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Group Project – Phase One Due: October 19
The purpose of this group project is to help you integrate the managerial accounting concepts we cover in class and apply them to a real-world business setting. This project contains two phases.
In the first phase, you will analyze your costs and come up with a cost formula for your business.
In the second phases, you will make sales forecast, conduct cost-volume profit analyses, prepare budgeted financial statements, and come up with strategies to improve the profitability of your business. After you complete all phases of this project, you will have good understanding of how managerial accounting tools can help managers run a business.
Group Policy:
This project is to be done in groups
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2) You will order white, cotton t-shirts from a T-shirt wholesaler. Each T-shirt costs (including taxes, shipping, and handling) $3.75 to purchase.
3) To store T-shirts that were bought, but not yet imprinted, you will rent a storage unit. The storage unit costs you $125 per month.
4) You agreed to pay your artist friend a $10,000 annual contract fee plus a $300 design fee for each of the 12 T-shirt pictures designed. This same term is renewable for the next 3 years. Each
T-shirt picture will only be used for one year. Therefore, in the second year, 12 new pictures will be designed at $300 each and another $10,000 annual contract fee will be charged.
5) You will buy several items before that start of your business:

[a] A computer and a printer: You will pay $6,000 (including taxes, shipping and handling) to buy a computer and a printer. You expect both to last about 3 years without salvage value. You will use the straight- line method for depreciation. You estimate that about 90% of the computer and printer will be used for factory operations and 10% will be for selling and administrative activities. [b] A heat press machine: You will pay $4,500 (including taxes, shipping and handling) for a heat press machine. The machine is used for imprinting t-shirts only and is expected to last 3 years without salvage value.
[c] Transfer paper: Each case of transfer paper costs $400 and contains 1,000 sheets of 8.5×11 transfer paper. You

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