| Course | ACC 550 Cost Accounting |
|---|---|
| Module | Module 10 |
| Paper type | graduate cost management report (final project) |
| Length | About 1,090 words, 6 pages |
| Format | APA 7 student paper |
| School | Southern New Hampshire University |
| Program | MS Accounting |
| Updated | October 2026 |
Free sample paper for ACC 550 Module 10
Cost Information for a New Strategy: A Cost Management Report to the Owners of a Composite Pecan Sheller
[Student Name]
Southern New Hampshire University
ACC 550: Cost Accounting
Final Project
[Instructor Name]
[Date]
The organization, setting and figures below are a composite written as a model document. No real employer, client, colleague or patient is described.
Cost Information for a New Strategy: A Cost Management Report to the Owners of a Composite Pecan Sheller
Executive Summary
The company's cost system was built for a business that sold most of its crop in bulk, and it now misleads a business moving into branded retail packs and candy. It spreads packaging, testing, order and warehouse costs evenly per pound, so retail packs appear to cost $0.43 a pound in post-shelling overhead when they actually cost about $1.42; at current prices several retail customers lose money. This report recommends five changes, in order of priority: reprice or restructure retail packs, roast and salt pieces for the bakery customer, adopt the activity-based model for decisions, evaluate managers against flexible budgets and set transfer prices for halves at market less selling cost. Together they are estimated to add about $2.5 million to annual profit in the first year, rising to about $3.7 million once roasting reaches full volume, against a one-time cost of under $300,000.
Strategic Context
Export demand for in-shell pecans fell by more than half last season, and the owners plan to shell more of the crop and sell it in branded retail packs and through the candy division. Labro (2019) argues that a costing system should be designed for the decisions it supports. The decisions now are which products and customers to grow, how to price them and how to evaluate the people running each part of the business.
Cost Behavior and Capacity
Two years of monthly data put the plant's cost at roughly $5.2 million a year of capacity cost plus 28 cents for each pound shelled, with costs falling less than proportionally when volume dropped because the owners retained trained graders. Fixed plant cost of over $5 million a year makes profit sensitive to volume, so prices should rest on costs per pound at the volume the plant is built for, not on a short crop's volume (Datar & Rajan, 2021).
Channel Costs
An activity-based model with five pools assigns $3.78 million of the $6.2 million post-shelling overhead to retail packs, which are 18 percent of pounds but drive 80 percent of changeovers and orders. Retail overhead is $1.42 a pound against $0.20 for bulk cartons. The result holds under reasonable changes to driver estimates. Kaplan and Cooper (1998) describe exactly this pattern, small orders and many variants hidden by volume-based rates, and recommend using activity information both to price and to change how work is done.
Joint Products
Joint cost of buying and shelling nuts should be allocated by sales value at split-off for inventory and reporting, because physical units would make meal appear unprofitable and could lead the company to discard $100,000 of meal sales per million pounds. Allocated joint cost should not be used to decide whether to sell or process products further. On an incremental basis, roasting and salting pieces for the bakery customer adds $91,000 per million pounds.
Budgeting and Evaluation
In the drought season, a static budget showed a $100,000 favorable plant variance that concealed $684,000 of overspending; nut prices and yields cost far more but were outside managers' control. Hansen et al. (2003) caution that rigid budget evaluation encourages defensive behavior, so performance reviews should compare each manager's controllable costs with a budget flexed to actual volume, and next year's budget should include crop scenarios and partial forward contracts.
Candy Division and Transfer Pricing
The candy division should be evaluated on a small scorecard linking packer training, order speed and accuracy, repeat corporate clients and contribution, following Kaplan and Norton (1996). It should pay for halves at the outside price net of selling cost, currently near $7.90 because of the glut and around $9.10 when markets normalize, with a negotiated price for surplus halves that cannot be sold outside. Cools et al. (2008) show that transfer pricing works best when its purpose is explicit; here the purpose is to align both managers with company profit.
Recommendations
Table 1. Prioritized Recommendations
| Priority | Recommendation | Estimated annual effect | Implementation cost |
|---|---|---|---|
| 1 | Raise retail pack prices 8 percent or set minimum order quantities, and reduce retail sizes from six to four | About $1.0 million | Low |
| 2 | Roast and salt pieces for the bakery customer, starting at half volume | About $1.3 million at half volume, $2.5 million at full | About $180,000 for roaster capacity |
| 3 | Use the activity-based model quarterly for pricing and customer decisions | Supports priority 1; avoids unprofitable expansion | About $40,000 including a time study |
| 4 | Evaluate managers against flexible budgets; add crop scenarios and partial forward buying | Reduces risk; avoids misjudging managers | Minimal |
| 5 | Market-based transfer price for halves with a surplus provision | Better decisions on candy products; about $0.2 million from new surplus products | Minimal |
The estimate for priority 1 assumes retail volume falls no more than 5 percent after the price change. The roasting estimate assumes the bakery customer takes the volume at $7.40 a pound.
Implementation
The controller will present retail pricing options to the owners within 30 days, with the sales director contacting the three largest retail chains before any change. The plant manager will obtain roaster quotes and a trial run within 60 days. The controller will update the activity-based model quarterly beginning next quarter, and the owners will adopt the flexible budget and transfer price policies at the start of the new fiscal year.
Measuring Whether the Changes Work
Each recommendation has a measure the owners can watch. Retail repricing will be judged by contribution per retail pound after activity-based overhead and by retail volume retention. Roasting will be judged by roasted pounds sold and the realized price premium over raw pieces. The activity-based model will be judged by whether quarterly customer cost reports change pricing or service decisions. Flexible budgeting will be judged by whether variance explanations separate controllable and uncontrollable effects. The transfer price policy will be judged by the volume of surplus halves used in new candy products. The controller will report these measures to the owners quarterly for the first year.
Risks and Limitations
Estimates rest on one year of activity data, supervisor estimates of packaging labor and the bakery customer's commitment. Retail chains may resist price increases, and the crop could change sharply again. Each recommendation should be reviewed after one season.
Conclusion
The company's strategy has changed faster than its cost information. Activity-based channel costs, careful joint cost treatment, flexible budgets and a market-based transfer price give the owners the information the new strategy needs, and five specific actions could add about $2.5 million in the first year and more as roasting grows.
References
Cools, M., Emmanuel, C., & Jorissen, A. (2008). Management control in the transfer pricing tax compliant multinational enterprise. Accounting, Organizations and Society, 33(6), 603-628. https://doi.org/10.1016/j.aos.2007.05.004
Datar, S. M., & Rajan, M. V. (2021). Horngren's cost accounting: A managerial emphasis (17th ed.). Pearson.
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
Kaplan, R. S., & Cooper, R. (1998). Cost and effect: Using integrated cost systems to drive profitability and performance. Harvard Business School Press.
Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: Translating strategy into action. Harvard Business School Press.
Labro, E. (2019). Costing systems. Foundations and Trends in Accounting, 13(3-4), 267-404. https://doi.org/10.1561/1400000058
What the ACC 550 Module 10 instructions ask for
The ACC 550 final project usually asks you to integrate the milestones into a single report recommending improvements to a company's cost management. Expect sections that summarize the strategic context, evaluate the current cost system, present the improved costing model and its results, address budgeting and performance evaluation and other topics from the course, and make prioritized recommendations with estimated financial effects and an implementation plan. Rework each milestone using the instructor's comments instead of dropping it in unchanged, and write for the decision makers named in the case: lead with the conclusions, keep calculations in exhibits and explain the reasoning in plain language. A short discussion of risks and limitations completes a graduate-level report.
How this ACC 550 Module 10 final project example is built
A single page of conclusions for the owners comes first. It explains that the company's cost system was built for bulk commodity sales and now misleads a business moving into retail. It summarizes cost behavior, about $430,000 a month fixed plus $0.28 a pound, and the activity-based finding that retail packs carry $1.42 a pound of post-shelling overhead, not $0.43. It confirms sales value at split-off for joint cost and the $91,000-a-batch gain from roasting pieces. It recommends flexible budgets for evaluation, a scorecard for candy and a market-based transfer price. Five recommendations are ranked with effects of about $2.5 million in year one and $3.7 million at full roasting volume, and an implementation plan sets owners and dates.
Where the ACC 550 Module 10 rubric puts the points
The ACC 550 final project rubric typically scores the integration and revision of the milestones, the accuracy and relevance of the cost analysis, the quality of recommendations and their financial support, the implementation plan, the treatment of risks and limitations and the professional quality of the report. Top papers read as one argument from strategy to recommendation, quantify effects with stated assumptions, prioritize recommendations and show how each follows from the analysis. Graders check that milestone feedback was addressed and that every figure in the summary matches its exhibit. Common deductions include milestones pasted together with repeated introductions, recommendations without estimates, inconsistent numbers across sections and missing implementation steps.
ACC 550 Module 10 help: the mistakes that cost points
A frequent weakness in these final reports is milestones joined end to end, with figures that conflict from one section to the next and conclusions that never connect. Another common gap is a list of recommendations with no priority or estimated effect, which gives decision makers nothing to choose with. If your company is a service firm, a hospital or a manufacturer of a different kind, the same structure applies: strategy, cost system, improved model, planning and control, recommendations, implementation. Check every figure in the summary against the exhibit it comes from before submitting; inconsistent numbers undermine an otherwise strong report.
Get ACC 550 Module 10 written to your instructions
Send the ACC 550 final project guidelines, your milestones with feedback and the rubric. The report will integrate them into one revised analysis with an executive summary, prioritized recommendations, estimated effects and an implementation plan. First samples are free; the usual turnaround is two days. 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.
More ACC 550 papers and related MS Accounting samples
- ACC 550 Module 1 Discussion: Cost Information After an Export Market Shrinks
- ACC 550 Module 2 Cost Behavior Short Paper: Fixed, Variable and Sticky Costs at a Seasonal Plant
- ACC 550 Module 3 Milestone One: Evaluating the Current Costing System
- ACC 550 Module 4 Discussion: Which Activities Add Value in a Sheller?
- ACC 550 Module 5 Milestone Two: An Activity-Based Model for Retail and Bulk Channels
- ACC 550 Module 6 Joint Cost Assignment: Halves, Pieces, Meal and Shells From One Pound
- ACC 550 Module 7 Milestone Three: A Flexible Budget for the Shelling Season
- ACC 550 Module 8 Discussion: A Balanced Scorecard for the Candy Division
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ACC 550 Module 10 questions, answered
Where can I find a free ACC 550 Module 10 Final Project sample?
This page shows a complete ACC 550 Module 10 final project cost management report for a pecan sheller, with five prioritized recommendations.
What should an ACC 550 final project include?
The strategic context, an evaluation of the current cost system, an improved costing model and results, budgeting and performance evaluation, other course topics as required and prioritized recommendations with an implementation plan.
Can milestone papers be reused in the final report?
By revising each for feedback and consistency and writing transitions so the report reads as one analysis, not separate papers.
Why prioritize recommendations in a cost management report?
Because decision makers have limited time and resources; ranking by financial effect, cost and risk helps them act on the most valuable changes first.
How long is the ACC 550 final project?
Length varies by section, often around ten to fifteen pages plus exhibits. Follow your guidelines and keep the main text focused on findings and recommendations.