MBA FPX5010

ASSESSMENT 2 – PRODUCT PRICING RECOMMENDATION

Instructions

Create a 9-slide presentation in which you analyze cost accounting practices to make a recommendation about whether or not to accept a purchase offer at a lower price than normal. You may either record the presentation or write a 2-3 page supporting report.

Introduction

This portfolio work project will help you to assess a request, complete an analysis to understand the impact on an organization, provide a recommendation, and communicate that recommendation.

Scenerio

The Acme Pickle Company has distributed pickles under the “Florida’s Best” brand for eight years from its production facility in Jacksonville, Florida. It sells the pickles to stores in the southeastern United States. Acme normally produces between 8,000 and 10,000 cases of pickles a month but has the capacity to produce 12,000 cases without adding equipment or personnel.

The owner of a twenty-store supermarket chain in Wisconsin, called Super Deals, visits friends in Florida and is impressed with the quality of “Florida’s Best” pickles. He approaches you, an Acme Pickle account manager, with an offer to buy 2,000 cases of pickles to use in a special promotion at his stores. He is thinking of something such as:

“Free jar of Florida’s Best pickles with every purchase of forty dollars or more—this month only!”

He offers Acme a price of $9.50 per case, knowing that it is a very substantial discount from the normal selling price of $20 a case. Acme’s management is inclined to turn the offer down, because their cost is calculated at $10.00 a case. They believe they would lose money if they sold at $9.50 a case. You, on the other hand, believe that some errors have been made in the cost accounting.

Your Role

You are the accYour analysis for the Controller and Sales Manager is needed to suggest a different way of calculating the pricing of the pickles that may be lower. As part of your analysis, address the following items:

Explain why some production costs are variable and some are fixed.

Analyze the benefit of recalculating the cost of pickle production.

How would you recalculate it?

What would the result be?

What is the benefit to the company of recalculating the cost?

Analyze how financial accounting of production cost differs from managerial accounting of production cost.

Explain the difference between the two accounting methods.

Identify the benefits and drawbacks of each method.

Recommend a plan of action to management regarding Super Deals’ offer.

Below is the cost report for a recent month. In this month, Acme produced 9,000 cases and sold them at $20 per case, which is Acme’s normal selling price. Nine thousand cases are well beyond Acme’s break-even point, enabling Acme to record a substantial profit at the nine-thousand-case level.

Acme Pickle Company Cost ReportItemCostCucumbers$15,000Spices and vinegar11,000Jars and lids10,000Direct labor, paid by the case30,000Line supervisors, on salary10,000Depreciation on factory10,000Property taxes on factory3,000Insurance on factory1,000Total Costs:$90,000Cost per case (9,000 cases produced) $10.00

Deliverable Format

Your team lead wants to share this analysis across remote locations of the organization and is hoping you will set the standard for how analyses and decisions of this type should be presented and supported. Your team has requested either a recorded presentation (including slides and notes) or a presentation and supporting reporting that can be distributed as a model. Prepare a presentation of at least 9 slides using PowerPoint or software of your choice detailing your recommendation and the information you used to make your recommendation. You can either record the presentation or prepare a separate report supporting the presentation.

If you choose to record your presentation, you may use Capella-supported Kaltura Media or another technology of your choice that produces a shareable URL. Kaltura is recording software that can be used to create webcam, screen, and audio recordings. Refer to the MBA Program Resources for the Using Kaltura tutorial to prepare for this option. If you choose to use something other than Kaltura Media, ensure that it creates a shareable URL and can be embedded in the courseroom to ensure faculty can access your recording.

Note: If you require the use of assistive technology or alternative communication methods to participate in these activities, please contact DisabilityServices@Capella.edu to request accommodations.

RECOMMENDATION REQUIREMENTS:

Presentation slides:

Create at least 9 slides detailing your recommendation and the information you used to make your recommendation.

Include additional details as slide notes.

Supporting information. Choose one of the following options:

Record your presentation.

Create a 2–3 page report to support your slides.

RELATED COMPANY STANDARDS:

The recommendation report is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.

In addition to the presentation or report materials, include:

Title (slide or page).

References (slide or page).

Appendix with supporting materials.

At least two APA-formatted references

ASSESSMENT 3 – PERFORMANCE EVALUATION

Instruction – Write a 1-2 page executive summary, along with an appendix of supporting information, in which you analyze an organization’s financial performance as well as their level of risk for lending and make and present a recommendation to help leadership make a loan decision.

IntroductionThis portfolio work project will help you complete a thorough review of an organization’s financial performance as well as their level of risk for lending. Your recommendation will help leadership create a loan portfolio, and your executive summary will clearly and concisely communicate your review to others in the organization.Scenerio

You work for an organization that provides loans to businesses. You are working with a client who is requesting a loan that will require a review of financial and related performance documents. You have been asked to review the documents and summarize your findings in a loan recommendation for your management team.

You may apply this scenario to either Option 1 or Option 2, described in

Requirements

below.

Your RoleYou are a loan manager for a lending organization, and your responsibilities include reviewing loan requests and providing recommendations in regard to whether the loan requests should be funded.Requirements

OPTION 1:

Your client works for Ace Company. Assume Ace Company requested a $3 million 10-year loan to purchase production equipment and develop accompanying software. Use the

Ace Company Data

Download Ace Company Data

document for this option.

OPTION 2:

Use a firm or scenario of your choosing.

Before choosing a company, read the assessment thoroughly to ensure:

The company fits the assessment requirements.

You have access to the financial statements and related performance documents needed to assess risk and make a loan recommendation. You will need information for this year and last year.

You can distribute the financial statements and related performance documents without disclosing confidential company information.

LOAN RECOMMENDATION

To arrive at your recommendation, analyze the financial performance of the requesting company and present it to your organization’s upper-management team. The management team will take your recommendation into consideration as they finalize loan requests.

Analyze the company’s performance and performance trends. Include the following in your analysis:

Analyze the trend for accounts receivable collections.

Identify the trend.

Explain the relevance of the trend.

Determine if the trend is improving or getting worse.

Compare the company’s average inventory turnover to the industry average inventory turnover rate. Note that the average industry turnover rate for Ace Company is 10 times per year.

Consider whether the company’s average inventory turnover is higher or lower than the industry average.

Explain whether a higher or lower average is better.

Determine whether the trend is improving or getting worse.

Evaluate the company’s short-term and long-term credit worthiness based on financial performance and trend (comparing this year to last year). Include in your evaluation:

Information about performance and trends.

Information about other relevant financial information you consider important to the decision.

Your recommendation regarding whether the bank should grant the loan based on the financial data.

Deliverable Formats

The management team of your organization requests this information in the form of a 1–2 page executive summary along with a title page, references page, and appendix of supporting information. The executive summary must highlight the key findings from your review and will provide your recommendation and rationale. The appendix must include data used in your analysis for others to review. Assume that this document is the only communication in regard to your analysis and recommendation and that you will not be with the team to explain anything as it deliberates. In other words, the documentation you provide must be well organized and include information for the management team to clearly see your recommendation and rationale.

Related company report standards:

The executive summary is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.

In addition to the executive summary, include:

A title page.

A references page.

Appendix with supporting materials. If you are using a firm or scenario of your choosing, ensure faculty has sufficient information to understand how you reached your recommendation.

At least two APA-formatted references.

ASSESSMENT 4 – EXPANSION RECOMMENDATIONS

Instructions

Prepare either a 3-4 page report or a 12-slide presentation in which you analyze financial information and risks associated with an investment to expand an organization and make a recommendation on whether or not to invest in expansion.

IntroductionThis portfolio work project will allow you to review information and risks associated with an investment to expand an organization. As this information will be shared broadly across the organization, you will have a choice in your final deliverable audience and will organize your deliverable to meet the needs of that audience.ScenerioZXY Company is a food product company. ZXY is considering expanding to two new products and a second production facility. The food products are staples with steady demands. The proposed expansion will require an investment of $7,000,000 for equipment with an assumed ten-year life, after which all equipment and other assets can be sold for an estimated $1,000,000. They will be renting the facility. ZXY requires a 12 percent return on investments. You have been asked to recommend whether or not to make the investment.Your RoleYou are an accounting manager. Your boss has asked you to review and provide a recommendation on the expansion based on information that has been provided.Requirements

In preparing and supporting your recommendation to either make the investment or not, include the following items as part of your analysis:

Analysis of financial information.

Identification of risks associated with the investment. Consider:

How risky the project appears.

How far off your estimates of revenues and expenses can be before your decision would change.

The difference if the company were to use a straight line versus a MACRS depreciation.

Recommendation for a course of action.

Explanation of criteria supporting your recommendation.

FINANCIAL INFORMATION

As part of your analysis you might find that additional information from marketing, accounting, or finance would be useful in making an informed and well-supported recommendation. In a real workplace setting you would have the ability to ask for that information. However, for the purposes of this assessment, you can make assumptions about the values of that data or ratios in support of your recommendation.

Accounting worked with the marketing group to create the

ZXY Company Financial Statements

Download ZXY Company Financial Statements

spreadsheet for the new products business and the new facility.

Notes about the financial information:

The expense line labeled SQF FDA Mandates refers to the costs of complying with Food and Drug Administration requirements.

Depreciation expense is calculated using 7-year life modified accelerated cost recovery system (MACRS).

Deliverable Format

Depending on the audience you choose to address, use one of the following options:

Report for a mid-management audience. Prepare a 3–4 page report detailing your recommendation and the information you used to make your recommendation.

Presentation for top leadership. Prepare a presentation of at least 12 slides detailing your recommendation and the information you used to make your recommendation. You may use your choice of presentation software. Include notes with additional details.

Keep in mind that your recommendation may be shared with others, so your materials should be designed for clarity and readability.

RELATED COMPANY STANDARDS FOR EITHER FORMAT:

The recommendation report is a professional document and should therefore follow the corresponding MBA Academic and Professional Document Guidelines, including single-spaced paragraphs.

In addition to the report or presentation, include: