Academic Writing

Assessment MHC601 Accounting and Finance for Managers Assessment type Weighting Due Portfolio: Cost Analysis 30% Week 8 Portfolio: Financial Report 30% Week 9 Final Exam 40% Week 11 Assessment 1 – Cost classification and Breakeven Analysis Report (2000 words) 30% of total unit mark. Due: Week 8, Friday 13th March before 5pm Investors and creditors frequently use breakeven analysis to quickly screen business plans by evaluating a firm’s cost structure and sales volume needed to generate profit. Suppose you are planning to run a small business, you are expected to determine costs and prepare a breakeven analysis. Part 1: Identify and classify costs Identify and properly classify all the costs that your business is likely to incur. As the business is a new start up, prepare the following: (a) Develop a list of all costs that the business incurs on a regular basis. (b) Classify each cost as product/service costs and period costs. (c) Classify each cost as variable, fixed or mixed cost. Develop one or two paragraphs about each set of costs, explaining the behaviour and purpose of each cost. (d) For each of your expected costs identified in (c), estimate variable cost per unit and total fixed cost. For mixed costs, be sure to identify variable and fixed cost components.   Part 2: Breakeven analysis The next component of the breakeven analysis for your business is to determine weighted average contribution margin (CM). Consider the selling price of your business products or services. After estimating your selling price, complete the following calculations, assume tax rate is 30%. (a) What is the weighted average contribution margin per unit? (b) What is the contribution margin ratio? (c) What is the total fixed cost? (d) What is sales volume (in units) at break-even point? (e) What is sales volume (in dollars) at break-even point? (f) Show breakeven points graphically. (g) Perform “what if” analysis of breakeven by considering the following: (i) Decreasing fixed cost by 10% (ii) Decreasing variable costs by 10% (iii) Increasing selling price by 10% (h) For your business, calculate number of products or services sold to earn after tax profit of $140,000. Part 3: Prepare an Analysis Report – comprising: a. Executive Summary – provide a one page summary. Include a snapshot of the results you calculated in your analysis and your recommendations based on these results. b. Introduction – provide a brief introduction to your report including a short summary of the business and activities, as key background/context. c. Discuss your results from part 1 and part 2. Address the fixed costs, variable costs and income statement, break-even analysis, contribution margin etc. Discuss critically key results that would impact on your business future decision-making. A. Report Format and Analysis Techniques: 1. Professional layout and presentation – concise, informative and correctly referenced. Graphs and colour can assist in summarising key points in your report. Submission guidelines • Typed in format specified (refer to CALS) and to be submitted in electronic form as a word-processed file to [login to view URL] on Friday 13th March before 5pm, of Week 8. • Please note that plagiarism is a serious academic offence. Please refer to CALS for a better understanding on how plagiarism is detected and prevented.