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Manac Individual Assignment Guidelines

This document outlines an individual assignment for a management accounting course. Students are assigned a publicly traded manufacturing company and must analyze 10 years of cost and financial data from Capitaline to estimate the company's variable and fixed costs. Students must then use this analysis to create schedules of cost of goods manufactured and cost of goods sold, estimate contribution margin, operating leverage, break-even point and margin of safety. Finally, students must submit a 1-page text report and 1-page table summarizing the company's cost structure. The assignment is worth 20% of the course grade.

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Durgit Kumar
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41 views

Manac Individual Assignment Guidelines

This document outlines an individual assignment for a management accounting course. Students are assigned a publicly traded manufacturing company and must analyze 10 years of cost and financial data from Capitaline to estimate the company's variable and fixed costs. Students must then use this analysis to create schedules of cost of goods manufactured and cost of goods sold, estimate contribution margin, operating leverage, break-even point and margin of safety. Finally, students must submit a 1-page text report and 1-page table summarizing the company's cost structure. The assignment is worth 20% of the course grade.

Uploaded by

Durgit Kumar
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Individual Assignment- Management Accounting

Due date: 28th Jan 2019

In this assignment you will analyse the cost data of publicly traded companies to understand
their cost structure, cost behaviour and the effect on profitability.

All students will be assigned a manufacturing company whose cost and financial data is
available on Capitaline (www.capitaline.com). Using Regression analysis, estimate variable
and fixed cost components of all operating cost items based on the last 10 year financial
data.

 The ideal case is positive slope and positive intercept. It means variable cost and fixed
costs are positive.
 Due to inflation and re-grouping of cost items by the companies/data base service
provider, it is possible that you may have negative intercept. In such situation,
assume fixed cost is zero and use =LINEST() function for variable cost where the
function assumes intercept is equal to zero.
 In rare cases for the above reasons, the variable cost component (slope) is negative
for any of the operating cost item, then assume variable cost is zero and treat the
most recent year cost as fixed cost.
 Use LINEST() function for raw material because it is purely variable cost.
 Use the latest year depreciation as fixed depreciation cost. You will not get split data
for depreciation on how much is related to manufacturing and how much is related
to non-manufacturing (Selling, Distribution and Administrative functions). From the
fixed cost schedule, find the depreciation for plant and machinery and treat this as
fixed manufacturing cost. Treat balance depreciation as depreciation for selling,
distribution and administrative cost.

After splitting the costs into fixed and variable, you need to do the following:

a. Create a schedule of COGM and COGS of the company the latest year.
b. Estimate the contribution margin, operating leverage factor, break-even point and
margin of safety.
c. Prepare a report commenting on the cost structure of the company.

The evaluation is based on the quality of the report. Report length: 1 page text report and 1
page Table. Submit hard copy of the report to PGP office.
Evaluation Weightage :20%

Deadline will not be extended under any circumstances. If the data of the company assigned
to you is not available for 10 years or if there are other issues in analysis, please write to the
faculty of your section and a new company may be assigned to you.

Regards,
M S Narasimhan, Jayadev and Jayanthi Iyer.

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