To: Managerial Accounting Entrepreneurs
From: Bartlett Investment Group LLC.
Dat
To: Managerial Accounting Entrepreneurs
From: Bartlett Investment Group LLC.
Date: Spring 2024
Subject: Project #1 Bartlett Investment Group wants to invest capital in your business. Create a new product or enhance an existing product that will be profitable in its market. You can create something entirely new, or use an existing company and add a new product. Be creative, and have fun with this! You could do anything from starting your own cookie business, to creating a new baseball bat, to creating a new useful tool, – the possibilities are endless. Do something that interests YOU!
Note – you must select a tangible product and not a service company. The project must be typed and submitted in word/excel format. No handwritten projects will be accepted. Memo: Create a 1–2 page narrative in memo format that describes your product, the costs to make your product, and how your product will be profitable. (75 points total) Note – narrative format is similar to how this project is addressed. You should have a to, from, date, and subject line. Your narrative should be in typed paragraph form and not merely bullet points answering the prompt below. Below are details to address in your memo:
1. Describe your product (10 points)
a. What is your product?
b. How much are you going to sell your product for?
c. How many units do you want to sell for your first year of operations?
d. What makes your product different?
e. Who will your consumer be?
f. How will you market/sell your product?
g. Who are your competitors?
2. Discuss how you will define your product cost in terms of direct materials, direct labor, and manufacturing overhead costs. How much is your product going to cost to make for each of these product costs? Remember the concepts & terms learned in Chapters 2 & 3. (25 points)
a. What are the direct materials needed to make the product?
i. List out all of the items needed to make your product
ii. How much do your total direct materials cost? b. How much direct labor will you need to make your product?
i. How many employees will you need to make the product? How many estimated hours does it take to make the product?
ii. How much is your total direct labor cost?
c. What is your manufacturing overhead costs to make the product? (10 points)
i. List examples of manufacturing overhead that you would incur to make your product.
ii. How much does your manufacturing overhead cost?
d. What is the total cost to make the product (Total DM, DL, and MOH)? (10 points)
i. Based on your cost to make your product, and your selling price is your product profitable?
e. Discuss different activities in the value chain and how these activities add value to your product. (10 points)
i. Research & Development, Design, Production, Marketing, Distribution, and Customer Service
Note – for any area that requires you to give a number, it is ok to give your best estimate. You can research costs and then give your best estimate for the cost of DM, DL, and MOH. Formatting (10 points) Your narrative should be 1-2 pages in typed paragraph form and not merely bullet points answering the project prompts. Any use of ChatGPT or any other form of text generating software used to complete this project will automatically result in a zero for the project. Income Statement: Create an estimated annual income statement for your first year of operations which shows the profit or loss for your product (25 points total). An excel template has been provided for your input. Note – there are two tabs to be completed in the excel file 1.) Income Statement and 2.) Calculation of COGS
1. Use your best estimates (you estimate the numbers) 2. Show calculations for direct materials used, cost of goods manufactured, and cost of goods sold. a. Your calculations should tie to what you have outlined in your memo
b. Your cost of goods sold should be the number of units you hope to sell multiplied by your total product cost. 3. Calculate your income statement. a. Your revenue should be the total units sold for the first year of operations multiplied by your selling price.
b. Your cost of goods sold will carry over from the “Calculation tab.”
c. Identify and list (estimate) what your operating expenses will be.
Note – Make sure to not double count your product costs that are part of your cost of goods sold as operating expenses. Expenses are part of cost of goods sold if it is direct materials, direct labor, or manufacturing overhead. Do not double count expenses in both areas!
Also have to complete the two pages on the excel spreadsheet about the business