Project Narrative:
This summer you’ve decided to take on a new venture. After the spring semester
ends, you’re returning to your hometown for a few weeks. A local church is
running its annual carnival and has offered you an opportunity to set up a
booth. You have the chance to relive some of your favorite childhood food
memories! In your booth space, you can sell any food item you wish (i.e.
candied apples, cotton candy, poutine, lemonade, funnel cake, deep-fried
Snickers). The carnival will run in the evenings for six days; each evening
from 6:00 pm – 10:00 pm.
 As operator of this booth, you will need to buy all the materials, hire all
of your labor (if needed), and pay 12.5\% of your sales revenue to N&A
Amusement Company and 12.5\% of your sales revenue to the church.
 Additionally, you are required to pay the church a $200 rental cost
(which includes utilities expense) for the booth space.
You are very excited to put your managerial accounting skills and other
business courses to use during the summer. In order to make this opportunity a
good use of your time, you need to determine the feasibility/profitability of this
venture. If successful, a good portion of the money you earn in the summer can
go towards your college education (or that much needed trip to someplace
tropical!).Costs
Carnival Cost Projections in Excel
Course:
ACCT 102
Section:
Submitted by:
online
Material:
Overhead:
$
$0.00
Total Fixed:
250.00
Total Variable: $
$250.00

Sales price per serving:
$0.00
Variable cost per serving:
$1.00
Contribution margin per serving:
($1.00)
Direct Material per batch of XYZ
Line
Item
Source
Quantity
Unit Cost
Extended Cost
Cost Type
1
$

Variable
2
$

Variable
3
$

Variable
4
$

Variable
$

Total direct material cost
Page 1 of 8
Costs
Carnival Cost Projections in Excel
Course:
ACCT 102
Section:
Submitted by:
online
Material:
Overhead:
$
$0.00
Total Fixed:
250.00
Total Variable: $
$250.00

Sales price per serving:
$0.00
Variable cost per serving:
$1.00
Contribution margin per serving:
($1.00)
Manufacturing Overhead
Item
Line
5
Source
Rate
Booth rental
$200 per week
Extended Cost
$
200.00
Cost Type
Fixed
6
Fixed
7
Fixed
8
Fixed
9
Fixed
10
Damage waiver on equipment
www.rental-world.com
50.00
Fixed
11
Fixed
12
Fixed
13
Fixed
14
Fixed
15
Fixed
16
Fixed
Total manufacturing overhead $
Page 2 of 8
250.00
Costs
Carnival Cost Projections in Excel
Course:
ACCT 102
Section:
Submitted by:
online
Material:
Overhead:
$
$0.00
Total Fixed:
250.00
Total Variable: $
$250.00

Sales price per serving:
$0.00
Variable cost per serving:
$1.00
Contribution margin per serving:
Fixed Costs
Item
Line
17
Total Amount
Booth rental
$
200.00
18
19
20
21
22
Damage waiver
50.00
23
24
25
26
27
28
Total Fixed Costs $
Page 3 of 8
250.00
($1.00)
Costs
Carnival Cost Projections in Excel
Course:
ACCT 102
Section:
Submitted by:
online
Material:
Overhead:
$
$0.00
Total Fixed:
250.00
Total Variable: $
$250.00

Sales price per serving:
$0.00
Variable cost per serving:
$1.00
Contribution margin per serving:
Variable costs
Line
Item
Cost per
serving
Basis
29
30
31
32
33
Fee paid to Church (\% of sales price)
$4.00 x 12.5\%
0.50
34
Fee paid to Amusement Company
$4:00 x 12.5\%
0.50
Total Variable Costs $
SOURCE: C. Andrew Lafond, La Salle University
Page 4 of 8
1.00
($1.00)
BREAK-EVEN ANALYSIS
Fixed Cost
Costs required to produce the first unit of a product.
Definition
Cost
Total Fixed Costs $
Unit Selling Price:
$1.00
The amount of money charged to the customer for each unit of a product or service.
Expected Unit Sales:
Number of units of the product projected to be sold over a specific period of time.
Break-Even Units:
SOURCE: C. Andrew Lafond, La Salle University
0
REAK-EVEN ANALYSIS
Variable Cost
Costs that vary directly with the production of one additional unit.
Definiton
Cost per unit
12.5\% fee paid to Church ($ x 12.5\%)
12.5\% fee paid to Amusement Co. ($ x 12.5\%)
Total Variable Costs $
or each unit of a product or service.
old over a specific period of time.

CARNIVAL BREAK-EVEN ANALYSIS
1,200.00
$0.00
1,000.00
Total Variable Unit Costs:
$0.00
800.00
Expected Sales in Units:
Price per Unit:
0
$1.00
Amount
Total Fixed Costs:
B/E point
600.00
Fixed Cost
400.00
Total Cost
200.00
Revenue
1,050
950
850
750
650
550
450
350
250
0
150
Break Even Units:
50
0.00
Units
Units
Fixed Cost
Variable Cost
Total Cost
Revenue
Profit
50
100
150
200
250
300
350
400
450
500
550
600
650
700
750
800
850
900
950
1,000
1,050
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
550.00
600.00
650.00
700.00
750.00
800.00
850.00
900.00
950.00
1,000.00
1,050.00
50.00
100.00
150.00
200.00
250.00
300.00
350.00
400.00
450.00
500.00
550.00
600.00
650.00
700.00
750.00
800.00
850.00
900.00
950.00
1,000.00
1,050.00
1,100
1,150
0.00
0.00
SOURCE: C. Andrew Lafond, La Salle University
0.00
0.00
0.00
0.00
1,100.00
1,150.00
1,100.00
1,150.00
Managerial Accounting, ACCT 102
Professor Kelson
Summer Job
Project Narrative:
This summer you’ve decided to take on a new venture. After the spring semester
ends, you’re returning to your hometown for a few weeks. A local church is
running its annual carnival and has offered you an opportunity to set up a
booth. You have the chance to relive some of your favorite childhood food
memories! In your booth space, you can sell any food item you wish (i.e.
candied apples, cotton candy, poutine, lemonade, funnel cake, deep-fried
Snickers). The carnival will run in the evenings for six days; each evening
from 6:00 pm – 10:00 pm.


As operator of this booth, you will need to buy all the materials, hire all
of your labor (if needed), and pay 12.5\% of your sales revenue to N&A
Amusement Company and 12.5\% of your sales revenue to the church.
Additionally, you are required to pay the church a $200 rental cost
(which includes utilities expense) for the booth space.
You are very excited to put your managerial accounting skills and other
business courses to use during the summer. In order to make this opportunity a
good use of your time, you need to determine the feasibility/profitability of this
venture. If successful, a good portion of the money you earn in the summer can
go towards your college education (or that much needed trip to someplace
tropical!).
Project Requirements
A. Determine your financial goal for this one-week venture.
B. Briefly describe the product that you will sell at the carnival as well as all of the costs
that you will have to incur during the week. On the Excel file (provided), classify each
cost as variable, fixed, or mixed. For mixed costs, be sure to identify the variable and
fixed components.
C. You will need to research all of your costs: direct materials, direct labor, and overhead
involved in making your product. On the Excel file tell me your source for each of these
costs (e.g. list websites where you found your information).
D. Perform market research to determine the appropriate price to charge for your product.
E. Before you begin any business venture, it is essential to perform a preliminary breakeven
analysis. Your findings provide the basis for assessing the reasonableness of this
business opportunity. An important part of this breakeven analysis is for you to
determine the contribution margin per unit. From parts C and D, you will be able to
determine your contribution margin per unit. After determining your contribution
margin per unit, answer the following questions:
1. What is the contribution margin per unit of your product?
2. What is the contribution margin ratio?
3. What are the total fixed costs?
4. What is the sales volume at the breakeven point?
5. What is the sales revenue in dollars at the breakeven point?
6. What is the sales volume in units required to reach your financial goal?
7. What is the sales revenue in dollars required to reach your financial goal?
F. In addition to your calculations, summarize your results in one paragraph. Remember,
your time to operate the booth has a value too; determine your earnings per hour to
conclude if this opportunity is worth your time.
A minimum two page Word document will address points A-F. Please organize your
thoughts in a concise and academic manner. You will be graded on content, grammar, and
spelling.
Grading Rubric
3
Planning
Statement as to the financial goal
Description of the carnival food product
Description of the costs to make the carnival food product
Classification of each cost as fixed, variable, or mixed
Determining the Cost and Selling Price of the Product
Direct materials
Direct labor
Manufacturing overhead
Selling price of the carnival food product
Preliminary Breakeven Analysis
Contribution margin per unit of the product
Feasibility of your target profit
Total fixed costs
Sales volume at the breakeven point
Sales revenue in dollars at the breakeven point
Sales volume in units required to reach your financial goal
Sales revenue in dollars required to reach your financial goal
Summary Paragraph Structure and Content
Content summarizes the results
Professional language and tone
Correct grammar and spelling
Paragraph organization/Flow of paper
External Research (Use, application and citation)
Adequate resources to support all cost figures and selling price
Total: ____________
Scoring:
0 – 41 points: Does not meet expectations
42 – 53 points: Meets expectations
54 – 60 points: Exceeds expectations
SOURCE: C. Andrew Lafond, LaSalle University
2
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