Project & Presentation Guidelines Summer

2015
Course Title: Managerial Accounting
Course Instructor: Afrin Rifat (Ani)

Course Code: ACT 333

Sections: 1 & 2

Project Topic: Implications of the mechanics of Managerial Accounting

Group Members: Maximum 5 in each group.
Requirements: Assume that, you have a manufacturing company. Now select a product
which you can manufacture. However select your product carefully. The product should not
have a very complicated production process. Choose something that you can manufacture and
for which raw materials are easily purchasable. In addition, before finalising the product, you
need to discuss your idea with me and get my approval for it.

Project Report Format: The project report should include a cover page followed by a
letter of transmittal, an abstract and a table of contents. The main report should be started
after the table of contents.
Contents of the Main Report1. Start the report with a background talking about the product that you have finalised.
Moreover discuss your reasons behind selecting that particular product.
2. Discuss the industry that your product belongs to and also talk about the competitors
that you have in the market.
3. Describe the manufacturing process of your product.
4. Describe the maximum number of units you will be able to produce in a month,
assuming that your group members are the only labours available.
5. Determine the production cost of your product i.e. materials; labour; manufacturing
overhead.
6. Determine the support costs and selling cost of your product.
7. Analyze your costs and classify them as fixed/ variable or mixed costs (if there is any),
direct/indirect (assuming the product as the cost object) and prime/conversion.
8. Determine the full cost.
9. Select a proper allocation base and calculate the unit product cost of your product by
assuming that you are following a traditional costing (Job costing for example) system.
10. Show a break-down of the support costs and explain the cost strategy of allocating your
support costs (direct; step-down; reciprocal).
11. Use an activity-based costing system to allocate the indirect costs (both MOH & support
costs). Identify the activities and select cost driver for each of the activity based on their
cause and effect relationship. Explain the reasons behind the selection of the cost
drivers. Determine the unit product cost under ABC.
12. Prepare the product-line profitability reports under both simple costing and ABC and
compare the results.

Project & Presentation Guidelines Summer

2015
13. Select an appropriate pricing strategy and discuss your reasons behind selecting that
strategy. Determine the price of your product and compare it with your competitors.
14. Forecast the demand and sales volume for your product and prepare a sales budget,
production budget, a direct material usage budget, direct material purchase budget,
direct labor cost budget, manufacturing overhead cost budget, ending inventory budget
and cost of goods sold budget for the next month.
Inventory strategies:
Finished Goods: No beginning Inventory. However 10% of the budgeted unit sales
should be maintained as target ending inventory.
Direct Materials: No beginning inventory. However 20% of the total material used in
production should be maintained as target ending inventory.
15. Prepare a budgeted income statement in the traditional format.
16. Prepare a budgeted contribution format income statement on both per unit and total
basis.
17. Determine the break-even point in unit sales and in revenue.
18. Determine the margin of safety and comment on the riskiness of your product.
19. Calculate the degree of operating leverage based on your previous calculations and
comment on it.
20. Perform a sensitivity analysis in case of a) 12% increase in the demand of the product
and b) 16% decrease in the demand of the product.

Typing Format of the Project Report:

Paper Size
Font
Font Size
Margin
Text Alignment
Maximum Page Limit

A4 Size
Times New Roman
12 Normal
Left: 1 inch minimum
Right: 1 inch minimum
Top: 1 inch minimum
Bottom: 1 inch minimum
Justify
30 pages (Including Cover page, Letter of
Transmittal, Table of contents & Abstract)

Submission Dates:
Last date of Submission (Soft copy)
Last date of Submission (Hard Copy)

7th August, 2015

9th August, 2015

Project & Presentation Guidelines Summer

2015
Presentation Dates:
9th August & 11th August

Sections 1 & 2

Good Luck!!!!!!!!!!!