An ACC 202 Module 8 final project memo in true form: findings from each stage of the managerial accounting project condensed for an owner, five prioritized recommendations with their financial effect, a table of measures to track and a closing request for decisions. Searches like "acc 202 module 8 assignment", "acc202 module 8 final project memo" and "acc 202 module 8 example" land here.
The ACC 202 Module 8 example, in full
Memorandum
To: Owner, Cedarline Candle Co.
From: [Student Name], Managerial Accounting Consultant
Date: [Date]
Re: Findings from the cost, profit and budget analysis, and five recommendations
Purpose and Decisions Requested
This memo summarizes the managerial accounting analysis of Cedarline Candle Co. completed over the past seven weeks and asks you to make three decisions by the end of the month: whether to raise the standard candle price to 26 dollars, whether to return to the original wax supplier, and whether to arrange a small line of credit before next October. Supporting schedules are in the attached workbook. The analysis relies on standard methods of cost behavior, cost-volume-profit analysis, budgeting and variance analysis (Datar & Rajan, 2021).
What We Found
Your cost structure is simpler than it looked. Every candle costs about 13.20 dollars in materials, piece pay, packaging, commission and energy, and the business carries about 16,130 dollars of fixed costs each month. At 24 dollars, each candle leaves 10.80 dollars to cover those fixed costs. The average cost per candle you had been using, which changed every month, mixed these two very different kinds of cost together.
You break even at about 1,494 candles a month and currently sell about 2,100, so sales could fall by roughly 29 percent before the business loses money. Your 6,000 dollar monthly profit goal, however, leaves only a 50-candle cushion at today's price. Wax prices are the biggest cost risk: a 15 percent increase would cut monthly profit by nearly 1,000 dollars.
The fourth quarter will be very profitable, about 55,700 dollars of operating income, and will pay for the new melting station in December from cash on hand. But October begins with less cash than your 10,000 dollar minimum, because you pay for holiday production weeks before wholesale customers pay you.
November's variances revealed that the cheaper wax cost more. It saved 452 dollars on price but required 605 dollars of extra wax, and slower curing added 420 dollars of rented space. Finally, your full-cost reports have been sending false signals: they made a profitable January hotel order look like a loss and made the Sea Salt line look unprofitable when dropping it would cost you about 1,800 dollars a month.
Recommendations
1. Raise the standard candle price to 26 dollars, starting on the website. Even if volume falls 8 percent, monthly profit rises from about 6,550 dollars to about 8,400 dollars, and you could lose up to about 15 percent of volume before the change stops paying. The higher margin also absorbs a wax price increase while keeping you above your profit goal.
2. Return to the original wax supplier and require joint sign-off from purchasing and production before any future supplier change, since the cheaper wax raised total cost.
3. Arrange a line of credit of about 10,000 dollars before October to cover the early-season cash gap; the budget shows it can be repaid from November collections.
4. Accept off-season special orders, such as the hotel's, when capacity is idle and the price exceeds about 12.50 dollars per candle in incremental cost, but decline them in November and December, when every candle of capacity has a full-price use.
5. Replace the full-cost product report with a contribution margin report by scent and by channel, showing shared fixed costs separately. Most of the wrong answers this year came from one habit, spreading fixed costs over each candle, and changing the report changes the habit.
Measures to Watch Each Month
Five figures, reviewed monthly, will show whether the plan is working.
Table 1
Monthly Measures for Cedarline Candle Co.
| Measure | Current | Target |
|---|---|---|
| Candles sold | 2,100 | At least 1,786 at a $26 price |
| Contribution margin per candle | $10.80 | $12.70 or more |
| Wax cost per candle | $3.10 | No more than $3.10 |
| Wax usage variance | $605 unfavorable | Under $200 |
| Cash on the first of each month | $8,000 (October 1) | At least $10,000 |
Note. Composite figures drawn from the project analysis.
Limits of the Analysis
The figures rest on assumptions that should be revisited quarterly. The cost formula holds only between 1,500 and 2,500 candles a month; beyond that, fixed costs step up, as they do each holiday season. Customer response to a price increase is an estimate, not a certainty, which is why the increase should start with one channel and be measured. Budgets built on a single forecast can mislead when conditions change, and research on budgeting practice supports updating forecasts as the year unfolds rather than holding to an annual plan (Hansen et al., 2003). These limits do not reverse any recommendation, but they are reasons to track results closely rather than treat the plan as fixed.
Next Steps
If you approve the three decisions above, I will update the pricing on the website within a week, notify the wax suppliers, prepare the line of credit application with our bank and deliver the first contribution margin report by scent for next month's review. I can review the workbook with you in person before you decide (Franklin et al., 2019).
References
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
Franklin, M., Graybeal, P., & Cooper, D. (2019). Principles of accounting, volume 2: Managerial accounting. OpenStax. https://openstax.org/details/books/principles-managerial-accounting
Hansen, S. C., Otley, D. T., & Van der Stede, W. A. (2003). Practice developments in budgeting: An overview and research perspective. Journal of Management Accounting Research, 15(1), 95-116. https://doi.org/10.2308/jmar.2003.15.1.95
How this ACC 202 Module 8 example is structured
A memo to a busy owner leads with the answer, so the first paragraph states the three decisions requested. Findings follow in the order of the project but are written as conclusions, not as a repeat of calculations. Recommendations are numbered and each carries its figure. A short table lists the measures to track monthly, and the memo ends by asking for specific decisions by a date.
Get ACC 202 Module 8 written to your instructions
Share the ACC 202 final project instructions and rubric, your completed workbook and the comments on your milestones. A final memo or presentation that turns your analysis into recommendations comes back within 24 to 48 hours; the first is free. The paper above is an original model document written by our desk, not a submitted student paper and not an official Southern New Hampshire University document.
ACC 202 Module 8 questions, answered
What does the ACC 202 final project require?
The final project usually asks students to complete a managerial accounting analysis of a company and communicate the results to management, often in a memo or presentation. It typically draws on cost classification, cost-volume-profit analysis, budgeting, variance analysis and decision analysis, ending with recommendations.
How should a memo to management be structured?
Put the purpose and main recommendation first, then the supporting findings, then the specific actions and what you need from the reader. Use headings and short paragraphs, include the key figures but not every calculation, and attach detailed schedules separately.
What is contribution margin and why does it matter for decisions?
Contribution margin is revenue minus variable costs. It shows how much each unit sold adds toward covering fixed costs and then profit. Because fixed costs often do not change with short-term decisions, contribution margin is usually the right measure for pricing, special orders and product line choices.