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ACC 206 Week 5 Final Assignment.

ACC 206 Week 5 Final Assignment. PLDZ-1907
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Assignment details:

You’ve just been hired onto ABC Company as the corporate controller. ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles. The company currently has annual sales of around $1.2 million, a 25% increase from the previous year. The company has an aggressive growth target of reaching $3 million annual sales within the next 3 years. The CEO has been trying to find additional products that can leverage the current ABC employee skillset as well as the manufacturing facilities.

As the controller of ABC Company, the CEO has come to you with a new opportunity that he’s been working on. The CEO would like to use the some of the shingle scrap materials to build cedar dollhouses. While this new product line would add additional raw materials and be more time-intensive to manufacture than the cedar shingles, this new product line will be able to leverage ABC’s existing manufacturing facilities as well as the current staff. Although this product line will require added expenses, it will provide additional revenue and gross profit to help reach the growth targets. The CEO is relying on you to help decide how this project can be afforded. Provide details about the estimated product costs, what is needed to break even on the project, and what level of return this product is expected to provide.

Financial information is:

ABC Company's current financial information (before/without expansion)

   

Cash

 $50,000

 $70,000

Accounts receivable (net)

 $120,000

 $180,000

Merchandise inventory

 $350,000

 $280,000

Property plant, & equipment

 $400,000

 $300,000

Less: Accumulated depreciation

 $(170,000)

 $(100,000)

Total assets

 $750,000

 $730,000

Accounts payable

 $250,000

 $210,000

Income taxes payable

 $40,000

 $10,000

Common stock

 $240,000

 $240,000

Retained earnings

 $220,000

 $270,000

Total liabilities & stock, equity

 $750,000

 $730,000

The firm's accrual-basis income statement revealed the following data:

Sales

 $1,200,000

Cost of goods sold

 $800,000

selling and administrative expenses

 $250,000

Depreciation expense

 $70,000

Income taxes

 $30,000

Dividends declared and paid during 20X2

 $100,000

ABC purchased $100,000 of equipment for cash on August 14, 20X2

(There was no interest expense.)

 

Based on Chapter 5's exercise 5

ABC's Product information

Current Product

Expansion Product (estimate)

Selling Price

$14.50

?

Units produced and expected to be sold

 80,000

 5,000

Machine Hours

 40,000

 5,000

Direct Materials

$1.30 per unit

$5.60 per unit

Direct labor dollars needed per product

 $2.80 per unit

 $4.00 per unit

Variable Factory Overhead

 $1.00 per Machine Hour

 $1.00 per Machine Hour

Variable Selling Expense

 $0.20 per unit

 $0.20 per unit

Total Fixed Costs:

Fixed Factory Overhead

 $198,000

Fixed Selling expenses

 $191,250

 

Write a five- to seven-page financial statement analysis of a public company, formatted according to APA style as outlined in the Ashford Writing Center (Links to an external site.)Links to an external site.. Your paper should consist of the following sections:

Introduction

Risk Profile

An overall risk profile of the company based on current economic and industry issues that it may be facing.

Cash Flow Statement

You need to complete a cash flow statement for the company using the direct method.

Once you’ve completed the cash flow statement, answer the following questions:

What does this statement of cash flow tell you about the sources and uses of the company funds?

Is there anything ABC Company can do to improve the cash flow?

Can this project be financed with current cash flow from the company? Why or why not?

If the c

Assignment details: You’ve just been hired onto ABC Company as the corporate controller. ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles. The company currently has annual sales of around $1.2 mi
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