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Learning Guide Unit 3

Learning Guide Unit 3

Site: University of the People

Course: BUS 5110 Managerial Accounting - Term 4, 2016-2017
Book: Learning Guide Unit 3
Printed by: ZAW WIN HLAING
Date: Thursday, 27 April 2017, 12:56 AM

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Table of contents
Overview

Introduction

Reading Assignment

Discussion Assignment

Written Assignment

Group Activity

Checklist

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Overview

Unit 3: Cost Analysis Models

Topics:

Contribution Margins
Fixed, Variable, and Mixed Costs
Break-Even Analysis
Cost-Volume-Profit Models

Learning Objectives:

By the end of this Unit, you will be able to:

1. Compute contribution margins.

2. Compute break-even points.
3. Establish cost-volume-profit models.

Tasks:

Peer assess Unit 2 Written Assignment

Read the Learning Guide and Reading Assignments
Participate in the Discussion Assignment (post, comment, and rate in the Discussion Forum)
Complete and submit the Written Assignment
Continue to participate in the Group Activity

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Introduction

A common theme explored in many business courses is how business leaders arrive at decisions on
whether to launch a new product, service, or project. This unit’s subject is one of the foundational
concepts that support business management in their decisions: Cost-volume-profit modelling. To
effectively use this model, a number of concepts need to be understood. These concepts include cost
behaviors (variable, fixed, or mixed costs), contribution margins, and break-even analysis.

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Reading Assignment

Walther, L. M. & Skousen, C.J. (2009). Managerial and Cost Accounting. Bookboon.com

Chapter 8

Heisinger, K., & Hoyle, J. B.(2012). Accounting for Managers. Creative Commons by-nc-sa 3.0.

Chapter 6

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Discussion Assignment

In this graduate course you are expected to participate often and engage in deep levels of discourse.
Please post your initial response as early as possible and continue to participate throughout the unit. You
are required to post an initial response to the question/issue presented in the Forum and then respond to
at least 3 of your classmates’ initial posts. You should also respond to anyone who has responded to
you.

Please select three companies and describe what they do. Select a major component of their production
process and speculate on how to calculate unit costs. Identify what you think are their variable, fixed, and
mixed costs of each.

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Written Assignment

Submit a paper which is 3-4 pages in length (no more than 4-pages), exclusive of the reference page.
Paper should be double spaced in Times New Roman (or its equivalent) font which is no greater than 12
points in size. The paper should cite at least three sources in APA format. One source can be your
textbook.

In this paper, please discuss the following case study. In doing so, explain your approach to the problem,
support your approach with references, and execute your approach. Provide an answer to the case
study’s question with a recommendation.

Case Study:

You are a cost management consultant and you have been asked by a small business owner for business
advice. Your client owns a chain of small, local operations that support larger caterers for special events.
Your client provides the tents for outside events, the soft drinks and snacks for the children of events,
along with floral and other decorative arrangements.

This kind of business is extremely competitive and your client would like to know how far she can lower
her prices without losing money. Currently, the chain of operations has $22,500,000 of revenue from
5,000 events that they have serviced.

The cost data she can provide you includes:

Floral costs, $200 per event,

Table arrangements, $100 per event,
Soft drinks and children snacks, $500 per event,
Annual allocated costs of tents and other structures, $500,000,
Annual allocated costs of trucks and vehicles, $2,000,000,
Annual costs related to maintaining permanent staff, $3,500,000,
Wage for temporary staff (paid per event), $1,800 per event.

You begin your analysis, of course, with a break-even calculation.

Superior papers will:

Provide an accurate solution.

Provide a narrative that defines and discusses the purpose of assigning cost categories of fixed and
variable costs.
Provide a narrative that defines and discusses the relationship of variable costs to contribution
margin.
Provide a narrative that discusses the limitations of the data.
Provide a narrative that speculates what data is missing from the case.

Be sure to use APA formatting in your paper. Purdue University’s Online Writing LAB (OWL) is a free
website that provides excellent information and resources for understanding and using the APA format
and style. The OWL website can be accessed here: http://owl.english.purdue.edu/owl/resource/560/01/

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Group Activity

Continue to work on the Group Activity, which you began during Unit 2 with your assigned teammates. You
can refer back to the Unit 2 Learning Guide or Group Collaboration Wiki at any time. Please remember
this assignment is due at the end of Unit 5.

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Checklist

Peer assess Unit 2 Written Assignment

Read the Learning Guide and Reading Assignments

Participate in the Discussion Assignment (post, comment, and rate in the Discussion Forum)

Complete and submit the Written Assignment

Continue to participate in the Group Activity

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