *
	Fav		Unf
Material Quantity Variance =
$0.00		Fav/Unf
Labor Rate Variance =
Fav/Unf >
Labor Efficiency Variance =
fav