BUS 220 Managerial Accounting Competency Statement: Accounting for internal decisions making, planning, and control purposes. The manufacturing environment is emphasized. Topics include cost behavior and analysi

BUS 220 Managerial Accounting Final Assessment Guide Page 1 of 14 Competency Name: BUS 220 Managerial Accounting Competency Statement: Accounting for internal decisions making, planning, and control purposes. The manufacturing environment is emphasized. Topics include cost behavior and analysis, relevant costs, job order and process cost systems, budgeting, and standard cost. Final Assessment Title: BUS 220 Final Assessment Program Learning Outcomes (PLOs) : PLO 1. Our graduates will be able to apply knowledge of the standards set by the authoritative bodies responsible for financi al reporting and managerial accounting theories to business organizations, state & local governments, and not -for -profit organizations. PLO 3. Our graduates will be able to identify and implement the appropriate managerial methods to analyze and evaluate accou nting data while ensuring the integrity of financial information and its impact on multiple stakeholders. PLO 4. Our graduates will be able to use clear and concise communication to convey relevant financial and non -financial information so that decision makers can formulate informed decisions. Course Learning Outcomes (CLOs) : 1. Identify the difference and s imilarities between financial and managerial accounting 2. Demonstrate an understanding of the importance for ethics in business 3. Demonstrate an understanding of an organization’s budget and the processes that are used to create budgets. 4. Demonstrate an understanding of the difference between variable and fixed costs 5. Demonstrate an understanding of how to calculate Manufacturing Overhead 6. Demonstrate an understanding of process costing 7. Demonstrate an understanding of how manage ment uses accounting information to plan and control operations BUS 220 Managerial Accounting Final Assessment Guide Page 2 of 14 Purpose of This Assessmen t The final assessment for this competency is to identify the differences and similarities in managerial and financial accounting, how ethics impacts accounting, and a completed series of comprehensive financial accounting problems that address budgeting, forecasting, standard costing, variance analysis, profitability, and cost analysis using a balance scorecard . Items Required for Submission A comprehensive solution set to a selection of managerial accounting problems that involve: • Preparing a comprehensive summary differences and similarities of Managerial and Financial Accounting • Preparing a case study on B usiness Ethics • Preparing Capital Budgets • Generating Operating Budgets • Demonstrating a knowledge of standard costing and variances • Performing profitability and cost analyses of businesses and business segments • Constructing a balanced scorecard for strategic planning and control purposes, considering both quantitative and qualitative data Step 1: Preparation In order to prepare for this assignment, it is important to carefully review the entire scenario for each problem found in Appendix A. When r eviewing each problem, the following questions should be considered: 1. What possible tasks are required? 2. What will you need to complete the problem? 3. What formulas will you need? 4. What resources from this competency might you reference to successfully complet e this problem? 5. Think about possible plans of action for what steps you will take — what strategies will you use to tackle each problem? BUS 220 Managerial Accounting Final Assessment Guide Page 3 of 14 Step 2: Perform Calculations & Explain Methods For each problem (found in Appendix A): 1. Use your plan of action to solve each problem, clearly outlining the procedures used, providing a concise explanation of each step, labeling relevant formulas, and showing wor ked out calculations and complete solutions. You may use an Excel spreadsheet or a calculator to help you perform the necessary calculations, but all corresponding work must be shown completely. 2. Answer all questions posed in the problem; if applicable, analyze and evaluate your results and provide a contextual explanation of the solutions you obtained. 3. Review your calculations and solutions and make sure that an external viewer would be able to follow your methodology and make sense of your c alculations and corresponding explanations. Make certain that you have completed all the steps of each problem. Step 3: Complete Checklist for Submission Before you submit, check to see if you believe you have met the criteria noted below.

Did you…. ✓ An swer all parts of each question completely and accurately? ✓ Provide clear and accurate steps, calculations, and solutions? ✓ Include an insightful analysis and evaluation of results where relevant? ✓ Provide a comprehensive and accurate description of each of t he four areas of a balanced scorecard, an accurate and clear definition of a key performance indicator (KPI), and meaningful real -world examples of KPIs for each balanced score card area? BUS 220 Managerial Accounting Final Assessment Guide Page 4 of 14 Step 4: Submit Your Work ● Your completed final assessment documents should be submitted through the Final Assessment link of your competency. ● Please note, that you can upload multiple files to the Final Assignment link. ● Make sure the files are converted to a doc, docx, ppt, pptx file . (you can share Google Doc and MS OneDrive documents from the “Choose Existing Activities ” button) ● To upload a file, click “Upload File” and choose the file(s) from your desktop: More tutorial resources can be found at the UMPI Student eLearning Hub BUS 220 Managerial Accounting Final Assessment Guide Page 5 of 14 Final Assessment Rubric Criterion EMERGING – 1 DEVELOPING - 2 PROFICIENT – 3 EXEMPLARY – 4 Managerial and Financial Accounting Does not answer all parts of each question completely and provides a weak analysis and evaluation of results where applicable. Partially answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Mostly answers all parts of each question completely and accurately, showing and e xplaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Business Ethics Does not answer all parts of each question completely and provides a weak analysis and evaluation of results where applicable. Partially answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Mostly answers all parts of each question completely and accurately, showing and e xplaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. BUS 220 Managerial Accounting Final Assessment Guide Page 6 of 14 Budgets Does not answer all parts of each question completely and provides a weak analysis and evaluation of results where applicable. Partially answers all parts of each questio n completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Mostly answers all parts of each question completely and accurately, showing and explaini ng all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Costs Does not answer all parts of each question completely and provides a weak analysis and evaluation of results where applicable. Partially answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Mostly answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insig htfully analyzing and evaluating results where applicable. Manufacturing Overhead Does not answer all parts of each question completely and provides a weak Partially answers all parts of each question completely and accurately, showing Mostly answers all parts of each question completely and accurately, showing Answers all parts of each question completely and accurately, showing BUS 220 Managerial Accounting Final Assessment Guide Page 7 of 14 analysis and evaluation of results where applicable. and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Process Costing Does not answer all Partially answers all Mostly answers all Answers all parts of parts of each question completely and parts of each question completely and parts of each question completely and each question completely and provides a weak accurately, showing accurately, showing accurately, showing analysis and and explaining all and explaining all and explaining all evaluation of results steps, calculations, and steps, calculations, and steps, calculations, where applicable. solutions clearly, and insightfully analyzing solutions clearly, and insightfully analyzing and solutions clearly, and insightfully and evaluating results and evaluating results analyzing and where applicable. where applicable. evaluating results where applicable. Planning and Controlling Operations Does not answer all parts of each question completely and provides a weak analysis and evaluation of results where applicable. Partially answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. Mostly answers all parts of each question completely and accurately, showing and explaining all steps, calculations and solutions clearly, and insightfully analyzing and evaluating results where applicable. Answers all parts of each question completely and accurately, showing and explaining all steps, calculations, and solutions clearly and insightfully analyzing and evaluating results where applicable. BUS 220 Managerial Accounting Final Assessment Guide Page 8 of 14 Planning and Controlling Operations: Balanced Score Card & Key Performance Indicators Provides a limited description of each of the four areas of a balanced scorecard, an inadequate definition of a KPI, and real world examples of KPIs that do not align to each balanced score card area. Provides a mostly accurate description of each of the four areas of a balanced scorecard, a somewhat accurate definition of a KPI, and somewhat relevant real world examples of KPIs for each balanced score card area. Provides an accurate description of each of the four areas of a balanced scorecard, an accurate definition of a KPI, and relevant real world examples of KPIs for each balanced score card area. Provides a comprehensive and accurate description of each of the four areas of a balanced scorecard, an accurate and clear definition of a KPI, and meaningful real world examples of KPIs for each balanced score card area. BUS 220 Managerial Accounting Final Assessment Guide Page 9 of 14 Appendix A: Managerial Accounting Problems Problem #1: Managerial and Financial Accounting 1. What are the fun damental differences between Managerial and Financial Accounting ? 2. What are the 3 primary functions of the Managerial Accountant ’s role in a business ? Provide a comprehensive description and an example for each function . Problem #2: Business Ethics Don’t -Cha -W anna -a-Coffee , a large -scale coffee com pany, has a chain of 12 5 retail coffee stores throughout New Englan d that sells co ffee and other related products . 3 years ago, the B OD (Board of Directors) approved a revamp ing of all the stores to update them to be more modern . The ir intent was to make the re tail s tores trendier so they could be competitive with Starbucks. Before the revamp was finalized, Jim J ama ica James , the assist ant financial controller , was asked to oversee the finan cial reporting for the 10 test s tores that was piloting the new r evamped look. Jim and his team were offere d cash incentive s based on the sales growth and prof itab ility of the 10 pilot stores. While Jim was excitedly (he had already booked a vacation with his share of the projected cash incentiv e that he was antic ipating ) completing the financial reports for the 10 pilot store s, he learned that there was a sizable amount of inventory that consi sted of thous ands of dollars of outdated products that should have been re turned to the manufacturer or sold at a deep discount if it had been too late to return to manufacturer for a refund . Despondently , h e had a meeting with his team, and they all agreed to ignore the obsolete inve ntory because reporting it would cause the financial results to be less than stellar , wh ich would then in turn negatively affect their cash incentive . He was so e xcited after the meeting because h e still would be taking that planned tropical vacation ! Required: Answer the followin g questions 1. A. Was it e thical for Jim not to have reported the obsolete inventory according to the Institu te of M anagement Accoun tants Statement of Ethical Practice ? B. W hich principles were not in compliance with the IMA ’s Stateme nt of Et hical Practi ce beca use of the team ’s decision? C. Why did you choose the principles reported in B ? 2. How hard would it have been for Jim to have taken the ethical app roach in this situation? 3. Explain what most likely was the outcome from the team ’s decisio n. BUS 220 Managerial Accounting Final Assessment Guide Page 10 of 14 Problem #3: Budgets UMPI Inc. is considering the purchase of a street paver machine for $225,000. The expected life of the machine will be three years, and it will have a salvage value of $25,000. Annual maintenance costs will total $7,500. Annual savings are predicted to be $92,500. The company's required rate of return is 8%. Igno re TVM. 1. Calculate the net cash inflow or outflow resulting from this investment opportunity. Be sure to prepar e a schedule that clearly depicts the time frame of the cash flows . Problem #4: Budgets "UMPI Inc. is considering the purchase of a street paver machine for $225,000. The expected life of the machine will be three years , and it will have a salvage value of $25,000. Annual maintenance costs will total $7,500. Annual savings are predicted to be $92,500. The company's required rate of return is 8%. Ignoring the TVM, calculate the net cash inflow or outflow resulting fro m this investment opportunity. Be sure to prepare a schedule that clearly depicts the time frame of the cash flows. 1) Using the Present Value Factors for $1 at 8% noted above (table provided for reference ), calculate the net present value of this investment (ignoring taxes) 2) Based o n your answer in requirement 1 : should UMPI purchase the street paver machine? https://www.accountingtools.com/articles/present -value -of-1-table BUS 220 Managerial Accounting Final Assessment Guide Page 11 of 14 Problem #5: Budgets BUS 220 Managerial Accounting Final Assessment Guide Page 12 of 14 Problem #6: Costs The University of Maine at Presque Isle has hired you, a managerial accounting student enrolled this semester, to analyze the cost of their I/T services they provide to their students. UMPI has given you the following data which shows the monthly total costs of providing I/T services, as well as the number of students who are using the I/T services each month. Month Number of Students Using I/T Services Total Cost of I/T Services January 1,700 225,500 $ February 2,000 241,700 $ March 2,150 249,800 $ April 2,200 252,500 $ May 2,500 268,400 $ June 650 168,100 $ July 500 159,500 $ August 1,000 187,500 $ September 1,450 211,900 $ October 1,800 231,500 $ November 2,100 247,200 $ December 2,350 259,900 $ Answer the following questions in good form. Be sure to provide the detail (forumulas) as to how you arrived at each answer.

In other words, be sure to show your work! Do not round. Take number out to 2 decimal places. Use the High-Low method of accounting to answer the following questions:

1. What is the variable cost per unit?

2. What is the fixed cost?

3. UMPI plans to see an increase in student enrollment over the next two years, so they have asked you to calculate the total cost of providing services to 3,100 students for projected year 2024 and 3,500 students for projected year 2025.

4. Discuss the limitations of using the High-Low method. BUS 220 Managerial Accounting Final Assessment Guide Page 13 of 14 Problem #7: Manufacturing Overhead You have been hired as a new accountant for Bake -Me -Some -Bread, Inc. They have asked you to calculate the company's Manufacturing Overhead Rate . You are given the following data from the accounting records for last month: Sales $ 535,000 Cleaning supplies for the plant $ 4,500 Salary for the plant manager $ 8,950 Raw Materials including flour & eggs $ 13,750 Shipping costs (to deliver bread to stores) $ 2,500 Bread baker wages (working on the production lines) $ 89,500 Commissions to bread salespeople $ 12,000 Utility expense for the plant $ 42,500 Depreciation on the factory equipment $ 25,400 Factory supplies not directly associated with the product $ 4,500 Legal fees $ 3,750 Required: 1. Calculate the amount of the company's M anufacturing Overhead . 2. Calculate the Manufacturing Overhead Rate . 3. How does calculating this rate help the company's finances? 4. Explain what it means if a company has a high manufacturing rate vs. a low manufacturing rate. Which rate is better; high or low? BUS 220 Managerial Accounting Final Assessment Guide Page 14 of 14 Problem # 8: Processing Costing UMPI's Potatoes produces ready -to -eat mashed potatoes for resale at food stores. The master budget indicates that the company expects to use 5 pounds of direct materials for each unit produced at a cost of $5 per pound (one unit = one batch of mashed) . Eac h unit produced will require 0.40 direct labor hours at a cost of $7.50 per hour. Variable manufacturing overhead is applied b ased on direct labor hours at a rate of $4 per hour. Last year's sales were expected to total 60,000 units. Jake just received la st year's actual results showing sales of 55,000 units. 1) Prepare a schedule showing the standard cost per unit for direct materials, direct labor, and variable manufacturing overh ead. 2) Prepare a flexible budget based on actual sales for direct materia ls, direct labor, and variable manufacturing overhead. Problem # 9: Processing Costing UMPI's Potato Company produces ready -to -eat mashed potatoes for resale at food stores. UMPI expected to use 5 pounds of direct materials to produce one unit (batch) of product (mashed) at a cost of $5 per pound. Actual results are in for last year, whi ch indicates 55,000 batches of mashed potatoes were sold. The company purchased 300,000 pounds of materials at $4.60 per pound and used 280,000 pounds in production. 1) Calculate the materials price variance. Indicate if it is favorable or unfavorable to the company. 2) Calculate the materials quantity variance. Indicate if it is favorable or unfavorable to the company. 3) Provide a logical reasoning for the materials price and quantity variances calculated in 1 and 2. 4) Suggest several possible reasons for the materials price and quantity variances calculated in requirements (1) and (2). BUS 220 Managerial Accounting Final Assessment Guide Page 15 of 14 Problem #10: Processing Costing UMPI's Potatoes produces ready -to -eat mashed potatoes for resale at food stores. UMPI expected to use 0.40 direct labor hours to produce one unit (batch) of product at a cost of $7.50 per hour. Actual results are in for the last year, which indicates 55 ,000 batches of mashed potatoes were sold. The company's direct labor workforce worked 26,400 hours at $6.50 per hour. 1) Calculate the labor rate variance. Indicate if it is favorable or unfavorable to the company. 2) Calculate the labor efficiency varianc e. Indicate if it is favorable or unfavorable to the company. 3) Provide a logical reasoning for the materials price and quantity variances calculated in 1 and 2. BUS 220 Managerial Accounting Final Assessment Guide Page 16 of 14 Problem #11: Planning & Controlling Tesla -R-Us Inc. has two separate divisions : Electric cars and Gasoline Cars. The following segmented financial information is for Tesla -R-Us's most recent fiscal year: Electric Division Gasoline Division Sales $8,100,000 $16,200,000 COGS (Costs of Goods Sold) $2,970,000 $7,830,000 Allocated Overhead $945,000 $2,295,000 S,G,&A (salaries, general, & admin ist ration ) Expenses $526,500 $567,000 The Electric division had average operating assets totaling $15,660,000 for the year, and the Gasoline division had average operating assets of $20,520,000. Assume the cost of capital rate is 14%, and the company's tax rate is 20%. 1) Prepare a segmented income statement, including the profit margin ratio for each division at the bottom of the segmented income statement. Be sure it is in the proper format of a segmented I/S. 2) Calculate the return on investment (ROI) for each division 3) Calculate the re sidual income for each division. 4) Summarize the answers to parts 1, 2, and 3. What does this information indicate about each division? BUS 220 Managerial Accounting Final Assessment Guide Page 17 of 14 Problem #1 2: Planning and Control Don't-Cha-Wanna-a-Coffee, a large-scale coffee company that has a chain of 125 retail coffee stores throughout New England, was embroiled in an ethics scandal 3 years ago. One of their employees overinflated the company earnings which caused the value of the stock to plummet. Investors were not happy, so they pulled out a large majority of their investment and sales were hurt by the negative publicity.

To help recover from this catastrophe, the chief operating officer (COO) is considering making an investment to purchase a machine that speeds up the cooking time of their top secret donut.

The donuts produced from this machine allows the consumer 1 granted wish. Sales are so widely popular that the current donut machine just cannot keep up with supplying enough (production) for the customers' demand. Dunkin, the COO, hopes that this new machine allows the donuts to be produced quicker than the stand-alone production machine.

This will allow for an increase to the volume of donuts produced within the same time frame that current production is running. Dunkin is a financially savy employee, so he requires an evaluation of the effect this purchase will have to his compensation.

Dunkin receives a base salary plus 30% bonus of his salary if he meets certain benchmarks.

Below is the information he has given you for his required analysis. He wants it on his desk by the end-of-semester!

1a. Calculate the sales margin without the new machine. Financial Data for consideration: 1b. Calculate the sales margin with the new machine. Machine cost 2,800,000 $ 2a. Calculate the asset turnover without the new machine. Projected generated income by new machine 800,000 $ 2b. Calculate the asset turnover with the new machine. Income generated without new machine 6,800,000 $ 3a. Calculate the Return On Investment without the new machine. Beginning year capital assets (w/out machine) 7,800,000 $ 3b. Calculate the Return On Investment with the new machine. End of year captial assets (w/out machine) 8,200,000 $ 4a. Calculate the Residual Income without the new machine. Tax rate 21% 4b. Calculate the Residual Income with the new machine. Minimum rate of return 12% 5a. Calculate the Economic Value Added without the new machine. Weighted average cost of capital 7% 5b. Calculate the Economic Value Added with the new machine. Sales without machine 17,800,000 $ 6a. Calculate the sales margin with the new machine. Sales with machine 19,200,000 $ 6. Calculate the sales margin with the new machine.

7. Should COO Dunk purchase the machine? Justify your answer with facts. BUS 220 Managerial Accounting Final Assessment Guide Page 18 of 14 Problem #1 3: Balanced Scorecard The Balanced Scorecard begins with the company ’s stra tegic a. List the four main areas of a balanced scorecard. Provide a comprehensive description of them. b. Define KPIs and how management uses them as a measurement tool. c. Select a business that you ar e familiar with and provide an example of a KPI for each balanced scorecard area for your selected company.