Randall K. Howell
ACC 206: Principles of Accounting II
March 4, 2013
The ABC Company is a manufacturing firm that specializes in making cedar roofing and siding shingles, introducing the new project to build cedar dollhouses by shingle scrap materials for reaching $3 million annual sales within the next 3 years. Explain the overall risk profile of the ABC Company based on current economic and industry issues. In order to help out the CEO I prepare reports that will contain the information regarding the project. These statements refer to the accompanying Excel spreadsheet as well as word documents. The statements are; Cash Flow statements, Product Cost, Net present value, Depreciation, Contribution Margins and Break-even Point of sales. In the last conclude the major risk factors in this project, management accountant responsibilities of the project and recommendations.
I. An overall risk profile of the company based on current economic and industry issues that it may be facing. It’s a mystifying time to be in the manufacturing industry. After a severe global financial crisis hasten merchandise prices and flounce to the side a year detonation, a promising revival give the industry reason to hope. But the global economy has degenerated into another less severe downturn in 2011, hindering global demand and forcing down merchandise prices once again. The move of the industry focusing on all over the risk based on current economic and industry concerns. Many industry leaders consider that current decline is a predicament of composure added in a catastrophe of basics. Economics and goods prices may be beyond the control of the industry, but an assortment be able to be achieved through good administration have spectator the initial economic predicament. The major risks that management is likely to face in 2012 are cost escalation, government involvement in the industry, access to new projects, ability to raise capital
References: 1) Wayne Jansen, Business risks facing the Mining Industry, kpmg.com, December 2011, pdf. Retrieved 18 December 2012 from http://www.kpmg.com/Ca/en/IssuesAndInsights/ArticlesPublications/Documents/6104_Top%20Risks%20in%20the%20Mining%20Industry_TL_web_v4%20(FINAL).pdf 2) Simon Wallace, Documentation Management and Control, epmbook.com, 2007, web. Retrieved 18 December 2012 from http://www.epmbook.com/documentation.htm 3) Bill Warner, What Does a CEO Do, evancarmichael.com, web. Retrieved 18 December 2012 from http://www.evancarmichael.com/Business-Coach/2552/What-Does-A-CEO-Do.html 3) The McGraw-Hill Companies, Inc., Chapter 9: Activity-Based Costing, csus.edu, 2011, pdf. Retrieved 18 December 2012 from http://www.csus.edu/indiv/p/pforsichh/documents/ACCY121FinalExamInstrManualchs9_11_13_16_Appendix.pdf