700322: Decision Making for Business Applied Project Guide - Accounting Assignment Help

Assignment Task:

Task:

In this assessment, you are required to compare two products using accounting and statistical analyses to make a business decision. To ensure that you capture all the necessary data, a Word template has been provided as a guide. You will also need to use Excel to create charts as required in 2(c) below. Once you have created the charts in Excel, copy and paste it into the Word file under the relevant section.
It is important that you delete all words highlighted in red in the Word template before submitting the Word file. These are provided as guides only and should not form part of your submitted work. Also, please do not include your name and student ID in the Word file, as the file will be used for the peer-review assessment.
Note that there are no right or wrong answers in the applied project. The decision you make will be determined by your calculations and analyses of each product.
You are given a project scenario of two products – electric vehicle battery (EVB) and solar panel battery (SPB) and the necessary data relating to each product. Use the data to complete the requirements outlined below. The scenario is at page 2 and data starts from page 3.
Required (as provided in the Word template)
Introduction and overview. (5 marks)
Calculation and data presentation. (20 marks – refer to the subsections below for the allocation of the 20 marks)
Prepare the income statements for the year ended 2022 for each product. (6 marks)
Prepare the balance sheet as at 2022 for each product. (6 marks)
Create a capital structure pie chart for each product. The capital structure should contain the total assets, total liabilities and total equity. You should create the pie chart in Excel then copy and paste it into your Word applied project. (3 marks)
Ratio analysis – Calculate the following two ratios for each product: quick ratio and net profit ratio. Industry average ratios are provided for you to make comparisons. (2 marks)
Prepare Cost-Volume-Profit (CVP) calculations for both products. (3 marks)
Business decision – use the information from requirement 2 and explain your decision which product the company should manufacture. Ensure that you use the data/information to support your decision. You will also need to use statistical data provided in the guide about success rates to justify your decision (no calculations required). (10 marks)
Conclusion – ensure that your conclusion ties back to the introduction. (5 marks)
Overall understanding and persuasiveness. (10 marks)
Grammar, punctuation, spelling, referencing, word limit and formatting. Ensure that you proofread your work before submission. (10 marks)

Scenario
There have been significant discussions on climate change recently and the Australian Federal Government is providing financing incentives to businesses to shift to clean energy. Your company, Batteries R Us Ltd, is conducting a feasibility study on two products. They would like to determine whether to manufacture electric vehicle batteries (EVB) or solar panel batteries (SPB). The data relating to each product is provided below and you are required to use your accounting and statistics knowledge to evaluate which product your company should manufacture. Due to your company’s budget constraints, only one product can be selected (also known as a mutually exclusive project).
Note: In order to make a sound business decision, for each product, prepare the income statement, balance sheet, quick ratio, net profit ratio and cost-volume-profit calculations.

• Product A – Electric Vehicle Battery (EVB)
• Data for the Income Statement (EVB)
• The expected total sales for this product for the year ended 30 June 2022 are $8,000,000 and the expected total costs and operating expenses are $5,000,000 and the costs will be allocated as follows:
• Table A-1
• Cost/Expense item Amount ($)
• Cost of goods sold 1,200,000
• Sales Salaries expense 450,000
• Office Salaries expense 400,000
• Advertising expense 350,000
• Office supplies expense 328,000
• Rent expense 840,000
• Insurance expense 230,000
• Utilities expense 290,000
• Depreciation expense 282,000
• Interest expense 280,000
• Tax expense 350,000
• Total 5,000,000
• Data for the Balance Sheet (EVB)
• The expected accounts for assets, liabilities and equity of Batteries R Us Ltd as at 30 June 2022 are as follows:
• Table A-2
• Accounts Amount ($)
• Accounts receivable 4,600,000
• Accounts payable 5,200,000
• Bank 950,000
• Capital 15,000,000
• Dividends paid 650,000
• Equipment 12,000,000
• Fixtures 2,500,000
• GST Collected 800,000
• GST Paid 350,000
• Inventory 1,950,000
• Land and Buildings 28,000,000
• Mortgage 27,000,000
• Ratios (EVB)
• Two of the most important ratios for Batteries R Us Ltd are the quick ratio (or acid test) and the net profit ratio. The company would like to know what these two ratios are and how they compared to the industry averages. Assume the industry averages are 0.80 time (or 0.80:1) for the quick ratio and 33.50% for the net profit ratio. Round your answers to 2 decimal places.
• Cost-Volume-Profit (CVP)
• This section relates to Table A-1. Each electric car battery sells for $6,400 and the variable cost per battery is $1,600. Variable costs include sales salaries, advertising and cost of goods sold. All other costs are fixed costs and they totalled $3,000,000.
• Determine:
• the contribution margin (CM)
• the break-even point (BEP)
• the sales units required to achieve a profit $5,000,000
•  
• Product B – Solar Panel Battery (SPB)
• Data for the Income Statement (SPB)
• The expected total sales for this product for the year end 30 June 2022 are $16,000,000 and the expected total costs and operating expenses are $10,400,000. The costs will be allocated as follows:
• Table B-1
• Cost/Expense item Amount ($)
• Cost of goods sold 4,700,000
• Sales Salaries expense 750,000
• Office Salaries expense 600,000
• Advertising expense 850,000
• Office supplies expense 528,000
• Rent expense 980,000
• Insurance expense 390,000
• Utilities expense 490,000
• Depreciation expense 282,000
• Interest expense 380,000
• Tax expense 450,000
• Total 10,400,000
• Data for the Balance Sheet (SPB)
• The expected accounts for assets, liabilities and equity of Batteries R Us Ltd as at 30 June 2022 are as follows:
• Table B-2
• Accounts Amount ($)
• Accounts receivable 6,600,000
• Accounts payable 6,700,000
• Bank 950,000
• Capital 15,000,000
• Dividends paid 650,000
• Equipment 13,500,000
• Fixtures 3,500,000
• GST Collected 1,600,000
• GST Paid 450,000
• Inventory 2,250,000
• Land and Buildings 28,000,000
• Mortgage 27,000,000
• Ratios (SPB)
• Two of the most important ratios for Batteries R Us Ltd are the quick ratio (or acid test) and the net profit ratio. The company would like to know what these two ratios are and how they compared to the industry averages. Assume the industry averages are 1.00 time (or 1.00:1) for the quick ratio and 34.00% for the net profit ratio. Round your answers to 2 decimal places.
• Cost-Volume-Profit (CVP)
• This section relates to Table B-1. Each solar panel battery sells for $12,500 and the variable cost per battery is $4,922. Variable costs include sales salaries, advertising and cost of goods sold. All other costs are fixed costs and they totalled $4,100,000.
• Determine:
• the contribution margin (CM)
• the break-even point (BEP)
• the sales units required to achieve a profit $7,000,000
• Where applicable, round your answers to the nearest whole number.
• Statistical Data To Aid in Decision Making:
• The data contained in the table below relates to requirement 3 (business decision). Ensure to include a brief discussion (approximately 75 words) of the statistical data from the table below for each product to support your decision in choosing which product to manufacture.
• Electric Vehicle Battery (EVB) Solar Panel Battery (SPB)
• Success rate in last 5 years 65% 80%
• Variance in success rate ±6% ±20%
• End of Applied Project Guide

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