You have decided to go into partnership with a colleague enrolled in your ACC2CAD subject. Your partnership business will consist of two subsidiaries (each subsidiary will be responsible for each of your product/service from your individual assignment) responsible for the production and selling of the product/service you each selected for your individual assignment. As the owners and accountants of your new partnership you are required to undertake cost-volume profit (CVP) analyses, prepare flexible budgets, and consider transfer pricing options based on the standard cost and prices you determined for your individual products in your individual assignment.
Please use Excel to undertake and record your relevant calculations for requirements below.
- Assume the actual results for your products/services costs (i.e price of direct materials, direct labour and overheads) are 10% more than what you budgeted for in your individual assignments’ master budget and the quantities are 5% (i.e sales level, quantity of materials used, etc) less to prepare the following for each subsidiary:
- A static budget at budgeted sales.
- A flexible profit and loss statement budget using actual sales level.
- Actual profit and loss statement.
- Calculate variances and investigate reasons for two of the most significant variances.
- Determine the sales mix for your products/services (provide detailed justification for your sales mix) and form a package contribution margin to calculate the break-even point in units and sales dollars. Prepare a contribution margin income statement to verify your break-event points.
- You need to submit two files for the assignment. One is the completed PDF file containing your work for all requirements. The second file is the Excel file containing your calculations for requirements 1 to 3.
- The first page of your PDF report should be a cover page with the subject code, the names and student ID’s of each group member and the name of your products/services. The second page should be a table of contents.
- The body of the PDF report will include the requirements above (1-3) and each requirement needs to be clearly numbered.
- The PDF report and Excel file needs to be page numbered and presented in a professional and well-formatted manner.