Managerial accounting

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As CEO of SeaSpray Marine, Ron Greenwood knows it is important to control costs and to Respond quickly to changes in the highly competitive boat-building industry. When IDG Consulting proposes that SeaSpray Marine invest in an ERP system, he forms a team to    evaluate the proposal: the plant engineer, the plant foreman, the systems specialist, the human resources director, the marketing director, and the management accountant.

A month later, management accountant Mike Cobalt reports that the team and IDG estimate that if SeaSpray Marine implements the ERP system, it will incur the following costs:

a. $350,000 in software costs

b. $80,000 to customize the ERP software and load SeaSpray’s data into the new ERP system

c. $125,000 for employee training

The team estimates that the ERP system should provide several benefits:

a. More efficient order processing should lead to savings of $185,000.

b. Streamlining the manufacturing process so that it maps into the ERP system will create savings of $275,000.

c. Integrating purchasing, production, marketing, and distribution into a single system will allow SeaSpray Marine to reduce inventories, saving $220,000.

d. Higher customer satisfaction should increase sales, which, in turn, should increase profits by $150,000.

Requirements

1. If the ERP installation succeeds, what is the dollar amount of the benefits?

2. Should SeaSpray Marine install the ERP system? Why or why not? Show your calculations.

3. Why did Greenwood create a team to evaluate IDG’s proposal? Consider each piece of cost- benefit information that management accountant Cobalt reported. Which person on the team is most likely to have contributed each item?

(Hint; Which team member is likely to have the most information about each cost or benefit?)

 

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Managerial Accounting

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(Ignore income taxes in this problem.) An investment of X dollars now will yield cash inflows of $3,000 at the end of the first year and $2,000 at the end of the fourth year. If the internal rate of return for this investment is 20%, then the value of X is:

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Managerial Accounting

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Cabigas Company manufactures two products, Product C and Product D. The company estimated it would incur $167,140 in manufacturing overhead
costs during the current period. Overhead currently is applied to the products on the basis of direct labor hours. Data concerning the current period’s
operations appear below:

Product C

Product D

Estimated volume

2,000 units

2,700 units

Direct labor hours per unit

Total hours

2.00 hours

4000 hour

0.80 hour

2160 hours

Direct materials cost per unit

$21.50

$24.10

Direct labor cost per unit

$24.00

$ 9.60

1) Compute the predetermined overhead rate under the current method, and determine the unit product cost of each product for the current
year.

The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its
traditional system based on direct labor hours. The activity-based costing system would use three activity cost pools. Data relating to these activities for
the current period are given below. Use the data for questions 20 to 24.

Estimated

Activity

Overhead

Expected Activity

Cost Pool

Costs

Product C

Product D

Total

Machine setups

$ 13,630

130

160

290

Purchase orders

85,750

750

1,000

1,750

General factory

67,760

4,000

2,160

6,160

$167,140

2) Determine the unit product cost of each product for the current period using the activity-based costing
approach.

3)?Which cost method would you use to manage this business and why?

4) You are the product manager for product D and are evaluated based on product profitability. Which method would
you prefer?

5) The government wants to buy product C and will pay the business for the cost of the product plus a fixed fee. Should you adopt the ABC
system or keep the old plant-wide overhead system and why?

6) A customer has offered to buy a special order of 100 units of D for $60 each. This sale will not impact any other
part of your business and you have excess capacity to produce this special order and will produce these extra units if you accept the order. How would this
impact the business ‘ would you be better off and by how much? Would you need other information to answer this question and, if so, what other
information?

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Managerial accounting

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I need a clip from youtube.com or a show from Unwrapped on food network or how its made on the discovery channel, for a product that might be interesting.
Requirements:
Prepare a 3 page paper discussing the following:
Describe the product that is being produced and the company that makes it
Summarize the production process that is used in making this product.
What raw materials are used to make this product?
What indirect materials are used to make this product?
Describe the jobs of the workers who would be considered “direct labor” in the making of this product.

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I need a clip from youtube.com or a show from Unwrapped on food network or how its made on the discovery channel, for a product that might be interesting.
Requirements:
Prepare a 3 page paper discussing the following:
Describe the product that is being produced and the company that makes it
Summarize the production process that is used in making this product.
What raw materials are used to make this product?
What indirect materials are used to make this product?
Describe the jobs of the workers who would be considered “direct labor” in the making of this product.
Describe the jobs of the workers who would be considered “indirect labor” in the making of this product.
Define manufacturing overhead. In addition to the indirect materials and indirect labor previously described, what other manufacturing overhead costs would be incurred in this production process? Be specific and thorough. Make reasonable “guesses” if you do not know for sure.
Would a job order costing system be used for this production process? Give specific reasons for your choice of which costing system would be most appropriate for this manufacturer.

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Managerial Accounting

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Instructions:
Please see theinstructionsin the attached file. Specifically for part2 there is an essay which has a word limit
deadline: 23 May wednesday
at 2 pm Australian Eastern Standard Time
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Management Accounting This assignment has two equally weighted parts:Part 1 – Technical Part 2 – Essay ( 1500 – 1800 word)The assessment criteria are on p. 5. PART 1: George Ltd manufactures two types of coils used in electric motors. The two types are: C20 and D40. They both require plastic and metal. Information for the two products for the month of April is given in the following tables:Input pricesDirect materialsPlastic$4 per kilogramMetal$3 per kilogramDirect manufacturing labour$10 per direct manufacturing labour hourInput quantities per unit of outputC20D40Direct materialsPlastic4 kilograms6 kilogramsMetal0.5 kilograms1 kilogramDirect manufacturing labour-hours (DMLH)3 hours5 hoursMachine-hours (MH)10 MH18MHInventory information, direct materialsPlasticMetalBeginning inventory250 kilograms60 kilogramsTarget ending inventory380 kilograms55 kilogramsCost of beginning inventory$950$180The company accounts for direct materials using a FIFO cost flow assumption.Sales and inventory information, finished goodsC20D40Expected sales in units500300Selling price$160$250Target ending inventory in units3515Beginning inventory in units1530Beginning inventory in dollars$1500$5580The company uses:a FIFO cost flow assumption for finished goods inventory.an activity-based costing system and classifies overhead into three activity pools: Set-up, Processing and Inspection. Activity rates for these activities are $100 per set-up hour. $5 per machine-hour and $16 per inspection-hour, respectively. Other information is as follows:Cost driver informationC20D40Number of units per batch2015Set-up time per batch1.5 hours1.75 hoursInspection time per batch0.5 hour0.6 hourNon-manufacturing fixed costs for March equal $36,000 of which half are salaries. Salaries are expected to increase by 5% in April. The only variable non-manufacturing cost is sales commission equal to 1% of sales revenue.Required:Prepare the following for April:Sales budgetProduction budget in unitsDirect material…

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Managerial Accounting

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Big Company manufactures keyboards. Management wishes to develop budgets for the upcoming quarter based on the following data:



sales in units 800 units

selling price per unit $60

inventory at beginning of the quarter (FG) 80 units

desired ending inventory (FG) 130 units

direct materials per unit 4 ounces plastic

plastic inventory at beginning of quarter 136 ounces

desired ending inventory of plastic 84 ounces

plastic cost $.18 per ounce



Compute the budgeted quantity of plastic which needs to be purchased for the next quarter.



850 ounces.

3,348 ounces.

3,452 ounces.

798 ounces.

902 ounces.

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Managerial Accounting

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A company expects to produce and sell 15,000 units of a single product. Management desires a 15% return on assets of $2,000,000. The following additional company
information is available:



Variable costs(per unit)

Production costs $65

Nonproduction costs $7

Fixed costs (in total)

Overhead $97,000

Nonproduction $23,000



Compute selling price per unit given that markup percentage equals desired profit divided by total costs.

$80

$100

$20

$72

$92


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Managerial Accounting

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Use the following information to answer question 4:

Direct materials used—$31,000
Direct labor—$18,000
Factory rent—$12,000
Equipment depreciation—factory—$2,000
Equipment depreciation—office—$750
Marketing expense—$2,500
Administrative expenses—$40,000
Units produced—35,000

4. What are the total nonmanufacturing costs?
A. $43,250
B. $57,250
C. $63,000
D. $106,250



5. For a student who is considering housing options for next semester, cost, proximity to
campus, and square feet of living area are all examples of
A. alternative solutions.
B. relevant variables.
C. problems.
D. decision objectives.

Use the following information to answer questions 6, 7, and 8:

During 2007, JKL Manufacturing had the following costs:
Equipment depreciation—factory $2,000
Equipment depreciation—office $5,750
Marketing expense $2,500
Direct materials used $31,000
Direct labor $18,000
Administrative expenses $15,000
Factory rent $12,000
3,500 units were produced in 2007

6. What is the product cost per unit, rounded to the nearest dollar?
A. $15
B. $18
C. $20
D. $25

7. What are the total period costs for 2007?
A. $23,250
B. $51,000
C. $68,750
D. $86,250

8. What is the net income for 2007 if 3,000 units are sold for $35 each?
A. $23,250
B. $27,750
C. $51,000
D. $105,000

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Managerial Accounting

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Could you pleas help me with this Budgeted income statement

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Go to printed page:1. Sales and variable costs of sales are expected to increase by 5 percent in the next quarter2. All sales are on credit with 50 percent collected in the quarter of sale and 50 percent collected in the following quarter.3. Variable cost of sales consists of 40 percent materials, 40 percent direct labor, and 20 percent variable overhead. Materials are purchased on credit. Sixty percent are paid for in the quarter of purchase, and the remaining amount is paid for in the quarter after purchase. There is no inventory. Also, direct labor and variable overhead costs are paid in the quarter the expenses are incurred.4. Fixed production costs (other than $3,000 of depreciation expense) are expected to increase by 2 percent. Fixed production costs requiring payment are paid in the quarter they are incurred.5. Fixed selling and administrative costs (other than $4,000 of depreciation expense) are expected to increase by 2 percent. Fixed selling and administrative costs requiring payment are paid in the quarter they are incurred.6. The tax rate is expected to be 40 percent. All taxes are paid in the quarter they are incurred.7. No purchases of fixtures or equipment are expected in the first quarter of 2012.RequiredPrepare a budgeted income statement for the first quarter of 2012.Prepare a budgeted statement of cash receipts and disbursements for the first quarter of 2012.Prepare a budgeted balance sheet as of the end of the first quarter of 2012.PROBLEM 10-3. Master Budget [http://online.vitalsource.com/books/9781118091050/content/id/B10-7LO 2] Techlabs operates a computer training center. The following data relate to the preparation of a master budget for January 2012.At the end of 2011, the company’s general ledger indicated the following balances:DebitsCreditsCash$ 50,000Accounts Payable$ 40,000Accounts receivable40,000Note payable60,000Equipment (net)120,000Common stock30,000Retained earnings80,000Total$210,000$210,0002. Tuition revenue in December 2011…

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Managerial Accounting

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You have been asked to help a local company evaluate a major capital expenditure. The

company is a new internet company and must buy a large computer system which will generate

additional revenue. The company provides you with the following information:

Initial cost of project $1,250,000

Depreciation method Straight-line

Salvage value $0

Residual value (sales price at end of project) $350,000

Tax rate (ordinary and capital gains tax) 35%

Incremental annual revenues in year 1 $368,000

Incremental annual expenses in year 1 $198,500

Working capital required at time of investment (t=0) $50,000

Working capital as percentage of revenue each year 12.0%

Cost of capital 12%

Economic life 10 years


Requirements:

a. Write a letter to the president of the company explaining whether the company should

acquire the computer system. Utilize both NPV and IRR. Assume that the initial $368,000 in

annual revenues will grow at a 8% annual rate and that the initial $198,500 in annual

expenses will grow at a 5% annual rate. The growth starts in year 2 from year 1, i.e. the

revenue is year 2 is $397,440, etc. Working capital is released at the end of the project.


b. Redo this analysis above using sum-of-years digits depreciation method. What happens to the

results and would you change your recommendation?


c. Redo this analysis above using MACRS (10 years) depreciation method. What happens to the

results and would you change your recommendation?

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Managerial Accounting

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A company reports the following information for its first year of operations.



units produced this year ? units

units sold this year 1,500

direct materials $9 per unit

direct labor $5 per unit

variable overhead $7 per unit

fixed overhead $24,000 in total



If the company’s cost per unit of finished goods using absorption costing is $27, how many units were produced?



4,000 units.

3,600 units.

1,846 units.

2,667 units.

2,000 units.

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Managerial Accounting

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Roland Company operates a small factory in which it manufactures two products: A and B. Production and sales result for last year were as follow:

A B

Units sold 8,000 20,000

Selling price per unit 65 52

Variable costs per unit 35 30

Fixed costs per unit 15 15

For purposes of simplicity, the firm allocates total fixed costs over the total number of units of A and B produced and sold.

The research department has developed a new product (C) as a replacement for product B. Market studies show that Roland Company could sell 11,000 units of C next
year at a price of $80, the variable costs per unit of C are $29. The introduction of product C will lead to a 10% increase in demand for product A and
discontinuation of product B. If the company does not introduce the new product, it expects next year’s result to be the same as last year’s.



Instructions

Should Roland Company introduce product C next year? Explain why or why not. Show calculations to support your decision.

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Managerial Accounting

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1.

4-12

Morris & Brown, Ltd

Income Statements

For the Three Months Ended September 30

July August September

Sales in units 4000 4500 5000

Sales revenue A$400,000 A$450,000 A$500,000

Cost of good sold 240,000 270,000 300,000

Gross margin 160,000 180,000 200,000

Selling and administrative expenses:

Advertising expense 21,000 21,000 21,000

Shipping expense 34,000 36,000 38,000

Salaries& commission 78,000 84,000 90,000

Insurance expense 6,000 6,000 6,000

Depreciate expense 15,000 15,000 15,000

Total selling& admin expens 154,000 162,000 170,000

Net operation income A$ 6000 A$ 18,000 A$30,000

(Note: Morrisey & Brown, Ltd. Australian- formatted income statement has been recast in the format common in the United States. The Australian dollar is denoted here by A$.)

Question:

(1)

Identify each of the company s expenses (including cost of good sold) as either variable, fixed, or mixed.

(2)

Using the high- low method, separate each mixed expense into variable and fixed elements. State the cost formula for each mixed expense.

(3)

Redo the company s income statement at the 5,000-unit level of activity using the contribution format.

2) 5-12

Menlo Company distributes a single product. The company s sales and expenses for last month follow:

Total Per Unit

Sales

$450,000

$30

Variable expenses

180,000

12

Contribution margin

270,000

18

Fixed expenses

216,000

Net Operating income

54,000

1)

What is the month break-even point in units sold and in sales dollars?

2)

Without resorting to computations, what is the total contribution margin at the break-even point?

3)

How many units would have to be sold each month to earn a target profit of $90,000? Use the formula method. Verify your answer by preparing contribution format income statement at the target sales level.

3) 6-1

Silver Company makes a product that is very popular as a Mother s Day gift. Thus, peak sales occur in May of each year, as shown in the company s sales budget for the second quarter given below:

April

May

June

Total

Budget sales (all on account)

$300,000

$500,000

$200,000

$1,000,000

From past experience, the company has learned that 20% of a month s sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second following sale. Bad debts are negligible and can be ignored. February sales totaled $230,000, and March sales totaled $260,000.

1)

Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter.

2)

Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

4) 6-7

Garden Depot is a retailer that is preparing its budget for the upcoming fiscal year. Management has prepared the following summary of its budget cash flows:

1st Quarter

2nd Quarter

3rd Quarter

4th Quarter

Total cash receipts

$180,000

$330,000

$210,000

$230,000

Total cash disbursements

$260,000

$230,000

$220,000

$240,000

The company s beginning cash balance for the upcoming fiscal year will be $20,000. The company requires a minimum cash balance of $10,000, and may borrow any amount needed from a local bank at a quarterly interest rate of 3%. The company may borrow any amount at the beginning of any quarter and may repay its loans, or any part of its loans, at the end of any quarter. Interest payments are due on any principal at the time it is repaid. For simplicity, assume that interest is not compounded.

Prepare the company s cash budget for the upcoming fiscal year.

5) 7-4

Vulcan Flyovers offers scenic overflights of Mount St. Helens, the volcano in Washington State that explosively erupted in 1982. Data concerning the company s operations in July appear below:

Vulcan Flyovers

Operating Data

For the Month Ended July 31

Planning Budget

Flexible Budget

Actual Results

Flights (q)

50

48

48

Revenue ($320.00q)

$16,000

$15,360

$13,650

Expenses:

Wages and salaries ($4,000 + $82.00q)

8,100

7,936

8,430

Fuel ($23.00q)

1,150

1,104

1,260

Airport fees ($650 + $38.00q)

2,550

2,474

2,350

Aircraft depreciation ($7.00q)

350

336

336

Office expenses ($190 + $2.00q)

290

286

460

Total expense

12,440

12,136

12,836

Net operating income

$3,560

$3,224

$814

The company measures its activity in terms of flights. Customers can buy individual tickets for overflights or hire an entire plane for an overflight at a discount.

1)

Prepare a flexible budget performance report for July

2)

Which of the variances should be of concern to management? Explain.

6) 8-5

Meiji Isetan Corp. of Japan has two regional divisions with headquarters in Osaka and Yokohama. Selected data on the two divisions follow (in millions of yen, denoted by =Y):

Division

Osaka Yokohama

Sales

=Y3,000,000

=Y9,000,000

Net operating income

=Y210,000

=Y720,000

Average operating assets

=Y1,000,000

=Y4,000,000

1)

For each division, compute the return on investment (ROI) in terms of margin and turnover. Where necessary, carry computations to two decimal places.

2)

Assume that the company evaluates performances using residual income and that the minimum required rate of return for any division is 15%. Compute the residual income for each division.

3)

Is Yokohama s greater amount of residual income an indication that it is better managed?

7) 8-15

Wingate Company, a wholesale distributer of videotapes, has been experiencing losses for some time, as shown by its most recent monthly contribution format income statement, which follows:

Sales

$1,000,000

Variable expenses

390,000

Contribution margin

610,000

Fixed expenses

625,000

Net operating income (loss)

$ (15,000)

In an effort to isolate the problem, the president has asked for an income statement segmented by division. Accordingly, the Accounting Department has developed the following information:

Division

East Central West

Sales

$250,000

$400,000

$350,000

Variable expenses as a percentage of sales

52%

30%

40%

Traceable fixed expenses

$160,000

$200,000

$175,000

1)

Prepare a contribution format income statement segmented by divisions, as desired by the president.

2)

As a result of a marketing study, the president believes that sales in the West Division could be increased by 20% if monthly advertising in that division were increased by $15,000. Would you recommend the increased advertising? Show computations to support your answer.

8) 11-8

Labeau Products, Ltd. Of Perth, Australia, has $35,000 to invest, The company is trying to decide between two alternative uses for the funds as follows:

Invest in Project X

Invest in Project Y

Investment required

$35,000

$35,000

Annual cash inflows

$9,000

Single cash inflow at the end of 10 years

$150,000

Life of the project

10 years

10 years

The company s discount rate is 18%

(ignore income taxes) Which alternative would you recommend that the company accept? Show all computations using the net present value approach. Prepare separate computations for each project.

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Managerial Accounting

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Use the following information to answer questions 20, 21, and 22:

The Drapery Company sells draperies suited for large or small windows and has
decided to adopt an activity-based costing system. Last year the company incurred
$800,000 in overhead costs related to the following activities:

Activity Allocation Base Overhead Cost
Purchasing # of purchase orders $300,000
Receiving # of shipments received $200,000
Sales # of sales orders $300,000

The activities for large and small window draperies were as follows:

Large Small
Purchase orders 5,000 10,000
Shipments received 7,500 12,500
Sales orders 6,500 8,500

20. What is the overhead rate for sales?
A. $60
B. $30
C. $20
D. $10

21. How much of the receiving overhead should be assigned to the large draperies?
A. $75,000
B. $100,000
C. $125,000
D. $200,000

22. If a customer requested a bid on a specially designed drapery that would require five
purchase orders, how much purchasing overhead would you include in the bid?
A. $25
B. $50
C. $100
D. $125

23. Cost of goods manufactured equals
A. beginning direct materials inventory plus all production costs incurred less ending
direct materials inventory.
B. beginning direct materials inventory plus all production costs incurred less ending
work-in-process inventory.
C. beginning work-in-process inventory plus direct materials used plus direct labor
used plus manufacturing overhead used less ending work-in-process inventory.
D. beginning work-in-process inventory plus direct materials used plus direct labor
used plus manufacturing overhead used plus beginning finished goods inventory.

24. If a company is in the process of implementing an activity-based costing system,
which cost driver would a purchasing department manager identify to allocate costs?
A. Amount of material
B. Number of receipts
C. Amount of labor hours
D. Number of parts

25. When considering housing options, if the cost of a dorm room and the cost of an
apartment across the street are the same, then cost is
A. sunk.
B. an opportunity cost.
C. relevant
D. not relevant.

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Sandusky Inc. has the following costs when producing 100,000 units:
Variable costs $800,000
Fixed costs 1,200,000
An outside supplier is interested in producing the item for Sandusky. If the item is produced outside, Sandusky could use the released production facilities to make another item that wou…

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For each cost item, indicate whether it would be variable or fixed with respect to the number of units produced and sold; and then whether it would be a selling cost, an administrative cost, or a manufacturing cost. If it is a manufacturing cost, indicate whether it would typically be treated as a direct cost or an indirect cost with respect to units of product. Select “None” if none of the categories apply for a particular item

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Higgins Inc. produces and sells three products. Unit data concerning each product is shown below.
Product
X Y Z
Selling price $200 $300 $250
Direct labor costs 30 75 45
Other variable costs 110 90 121

The company has 2,000 hours of labor available to build inventory in anticipa…

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A company’s unit costs based on 100,000 units are:

Variable costs $25

Fixed costs 10

The normal unit sales price per unit is $55. A special order from a foreign company has been received for 5,000 units at $45 a unit. In order to fulfill the order,
3,000 units of regular sales would have to be foregone.



The opportunity cost associated with this order is



The incremental profit (loss) from accepting the order would be

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1. Use an Excel spreadsheet to determine the amount of indirect costs that would be attributable to each product line using activity-based costing (ABC). Data
is in the ABC Analysis tab of the file.

2. Using sales, variable product costs, and commissions originally given (in the Segmented Income Statement tab of the Excel file), and your findings from part
one, recalculate the profitability of each product line (using an Excel spreadsheet). (You will basically be replacing the indirect cost row in the spreadsheet
in the Segmented Income Statement with your answers to part one, and recalculating income for each product line. The total indirect costs and the total income
will be the same. The amounts for each product line will just be different than those originally given.

3. The firm was considering devoting a greater share of the production resources to the sports line. What do your results in part two imply about the product
line’s continued success, and whether the firm should devote more resources to that line? You should consider and answer the following questions: Should the
sports line be dropped? Can you determine why market share (sales) for the sports line was increasing? Are there other things the firm could do to make the
sports line more profitable, related to pricing, product options, cost reduction, etc.? What are the benefits of an ABC allocation of indirect costs that a
single, volume-based allocation cannot provide?

Blue Ridge Manufacturing

Segmented Income Statement

Designer

Children’s

Sports

Total

Sales

$3,464,915

$3,246,587

$1,739,510

$8,451,012

Less:

Variable product costs

1,829,464

1,977,798

1,137,225

4,944,487

Commissions

236,805

256,006

147,202

640,013

Contribution Margin

$1,398,646

$1,012,783

$455,083

$2,866,512

Less:

Indirect expenses

687,601

497,903

223,728

1,409,232

Income

$711,045

$514,880

$231,355

$1,457,280

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Answer questions 11 and 12 from the following information:

Factors Xenabox T.V. BigScreen T.V.
Screen size 50 inch 50 inch
Picture quality great good
Cost $1,300 $1,300
Delivery charge $50$50

11. Which of the following four factors is relevant to your decision?
A. Screen size
B. Picture quality
C. Cost
D. Delivery charge

12. Which of the following four factors is qualitative?
A. Screen size
B. Picture quality
C. Cost
D. Delivery charge

13. Which of the following statements best reflects the differences between the needs of
internal users and the needs of external users of accounting information?
A. Accounting information for external users is more flexible.
B. Accounting information for internal users is more timely.
C. Accounting information for external users is more future-oriented.
D. Accounting information for internal users is more focused on the organization as a
whole.

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LIABILITIES

The following items are extracted “in a random order” from the accounting records of MST Corp for the period ended December 31, 2002

Accounts payable 65,600
Accrued Liabilities 11,347
6 % Bonds payable, due Feb 1, 2003 100,000
8% Bonds payable, due June 1, 2003 250,000
Unamortized bond discount (8% bonds of 2003) 260
11% Bond payable, due June 1, 2012 300,000
Unamortized bond premium (11% bonds of 2012) 1,700
Accrued interest payable 7,333
Bond interest expense 61,000
Other interest expe

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LIABILITIES

The following items are extracted “in a random order” from the accounting records of MST Corp for the period ended December 31, 2002

Accounts payable 65,600
Accrued Liabilities 11,347
6 % Bonds payable, due Feb 1, 2003 100,000
8% Bonds payable, due June 1, 2003 250,000
Unamortized bond discount (8% bonds of 2003) 260
11% Bond payable, due June 1, 2012 300,000
Unamortized bond premium (11% bonds of 2012) 1,700
Accrued interest payable 7,333
Bond interest expense 61,000
Other interest expense 17,000
Notes payable (short-term) 110,000
Lease payment obligations – Capital lease 23,600
Pension obligation 410,000
Unfunded obligations for post retirement benefits 72,000
Deferred Income tax 130,000
Income Tax expense 66,900
Income Tax payable 17,300
Operating Income 280,800
Net Income 134,700
Total assets 2,093.300

Other information
The 6% Bonds due in Feb 2003 will be refinanced in Jan 2003 through the issuance of $ 150,000 in 9%, 20 years bonds
The 8% Bonds due June 2003 will be repaid entirely
MST Corp is committed to total lease payments of $ 14,400 in 2003. Of this amount, $ 7,479 is applicable to operating leases and $ 6,921 to capital leases. Payments on capital leases will be applied as follows: $ 2,300 to interest expense and $ 4.621 to reduction in the capitalized lease payment obligation
MST pension plan is fully funded with an independent trustee
The obligation for postretirement benefits other than pensions consists of a commitment to maintain health insurance for retired employees. During 2003, MST will fund $ 18,000 of this obligation
The $ 17,300 income tax payable relates to income tax of 2002 and must be paid on or before March 15, 2003. No portion of the deferred tax liability is regarded as a current liability

INSTRUCTIONS
Using this…

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Consider the following scenario:

Your CFO, in her initial work, needs to decide whether to set up a job order costing system or a process type costing system. She has asked you to make a recommendation based on the following information. You plan to meet with her in the morning. Write 4–6 parag…

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MANAGERIAL ACCOUNTING
Breakeven sales; sales to earn a target operating income, contribution margin income statement
British Productions performs London shows. The average show sells 900 tickets at $65 per ticket. There are 155 shows a year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $330 per show. The cast is paid after each show. The other variable cost is program-printing cost of $9 per guest. Annual fixed costs total $580,500.

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MANAGERIAL ACCOUNTING
Breakeven sales; sales to earn a target operating income, contribution margin income statement
British Productions performs London shows. The average show sells 900 tickets at $65 per ticket. There are 155 shows a year. No additional shows can be held as the theater is also used by other production companies. The average show has a cast of 55, each earning a net average of $330 per show. The cast is paid after each show. The other variable cost is program-printing cost of $9 per guest. Annual fixed costs total $580,500.
Requirements
Compute revenue and variable costs for each show.
Use the income statement and equation approach to compute the number of shows British Productions must perform each year to break even.
Use the contribution margin approach to compute the number of shows needed each year to earn a profit of $4,128,000. Is this profit goal realistic? Give your reasoning.
Prepare British Productions’ contribution margin income statement for 155 shows performed in 2012. Report only two categories of costs: variable and fixed.
*PLEASE REVIEW AND ANSWER ALL REQUIREMENTS

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Detailed answer to the questions please.

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Chapter 1 Assigned Questions
1–1
How does managerial accounting differ from financial accounting?
Managerial accounting is different from financial accounting in that Managerial accounting deals more with planning, controlling, and decision making within an organized group or company. Whereas, financial accounting is data and information that is presented to a third-party or another company about that business. Also, managerial accounting deals with future decisions and timeliness. They do not comply with the GAAP/IFRS. On the other hand, financial accounting deals with past consequences and precision. Financial accounting does have to comply with GAAP/IFRS.
1–3
If you had to decide whether to continue making a component part or to begin buying the part from an overseas supplier, what quantitative and qualitative factors would influence your decision?
1–5
Why is managerial accounting relevant to business majors and their future careers?
1–8
Why do management accountants need to understand their company’s strategy?
1–13
Why do companies that implement Lean Production tend to have minimal inventories?
1–14
Why are leadership skills important to managers?
1–15
Why is ethics important to business?

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(Ignore income taxes in this problem.) Arnold Inc. is considering the purchase of a machine that costs $100,000, has a useful life of 18 years, and no salvage value. The company&#39;s discount rate is 12%. If the machine&#39;s net present value is $5,850, then the annual cash inflo…

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(Ignore income taxes in this problem.) Brown Corp. is thinking of investing $70,000 to start a bookstore. Brown plans to withdraw $15,000 from the business at the end of each year for the next five years. At the end of the fifth year, Brown plans to sell the business for $110,000 cash. At a 12% disc…

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Kid Adventures Company projected current year sales of 3,600 swing sets at a unit sale price of $225.00. Actual current year sales were 3,300
units at $215.00 per unit. Actual variable costs, budgeted at $166.00 per unit, totaled $175.00 per unit. Budgeted fixed costs totaled $122,000 while actual
fixed costs amounted to $118,000. What is the sales volume variance for operating income? answer has to be favorable / unfavorable variance (please show your
work)

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a corporation had 45,000 shares of common stock outstanding from january 1 to april 1 and 65,000 shares from april 1 to december 31. what is the weighted -average numbers of shares used for earnings per share calculations?
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Please see the attached document. I need this in the next 4 hours. Do not take this on if you cannot deliver in 4 hours time from NOW. Thanks

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Managerial Accounting
Group Project – Excel Budgeting
50 points
Using MS Excel and the information provided below for Isle Corporation:
Prepare a master budget for each of the first three months of 2014; include the following component budgets (show supporting calculations as needed and round amounts to the nearest dollar):
Monthly sales budgets (showing both budgeted unit sales and dollar sales).
Monthly merchandise purchases budgets.
Monthly selling expense budgets.
Monthly general and administrative expense budgets.
Monthly capital expenditures budgets.
Monthly cash budgets.
Budgeted income statement for the entire first quarter (not for each month).
Budgeted balance sheet as of March 31, 2014.
If you are not familiar with Excel or you need a refresher, go to
http://people.usd.edu/~bwjames/tut/excel/http://people.usd.edu/~bwjames/tut/excel/ for a tutorial. The tutorial is also available to you in Student Resources on the Course Menu in Blackboard.
You must use cell references wherever possible when you are building your spreadsheets. This includes using them in your formulas as well. Not doing so will cost you points.
Typing computational results in the cells is not acceptable and will result in zero points.
Submit one Excel worksheet using the tabs at the bottom left for each budget. Be sure to name the tabs appropriately (see below).
Copying another group’s work is not allowed as part of Academic Integrity and will result in a zero for all parties involved. Do not share your work with other groups as you don’t know what their intentions may be and you will suffer the same penalty as them in the case of copying.
Assignments submitted late will suffer a 20% penalty. Late assignments will be accepted no later than one day after the deadline.
Near the end of 2013, the management of Isle Corporation, a merchandising company, prepared the following estimated balance sheet for December 31, 2013.
To prepare a master budget for…

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PROBLEM 1–7 Ethics in Business [LO3]
Consumers and attorney generals in more than 40 states accused a prominent nationwide chain of
auto repair shops of misleading customers and selling them unnecessary parts and services, from
brake jobs to front-end alignments. Lynn Sharpe Paine reported the si…

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Grenville, Inc. makes table top two burner cookers used in the Caribbean and South America. Recently, sales have been declining as more families can now afford regular size stoves complete with four burners and an oven.

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Grenville, Inc. makes table top two burner cookers used in the Caribbean and South America. Recently, sales have been declining as more families can now afford regular size stoves complete with four burners and an oven. The company’s contribution format income statement for the most recent year is given below:

Sales (15,000 units x $60) $900,000
Variable expenses 675,000
Contribution margin 225,000
Fixed expenses 245,000
Net operating income (loss) (20,000)

Required: (Round to the nearest $ as needed)

Compute the company’s CM ratio

Compute the company’s break-even point in units

Compute the company’s break-even point in sales dollars

The president of the company believes a $17,000 increase in the annual advertising budget will result in an increase in quarterly sales of 1,000 units. If the president is right what will be change in annual operating income? (Must show work to support answer)

Refer back to the original data. The sales manager is convinced that a 10% reduction in the selling price, combined with an increase of only $10,000 in the advertising budget, will cause unit sales to increase by 50%. Prepare the new contribution format income statement assuming these changes were adopted.

6. Refer back to the original data. The Marketing Department thinks that a fancy design on the stove top would increase sales. The only cost associated with the new design would be variable cost of $2.00 per unit. Assuming no other changes, how many units would have to be sold each year to earn a profit of $5,500?

7. Refer back to the original data. By automating certain operations, the company could reduce variable costs by $3 per unit. However, fixed costs would increase annually by $45,000.

a. Compute the new CM ratio

Compute the new…

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In this letter, you should state specific examples of the ethical standards and laws that you are following as the tax and financial analyst; also touch on your findings on the ethical standard for a corporation’s financial and tax reporting.

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Corporation A is trying to determine a predetermined manufactured overhead. Estimated overhead for this upcoming year is $312,500. budgeting machine hours are 97,000 hours, and budgeted hours at 162,000. Actual overhead was $1,100,000 and actual overhead hours worked were 150,000.

What is the predetermined overhead?

What is the overhead applied?

Determine the amount of overhead tht is over/under applied.

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Project 4 is due on 10/23/2012 at 9:00AM, CST. Please review and let me know what it will cost. DO NOT CALL ME ON ANY PHONE. Email me or leave a note on Transtutors.com & I will pay via PayPal.

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Solution
Project 4
Academic Honesty Policy
Save you file using your first initial, last name, and name of problem.
If you type in any numbers in the solution, I will take off 5 pts., since we use Excel so that we can update budgets or do what if analysis without retyping numbers.
Sales Budget
Units
Budgeted Income Statement
Sales Revenue
Less: Cost of goods sold
Net income
Name: Type your name here
I have a template set up on the solution worksheet that you should use to complete the required budgets that are stated on the solution worksheet tab.
You need to use cell references in the development of your budgets.
You must use this worksheet to reference the data that is being inputted onto the budgets on the solution worksheet.
You should use this sheet as your data field and only use cell references and formulas in your budgets.
Your grade will be based on accuracy of your solution and correct usage of excel. The solution worksheet has formatted budgets for you to complete.
The beauty behind excel is that managers can perform what-if analysis just by changing the data, so you do not need to retype the budgets if you
have used cell references and formulas throughout.
Lucy’s Gourmet Basket shop is planning to open for business on July 1, 20XX and she is concerned about
the survivability of her company. She has contacted you to prepare operating budgets for the
quarter ending September 30, 20XX. She would like the budgets set out in monthly and
quarterly columns for this time period. This business is a merchandising business
so you do not need to worry about the manufacturing of the gourmet baskets.
Sales:
July
August
September
October
Selling Price
Ending inventory should be
of next months sales demand in units
Beginning Inventory, July 1
Purchase price of baskets
Payment of purchases
Paid in month of purchase
Paid in month after purchase
Projected Cash Sales and collection history of the credit sales is as…

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a. preparing budget.

b. Santa Fe Corporation produces and sells a single produalkected sales for September are 12,000
R

units; for October, 15,000 units; for November, 9,000 s; for December, 10,000 units; and for

January, 14,000 units. The company’s desired level of en finished goods inventory at the end of a

month is 10 percent of the following month’s sales in uni , the end of August, 1,200 units were onhand.How many units need to beproduced Inthe fourthrorter?

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managerial accounting

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Raynor Company has the following data:

  • Direct labor 76,000
  • Direct materials used 84,000
  • Total manufacturing overhead 60,000
  • Ending work in process 45,000
  • Beginning work in process 30,000

Calculate the cost of goods manufactured. (Hint: you need to calculate total manufacturing costs!)


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Managerial Accounting

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The Anazi Leather Company manufactures leather handbags (H) and moccasins (M). The company has been using the factory overhead rate method but has decided to
evaluate the multiple production department factory overhead rate to allocate factory overhead. The factory overhead estimated per unit together with direct
materials and direct labor will help determine selling prices.

Handbags = 60,000 units, 3 hours of direct labor

Moccasins= 40,000 units, 2 hours of direct labor

Total Budgeted factory overhead cost = $360,000

The company has two different production departments: Cutting and Sewing. The cutting department has a factory overhead budget of $80,000. Each unit will
require 1 direct labor hour or a total of 100,000 direct labor hours.

The Sewing Department estimates factory overhead in the amount of $280,000. Handbags require 2 hours of sewing time and Moccasins require 1 hour for a total of
160,000 labor hours.

Calculate the amount of factory overhead to be allocated to each unit using direct labor hours.

Moccasins $
Handbags $
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Managerial Accounting

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Here is the adjusted assignment that’s needed:
Problem 18-1A

Telly Savalas owns the Bonita Barber Shop. He employs7barbers and pays each a base rate of $1,100per month. One of the barbers serves as the manager and receives an extra $500per month. In addition to the base rate, each barber also receives a commission of $5.70per haircut.
Other costs are as follows.

Advertising $220 per month
Rent $940 per month
Barber supplies $0.40 per haircut
Utilities $175 per month plus $0.20per haircut
Magazines $30 per month


Telly currently charges $11.50per haircut.

Determine the variable cost per haircut and the total monthly fixed costs.(Round variable costs to 2 decimal places, e.g. 2.25.)


Total variable cost per haircut $
Total fixed $



LINK TO TEXTLINK TO TEXT LINK TO VIDEO
Compute the break-even point in units and dollars.(Round answers to 0 decimal places, e.g. 1,225.)

Break-even point haircuts
Break-even point $



LINK TO TEXT LINK TO VIDEO
Determine net income, assuming2,340haircuts are given in a month.

Net income $



LINK TO TEXTLINK TO TEXT LINK TO VIDEO


Exercise 18-9

The Green Acres Inn is trying to determine its break-even point. The inn has 50 rooms that it rents at $75a night. Operating costs are as follows.

Salaries $8,673 per month
Utilities $1,859 per month
Depreciation $1,239 per month
Maintenance $619 per month
Maid service $9 per room
Other costs $36 per room


Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars.

(1) Break-even point rooms
(2) Break-even point $





Exercise 18-11

Kare Kars provides shuttle service between four hotels near a medical center and an international airport. Kare Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below.

Fare revenues (1,400fares) $35,000
Variable costs
Fuel $4,200
Tolls and parking 2,100
Maintenance 700 7,000
Contribution margin 28,000
Fixed costs
Salaries 14,110
Depreciation 1,328
Insurance 1,162 16,600
Net income $11,400


(a)Calculate the break-even point in (1) dollars and (2) number of fares.


(1) Break-even point $
(2) Break-even point fares


(b)Without calculations, determine the contribution margin at the break-even point.


Contribution margin at the break-even point $



LINK TO TEXT
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MANAGERIAL ACCOUNTING

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Question 21 Figure 4-1. Foster Company makes power tools. The budgeted sales are $420,000, budgeted variable costs are $147,000, and budgeted fixed costs are
$227,500. what is the budgeted operating income> What is the variable cost ratio What is the breakeven point in sales dollar? What is the contribution margin
Refer to Figure 4-1. What is the contribution ratio? Answer 35% 65% 54% 89% 50%

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Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, meals on wheels, and housekeeping. In the home nursing program, nurses…

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Managerial Accounting

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The publishing company is currently selling 8,000 copies of the textbook per edition but management feels that sales could be increased by 1,000 books if the
selling price per book was reduced by $1.00 per copy. Implementing such a policy should result in: Answer a) an increase in total contribution margin of $5,150. b)
a decrease in total contribution margin of $4,150. c) a decrease in total contribution margin of $3,850. d) an increase in total contribution margin of $4,850.

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Managerial Accounting

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Apply manufacturing overhead to each of several jobs using both a single overhead-rate approach and an activity-based-costing approach, and explain the
advantages and disadvantages of the latter, as compared to the former.

Use the following information to answer the following TWO questions:

Acton Company has two products: A and B. The annual production and sales of Product A is 800 units and of Product B is 500 units. The company has traditionally
used direct labor-hours as the basis for applying all manufacturing overhead to products. The company is considering switching to an activity-based costing
system for the purpose of computing unit product costs for external reports. The new activity-based costing system would have three overhead activity cost
pools–Activity 1, Activity 2, and General Factory–with estimated overhead costs and expected activity as follows:

1)The predetermined overhead rate under the traditional single-rate costing system is closest to: (Points : 5)

$ 37.46.

$ 21.60.

$ 13.17.

$ 53.68.

2) In correspondence to SLOAT question number 3b.

The overhead cost per unit of Product B under the traditional costing system is closest to: (Points : 5)

$10.74

$7.49

$4.32

$2.63

3) The amount of Activity 1 cost per unit of Product B under the activity based costing system is closest to: (Points : 5)

$24.17

$26.36

$15.82

$29.00






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Managerial Accounting

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1. Use the following data to find the direct labor efficiency variance.

Direct labor standard (4 hrs. @ $7/hr.) $28 per unit

Actual Hours worked per unit 3.5 hours

Actual Units produced 3,500 units

Actual rate per hour $7.50

(A) $6,125 unfavorable

(B) $12,250 favorable

(C) $6,125 favorable

(D) $7,000 favorable

(E) $7,000 unfavorable

2. Use the following data to find the direct labor rate variance.

Direct labor standard (4 hrs. @ $7/hr.) $28 per unit

Actual hours worked per unit 3.5 hours

Actual units produced 3,500 units

Actual rate per hour $7.5

(A)$12,250 favorable

(B)$6,125 unfavorable

(C)$7,000 favorable

(D)$7,000 unfavorable

(E)$6,125 favorable

3. Use the following data to find the total direct labor cost variance.

Direct labor standard (4 hrs. @ $7/hr.) $28 per unit

Actual hours worked per unit 3.5 hours

Actual units produced 3,500 units

Actual rate per hour $7.5

(A)$7,000 favorable

(B)$12,250 favorable

(C)$7,000 unfavorable

(D)$6,125 favorable

(E)$6,125 unfavorable

4. Actual fixed overhead for a company during March was $77,612. The flexible budget for fixed overhead this period is $78,000 based on a production level of
4,875 units. If the company actually produced 4,300 units, what is the fixed overhead volume variance for March?

(A) $388 unfavorable

(B) $9,200 unfavorable

(C) $9,200 favorable

(D) $388 favorable

(E) $8,812 unfavorable

5. The following company information is available:

Direct materials used for production 712 pounds

Standard quantity for units produced 750 pounds

Standard cost per pound of direct material $48

Actual cost per pound of direct material $50

The direct materials quantity variance is:

(A)$1,424 favorable

(B)$1,424 unfavorable

(C)$400 favorable

(D)$1,824 favorable

(E)$1,824 unfavorable

6.

Direct materials used for production 36,000 gallons

Standard quantity for units produced 34,400 gallons

Standard cost per gallon for direct material $6.00

Actual cost per gallon of direct material $6.10

The drect materials price variance is:

(A)$13,200 unfavorable

(B)$10,000 unfavorable

(C)$13,200 favorable

(D)$9,600 unfavorable

(E)$3,600 unfavorable

7. Landlubber Company established a standard direct materials cost of 1.5 gallons at $2 per gallon for one unit of its product. During the past month, actual
production was 6,500 units. The material quantity variance was $700 favorable and the material price variance was $470 unfavorable. The entry to charge Goods
in Process Inventory for the standard material costs during the month and to record the direct material variances in the accounts would include

(A) a credit to goods in process for $19,500

(B) A debit to raw materials for $19,500

(C) a credit to goods in process for $19,270

(D) a debit to direct material price variance for $470

(E) a debit to direct material quantity variance for $700

8. Adams, Inc., uses the following standard to produce a single unit of its product:

Overhead (2 hrs. @ $3/hr.) = $6

The flexible budget for overhead is $100,000 plus $1 per direct labor hour. Actual data for the month show overhead costs of $150,000 based on 24,000 units of
production. The overhead volume variance is:

(A)$36,000 unfavorable

(B)$16,000 unfavorable

(C)$12,000 favorable

(D)$4,000 unfavorable

(E)$10,000 favorable

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Managerial Accounting

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I just need an answer to # 14

Arrow Industries employs a standard cost system in which direct materials inventory is carried at standard cost. Arrow has established the following standards for the prime costs of one unit of product. Use the data for questions 10 to 14.

Standard Standard Standard
Quanti…

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managerial accounting

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Cycle Gear Corporation has incurred the following costs on job number W456, an order for 20 spe-
cial sprockets to be delivered at the end of next month.
Direct materials:
On April 10, requisition number 15673 was issued for 20 titanium blanks to be used in the
special order.The blanks cost $15.00 each.
On April 11, requisition number 15678 was issued for 480 hardened nibs also to be used in
the special order.The nibs cost $1.25 each.
Direct labour:
On April 12, Jamie Unser worked from 11:00 AMuntil 2:45 PMon Job W456.He is paid
$9.60 per hour.
On April 18, Melissa Chan worked from 8:15 AMuntil 11:30 AMon Job W456.She is paid
$12.20 per hour.
Required:
1. On what documents would these costs be recorded?
2. How much cost should have been recorded on each of the documents for Job W456?

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managerial accounting

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Choose an item that you would like to manufacture.  You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected.  The product should require materials and labor and be something that you are familiar with in process from start to finish.  The product must be useful and marketable.  You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated.

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Choose an item that you would like to manufacture.  You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected.  The product should require materials and labor and be something that you are familiar with in process from start to finish.  The product must be useful and marketable.  You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated. Consider production as if you were making the product from beginning to end, and not as if using a kit. 
 Perform the following steps:  
 1. Choose a product to manufacture and describe the manufacturing process. 2. Prepare the following budgets for 1 quarter broken down monthly regarding your chosen item:   • estimated sales budget  • estimated direct materials budget • estimated direct labors budget  • estimated manufacturing overhead budget  • estimated selling and administrative expenses • estimated income statement.   
3. Classify all manufacturing costs and selling and administrative expenses as either variable or fixed. 
4….

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managerial accounting

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Thornton Manufacturing is a small manufacturer that uses machine-hours as its activity base for assigned overhead costs to jobs. The company
estimated the following amounts for 2013 for the company and for Job 58:

Company Job 58

  • Direct materials $50,000 $5,000
  • Direct labor $35,000 $1,800
  • Manufacturing overhead costs $48,000
  • Machine hours 60,000 2,200

During 2013, the actual machine-hours totaled 66,000, and actual overhead costs were $49,000.

Compute the total manufacturing costs for Job 58.


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Managerial Accounting

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9. TomÂ’s Thimbles, a manufacturing company, began the month with raw materials
costing $9,000 on hand. Purchases during the month totaled $12,000. If $8,000
of raw materials were remaining at the end of the month, what was the amount
used for production during the current month?
A. $4,000
B. $11,000
C. $13,000
D. $29,000

10. An employee who works 40 hours per week spent 3 hours talking about football and
had 37 productive hours. The employee is paid $5 per hour and was paid for a full
40-hour week. In a job costing system, how would the labor costs be classified?
A. Direct labor $200
B. Direct labor $185, Slack time $15
C. Direct labor $185, Overhead $15
D. Overhead $200

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managerial accounting

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ACME lost millions of dollars more despite the fact that it was able to make furniture faster using the robots. Why would this

happen? What could have caused this situation? Should this tactic be used to increase operating income?Would this happen in service companies or only
manufacturing companies? Explain

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Franklin Paper Company manufactures newsprint. The product is manufactured in two departments, Papermaking and Converting. Pulp is first placed into a
vessel at the beginning of papermaking production. The following information concerns production in the Papermaking Department for January.

Account Work in Process”Papermaking Department Account No.
Date Item Debit Credit Balance
Debit Credit
Jan. 1 Bal., 6,800 units, 80% completed 4,352
31 Direct materials, 36,300 units 58,080 62,432
31 Direct labor 16,760 79,192
31 Factory overhead 9,420 88,612
31 Goods transferred, 40,500 units ? ?
31 Bal., 2,600 units, 90% completed ?

I am looking for the $ amount of work in process that is transferred to converting department

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Talia Corp. produces digital cameras. For each camera produced, direct materials are $24, direct labor is $16, variable manufacturing overhead is $12, fixed manufacturing overhead is $28, variable selling and administrative expenses are $10, and fixed selling and administrative expenses are $24.
Ins…

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Managerial Accounting

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ACC 550 Managerial
Accounting

Take Home Examination

Name____________________________________________

Due 15 August 2012.
Please deliver in person or scan handwritten document and send to
rmonger@auaf.edu.af.

The following two
questions relate to the optional make-up examination for Chapters 2 and 3.

Leslie Mittelberg is considering the wholesaling of a
leather handbag from Kenya.She must
travel to Kenya to check on quality and transportation.The trip will cost $3000.The cost of the handbag is $10 and shipping
to the United States can occur through the postal system for $2 per handbag or
through a freight company which will ship a container that can hold up to a 1000
handbags at a cost of $1000.The freight
company will charge $1000 even if less than 1000 handbags are shipped.Leslie will try to sell the handbags to
retailers for $20.Assume there are no
other costs and benefits.

Required:

a.What
is the break-even point if shipping is through the postal system?

b.How
many units must be sold if Leslie uses the freight company and she wants to
have a profit of $1000?

c.At what output level would the two shipping methods yield the
same profit?

d.Suppose
a large discount store asks to buy an additional 1000 handbags beyond normal
sales.Which shipping method should be
used and what is the minimum sales price Leslie should consider in selling
those 1000 handbags?

2.Suppose the
opportunity cost of capital is 10 percent and you have just won a $1 million
lottery that entitles you to $100,000 at the end of each of the next ten years.

Required:

a.What is the minimum lump sum cash
payment you would be willing to take now in lieu of the ten-year annuity?

b.What is the minimum lump sum you would
be willing to accept at the end of the ten years in lieu of the annuity?

c.Suppose three years have passed and
you have just received the third payment and you have seven left when the
lottery promoters approach you with an offer to “settle-up for cash.”What is the minimum you would accept (the end
of year three)?

d.How would your answer to part (a)
change if the first payment came immediately (at t = 0) and the remaining
payments were at the beginning instead of at the end of each year?

The next two problems
relate to the new material in Chapters 12 and 13.

1. Overhead is applied
on the basis of direct labor hours.
Three direct labor hours are required for each product unit.Planned production for the period was set at
8,000 units.Manufacturing overhead for
the period is budgeted at $204,000, of which 30 percent is fixed.The 26,200 hours worked during the period
resulted in production of 8,500 units.
Manufacturing overhead cost incurred was $220,500.

Required:

Calculate the following three
overhead variances:

a.Overhead
volume variance.

b.Overhead
efficiency variance.

c.Overhead spending
variance.

2. Arrow Industries
employs a standard cost system in which direct materials inventory is carried
at standard cost.Arrow has established
the following standards for the direct costs of one unit of product.

Standard

Quantity

Standard

Price

Standard

Cost

Direct materials

8 pounds

$1.80 per pound

$14.40

Direct labor

0.25 hour

$8.00 per hour

2.00

$16.40

During May, Arrow purchased 160,000
pounds of direct materials at a total cost of $304,000.The total factory wages for May were $42,000,
90 percent of which were for direct labor.
Arrow manufactured 19,000 units of product during May using 142,500
pounds of direct material and 5,000 direct labor hours.

Required:

a.Calculate the direct materials price variance for May.

b.Calculate the direct materials quantity variance for May.

c.Calculate the direct labor wage rate variance for May.

d.Calculate the direct labor efficiency variance for May.

Take-home final
examination – The four problems below constitute the remainder of your final
examination. The four problems above for chapters 2, 3, 12, and 13 will also be
counted as part of the final examination.

1. Rose Bach has recently been hired
as controller of Empco Inc., a sheet-metal manufacturer.Empco has been in the sheet-metal business
for many years and is currently investigating ways to modernize its manufacturing
process.At the first staff meeting Bach
attended, Bob Kelley, chief engineer, presented a proposal for automating the
drilling department.Kelley recommended
that Empco purchase two robots that could replace the eight direct labor
workers in the department.The cost
savings outlined in Kelley’s proposal include two elements.First, direct labor cost in the drilling
department is eliminated.Second,
manufacturing overhead cost in the department is reduced to zero because Empco
charges manufacturing overhead on the basis of direct labor dollars using a
plantwide rate.

The president of Empco felt that
Kelley’s explanation of the cost savings made no sense.Bach agreed and explained that as firms
become more automated, they should rethink their manufacturing overhead
systems.The president asked Bach to
look into the matter and prepare a report for the next staff meeting.

To refresh her knowledge, Bach
reviewed articles on manufacturing overhead allocation for an automated factory
and discussed the matter with some of her peers.She also gathered the historical data
presented below on the manufacturing overhead rates experienced by Empco over
the years.Bach also wanted to have some
departmental data to present at the meeting.
Using Empco’s accounting records, she was able to estimate the annual
averages presented below for each manufacturing department in the 1990s.

Historical Data

Date

Average Annual

Direct Labor

Cost

Average Annual

Manufacturing

Overhead Cost

Average

Manufacturing

Overhead

Application Rate

1950s

$1,000,000

$1,000,000

100%

1960s

1,200,000

3,000,000

250

1970s

2,000,000

7,000,000

350

1980s

3,000,000

12,000,000

400

1990s

4,000,000

20,000,000

500

Annual Averages

Cutting

Department

Grinding

Department

Drilling

Department

Direct labor

$ 2,000,000

$1,750,000

$ 250,000

Manufacturing
overhead

11,000,000

7,000,000

2,000,000

Required:

a.Disregarding the
proposed use of robots in the drilling department, describe the shortcomings of
Empco’s current system for applying overhead.

b.Do you agree with
Bob Kelley’s statement that the manufacturing overhead cost in the drilling
department will be reduced to zero if the automation proposal is implemented?
Explain.

c.Recommend ways to
improve Empco’s method for applying overhead by describing how it should revise
its overhead accounting system:

(i)in
the cutting and grinding departments.

(ii)to accommodate the automation of the
drilling department.

2. Sonimad Sawmill manufactures two lumber
products from a joint milling process.
The two products developed are mine support braces (MSBs) and unseasoned
commercial building lumber (CBL).A
standard production run incurs joint costs of $300,000 and results in 60,000
units of MSB and 90,000 units of CBL.
Each unprocessed unit of MSB sells for $2 per unit and each unprocessed
unit of CBL sells for $4 per unit.

If
the CBL is processed further at a cost of $200,000, it can be sold at $10 per
unit but 10,000 units are unavoidably lost (with no discernible value).The MSB units can be coated with a preservative
at a cost of $100,000 per production run and then sold for $3.50 each.

Required:

a.If no further work is done after the initial milling
process, calculate the cost of CBL using physical quantities to allocate the
joint cost.

b.If no further work is done after the initial milling
process, calculate the cost of MSB using relative sales value to allocate the
joint cost.

c.Should MSB and CBL be processed further or sold immediately
after initial milling?

d.Given your decision in
(c), prepare a schedule computing the completed cost assigned to each unit of
MSB and CBL as charged to finished goods inventory.Use net realizable value for allocating joint
costs.

3.The Jung Corporation’s budget calls for
the following production:

Quarter 1

45,000 units

Quarter 2

38,000 units

Quarter 3

34,000 units

Quarter 4

48,000 units

Each unit
of production requires three pounds of direct material.The company’s policy is to begin each quarter
with an inventory of direct materials equal to 30 percent of that quarter’s
direct material requirements.Compute
budgeted direct materials purchases for the third quarter.

4. A soft drink
company has three bottling plants throughout the country.Bottling occurs at the regional level because
of the high cost of transporting bottled soft drinks.The parent company supplies each plant with
the syrup.The bottling plants combine
the syrup with carbonated soda to make and bottle the soft drinks.The bottled soft drinks are then sent to
regional grocery stores.

The
bottling plants are treated as costs centers.
The managers of the bottling plants are evaluated based on minimizing
the cost per soft drink bottled and delivered.
Each bottling plant uses the same equipment, but some produce more
bottles of soft drinks because of different demand.The costs and output for each bottling plant
are:

ABC

Units
Produced10,000,00020,000,00030,000,000

Variable
Costs$200,000$450,000$650,000

Fixed
Costs$1,000,000$1,000,000$1,000,000

Required:

a.Estimate
the average cost per unit for each plant.

b.Why
would the manager of plant A be unhappy with using the average cost as the
performance measure?

c.What
is an alternative performance measure that would make the manager of plant A happier?

d.Under
what circumstances might the average cost be a better performance measure?

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Managerial accounting

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Homer Company expects credit sales for January to be $50,000. Cash sales are expected to be $30,000. The company expects credit and cash sales to increase 10%
for the month of February. Credit sales are collected in the month following the month in which sales are made. Based on this information the amount of cash
collections in February would be:

Answer

a.

$88,000.

b.

$80,000.

c.

$83,000.

d.

$85,000.


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Use the following to answer questions 1-3:
A partial listing of costs incurred at Archut Corporation during September appears below:
Direct materials $113,000
Utilities, factory $5,000
Administrative salaries $81,000
Indirect labor $25,000
Sales commissions $48,000
Depreciation of production equipment $20,000
Depreciation of administrative equipment $30,000
Direct labor $129,000
Advertising $135,000

1. The total of the manufacturing overhead costs listed above for September is:
A) $586,000
B) $50,000
C) $292,000
D) $30,000

2. The total of the product costs listed above for September is:
A) $292,000
B) $294,000
C) $50,000
D) $586,000

3. The total of the period costs listed above for September is:
A) $294,000
B) $344,000
C) $292,000
D) $50,000

Use the following to answer questions 4-5:
Boardman Company reported the following data for the month of January:
Inventories: 1/1 1/31
Raw materials $32,000 $31,000
Work in process $18,000 $12,000
Finished goods $30,000 $35,000
Additional information:
Sales revenue $210,000
Direct labor costs $40,000
Manufacturing overhead costs $70,000
Selling expenses $25,000
Administrative expenses $35,000
4. If raw materials costing $35,000 were purchased during January, the total manufacturing costs for the month would be:
A) $145,000
B) $144,000
C) $151,000
D) $146,000

5. Boardman Company’s total conversion cost for January would be:
A) $110,000
B) $170,000
C) $135,000
D) $130,000

Use the following to answer questions 6-7:
Management of Mcgibboney Corporation has asked your help as an intern in preparing some key reports for November. The beginning balance in the raw materials inventory account was $25,000. During the month, the company made raw materials purchases amounting to $54,000. At the end of the month, the balance in the raw materials inventory account was $37,000. Direct labor cost was $25,000 and manufacturing overhead cost was $62,000. The beginning balance in the work in process account was $22,000 and the ending balance was $23,000. The beginning balance in the finished goods account was $44,000 and the ending balance was $50,000. Selling expense was $21,000 and administrative expense was $38,000.

6. The conversion cost for November was:
A) $116,000
B) $79,000
C) $87,000
D) $129,000
7. The prime cost for November was:
A) $79,000
B) $59,000
C) $67,000
D) $87,000

8.
Indirect labor is part of:
A) Prime cost
B) Conversion cost
C) Period cost
D) Nonmanufacturing cost

The cost of lubricants used to grease a production machine in a manufacturing company is an example of a(n):
A) period cost
B) direct material cost
C) indirect material cost
D) none of the above

Property taxes on a company’s factory building would be classified as a(n):
A) product cost
B) opportunity cost
C) period cost
D) variable cost

9. Elliott Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company manufactures tools to customer specifications. The following data pertain to Job 1501:

Direct materials used $4,200
Direct labor-hours worked 300
Direct labor rate per hour $8.00
Machine-hours used 200
Predetermined overhead rate per machine-hour $15.00

What is the total manufacturing cost recorded on Job 1501?
A) $8,800
B) $9,600
C) $10,300
D) $11,100

10. Avery Co. uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. For the month of October, Avery’s estimated manufacturing overhead cost was $300,000 based on an estimated activity level of 100,000 direct labor-hours. Actual overhead amounted to $325,000 with actual direct labor-hours totaling 110,000 for the month. How much was the overapplied or underapplied overhead?
A) $25,000 overapplied
B) $25,000 underapplied
C) $5,000 overapplied
D) $5,000 underapplied

11. Woodman Company uses a predetermined overhead rate based on direct labor-hours to apply manufacturing overhead to jobs. Estimated and actual data for direct labor and manufacturing overhead for last year are as follows:

Estimated Actual
Direct labor-hours 600,000 550,000
Manufacturing overhead $720,000 $680,000
The manufacturing overhead for Woodman Company for last year was:
A) overapplied by $20,000
B) overapplied by $40,000
C) underapplied by $20,000
D) underapplied by $40,000

12. Reamer Company uses a predetermined overhead rate based on machine-hours to apply manufacturing overhead to jobs. The company has provided the following estimated costs for next year:

Direct materials $1,000
Direct labor $3,000
Sales commissions $4,000
Salary of production supervisor $2,000
Indirect materials $400
Advertising expense $800
Rent on factory equipment $1,000
Reamer estimates that 500 direct labor-hours and 1,000 machine-hours will be worked during the year. The predetermined overhead rate per hour will be:

A) $6.80
B) $6.00
C) $3.00
D) $3.40

13. The management of the Medulla Fitness Club believes that the attendance by its members is an appropriate activity measure for total operating cost. Shown below are attendance figures and total operating costs for the past six months:

Members
Attendance Operating
Cost
Jan
Feb
Mar
Apr
May
Jun 150,000
130,000
160,000
120,000
170,000
190,000 $786,000
$735,000
$792,000
$706,000
$799,000
$874,000
Assume that the relevant range includes all of the activity levels mentioned in this problem.
a) Find the estimate cost equation using the high-low method;

b) If Medulla expects to have 180,000 members attend the club in July, what will be the estimated total operating cost?

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Managerial Accounting

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Uxmaiz Corporation had only one job in process during May-Job X32z- and had no finished goods inventory on May 1. Job X32Z was started in April and finished
during May. Data concerning that job appear below:


In May, overhead was over applied by $300. The company adjusts its cost of goods sold every month for the amount of the overhead that was under applied or over
applied.

  1. Using the direct method, what is the cost of goods sold for May?
  2. What is the total value of the finished goods inventory at the end of May?
  3. What is the total value of the work in process inventory at the end of May?
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Managerial Accounting

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If a question asks for the effect on costs or
income of a certain action, you MUST give both the amount and the direction
(increase/decrease) of the change in your answer. The answer to any question
asking for a variance is incomplete without the direction of the variance
(F/U).

3.Powell Inc. measures its
activity in terms of skeins of yarn dyed. Last month, the budgeted level of
activity was 14,100 skeins and the actual level of activity was 13,700 skeins.
The company’s owner budgets for dye costs, a variable cost, at $0.40 per skein.
The actual dye cost last month was $4,510. In the company’s flexible budget
performance report for last month, what would have been the spending variance
for dye costs?

(for
questions 4-7) Doggy Day Care uses tenant-days as its measure of
activity; an animal housed in the kennel for one day is counted as one
tenant-day. During May, the kennel budgeted for 3,400 tenant-days, but its
actual level of activity was 3,380 tenant-days. The kennel has provided the
following data concerning the formulas used in its budgeting and its actual
results for May:
Data used in budgeting:

Actual results for May:

4.The net operating
income in the planning budget for May would be:

5.The net operating income in the flexible budget for May would be:

6.The activity variance for net operating income in
May would be:

7.The overall revenue and spending variance for May
would be:

(for questions 10-12) James
Company makes a product with the following standard costs:

The company reported the following results concerning this product in June.

The company applies variable overhead on the basis of direct labor-hours. The direct
materials purchases variance is computed when the materials are purchased.

10.The materials
quantity variance for June is:

11.The materials price variance for June
is:

12.The labor efficiency
variance for June is:

13.Wally
Inc. uses a standard cost system in which it applies manufacturing overhead to
units of product on the basis of standard direct labor-hours (DLHs). The
following data pertain to last month’s operations:

The fixed manufacturing overhead budget variance is:


14.Miller Inc. uses a standard cost system in which it
applies manufacturing overhead to units of product on the basis of standard
direct labor-hours (DLHs). The information below pertains to a recent month’s
activity:

The volume variance would be:

28. Condensed
monthly operating income data for Power Inc. for November is presented below.
Additional information regarding Power’s operations follows the statement.

Three-quarters of each store’s traceable fixed expenses are avoidable if the
store were to be closed.
Power allocates common fixed expenses to each store on the basis of sales
dollars.
Management estimates that closing the Town Store would result in a ten percent
decrease in Mall Store sales, while closing the Mall Store would not affect Town
Store sales.
The operating results for November are representative of all months.

A
decision by Power Inc. to close the Town Store would result in a monthly
increase (decrease) in Power’s operating income of:

29.(Ignore
income taxes in this problem.) Roberts Inc. is considering the purchase of a machine that
would cost $330,000 and would last for 5 years. At the end of 5 years, the
machine would have a salvage value of $50,000. By reducing labor and other
operating costs, the machine would provide annual cost savings of $76,000. The
company requires a minimum pretax return of 12% on all investment projects. The
net present value of the proposed project is:

31.(Ignore
income taxes in this problem.) Browne Corporation is investigating an
investment in equipment that would have a useful life of 9 years. The company
uses a discount rate of 15% in its capital budgeting. The net present value of
the investment, excluding the salvage value, is -$230,392. To the nearest whole
dollar how large would the salvage value of the equipment have to be to make
the investment in the equipment financially attractive?

(for questions 34-35)(Ignore income
taxes in this problem.) The management of Norcross Corporation is considering
the purchase of a machine that would cost $310,000, would last for 6 years, and
would have no salvage value. The machine would reduce labor and other costs by
$116,000 per year. The company requires a minimum pretax return of 16% on all
investment projects.

34.The
present value of the annual cost savings of $116,000 is:

35.The
net present value of the proposed project is:

36.The
following transactions occurred last year at Inkster Inc.:

Based solely on the above information, the net cash provided by financing
activities for the year on the statement of cash flows would be:

40.
Spade Company recorded the following events last year:

On the statement of cash flows, some of these events are classified as
operating activities, some are classified as investing activities, and some are
classified as financing activities.

Based solely on the
information above, the net cash provided by (used in) investing activities on
the statement of cash flows would be:

(for
questions 41-43) The changes in Sable Inc.’s balance sheet account balances for
last year appear below:

The company’s income statement for the year appears below:

The company declared and paid $67,000 in cash dividends during the year. It did
not dispose of any property, plant, and equipment during the year. The company
uses the direct method to determine the net cash provided by operating
activities.

41.On the statement
of cash flows, the sales revenue adjusted to a cash basis would be:

42.On the statement of cash flows, the cost of goods sold adjusted to a
cash basis would be:

43.On the statement of cash flows, the selling and administrative expense
adjusted to a cash basis would be:

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Managerial Accounting

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Raul Martinas, professor of languages at Eastern University, owns a small office building adjacent to the university campus. He acquired the property 10 years ago at a total cost of $541,000—$53,000 for the land and $488,000 for the building. He has just received an offer from a realty company…

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Managerial Accounting

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Comparative statement data for Lionel Company and Barrymore Company, two competitors, appear below. All balance sheet data are as of December 31, 2014, and
December 31, 2013. Lionel Company Barrymore Company 2014 2013 2014 2013 Net sales $1,549,035 $339,038 Cost of goods sold 1,053,345 237,325 Operating expenses
278,825 77,979 Interest expense 7,745 2,034 Income tax expense 61,960 8,476 Current assets 401,584 $388,020 86,450 $ 82,581 Plant assets (net) 596,920 575,610
142,842 128,927 Current liabilities 65,015 75,507 19,618 14,654 Long-term liabilities 102,500 84,000 16,711 11,989 Common stock, $5 par 578,765 578,765 137,435
137,435 Retained earnings 252,224 225,358 55,528 47,430 Prepare a vertical analysis of the 2014 income statement data for Lionel Company and Barrymore Company in
columnar form. (Round percentages to 1 decimal place, e.g. 12.1%.) Condensed Income Statement For the Year Ended December 31, 2014 Lionel Company Barrymore Company
Dollars Percent Dollars Percent

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7. The following standards for variable manufacturing overhead have been established for a company that makes only one product:? ?The following data
pertain to operations for the last month:? ?What is the variable overhead efficiency variance for the month? A. $9,219 U?B. $10,179
U?C. $9,867 U?D. $648 U

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The Green Division of Frizell Company reported the following data for the current year.
Sales $3,166,300
Variable costs 2,000,000
Controllable fixed costs 609,000
Average operating assets 5,219,400

Top management is unhappy with the investment center’s return on investment (ROI). It a…

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Lenitnes Company is considering an investment in technology to improve its operations. The investment will require an initial outlay of $245,000 and will yield the following expected cash flows. Management requires investments to have a payback period of 3 years, and it requires a 11% return on its …

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Managerial Accounting

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Company’s cost analysis has concluded that utilities cost is a mixed cost, and they are attempting to find a base which the cost might be closely correlated.



Quarter: Tons Mixed Direct Labor Hours Utilities Cost

Year 1:

First 15,000 5,000 $50,000

Second 11,000 3,000 $45,000

Third 21,000 4,000 $60,000

Fourth 12,000 6,000 $75,000

YEar 2:

First 18,000 10,000 $100,000

Second 25,000 9,000 $105,000

Third 30,000 8,000 $85,000

Fourth 28,000 11,000 $120,000



Using tons mined as the independent x variable:

1.Determine a cost formula for utilities cost using the least squares regression method.

2. Prepare a scattergraph and plot the tons mined and utilities cost. (place cost on the vertical axis and tons mined on the horizontal axis) Fit a straight line
to the plotted points using the cost formula determined by (1)



3. Using the direct labor hours as the independent (x) variable, repeat the computations in (1) and (2) above

4.WOuld you recommend that the company use tons mined or direct labor hours as a base for planning utilities cost?

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Assignment
Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, the amount paid a mechanic is based on an industry average of time estimated to complete a repair job. The repair shop bills the customer for the industry average amount of time at the repair center’s billable cost per hour. This means a customer can pay, for example, $120 for two hours of work on a car when the actual time worked was only one hour. Many experienced mechanics can complete repair jobs faster than the industry average.

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Assignment
Labor costs of an auto repair mechanic are seldom based on actual hours worked. Instead, the amount paid a mechanic is based on an industry average of time estimated to complete a repair job. The repair shop bills the customer for the industry average amount of time at the repair center’s billable cost per hour. This means a customer can pay, for example, $120 for two hours of work on a car when the actual time worked was only one hour. Many experienced mechanics can complete repair jobs faster than the industry average. The average data are compiled by engineering studies and surveys conducted in the auto repair business. Assume that you are asked to complete such a survey for a repair center. The survey calls for objective input, and many questions require detailed cost data and analysis. The mechanics and owners know you have the survey and encourage you to complete it in a way that increases the average billable hours for repair work.
Required:
Who are the stakeholders in this situation?
What are the ethical consideration?
How will you complete this assignment and why?
PS: responses must be 3-4 sentences long each and represent “active communication.”

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Managerial Accounting

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Lynn Company had $153,600 of net income in 2008 when the selling price per unit was $161, the variable costs per unit were $101, and the fixed costs were $573,600. I nee help with some accounting questions……Management expects per unit data and total fixed costs to remain the same in 2009. The president of Lynn Company is under pressure from stockholders to increase net income by $64,800 in 2009.
Compute the number of units sold in 2008
Compute the number of units that would have to be sold in 2009 to reach the stockholders’ desired profit level.
Assume that Lynn Company sells the same number of units in 2009 as it did in 2008. What would the selling price have to be in order to reach the stockholders’ desired profit level? (Round answer to 0 decimal places.)

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Managerial Accounting

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Which of the following statements does not describe a characteristic of management accounting?

Question 1 options:
A) management accounting places a great deal of emphasis on the future
B) management accounting must conform to GAAP
C) management accounting is more concerned with individual segments of t…

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Managerial Accounting

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Renfree Mines, Inc., owns the mining rights to a large tract of land in a mountainous area. The tract contains a mineral deposit that the
company believes might be commercially attractive to mine and sell. An engineering and cost analysis has been made, and it is expected that the
following cash flows would be associated with opening and operating a mine in the area:


Cost of equipment required $ 970,000
Annual net cash receipts $ 355,000*
Working capital required $ 250,000
Cost of road repairs in eleven years $ 71,000
Salvage value of equipment in twelve years $ 120,000

*Receipts from sales of ore, less out-of-pocket costs for salaries, utilities, by Coupon Companion Plugin” id=”_GPLITA_0″ href=”http://ezto.mhecloud.mcgraw-hill.com/#” class=”c11″ name=”_GPLITA_0″>insurance, and so forth.

by Coupon Companion Plugin” id=”_GPLITA_0″ href=”http://ezto.mhecloud.mcgraw-hill.com/#” class=”c11″ name=”_GPLITA_0″>


The mineral deposit would be exhausted after twelve years of mining. At that point, the working capital would be released for reinvestment
elsewhere. The company%u2019s required rate of return is 21%. (Ignore income by Coupon Companion Plugin” id=”_GPLITA_1″ href=”http://ezto.mhecloud.mcgraw-hill.com/#” class=”c11″ name=”_GPLITA_1″>taxes.)

by Coupon Companion Plugin” id=”_GPLITA_1″ href=”http://ezto.mhecloud.mcgraw-hill.com/#” class=”c11″ name=”_GPLITA_1″>

Click here to view Exhibit 11B-1 andExhibit 11B-2, to determine the appropriate discount factor(s) using tables.


Required:
a.

Determine the net present value of the proposed mining project. (Negative amount should be indicated by a
minus sign. Round discount factor(s) to 3 decimal places, other intermediate calculations and final answer to the nearest whole
dollar.)


Net present value $


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managerial accounting

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UNIVERSITY OF DAYTONDepartment of AccountingACC 208 – 82 – Instructor – Prof. ShankarSummer 2012 Mid Term Exam Name______________________________INSTRUCTIONS:Place your name on this cover sheet. (If there is any risk that your exam booklet will come apart, place your name at the top of every page). Be sure to show all work . Partial credit for incorrect answers, where given, cannot be given unless you show supporting computations. Correct answers not supported by computations may be subject to loss of credit.Academic dishonesty will NOT be tolerated and may result in the maximum penalty. This includes not allowing others to view your answers or computations. The examination remains the property of the Department of Accounting and may not be copied or retained by the student. Do not alter, add, erase, etc. any answers or markings on your exam after the exam period ends OR at any later time. This examination booklet contains 7 total pages, including the cover. It is your responsibility to insure that all pages are contained in this examination booklet.The exam answers will have to be submitted by email attachment to me. The due date for receiving the answers in my in-box is 11PM on 07/22/2012. There will point deductions for late submission of answers. You may type/solve your answers using Excel or Word programs. Please present your answers in a professional and easy to read format. You may also scan and attach your answers if they are hand written. Maximum pointsPoints ReceivedMultiple choice QuestionsPosted on Connect82Problem 1CVP Analysis18Problem 2Costing8Problem 3Costing8Problem 4Activity Based Costing16Problem 5COGM, COGS, Income Stmt18150Problem 1 – CVP Analysis – 18 Points Tanner Company’s most recent contribution format income statement is presented below:  The company sells its only product for $15 per unit. There were no beginning or ending inventories.Required:a. Compute the company’s break-even point in units sold.b. Compute the total…

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managerial accounting

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Flexible Budgets” Please respond to the following:

  • Evaluate whether or not a flexible budget approach dilutes the value of a budget process in the organization.

  • Evaluate the impact to a business when compensation, such as sales commissions and bonus, are tied to achieving budgeted expectations. Suggest how management can prevent employees from manipulating results.

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MANAGERIAL ACCOUNTING :

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Pena Corporation incurred the following costs while manufacturing its product.



Materials used in product $102,000 Advertising expense $48,000
Depreciation on plant 67,000 Property taxes on plant 24,000
Property taxes on store 8,500 Delivery expense 24,000
Labor costs of assembly-line workers 115,000 Sales commissions 45,000
Factory supplies used 29,000 Salaries paid to sales clerks 53,000



Work-in-process inventory was $14,000 at January 1 and $17,500 at December
31. Finished goods inventory was $69,000 at January 1 and $56,800 at December
31.


Compute the following:



Cost of goods manufactured $
Cost of goods sold $
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Managerial Accounting

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Required Assignment 2 Manufacturing Budget Analysis

Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department.

The men had just attended the monthly performance evaluation meeting for plant department heads. These meetings had been held on the third Tuesday of each month since Robert Ferguson, Jr., the president’s son, had become plant manager a year earlier.

As they were walking, Tom Emory spoke: Boy, I hate those meetings! I never know whether my department’s accounting reports will show good or bad performance. I’m beginning to expect the worst. If the accountants say I saved the company a dollar, I’m called Sir, but if I spend even a little too much boy, do I get in trouble. I don’t know if I can hold on until I retire.

Tom had just been given the worst evaluation he had ever received in his long career with Ferguson & Son. He was the most respected of the experienced machinists in the company. He had been with the company for many years and was promoted to supervisor of the machine shop when the company expanded and moved to its present location. The president (Robert Ferguson, Sr.) had often stated that the company’s success was due to the high-quality work of machinists like Tom. As supervisor, Tom stressed the importance of craftsmanship and told his workers that he wanted no sloppy work coming from his department.

When Robert Ferguson, Jr., became the plant manager, he directed that monthly performance comparisons be made between actual and budgeted costs for each department. The departmental budgets were intended to encourage the supervisors to reduce inefficiencies and to seek cost reduction opportunities. The company controller was instructed to have his staff tighten the budget slightly whenever a department attained its budget in a given month; this was done to reinforce the plant manager’s desire to reduce costs. The young plant manager often stressed the importance of continued progress toward attaining the budget; he also made it known that he kept a file of these performance reports for future reference when he succeeded his father.

Tom Emory’s conversation with Jim Morris continued as follows:

Emory: I really don’t understand. We’ve worked so hard to meet the budget, and the minute we do so they tighten it on us. We can’t work any faster and still maintain quality. I think my men are ready to quit trying. Besides, those reports don’t tell the whole story. We always seem to be interrupting the big jobs for all those small rush orders. All that setup and machine adjustment time is killing us. And quite frankly, Jim, you were no help. When our hydraulic press broke down last month, your people were nowhere to be found. We had to take it apart ourselves and got stuck with all that idle time.

Morris: I’m sorry about that, Tom, but you know my department has had trouble making budget, too. We were running well behind at the time of that problem, and if we had spent a day on that old machine, we would never have made it up. Instead, we made the scheduled inspections of the forklift trucks because we knew we could do those in less than the budgeted time.

Emory: Well, Jim, at least you have some options. I’m locked into what the scheduling department assigns to me and you know they’re being harassed by sales for those special orders. Incidentally, why didn’t your report show all the supplies you guys wasted last month when you were working in Bill’s department?

Morris: We’re not out of the woods on that deal yet. We charged the maximum we could to other work and haven’t even reported some of it yet.

Emory: Well, I’m glad you have a way of getting out of the pressure. The accountants seem to know everything that’s happening in my department, sometimes even before I do. I thought all that budget and accounting stuff was supposed to help, but it just gets me into trouble. It’s all a big pain. I’m trying to put out quality work; they’re trying to save pennies.

Review the case. Respond to the following:

  • Identify the problems that appear to exist in Ferguson & Son Manufacturing Company’s budgetary control system and explain how the problems are likely to reduce the effectiveness of the system. (approximately 1 page)
  • Explain how Ferguson & Son Manufacturing Company’s budgetary control system could be revised to improve its effectiveness. (approximately 1 2 pages)
  • Explain how the use of an activity-based costing system could change the results of the budget, if utilized. (approximately 1 page)
  • As stated in the case, many employees have quit trying and have altered behavior on the job. Provide specific ways for how you would use a budget to change employee behavior and align goals in the organization. Explain how goal alignment can improve profitability and overall return to the shareholders of the company. (approximately 1 page)
  • Synthesize data to explain the concept of ROI and describe how the use of an activity-based costing system can improve the company s ROI and the potential impact on free cash flow. (approximately 1 page)

Write a 5 6-page report in Word format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M5_A2.doc.

By Wednesday, October 2, 2013, deliver your assignment to the M5: Assignment 2 Dropbox.

Assignment 2 Grading Criteria Maximum Points
Identified the problems that appear to exist in the company s budgetary control system and explained how the problems are likely to reduce the effectiveness of the system. 64
Explained how the company’s budgetary control system could be revised to improve its effectiveness. 64
Explained how the use of an activity-based costing system could change the results of the budget if utilized. 44
Identified ways of how one can use a budget to change employee behavior and align goals in the organization and explained how goal alignment can improve profitability and overall return to shareholders of the company. 44
Synthesized data to explain the concept of ROI, how the use of an activity-based costing system can improve the company s ROI, and the potential impact on free cash flow. 56
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation. 28
Total: 300
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managerial accounting

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Please help me solve this:
[The following information applies to the questions displayed below.]

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below:

Budgeted Actual
Sales …

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Managerial Accounting

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Please do NOT call me with how much the cost is. Please send an email or post it cost here. I will pay via PayPal.

Sorry this is late in getting to you–shot time to complete.

David Etmund

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Report
Problem 2
Problem 1
Instruction
Name: Type in your name here
This is a take home exam and you should not discuss this exam with anyone. You should post generic questions to the office discussion forum
or you can e-mail me with specific questions and I can decide what to answer.
Please use this workbook as your exam template and prepare your solution on the specific problem worksheet.
On questions that ask for comments and explanations, I expect more than a one sentence response. You need to make sure your response is answering my question.
Submit one excel file containing your solution in step 2 of this assignment.
Referencing cells or typing out your calculations will be acceptable. I would not wait until the last day to try to complete this exam.
You should always verify that your problem has been loaded correctly by either going back to the assignment and clicking on Ok and you should
see the file you uploaded and you can also go to view grades and click on the exclamation to see the file you have loaded.  Remember it is your
responsibility to take the time to verify that your file has uploaded correctly.  If there are problems, please contact me immediately.
Please make sure you review my honesty policy that is shown below and also set out in the syllabus.
Problem 1
Reference Chapter 10 and 11
The roofing company manufactures shingles.
The company uses direct labor as the cost driver for the overhead calculations.
Asphalt
pounds
per pound
Direct labor
hours
per hour
Variable Manufacturing overhead
Fixed Manufacturing overhead

Budgeted fixed manufacturing overhead for the period is
Budgeted units to be produced
Units
Standard fixed manufacturing overhead based on expected capacity of
direct labor hours
The following information is available regarding the company’s actual operations for the period.
Shingles produced
Direct Materials purchased:
Direct Materials used:
Total direct labor cost
Manufacturing…

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managerial accounting

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Variance Analysis” Please respond to the following:

  • From the first e-Activity, the article indicates approximately 90% of the companies in the study were sensitive to the variances in material prices. Examine the causes of material price variances and the potential impact on pricing decisions.
  • Examine the reasons service companies are more sensitive to labor and price variances, as compared to material price variances, in the industrial sector and why managing these variances is essential to sustaining profitability.

Balanced Scorecard” Please respond to the following:

  • Create an argument for using a balanced scorecard approach to evaluating business performance considering how you convince management and employees that it is an effective business tool.
  • Describe the techniques you would employ to determine the effectiveness of a balanced scorecard in your organization.
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Managerial Accounting.

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Problem 19-1A Variable costing income statement and conversion to absorption costing income L.O. P2, P4 Torres Company began operations this year. During this
first year, the company produced 100,000 units and sold 80,000 units. The absorption costing income statement for its first year of operations follows. Sales
(80,000 units Af— $50 per unit) $ 4,000,000 Cost of goods sold Beginning inventory $ 0 Cost of goods manufactured (100,000 units Af— $30 per unit) 3,000,000 Cost of
good available for sale 3,000,000 Ending inventory (20,000 Af— $30) 600,000 Cost of goods sold 2,400,000 Gross margin 1,600,000 Selling and administrative expenses
510,000 Net income $ 1,090,000 Additional Information a. Selling and administrative expenses consist of $350,000 in annual fixed expenses and $2 per unit in
variable selling and administrative expenses. b. The company’s product cost of $30 per unit is computed as follows. Direct materials $ 4 per unit Direct labor $ 15
per unit Variable overhead $ 3 per unit Fixed overhead ($800,000 / 100,000 units) $ 8 per unit Required: 1. Prepare an income statement for the company under
variable costing. (Input all amounts as positive values except net loss which should be indicated with a minus sign. Omit the “$” sign in your response.)

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Managerial Accounting

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A. Multiple Choice. 40 points.

1. ____ 2. ____ 3. ____ 4. ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10. ____ 11. ____ 12. ____

1. Which of the following is part of prime cost, but not part of conversion cost ?
a. Direct materials.
b. Direct Labor.
c. Factory Overhead.
d. More than one of the above.
e. None of the above.

2. Product costs are initially recorded as:
a. Assets.
b. Liabilities.
c. Owners Equity.
d. Revenue.
e. Expense.

3. As the number of units produced increases, which of the following is true ?
a. Variable costs per unit decrease.
b. Variable costs per unit increase.
c. Fixed costs per unit increase.
d. Fixed Costs per unit decrease.
e. None of the above.

4. Normal costing:
a. Is necessary to allow sales prices to be determined in a timely manner.
b. Includes actual prime costs and estimated conversion costs.
c. Includes estimated prime costs and actual conversion costs.
d. More than one of the above.
e. None of the above.

5. Which of the following factories is most likely to use job order costing ?
a. Dairy.
b. Chemical refinery.
c. Shipyard.
d. More than one of the above.
e. None of the above.

6. Jo Company has a predetermined overhead rate of $ 5 per direct labor hour. The job cost sheet for Job 145, which contained 500 identical units, shows 1,000 direct labor hours costing $ 10,000 and materials requisitions totaling $ 7,500. What is the cost per unit for Job 145 ?
a. $ 35. b. $ 135. c. $ 30. d. $ 45. e. Some other amount.

7. Duties of an accountant do not include:
a. Competence. b. Confidentiality. c. Privilege. d. Objectivity.

8. Unlike financial accounting, management accounting is primarily concerned with:
a. Objectivity.
b. Reporting of historical information.
c. Reporting to potential investors and creditors.
d. Controlling the actions of agents.

9. Which of the following would normally occupy a line position ?
a. Assembly worker.
b. Cost accounting manager.
c. Chief Financial Officer
d. Secretary to the Chief Financial Officer.
10. Which of the following should not be considered in a decision ?
a. Opportunity costs.
b. Sunk costs.
c. Relevant costs.
d. Mutually exclusive alternatives.

11. An asset that appears on both the balance sheet and income statement of a merchandising company is:
a. cash.
b. equipment.
c. inventory.
d. purchases.

12. Which of the following is least likely to be an product cost ?
a. depreciation of a customer delivery van.
b. depreciation of a raw materials warehouse.
c. indirect materials.
d. salary of factory secretary.

B. Problems. 60 points.

1. Ace Company began business on January 1, 2010 to make and sell chairs. During the year, Ace rented a factory for $5,000 per month, spent $100,000 on component parts for chairs, $40,000 on factory labor, and $10,000 to advertise the chairs. Ace used 90% of the component parts to make 500 chairs and sold 490 of the chairs for $600 each. 100 chairs were in process at the end of the year with a cost of $9,000. Each month, Ace paid $2,000 for secretarial services. Ace also paid sales commissions of $100 for each chair sold.

(a) What was the cost per chair completed ?
(b) Prepare a schedule of cost of goods manufactured.
(c) Prepare an income statement.

2. Identify each cost described in problem 1 as product or period and fixed or variable, buy writing the terms in the spaces below.
Product or Period ? Fixed or Variable ?

“Ace rented a factory for $5,000 per month” _______________ _______________

“spent $100,000 on component parts for chairs” _______________ _______________

“$40,000 on factory labor” (paid on a weekly basis) ______________ _______________

“$10,000 to advertise the chairs” _______________ _______________

“paid $2,000 for secretarial services” _______________ _______________

“paid sales commissions of $100 for each chair sold” _______________ _______________

3. Acme Manufacturing Company expected to have total factory overhead of $1,000,000 during 2010, and to require 80,000 direct labor hours to operate the factory during the year. During 2010, Ace actually had total direct factory overhead of $1,010,000 and used 82,000 direct labor hours to operate the factory.

(a) What amount of factory overhead should Acme apply per direct labor hour ? $ __________
(b) What amount of factory overhead should be applied during the year ? $ __________
(c) What journal entry is needed to close the factory overhead account at the end of the year ?

4. During 2010, Custom Car Company is a railroad car repair shop that has contracted to repair 10 cars damaged in an accident. Custom Car’s budgeted annual repair shop overhead for 2010 was $5,000,000 and the company’s direct labor budget for the year was $8,000,000. $12,000 of materials and $8,000 of labor were required to repair the cars.

(a) What type of job cost system should be used to determine the cost of the repairs ? __________

(b) What is the name of the document used to record the cost of the repairs ? __________
(c) What is the “normal” cost of the repairs ? $ __________
(d) What does the term “normal cost” mean, and how does normal cost differ from actual cost ?
5. Pappy’s Shine Company brews “Shine”, an adult beverage. On 1.1.10, Pappy had 20,000 gallons partially complete; 100% complete as to materials ($25,200) and 75% complete as to brewing ($24,800). During the year, 180,000 gallons were placed into production and 160,000 gallons were completed. The cost of the materials added during the year was $334,800, and other costs required for production during the year totaled $238,700.
(a) What type of job cost system should be used to determine the cost of a gallon of Shine ? _______________
(b) What is the cost of one gallon of shine ? $ ________________
(c) What is the cost of goods manufactured for the year ? $ ________________
(d) What is the cost of the work in process inventory at the end of the year ? $ ________________
6. Tom is an accountant employed by the Big Corporation and recently assigned to the factory producing widgets, where he reports to Sally, the division manager. Tom has prepared a factory overhead application rate based on direct labor hours, using information provided by the plant engineer. Sally asks Tom to revise the rate by adding 10% to the engineer’s estimates of total factory overhead. Sally says the 10% has traditionally been added to make sure more than enough factory overhead is applied during the year.
(a) What are Tom’s obligations with respect to the overhead application rate ?
(b) What effect would Sally’s request have on the normal cost of widgets ?

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Managerial Accounting

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Simple_DLScattergraph_DLPart 2Part 1Project 2Name: TYPE in your name hereYou should always verify that your problem has been loaded correctly by either going back to the assignment and clicking on Ok and you should see the file you uploaded and you can also go to view grades and click on the exclamation to see the file you have loaded.  Remember it is your responsibility to take the time to verify that your file has uploaded correctly.  If there are problems, please contact me immediately.You will be graded on the accuracy of your answer and the usage of excel.You must use excel cell referencing in all of your calculations and use the data analysis tool in development of your regression tables.I have a demonstration exercise that demonstrates the traditional and the ABC method and an audio PowerPoint of this process, too, in course documents chapter 5 folder and an extensive regression demonstration in the chapter 6 course document folder.Please make sure you read the academic honesty policy, since I want to make sure everyone realizes that they should not be discussingthis problem outside the discussion board. This is an individual assignment and should be completed by each student on their own.I realize some of you maybe best friends or relatives, but this is an individual assignment and you should not be working as a team.Part 1–covers chapter 3 using a predetermined overhead rate and chapter 5 using ABCXYZ company manufactures chemicals used in radiological imaging systems. The company had originally used machine hours as the cost driver to develop one predetermined overhead rate.You have been recently hired by this company to review the costing of chemicals and realize that maybe a predetermined overhead rate does not give an accurate cost picture. You remember discussing overhead cost issues in MBA642 and want to implement ABC, so you have done some research and come up with the following activity cost pools and cost drivers.Activity cost PoolBudgeted…

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Gill corporation manufactures model airplane. the company purchased for 170000 automated production equip that can make the model parts. the equip has a 10000
salvage value and a 10 year uselife. of equip was purchased on Jan.1 record in T-account the adjusting entry that the company would make in dec 31 to record
depreciation on equip?.

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Managerial Accounting

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Assignment 2 Applying Decision-Making Skills

As a manager, part of your role is to develop strategy, and share this strategy with various stakeholders within the organization. This assignment will allow you to take your findings as a manager and communicate these findings to those who are affected.

Your company has been presented with a decision on replacing a piece of equipment for a new computerized version that promotes efficiency for the upcoming year. As manager you will need to decide whether or not the purchase of the new equipment is a worthwhile investment and to communicate your recommendations to Executive Management for a final decision. To be convincing, sufficient support for your recommendations must be provided in order to be considered valid and accepted.

Existing Equipment
Original Cost 60,000
Present Book Value 30,000
Annual Cash Operating Costs 145,000
Current Market Value 15,000
Market Value in Ten Years 0
Remaining useful Life 10 years
Replacement Equipment
Cost 600,000
Annual Cash Operating Costs 50,000
Market Value in Ten Years 0
Useful Life 10 years
Other Information
Cost of Capital 10%
Payback requirement 6 years

In this assignment, use the information above to develop a comprehensive analysis using NPV, Payback Method, and IRR to develop a recommendation on replacing the existing equipment with a new computerized version. Develop an executive summary of your findings in a Microsoft PowerPoint presentation format to present to Executive Management.

Do the following in your presentation:

  • Include a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations.
  • Be sure to incorporate specific details to highlight or support the summary including calculations.
  • Using your knowledge of capital budgeting techniques, explain how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process.

Develop a 10-12 slide presentation in PowerPoint format. Apply APA standards to citation of sources. Use the following file naming convention: LastnameFirstInitial_M4_A2.ppt.

By Wednesday, September 25, 2013, deliver your assignment to the M4: Assignment 2 Dropbox.

Assignment 2 Grading Criteria Maximum Points
Wrote a statement of the problem or topic, a concise analysis of the findings, and a recapitulation of any main conclusions or recommendations. 28
Explained the summary using specific details including calculations. 28
Explained how principles of capital budgeting, such as the payback method, IRR, and NPV, can be used to assess the potential projects and assist in the decision-making process displaying knowledge of capital budgeting techniques. 36
Wrote in a clear, concise, and organized manner; demonstrated ethical scholarship in accurate representation and attribution of sources; and displayed accurate spelling, grammar, and punctuation. 8
Total: 100
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Managerial Accounting

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Ariane Electronics power supply devices in their plant located in Malayasia. The pwoer supply supplies are used in various products such as hair dryers, elecric knives, drills, and so on. The power supplies vary primarily by the watts of output they produce. They range from 5 watts to 30 watts. Aria…

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Managerial accounting

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Question 1
Bank loan officers would find which of the following budgets to be most important in determining whether or not to give a company a loan?
Answer
sales budget production budget budgeted income statement budgeted balance sheet cash budget 3 points
Question 2
Aces Company budgeted the following sales in units:
January 30,000 February 20,000 March 40,000 Aces’ policy is to have 20% of the following month’s sales in inventory. On January 1, inventory equaled 7,500 units. February production in units is:
Answer
20,000. 28,000. 24,000.

Document Preview:

Question 1
Bank loan officers would find which of the following budgets to be most important in determining whether or not to give a company a loan?
Answer
sales budget production budget budgeted income statement budgeted balance sheet cash budget 3 points
Question 2
Aces Company budgeted the following sales in units:
January 30,000 February 20,000 March 40,000 Aces’ policy is to have 20% of the following month’s sales in inventory. On January 1, inventory equaled 7,500 units. February production in units is:
Answer
20,000. 28,000. 24,000. 26,500. 40,000. 3 points
Question 3
Diamond Company budgeted the following production in units for the first quarter of the year:
January 30,000 February 20,000 March 40,000 Each unit requires 3 pounds of raw material. Diamond’s policy is to have 20% of the following month’s production needs for materials in inventory. On January 1, the raw materials inventory equaled 11,000 pounds.

Raw materials purchases budgeted for February in pounds equal:
Answer
72,000. 32,000. 91,000. 30,000. 54,000. 3 points
Question 4
Diamond Company budgeted the following production in units for the first quarter of the year:
January 30,000 February 20,000 March 40,000 Each unit requires 3 pounds of raw material. Diamond’s policy is to have 20% of the following month’s production needs for materials in inventory. On January 1, the raw materials inventory equaled 11,000 pounds.

Desired ending inventory for January in pounds equals:
Answer
12,000 6,000 3,000 4,000 11,000 3 points
Question 5
Belant Company budgeted 200,000 units for June, 210,000 for July and 300,000 for August. Each unit requires 0.25 direct labor hours. How many direct labor hours are budgeted for August?
Answer
50,000 5,000 75,000 52,500 300,000 3 points
Question 6
Birrell Company manufactures pottery. Production of large garden pots for the…

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Managerial accounting

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Winfrey Co.”s March 31 inventory of raw materials is $140,000. Raw materials purchases in April are $470,000, and factory payroll cost in April is $253,000. Overhead costs incurred in April are: indirect materials, $24,000; indirect labor, $15,000; factory rent, $19,000; factory utilities, $11,000; and factory equipment depreciation, $68,100. The predetermined overhead rate is 55% of direct labor cost. Job 306 is sold for $360,000 cash in April. Costs of the three jobs worked on in April follow.

Job 306

Job 307

Job 308

Balances on March 31

Direct materials

$

14,000

$

21,000

Direct labor

14,000

6,000

Applied overhead

7,700

3,300

Costs during April

Direct materials

95,000

170,000

$

65,000

Direct labor

28,000

70,000

140,000

Applied overhead

?

?

?

Status on April 30

Finished (sold)

Finished (unsold)

In process

references

1. value:
10.00 points

Required:

1. Determine the total of each production cost incurred for April (direct labor, direct materials, and applied overhead), and the total cost assigned to each job (including the balances from March 31). (Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response. )

306

307

308

April Total

Beginning goods in process
(From March)

$

$

$

$

For April

Direct materials

Direct labor

Applied overhead

Total costs added in April

Total costs

$

$

$

$

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2. value:
10.00 points

Materials purchases (on credit), factory payroll (paid in cash), and actual overhead costs including indirect materials and indirect labor. (Factory rent and utilities are paid in cash.)

Assignment of direct materials, direct labor, and applied overhead costs to the Goods in Process Inventory.

Transfer of Jobs 306 and 307 to the Finished Goods Inventory.

Cost of goods sold for Job 306.

Revenue from the sale of Job 306.

Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account. (The amount is not material.)

2. Prepare journal entries for the month of April to record the above transactions. (Omit the “$” sign in your response.)

General Journal

Debit

Credit

To record materials purchases.


(Click to select)Accounts payableFactory payrollGoods in process inventoryRaw materials inventorySalesCashAccounts receivableFactory overhead


(Click to select)Factory overheadRaw materials inventoryCashSalesAccounts payableAccounts receivableGoods in process inventoryFactory payroll

To record factory payroll.


(Click to select)Factory payrollGoods in process inventoryFinished goods inventoryFactory overheadCashSalesAccumulated depreciationPrepaid factory payroll


(Click to select)Factory payrollGoods in process inventoryAccumulated depreciationFactory overheadFinished goods inventoryPrepaid factory payrollSalesCash

To record indirect materials.


(Click to select)CashAccumulated depreciationFinished goods inventoryFactory payrollFactory overheadSalesRaw materials inventoryCost of goods sold


(Click to select)Raw materials inventoryCost of goods soldSalesFinished goods inventoryAccumulated depreciationFactory payrollCashFactory overhead

To record indirect labor.


(Click to select)Finished goods inventoryRaw materials inventoryAccumulated depreciationAccounts payableSalesFactory overheadCashFactory payroll


(Click to select)Factory overheadCashFactory payrollRaw materials inventoryFinished goods inventoryAccumulated depreciationSalesAccounts Payable

To record factory rent.


(Click to select)CashFactory payrollAccumulated depreciationFinished goods inventoryRaw materials inventoryFactory overheadCost of goods soldGoods in process inventory


(Click to select)Raw materials inventoryFinished goods inventoryGoods in process inventoryAccumulated depreciationFactory overheadFactory payrollCashCost of goods sold

To record factory utilities.


(Click to select)CashAccounts payableCost of goods soldAccumulated depreciationRaw materials inventoryFactory overheadSalesFinished goods inventory


(Click to select)Accumulated depreciationSalesAccounts payableFactory overheadCashRaw materials inventoryCost of goods soldFinished goods inventory

To record depreciation for factory equipment.


(Click to select)Accumulated depreciationSalesCashFinished goods inventoryFactory overheadFactory payrollCost of goods soldRaw materials inventory


(Click to select)Accumulated depreciationFactory overheadFinished goods inventoryFactory payrollRaw materials inventoryCost of goods soldCashSales

To assign direct materials to jobs.


(Click to select)Goods in process inventoryFinished goods inventoryRaw materials inventoryFactory payrollCashSalesFactory overheadAccumulated depreciation


(Click to select)Goods in process inventoryCashAccumulated depreciationSalesRaw materials inventoryFinished goods inventoryFactory overheadFactory payroll

To assign direct labor to jobs.


(Click to select)Factory overheadFinished goods inventoryCashFactory payrollCost of goods soldRaw materials inventorySalesGoods in process inventory


(Click to select)CashRaw materials inventoryFactory payrollGoods in process inventoryCost of goods soldFactory overheadSalesFinished goods inventory

To apply overhead to jobs.


(Click to select)Finished in goods inventorySalesAccumulated depreciationCashFactory payrollFactory overheadGoods in process inventoryCost of goods sold


(Click to select)CashSalesCost of goods soldFinished in goods inventoryAccumulated depreciationFactory overheadGoods in process inventoryFactory payroll

To record jobs completed.


(Click to select)Raw materials inventoryCashFinished goods inventoryAccumulated depreciationFactory overheadFactory payrollCost of goods soldGoods in process inventory


(Click to select)Factory payrollCashRaw materials inventoryFactory overheadGoods in process inventoryCost of goods soldFinished goods inventoryAccumulated depreciation

To record cost of sale of job.


(Click to select)Goods in process inventoryFactory payrollCost of goods soldAccumulated depreciationSalesFinished goods inventoryCashFactory overhead


(Click to select)Factory payrollAccumulated depreciationGoods in process inventoryCashCost of goods soldFactory overheadSalesFinished goods inventory

To record sale of job.


(Click to select)CashFinished goods inventorySalesGoods in process inventoryCost of goods soldFactory overheadFactory payrollAccumulated depreciation


(Click to select)Cost of goods soldFactory payrollFinished goods inventoryCashAccumulated depreciationGoods in process inventoryFactory overheadSales

To assign Over/Underapplied overhead.


(Click to select)Factory overheadAccumulated depreciationGoods in process inventoryFinished goods inventoryCashFactory payrollSalesCost of goods sold


(Click to select)CashAccumulated depreciationCost of goods soldSalesFactory payrollFactory overheadGoods in process inventoryFinished goods inventory

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3. value:
10.00 points

3. Prepare a manufacturing statement for April (use a single line presentation for direct materials and show the details of overhead cost.) (Amounts to be deducted should be indicated with a minus sign. Omit the “$” sign in your response.)

WINFREY COMPANY
Manufacturing Statement
For Month Ended April 30


(Click to select)Indirect laborFactory overheadCost of goods manufacturedFactory utilitiesFactory rentIndirect materialsDirect materials used

$


(Click to select)Direct labor usedIndirect materialsCost of goods manufacturedIndirect laborFactory overheadFactory rentFactory utilities

Factory overhead


(Click to select)Indirect laborDirect labor usedDirect materials usedFactory utilitiesFactory rentIndirect materialsDepreciation of equipment

$


(Click to select)Factory rentIndirect laborDirect labor usedIndirect materialsFactory utilitiesDirect materials usedDepreciation of equipment


(Click to select)Direct labor usedIndirect laborDirect materials usedFactory rentDepreciation of equipmentFactory utilitiesIndirect materials


(Click to select)Direct materials usedIndirect materialsDepreciation of equipmentDirect labor usedFactory utilitiesFactory rentIndirect labor


(Click to select)Factory rentDirect labor usedIndirect laborDepreciation of equipmentFactory utilitiesIndirect materialsDirect materials used

Total manufacturing costs


(Click to select)Add: Goods in process, March 31Direct materials usedDeduct: Goods in process, March 31Direct labor usedCost of goods manufacturedIndirect laborFactory overhead

Total cost of goods in process


(Click to select)Factory overheadDeduct: Goods in process, April 30Direct materials usedDirect labor usedDepreciation of equipmentFactory rentAdd: Goods in process, April 30


(Click to select)Add: Overapplied overheadDeduct: Underapplied overhead

Cost of goods manufactured

$

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4. value:
10.00 points

4.1 Compute gross profit for April. (Omit the “$” sign in your response.)

Gross profit

$

4.2 Show how to present the inventories on the April 30 balance sheet. (Omit the “$” sign in your response.)

Inventories

Raw materials

$

Goods in process (Job 308)

Finished goods (Job 307)

Total inventories

$

[The following information applies to the questions displayed below.]

Thai Bay s computer system generated the following trial balance on December 31, 2011. The company s manager knows something is wrong with the trial balance because it does not show any balance for Goods in Process Inventory but does show balances for the Factory Payroll and Factory Overhead accounts.

Debit

Credit

Cash

$

44,000

Accounts receivable

38,000

Raw materials inventory

24,000

Goods in process inventory

0

Finished goods inventory

9,000

Prepaid rent

3,000

Accounts payable

$

9,500

Notes payable

12,500

Common stock

30,000

Retained earnings

87,000

Sales

180,000

Cost of goods sold

113,000

Factory payroll

20,000

Factory overhead

29,000

Operating expenses

39,000

Totals

$

319,000

$

319,000

After examining various files, the manager identifies the following six source documents that need to be processed to bring the accounting records up to date.

Materials requisition 21-3010:

$

4,700

direct materials to Job 402

Materials requisition 21-3011:

$

7,400

direct materials to Job 404

Materials requisition 21-3012:

$

1,500

indirect materials

Labor time ticket 6052:

$

5,000

direct labor to Job 402

Labor time ticket 6053:

$

12,000

direct labor to Job 404

Labor time ticket 6054:

$

3,000

indirect labor

Jobs 402 and 404 are the only units in process at year-end. The predetermined overhead rate is 200% of direct labor cost.

Direct materials costs to Goods in Process Inventory.

Direct labor costs to Goods in Process Inventory.

Overhead costs to Goods in Process Inventory.

Indirect materials costs to the Factory Overhead account.

Indirect labor costs to the Factory Overhead account.

5. value:
10.00 points

Required:

Prepare journal entries to assign the above costs. (Omit the “$” sign in your response.)

Date

General Journal

Debit

Credit


(Click to select)Goods in process inventoryAccounts payableFinished goods inventoryFactory overheadRaw materials inventoryAccumulated depreciationFactory payrollCost of goods sold


(Click to select)Cost of goods soldAccounts payableGoods in process inventoryFactory overheadRaw materials inventoryAccumulated depreciationFinished goods inventoryFactory payroll


(Click to select)Finished goods inventoryFactory overheadCost of goods soldCashFactory payrollGoods in process inventoryAccumulated depreciationRaw materials inventory


(Click to select)Factory payrollAccumulated depreciationFinished goods inventoryCashFactory overheadRaw materials inventoryGoods in process inventoryCost of goods sold


(Click to select)Accounts payableRaw materials inventoryGoods in process inventorySalesFactory payrollCashFactory overheadFinished goods inventory


(Click to select)Accounts payableRaw materials inventoryFinished goods inventoryFactory payrollCashFactory overheadSalesGoods in process inventory


(Click to select)Factory payrollRaw materials inventoryAccounts payableCashFactory overheadFinished goods inventoryGoods in process inventorySales


(Click to select)Raw materials inventoryCashFactory payrollGoods in process inventoryFinished goods inventorySalesFactory overheadAccounts payable


(Click to select)SalesFinished goods inventoryRaw materials inventoryGoods in process inventoryAccounts payableFactory overheadCashFactory payroll


(Click to select)Finished goods inventoryFactory payrollFactory overheadSalesCashRaw materials inventoryGoods in process inventoryAccounts payable

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6. value:
10.00 points

2.1 Determine the revised balance of the Factory Overhead account after making the entries in part 1. Determine whether there is any under- or overapplied overhead for the year. (Input all amounts as positive values. Omit the “$” sign in your response.)


(Click to select)Overapplied overheadUnderapplied overhead

$

2.2 Prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold, assuming the amount is not material. (Omit the “$” sign in your response.)

Date

General Journal

Debit

Credit

Dec. 31


(Click to select)CashCost of goods soldGoods in process inventoryOverapplied overheadFactory payrollSalesFinished goods inventoryFactory overhead


(Click to select)Overapplied overheadCashFinished goods inventoryCost of goods soldFactory payrollGoods in process inventorySalesFactory overhead

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7. value:
10.00 points

Prepare a revised trial balance. (The items in the Trial Balance should be grouped as follows: Assets, Liabilities (in order of their liquidity), Equity, Revenues, and Expenses. Leave no cells blank – be certain to enter “0” wherever required. Omit the “$” sign in your response.)

THAI BAY COMPANY
Trial Balance
December 31, 2011

Debit

Credit


(Click to select)Accounts receivableRaw materials inventoryFinished goods inventoryGoods in process inventoryPrepaid rentCash

$


(Click to select)Prepaid rentFinished goods inventoryRaw materials inventoryAccounts receivableCashGoods in process inventory


(Click to select)Prepaid rentGoods in process inventoryAccounts receivableRaw materials inventoryCashFinished goods inventory


(Click to select)Accounts receivableGoods in process inventoryPrepaid rentFinished goods inventoryRaw materials inventoryCash


(Click to select)Finished goods inventoryPrepaid rentCashRaw materials inventoryGoods in process inventoryAccounts receivable


(Click to select)Goods in process inventoryFinished goods inventoryCashPrepaid rentAccounts receivableRaw materials inventory


(Click to select)Accounts payableCommon stockCost of goods soldSalesRetained earningsNotes payable

$


(Click to select)Common stockSalesAccounts payableNotes payableRetained earningsCost of goods sold


(Click to select)Accounts payableCommon stockPrepaid rentNotes payableCost of goods soldSales


(Click to select)Cost of goods soldPrepaid rentAccounts payableSalesRetained earningsNotes payable


(Click to select)Accounts receivableSalesCashCost of goods soldRaw materials inventoryGoods in process inventory


(Click to select)Factory overheadCost of goods soldAccounts payableOperating expensesFactory payrollCash


(Click to select)Accounts payableCashCost of goods soldFactory overheadOperating expensesFactory payroll


(Click to select)Factory overheadCashOperating expensesCost of goods soldFactory payrollAccounts payable


(Click to select)Accounts payableCashOperating expensesFactory payrollCost of goods soldFactory overhead

Totals

$

$

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8. value:
10.00 points

4.1 Prepare an income statement for year 2011. (Amounts to be deducted and net loss amount should be indicated with minus sign. Omit the “$” sign in your response.)

THAI BAY COMPANY
Income Statement
For Year Ended December 31, 2011


(Click to select)Operating expensesCost of goods soldAccounts receivablePrepaid rentSales

$


(Click to select)SalesCost of goods soldOperating expensesAccounts payablePrepaid rent


(Click to select)Gross profitGross loss


(Click to select)Operating expensesAccounts receivablePrepaid rentCost of goods soldAccounts payable


(Click to select)Net incomeNet loss

$

4.2 Prepare a balance sheet as of December 31, 2011. (Be sure to list the assets and liabilities in order of their liquidity. Omit the “$” sign in your response.)

THAI BAY COMPANY

Balance Sheet

December 31, 2011

Assets


(Click to select)Accounts payablePrepaid rentCashNotes payableAccounts receivable

$


(Click to select)Accounts payableAccounts receivablePrepaid rentNotes payableCash

Inventories


(Click to select)Accounts receivableRaw materials inventoryGoods in process inventoryFinished goods inventoryCash

$


(Click to select)CashRaw materials inventoryAccounts receivableGoods in process inventoryFinished goods inventory


(Click to select)Finished goods inventoryRaw materials inventoryCashAccounts receivableGoods in process inventory


(Click to select)Common stockPrepaid rentAccounts payableCashAccounts receivable

Total Assets

$

Liabilities and Equity


(Click to select)Notes payableRetained earningsCashCommon stockAccounts payable

$


(Click to select)CashRetained earningsCommon stockAccounts payableNotes payable

Total Liabilities


(Click to select)Common stockAccounts receivableCashPrepaid rentNotes payable


(Click to select)Prepaid rentNotes payableCashAccounts receivableRetained earnings

Total Stockholders” Equity

Total Liabilities and Equity

$

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In December 2010, Gomez Company s manager estimated next year s total direct labor cost assuming 50 persons working an average of 2,080 hours each at an average wage rate of $15 per hour. The manager also estimated the following manufacturing overhead costs for year 2011.

Indirect labor

$

220,100

Factory supervision

127,000

Rent on factory building

84,000

Factory utilities

44,400

Factory insurance expired

35,500

Depreciation Factory equipment

247,000

Repairs expense Factory equipment

31,700

Factory supplies used

35,700

Miscellaneous production costs

17,000

Total estimated overhead costs

$

842,400

At the end of 2011, records show the company incurred $777,032 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $347,000; Job 202, $325,000; Job 203, $166,000; Job 204, $429,000; and Job 205, $182,000. In addition, Job 206 is in process at the end of 2011 and had been charged $11,800 for direct labor. No jobs were in process at the end of 2010. The company s predetermined overhead rate is based on direct labor cost.

Required

Determine the predetermined overhead rate for year 2011. (Omit the “%” sign in your response.)

Predetermined overhead rate

%

Determine the total overhead cost applied to each of the six jobs during year 2011. (Omit the “$” sign in your response.)

Job No.

Applied Overhead

201

$

202

203

204

205

206

Total

$

Determine the over- or underapplied overhead at year-end 2011. (Input all amounts as positive values. Omit the “$” sign in your response.)


(Click to select)Overapplied overheadUnderapplied overhead

$

Assuming that any over- or underapplied overhead is not material, prepare the adjusting entry to allocate any over- or underapplied overhead to Cost of Goods Sold at the end of year 2011. (Omit the “$” sign in your response.)

Date

General Journal

Debit

Credit

Dec. 31


(Click to select)Factory overheadCost of goods soldAccounts receivableGoods in process inventoryFinished goods inventoryCashFactory payrollSales


(Click to select)SalesGoods in process inventoryCashFinished goods inventoryFactory payrollAccounts receivableCost of goods soldFactory Overhead

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Managerial accounting

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Carter Corporation uses the weighted-average method in its processcosting system. Data concerning the first processing department for the most recent month are listed below.

Work in process, beginning: 

Units in beginning work-in-process inventory 400

Materials costs $6,900

Conversion costs $2,500

Percentage complete for materials 80%

Percentage complete for conversion 15%

Units started into production during the month 6,000

Units transferred to the next department during the month 5,800

Materials costs added during the month $112,500

Conversion costs added during the month $210,300

Ending work in process:

Units in ending work-in-process inventory 1,400

Percentage complete for materials 70%

Percentage complete for conversion 40%

Required: Calculate the equivalent units for materials (using the weighted-average method) for the month in the first processing department.

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Managerial Accounting

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How do differences in production and sales levels affect income under absorption and variable costing?


Management is often faced with the alternative of continuing to make a product or component internally, or going to an external source and purchasing the product or component. In gathering relevant …

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managerial accounting

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Swisher, Incorporated reports the following annual cost data for its single product.

This product is normally sold for $48 per unit. If Swisher increases its production to 50,000 units, while sales remain at the current 30,000 unit level, by
how much would the company’s gross margin increase or decrease under variable costing

$60,000 increase.
$90,000 increase.
There is no change in gross margin.
$90,000 decrease.

$60,000 decrease

Sea Company reports the following information regarding its production cost.

Units Produced 42,000 Units

Direct Labor $35 per unit

Direct materials $28 per unit

Variable Overhead $17 per unit

Fixed overhead $105,000 in total

Compute production cost per unit under variable costing.

$82.50
$28.00
$35.00
$63.00
$80.00
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Managerial Accounting

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At the beginning of the year, Gaudi Company estimated the following:


Overhead: $432, 000

Direct Labor Hours: 90, 000


Gaudi uses normal costing and applies overhead on the basis of direct labor hours. For the month of January, direct labor hours were 7, 650. By the end of the
year, Gaudi showed the following actual amounts:


Overhead: $436, 000

Direct labor hours: 89, 600


Assume the unadjusted Cost of Goods Sold for Gaudi was $707, 000


1. Calculate the predetermined overhead rate for Gaudi.

2. Calculate the overhead applied to production for January.

3. Calculate the total applied overhead for the year. Was overhead over- or underapplied? By how much?

4. Calculate adjusted Cost of Goods Sold after adjusting the overhead variance.

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Managerial Accounting

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Deliveable Length- Excel Spreadsheet and 1-2 pages
Consider the following scenario:

The Ski Por Corporation which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cros…

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Managerial Accounting

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Choose an item that you would like to manufacture. You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected. The product should require materials and labor and be something that you are familiar with in process from start to finish. The product must be useful and marketable. You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated.

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Choose an item that you would like to manufacture. You do not actually need to manufacture something, but will proceed through the assignment as if you were planning on manufacturing the item you have selected. The product should require materials and labor and be something that you are familiar with in process from start to finish. The product must be useful and marketable. You can choose something as simple as making chocolate chip cookies, a type of craft, or something more complicated. Consider production as if you were making the product from beginning to end, and not as if using a kit.Perform the following steps: Choose a product to manufacture and to describe the manufacturing process. Prepare the following budgets for 1 quarter broken down monthly regarding your chosen item: estimated sales budget, estimated direct materials budget, estimated direct labors budget, estimated manufacturing overhead budget, estimated selling and administrative expenses and an estimated income statement. Classify all manufacturing costs and selling and administrative expenses as either variable or fixed. Prepare a contribution margin income statement separating all variable and fixed costs into their own categories. Determine the breakeven point in units and dollars. Also, determine the number of units and dollars that need to be sold to make a target profit of $5,000 a month. Identify what types of trends you should be aware of in the industry and who the primary competitors are. Answer the following question: If you had to improve the bottom line, what would you do and what concerns would you have going forward. Choose a piece of equipment that you might consider purchasing to increase production of your item and address the following questions: What types of capital budgeting factors would you look at when deciding whether to do this? What would be the relevant costs that you would consider in this decision?Your final project should be in the form of a paper using…

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Managerial Accounting

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Waller Inc. uses the FIFO method in its process costing system. Data concerning the first processing department for the most recent month are listed below:





Beginning work in process inventory:

Units in the beginning work in process inventory 600

Materials costs $ 4,200

Conversion costs $ 7,800

Percent complete with respect to materials 55%

Percent complete with respect to conversion 30%

Units started into production during the month 9,900

Units transferred to the next dept during the month 8,900

Materials costs added during the month $108,400

Conversion costs added during the month $364,700

Ending work in process inventory:

Units in ending work in process inventory 1,600

Percent complete with respect to materials 60%

Percent complete with respect to conversion 40%







A. What are the equivalent units for materials for the month in the first processing department?



B. What is The total cost transferred from the first processing department to the next processing department during the month?

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Managerial Accounting

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Attached are 7 multiple choice problems I’m uncertain about.

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1.) Henson produces a product that requires 10 standard labor hours at $5/hr. If Henson produces 1,000 units and used 10,000 direct labor hours, the labor rate efficiency variance is:
a.) $10,000
b.) $50,000
c.) 0
d.) None of the above
2.) The present value of cash flow allows an individual to assess.
a.) The value of a present cash flow
b.) The Value of a stream of cash flows in terms of the best alternative
c.) Both A and B
d.) Neither A nor B
3.) The capital expenditures budget is tied closely to the:
a.) Sales Budget
b.) Purchases budget
c.) Cash receipts budget
d.) Cash expenditures budget
4.) There is a fixed cost element in ending inventory using the absorption costing approach.
True or False
5.) The labor efficiency variance is used in activity based costing.
True or False
6.) If production equals sales and there are no beginning or ending inventories:
a.) Variable costing gives a higher net income than absorption costing
b.) Variable costing gives a lower net income than absorption costing
c.) Net income is the same under each assumption
d.) None of the above
7.) Jeremiah pays for 50% of its purchases in the month of purchase, 30% in the month after and 20% in the month after that. For a $100,000 purchase in January, what is the accounts payable with respect to this purchase at the end of February?
a.) $50,000
b.) $30,000
c.) $20,000
d.) None of the above

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managerial accounting

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a.) Determine teh equivalent units of porduction and teh unit production costs for the Assembly Department.

b.) Determine the assignment of costs to goods transferred out and in process.

c.) Prepare a production sheet cost report for the Assembly Department.

All base off of the following information…

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Managerial Accounting

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The EG Company produces and sells one product. The following data refer to the year just completed:


Beginning inventory 0
Units produced 28,100
Units sold 21,900
Sales price per unit $ 410
Selling and administrative expenses:
Variable per unit $ 23
Fixed (total) $ 306,600
Manufacturing costs:
Direct materials cost per unit $ 229
Direct labor cost per unit $ 58
Variable manufacturing overhead cost per unit $ 36
Fixed manufacturing overhead $ 421,500


Assume that direct labor is a variable cost.


Required:
a.

Compute the cost of a single unit of product under both the absorption costing and variable costing approaches.

b.

Prepare an income statement for the year using absorption costing.

c.

Prepare a contribution format income statement for the year using variable costing.

d.

Reconcile the absorption costing and variable costing net operating income figures in (b) and (c) above.

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Managerial Accounting

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Salesbudgetdata for Palermo Company are given in BE9-2. Management desires to have an ending finished goods inventory equal to 25% of the next quarter’s expected unit sales. Prepare a production budget by quarters for the first 6 months of 2014.
BE9-4: Perine Company has 2,000 pounds of raw materials in its December 31, 2013, ending inventory. Required production for January and February of 2014 are 4,000 and 5,000 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $6. Management desires an ending inventory equal to 25% of next month’s materials requirements. Prepare the direct materials budget for January.

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Managerial Accounting

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Problem 17-2A

Schultz Electronics manufactures two large-screen television models: the Royale which sells for $1,570, and a new model, the Majestic, which sells for $1,300. The production cost computed per unit under traditional costing for each model in 2014 was as follows.

Traditional Costing Royale Majestic
Direct materials $660 $410
Direct labor ($20 per hour) 120 100
Manufacturing overhead ($40per DLH) 240 200
Total per unit cost $1,020 $710


In 2014, Schultz manufactured 25,000 units of the Royale and 10,000 units of the Majestic. The overhead rate of $40per direct labor hour was determined by dividing total expected manufacturing overhead of $7,920,900by the total direct labor hours (200,000) for the two models.
Under traditional costing, the gross profit on the models was Royale $550or ($1,570– $1,020), and Majestic $590or ($1,300– $710). Because of this difference, management is considering phasing out the Royale model and increasing the production of the Majestic model.
Before finalizing its decision, management asks Schultz’s controller to prepare an analysis using activity-based costing (ABC). The controller accumulates the following information about overhead for the year ended December 31, 2014.

Activities Cost Drivers Estimated
Overhead
Expected Use of
Cost Drivers
Activity-Based
Overhead Rate
Purchasing Number of orders $1,244,960 40,160 $31/order
Machine setups Number of setups 913,680 16,920 54/setup
Machining Machine hours 5,010,180 119,290 42/hour
Quality control Number of inspections 752,080 26,860 28/inspection


The cost drivers used for each product were:

Cost Drivers Royale Majestic
Total
Purchase orders 16,600 23,560 40,160
Machine setups 4,150 12,770 16,920
Machine hours 74,450 44,840 119,290
Inspections 10,300 16,560 26,860
Assign the total 2014 manufacturing overhead costs to the two products using activity-based costing (ABC) and determine the overhead cost per unit.(Round cost per unit to 2 decimal places, e.g. $12.25.)

Royale Majestic
Total assigned costs $ $
Cost per unit $ $



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What was the cost per unit of each model using ABC costing.(Round cost per unit to 2 decimal places, e.g. $12.25.)

Royale Majestic
Cost per unit $ $



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What was the gross profit of each model using ABC costing.(Round answers to 2 decimal places, e.g. $12.25.)

Royale Majestic
Gross profit $ $



Exercise 17-8

Santana Corporation manufactures snowmobiles in its Blue Mountain, Wisconsin, plant. The following costs are budgeted for the first quarter’s operations.

Machine setup, indirect materials $4,000
Inspections 16,000
Tests 4,000
Insurance, plant 110,000
Engineering design 140,000
Depreciation, machinery 520,000
Machine setup, indirect labor 20,000
Property taxes 29,000
Oil, heating 19,000
Electricity, plant lighting 21,000
Engineering prototypes 60,000
Depreciation, plant 210,000
Electricity, machinery 36,000
Machine maintenance wages 19,000
Classify the above costs of Santana Corporation into activity cost pools using the following: engineering, machinery, machine setup, quality control, factory utilities, maintenance.

Budgeted Costs Activity Cost Pool
Machine setup, indirect materials Machine SetupEngineeringMachineryQuality ControlFactory UtilitiesMaintenance
Inspections Machine SetupQuality ControlFactory UtilitiesEngineeringMachineryMaintenance
Tests MaintenanceQuality ControlFactory UtilitiesEngineeringMachineryMachine Setup
Insurance, plant EngineeringMaintenanceMachine SetupFactory UtilitiesMachineryQuality Control
Engineering design MaintenanceEngineeringQuality ControlFactory UtilitiesMachine SetupMachinery
Depreciation, machinery MachineryMaintenanceEngineeringFactory UtilitiesMachine SetupQuality Control
Machine setup, indirect labor Quality ControlMaintenanceFactory UtilitiesEngineeringMachineryMachine Setup
Property taxes MaintenanceEngineeringMachineryMachine SetupQuality ControlFactory Utilities
Oil, heating MaintenanceFactory UtilitiesEngineeringMachineryMachine SetupQuality Control
Electricity, plant lighting Machine SetupFactory UtilitiesMachineryMaintenanceEngineeringQuality Control
Engineering prototypes Machine SetupQuality ControlEngineeringFactory UtilitiesMaintenanceMachinery
Depreciation, plant MaintenanceMachineryQuality ControlMachine SetupFactory UtilitiesEngineering
Electricity, machinery MaintenanceMachine SetupFactory UtilitiesEngineeringQuality ControlMachinery
Machine maintenance wages Machine SetupQuality ControlEngineeringFactory UtilitiesMaintenanceMachinery



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Identify a cost driver that may be used to assign each cost pool to each line of snowmobiles.

Budgeted Costs Cost Driver
Machine setup, indirect materials Engineering HoursNumber of Purchase OrdersSquare Feet or Machine HoursNumber of EmployeesDirect Labor HoursNumber of RequisitionsMachine HoursNumber of Machines or Machine HoursNumber of Tests or InspectionsNumber of SetupsNumber of Parts or Assemblies
Inspections Number of Tests or InspectionsSquare Feet or Machine HoursNumber of Parts or AssembliesNumber of Purchase OrdersNumber of EmployeesNumber of Machines or Machine HoursMachine HoursNumber of RequisitionsEngineering HoursNumber of SetupsDirect Labor Hours
Tests Machine HoursSquare Feet or Machine HoursNumber of Tests or InspectionsNumber of SetupsNumber of Machines or Machine HoursNumber of Parts or AssembliesNumber of RequisitionsNumber of EmployeesDirect Labor HoursNumber of Purchase OrdersEngineering Hours
Insurance, plant Square Feet or Machine HoursNumber of Tests or InspectionsEngineering HoursNumber of EmployeesNumber of SetupsNumber of Purchase OrdersMachine HoursNumber of RequisitionsDirect Labor HoursNumber of Machines or Machine HoursNumber of Parts or Assemblies
Engineering design Number of Tests or InspectionsEngineering HoursDirect Labor HoursSquare Feet or Machine HoursMachine HoursNumber of EmployeesNumber of RequisitionsNumber of SetupsNumber of Machines or Machine HoursNumber of Purchase OrdersNumber of Parts or Assemblies
Depreciation, machinery Number of Tests or InspectionsEngineering HoursNumber of Purchase OrdersNumber of Machines or Machine HoursSquare Feet or Machine HoursNumber of RequisitionsNumber of Parts or AssembliesNumber of EmployeesDirect Labor HoursMachine HoursNumber of Setups
Machine setup, indirect labor Number of RequisitionsNumber of Parts or AssembliesSquare Feet or Machine HoursNumber of Purchase OrdersNumber of EmployeesEngineering HoursDirect Labor HoursMachine HoursNumber of Tests or InspectionsNumber of SetupsNumber of Machines or Machine Hours
Property taxes Machine HoursNumber of Machines or Machine HoursNumber of SetupsNumber of Tests or InspectionsSquare Feet or Machine HoursNumber of Parts or AssembliesNumber of EmployeesNumber of RequisitionsDirect Labor HoursNumber of Purchase OrdersEngineering Hours
Oil, heating Direct Labor HoursNumber of Tests or InspectionsSquare Feet or Machine HoursNumber of Parts or AssembliesNumber of RequisitionsNumber of EmployeesNumber of Machines or Machine HoursNumber of Purchase OrdersEngineering HoursMachine HoursNumber of Setups
Electricity, plant lighting Number of Machines or Machine HoursNumber of EmployeesNumber of RequisitionsDirect Labor HoursNumber of Parts or AssembliesEngineering HoursNumber of Purchase OrdersMachine HoursNumber of SetupsNumber of Tests or InspectionsSquare Feet or Machine Hours
Engineering prototypes Machine HoursNumber of SetupsNumber of Tests or InspectionsNumber of RequisitionsSquare Feet or Machine HoursNumber of Purchase OrdersEngineering HoursNumber of Machines or Machine HoursNumber of Parts or AssembliesNumber of EmployeesDirect Labor Hours
Depreciation, plant Engineering HoursNumber of Parts or AssembliesNumber of RequisitionsNumber of Purchase OrdersDirect Labor HoursMachine HoursSquare Feet or Machine HoursNumber of SetupsNumber of Tests or InspectionsNumber of EmployeesNumber of Machines or Machine Hours
Electricity, machinery Engineering HoursDirect Labor HoursNumber of SetupsNumber of Tests or InspectionsMachine HoursNumber of Machines or Machine HoursNumber of Parts or AssembliesNumber of EmployeesNumber of RequisitionsNumber of Purchase OrdersSquare Feet or Machine Hours
Machine maintenance wages Number of Tests or InspectionsNumber of Parts or AssembliesMachine HoursNumber of SetupsDirect Labor HoursEngineering HoursNumber of Purchase OrdersSquare Feet or Machine HoursNumber of Machines or Machine HoursNumber of EmployeesNumber of Requisitions



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Managerial Accounting

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Please explain the solution.

The company is considering using an activity-based costing system to compute unit product costs for external financial reports instead of its traditional system based on direct labor hours. The activity-based costing system would use three activity cost pools. Data relati…

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Managerial Accounting

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Data concerning Moscowitz Corporation’s single product appear below:


<?xml:namespace prefix = v ns = “urn:schemas-microsoft-com:vml” /> <?xml:namespace prefix = o ns =
“urn:schemas-microsoft-com:office:office” /> per unit percent of sales

Selling price $160 100%

Variable expenses 96 60%

Contribution margin $64 40%


Fixed expenses are $375,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like
to cut the selling price by $15 and increase the advertising budget by $23,000 per month. The marketing manager predicts that these two changes would increase
monthly sales by 3,100 units. What should be the overall effect on the company’s monthly net operating income of this change?


A. decrease of $128,900

B. increase of $426,500

C. increase of $8,900

D. increase of $128,900

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managerial accounting

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Butterfly World’s budgeted sales for April were estimated at $500,000, sales commissions at 4% of sales, and the sales manager’s salary at 800,000. Shipping expenses were estimated at 1% of sales and miscellaneous selling expenses were estimated at $1,000,plus 0.5% of sales.

Instructions:
Determine …

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Managerial Accounting

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Wall Nuts, Inc. produces paneling which requires two processes, A and B, to complete. Oak is the best selling of all the many types of paneling produced.
Information related to the 40,000 units of oak paneling produced annually is shown below.



Direct materials $380,000

Direct Labor

Department A (6,000 DLH x $25 per DLH) $150,000

Department B (35,125 DLH x $16 per DLH) $562,000

Machine Hours

Department A 24,000 MH

Department B 32,000 MH



Wall Nuts’ total expected overhead costs and related overhead data are shown below.



Departments. Department A. Department B.

Direct labor hours 67,000 DLH 170,000 DLH

Machine hours 100,000 MH 80,000 MH

Manufacturing overhead costs $450,000 $600,000



Use the data for Wall Nuts, Inc. to compute departmental overhead rates based on machine hours in Department A and machine hours in Department B.

$4.50 per MH in Dept A; $4.50 per MH in Dept B.

$7.50 per MH in Dept A; $7.50 per MH in Dept. B.

$4.50 per MH in Dept A; $7.50 per MH in Dept B.

$2.70 per MH in Dept A; $6.00 per MH in Dept B.

$0.60 per MH in Dept A; $0.80 per MH in Dept B.


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— Managerial Accounting

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Wright’s Construction builds custom houses for individual buyers. On June 1, it had one job started with a beginning Work-in-Process of $56,000. During June the job was finished and sold. Direct labor for the job in June was $75,000 and direct materials used were $57,000. Overhead is computed at a r…

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Managerial accounting

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Collegepak company produced and sold 70,000 backpacks during the year just eneded at the an average price of $30 per unit. Variable manufacturing costs were $12 per unit, and variable marketing costs were $6 per unit sold. Fixed costs amounted to $540,000 for manufacturing and $216,000 for marketing. There was no year-end work in process inventory. (ignore income taxes)
1. compute collegepak Break even point in sales dollars for the year.
2. compute the number of sales units required to earn a net income of $540,000 during the year.
3. collegepak’s variable manufacturing costs were expected to increase by 10% in the coming year. Compute the firms break even point in sales dollar for the coming year.
4. If collegepak’s variable manufacturing costs do increase 10%, compute the selling price that would yield the same contribution margin ratio in the coming year.

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Managerial Accounting

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Exercise 18-16

Glacial Company estimates that variable costs will be60% of sales, and fixed costs will total $926,000. The selling price of the product is $5.
Compute the break-even point in (1) units and (2) dollars.

(1) Break-even sales units
(2) Break-even sales $


Compute the margin of safety in (1) dollars and (2) as a ratio, assuming actual sales are $2,930,380.(Round ratio to 0 decimal places, e.g. 20%.)


(1) Margin of safety $
(2) Margin of safety ratio %





Problem 18-1A

Telly Savalas owns the Bonita Barber Shop. He employs6barbers and pays each a base rate of $1,300per month. One of the barbers serves as the manager and receives an extra $520per month. In addition to the base rate, each barber also receives a commission of $5.90per haircut.
Other costs are as follows.

Advertising $260 per month
Rent $960 per month
Barber supplies $0.40 per haircut
Utilities $170 per month plus $0.20per haircut
Magazines $20 per month


Telly currently charges $11.70per haircut.

Determine the variable cost per haircut and the total monthly fixed costs.(Round variable costs to 2 decimal places, e.g. 2.25.)


Total variable cost per haircut $
Total fixed $



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Compute the break-even point in units and dollars.(Round answers to 0 decimal places, e.g. 1,225.)

Break-even point haircuts
Break-even point $



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Determine net income, assuming2,370haircuts are given in a month.

Net income $




Problem 18-3A

Dousmann Corp.’s sales slumped badly in 2014. For the first time in its history, it operated at a loss. The company’s income statement showed the following results from selling618,000units of product: sales $2,472,000; total costs and expenses $2,616,200; and net loss $144,200. Costs and expenses consisted of the amounts shown below.

Total Variable Fixed
Cost of goods sold $2,163,000 $1,483,200 $679,800
Selling expenses 247,200 74,160 173,040
Administrative expenses 206,000 49,440 156,560
$2,616,200 $1,606,800 $1,009,400


Management is considering the following independent alternatives for 2015.

1. Increase unit selling price24% with no change in costs, expenses, and sales volume.
2. Change the compensation of salespersons from fixed annual salaries totaling $154,500to total salaries of $61,800plus a6% commission on sales.


(a)Compute the break-even point in dollars for 2014.(Round final answer to 0 decimal places, e.g. 1,225.)


Break-even point $


(b)Compute the contribution margin under each of the alternative courses of action.(Round final answer to 0 decimal places, e.g. 1,225.)

Contribution margin for alternative 1 %
Contribution margin for alternative 2 %


Compute the break-even point in dollars under each of the alternative courses of action.(Round selling price per unit to 2 decimal places, e.g. 5.25 and other calculations to 0 decimal places, e.g. 20% and also final answer to 0 decimal places, e.g. 1,225.)

Break-even point for alternative 1 $
Break-even point for alternative 2 $


Which course of action do you recommend?Alternative 1Alternative 2





Exercise 18-9

The Green Acres Inn is trying to determine its break-even point. The inn has 50 rooms that it rents at $75a night. Operating costs are as follows.

Salaries $8,547 per month
Utilities $1,832 per month
Depreciation $1,221 per month
Maintenance $610 per month
Maid service $9 per room
Other costs $36 per room


Determine the inn’s break-even point in (1) number of rented rooms per month and (2) dollars.

(1) Break-even point rooms
(2) Break-even point $





Exercise 18-11

Kare Kars provides shuttle service between four hotels near a medical center and an international airport. Kare Kars uses two 10-passenger vans to offer 12 round trips per day. A recent month’s activity in the form of a cost-volume-profit income statement is shown below.

Fare revenues (1,400fares) $35,000
Variable costs
Fuel $6,300
Tolls and parking 3,150
Maintenance 1,050 10,500
Contribution margin 24,500
Fixed costs
Salaries 12,495
Depreciation 1,176
Insurance 1,029 14,700
Net income $9,800


(a)Calculate the break-even point in (1) dollars and (2) number of fares.


(1) Break-even point $
(2) Break-even point fares


(b)Without calculations, determine the contribution margin at the break-even point.


Contribution margin at the break-even point $



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Managerial accounting

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Please write the steps out of how to find the answe

2. Kramer Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs. Each coffee table
consists of 20 separate parts totaling $240 in direct materials, and requires 5.0 hours of machine time to produce. Additional information follows:

Activity

Allocation Base

Cost Allocation Rate

Materials handling

Number of parts

$2.00 per part

Machining

Machine hours

$2.75 per machine hour

Assembling

Number of parts

$1.00 per part

Packaging

Number of finished units

$3.00 per finished unit

What is the total manufacturing cost per coffee table?

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The Wisbley Company is contemplating the purchase of a helicopter for its executives to use in their business trips. This helicopter could
be either purchased or leased from the manufacturer. The useful life of the helicopter is four years. Data concerning these two alternatives follow:

(Ignore income taxes in this problem.) The Wisbley Company is contemplating the purchase of a helicopter for its executives to use in their
business trips. This helicopter could be either purchased or leased from the manufacturer. The useful life of the helicopter is four years. Data concerning
these two alternatives follow: Picture If the helicopter is leased, it would be returned to the manufacturer in four years. Wisbley’s required rate of return
is 22%. The present value of the cash outflows for repairs, assuming the helicopter is purchased, would be: Answer a. $(14,000) b. $(8,440) c. $(2,000) d.
$(8,682)

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Montson, Inc. produces a
product requiring three square feet at $6 per square foot. If the desired
ending inventory is $18,000 and the beginning inventory is $36,000, how many
units must Montson produce to make direct materials purchases $54,000?

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Adria Company recently implemented an activity-based costing system. At the beginning of the year, management made the
following estimates of cost and activity in the company%u2019s five activity cost pools:


Activity Cost Pool

Activity

Measure

Expected

Overhead Cost

Expected

Activity

Labor-related

Direct labor-hours

$

175,000

35,000

DLHs

Purchase orders

Number of orders

$

64,710

900

orders

Material receipts

Number of receipts

$

162,400

1,400

receipts

Relay assembly

Number of relays

$

309,750

10,500

relays

General factory

Machine-hours

$

735,000

70,000

MHs


value:

8.00 points

2. The expected activity for the year was distributed among the company’s four products as follows:


Expected Activity

Activity Cost Pool Product A Product B Product C Product D
Labor-related (DLHs) 5,700 7,300 10,150 8,850
Production orders (orders) 145 305 85 415
Material receipts (receipts) 370 165 205 560
Relay assembly (relay) 0 4,350 0 7,150
General factory (MHs) 10,400 19,400 16,700 21,500

Using the ABC data, determine the total amount of overhead cost assigned to each product. (Do not round intermediate calculations. Round your answers to the nearest dollar amount.)


Product A $
Product B $
Product C $
Product D $

referencesebook &
resources


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Consider the following scenario:

The Ski Pro Corporation, which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cross-country skis.

After considerable research, a cro…

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Products Gamma and Delta are joint products. The joint production cost of the products is $800. Gamma has a market value of $500 at the
split-off point. If Gamma is further processed at an additional cost of $600, its market value is $1,400. Product Delta has a market value of $1,100 at the
split-off point. If Product Delta is further processed at an additional cost of $300, its market value is $1,400. Using the relative
sales value method, calculate the joint product cost that would be allocated to Gamma and Delta. How do you know if one of the products should be further
processed?

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The owner of Brooklyn Restaurant is disappointed because the restaurant has been averaging 5,000 pizza sales per month but the restaurant and wait staff can make and serve 10,000 pizzas per month. The variable cost (for example, ingredients) of each pizza is $1.20. Monthly fixed costs (for example, …

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ACCT 525 – 03 Test # 1 (Chapters 1 to 4) Advanced Managerial Accounting Spring, 2011 Wilson

Your submission of test answers, and your name typed below, certifies your attestation that your answers have been prepared with no help from any other person.
____________________
name
A. Multiple Choice. 40 points.

1. ____ 2. ____ 3. ____ 4. ____ 5. ____ 6. ____ 7. ____ 8. ____ 9. ____ 10. ____ 11. ____ 12. ____

1. Which of the following is part of prime cost, but not part of conversion cost ?
a. Direct materials.
b. Direct Labor.
c. Factory Overhead.
d. More than one of the above.
e. None of the above.

2. Product costs are initially recorded as:
a. Assets.
b. Liabilities.
c. Owners Equity.
d. Revenue.
e. Expense.

3. As the number of units produced increases, which of the following is true ?
a. Variable costs per unit decrease.
b. Variable costs per unit increase.
c. Fixed costs per unit increase.
d. Fixed Costs per unit decrease.
e. None of the above.

4. Normal costing:
a. Is necessary to allow sales prices to be determined in a timely manner.
b. Includes actual prime costs and estimated conversion costs.
c. Includes estimated prime costs and actual conversion costs.
d. More than one of the above.
e. None of the above.

5. Which of the following factories is most likely to use job order costing ?
a. Dairy.
b. Chemical refinery.
c. Shipyard.
d. More than one of the above.
e. None of the above.

6. Jo Company has a predetermined overhead rate of $ 5 per direct labor hour. The job cost sheet for Job 145, which contained 500 identical units, shows 1,000 direct labor hours costing $ 10,000 and materials requisitions totaling $ 7,500. What is the cost per unit for Job 145 ?
a. $ 35. b. $ 135. c. $ 30. d. $ 45. e. Some other amount.

7. Duties of an accountant do not include:
a. Competence. b. Confidentiality. c. Privilege. d. Objectivity.

8. Unlike financial accounting, management accounting is primarily concerned with:
a. Objectivity.
b. Reporting of historical information.
c. Reporting to potential investors and creditors.
d. Controlling the actions of agents.

9. Which of the following would normally occupy a line position ?
a. Assembly worker.
b. Cost accounting manager.
c. Chief Financial Officer
d. Secretary to the Chief Financial Officer.
10. Which of the following should not be considered in a decision ?
a. Opportunity costs.
b. Sunk costs.
c. Relevant costs.
d. Mutually exclusive alternatives.

11. An asset that appears on both the balance sheet and income statement of a merchandising company is:
a. cash.
b. equipment.
c. inventory.
d. purchases.

12. Which of the following is least likely to be an product cost ?
a. depreciation of a customer delivery van.
b. depreciation of a raw materials warehouse.
c. indirect materials.
d. salary of factory secretary.

B. Problems. 60 points.

1. Ace Company began business on January 1, 2010 to make and sell chairs. During the year, Ace rented a factory for $5,000 per month, spent $100,000 on component parts for chairs, $40,000 on factory labor, and $10,000 to advertise the chairs. Ace used 90% of the component parts to make 500 chairs and sold 490 of the chairs for $600 each. 100 chairs were in process at the end of the year with a cost of $9,000. Each month, Ace paid $2,000 for secretarial services. Ace also paid sales commissions of $100 for each chair sold.

(a) What was the cost per chair completed ?
(b) Prepare a schedule of cost of goods manufactured.
(c) Prepare an income statement.

2. Identify each cost described in problem 1 as product or period and fixed or variable, buy writing the terms in the spaces below.
Product or Period ? Fixed or Variable ?

“Ace rented a factory for $5,000 per month” _______________ _______________

“spent $100,000 on component parts for chairs” _______________ _______________

“$40,000 on factory labor” (paid on a weekly basis) ______________ _______________

“$10,000 to advertise the chairs” _______________ _______________

“paid $2,000 for secretarial services” _______________ _______________

“paid sales commissions of $100 for each chair sold” _______________ _______________

3. Acme Manufacturing Company expected to have total factory overhead of $1,000,000 during 2010, and to require 80,000 direct labor hours to operate the factory during the year. During 2010, Ace actually had total direct factory overhead of $1,010,000 and used 82,000 direct labor hours to operate the factory.

(a) What amount of factory overhead should Acme apply per direct labor hour ? $ __________
(b) What amount of factory overhead should be applied during the year ? $ __________
(c) What journal entry is needed to close the factory overhead account at the end of the year ?

4. During 2010, Custom Car Company is a railroad car repair shop that has contracted to repair 10 cars damaged in an accident. Custom Car’s budgeted annual repair shop overhead for 2010 was $5,000,000 and the company’s direct labor budget for the year was $8,000,000. $12,000 of materials and $8,000 of labor were required to repair the cars.

(a) What type of job cost system should be used to determine the cost of the repairs ? __________

(b) What is the name of the document used to record the cost of the repairs ? __________
(c) What is the “normal” cost of the repairs ? $ __________
(d) What does the term “normal cost” mean, and how does normal cost differ from actual cost ?
5. Pappy’s Shine Company brews “Shine”, an adult beverage. On 1.1.10, Pappy had 20,000 gallons partially complete; 100% complete as to materials ($25,200) and 75% complete as to brewing ($24,800). During the year, 180,000 gallons were placed into production and 160,000 gallons were completed. The cost of the materials added during the year was $334,800, and other costs required for production during the year totaled $238,700.
(a) What type of job cost system should be used to determine the cost of a gallon of Shine ? _______________
(b) What is the cost of one gallon of shine ? $ ________________
(c) What is the cost of goods manufactured for the year ? $ ________________
(d) What is the cost of the work in process inventory at the end of the year ? $ ________________
6. Tom is an accountant employed by the Big Corporation and recently assigned to the factory producing widgets, where he reports to Sally, the division manager. Tom has prepared a factory overhead application rate based on direct labor hours, using information provided by the plant engineer. Sally asks Tom to revise the rate by adding 10% to the engineer’s estimates of total factory overhead. Sally says the 10% has traditionally been added to make sure more than enough factory overhead is applied during the year.
(a) What are Tom’s obligations with respect to the overhead application rate ?
(b) What effect would Sally’s request have on the normal cost of widgets ?

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The Peacock Company manufactures fishing rods and reels. The company uses a standard cost system. The direct labor, direct materials and factory overhead for
the model #345 commercial fishing rod and reel are as follows:


Direct labor: Standard rate is $8 per hour

Standard time per unit is 1.5 hours
Direct materials: Standard price is $1 per linear foot

Standard quantity is 5 linear feet
Variable factory overhead: Standard rate is $10.50 per direct labor hour
Fixed factory overhead: Standard rate is $0.50 per direct labor hour


Determine the standard cost of the model #345 fishing rod and reel. Round the answer to nearest whole cent.


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Custom Metal Works produces castings and other metal parts to customer specifications. The company uses a job-ordercosting systemand applies overhead costs to jobs on the basis of machine-hours. At the beginning of the year, the company used a cost formula to estimate that it would incur $4,320,000 in manufacturing overhead cost at an activity level of 576,000 machine-hours.


The company had nowork in processat the beginning of the year. The company spent the entire month of January working on one large order—Job 382, which was an order for 8,000 machined parts. Cost data for January follow:



a. Raw materials purchased on account, $315,000.
b. Raw materials requisitioned for production, $270,000 (80% direct and 20% indirect).
c. Labor cost incurred in the factory, $190,000, of which $80,000 wasdirect laborand $110,000 was indirect labor.
d. Depreciation recorded on factory equipment, $63,000.
e. Other manufacturing overhead costs incurred, $85,000 (credit AccountsPayable).
f.

Manufacturingoverhead costwas applied to production on the basis of 40,000 machine-hours actually worked during January.

g.

The completed job was moved into the finished goods warehouse on January 31 to await delivery to the customer. (In computing the dollar amount for this entry, remember that the cost of a completed job consists of direct materials, direct labor, andappliedoverhead.)



Required:
1.

Prepare journal entries to record items (a) through (f) above. Ignore item (g) for the moment.(Do not round intermediate calculations.)



General Journal Debit Credit
a. (Click to select)Wages and salaries payableRaw materialsAccounts receivableManufacturing overheadAccounts payableWork in processFinished goodsAccumulated depreciation
(Click to select)Accounts receivableAccumulated depreciationWages and salaries payableWork in processManufacturing overheadFinished goodsAccounts payableRaw materials
b. (Click to select)Manufacturing overheadWages and salaries payableAccounts receivableAccumulated depreciationAccounts payableWork in processFinished goodsRaw materials
(Click to select)Manufacturing overheadAccounts payableAccounts receivableWork in processAccumulated depreciationFinished goodsWages and salaries payableRaw materials
(Click to select)Accumulated depreciationManufacturing overheadRaw materialsAccounts receivableAccounts payableFinished goodsWork in processWages and salaries payable
c. (Click to select)Raw materialsAccumulated depreciationAccounts payableAccounts receivableFinished goodsWages and salaries payableWork in processManufacturing overhead
(Click to select)Accumulated depreciationAccounts receivableWork in processManufacturing overheadFinished goodsAccounts payableWages and salaries payableRaw materials
(Click to select)Manufacturing overheadWork in processAccounts receivableRaw materialsAccumulated depreciationAccounts payableWages and salaries payableFinished goods
d. (Click to select)Accounts payableFinished goodsManufacturing overheadWork in processAccumulated depreciationRaw materialsAccounts receivableWages and salaries payable
(Click to select)Accumulated depreciationAccounts receivableFinished goodsRaw materialsWork in processWages and salaries payableAccounts payableManufacturing overhead
e. (Click to select)Raw materialsFinished goodsWages and salaries payableWork in processAccounts receivableManufacturing overheadAccounts payableAccumulated depreciation
(Click to select)Accounts payableFinished goodsManufacturing overheadRaw materialsAccounts receivableWages and salaries payableWork in processAccumulated depreciation
f. (Click to select)Accounts payableManufacturing overheadFinished goodsRaw materialsWork in processWages and salaries payableAccumulated depreciationAccounts receivable
(Click to select)Finished goodsWages and salaries payableAccumulated depreciationRaw materialsAccounts payableAccounts receivableManufacturing overheadWork in process



2.

Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant items from your journal entries to these T-accounts.(Do not round intermediate calculations. Record the transactions in the given order.)



Manufacturing Overhead


(Click to select)(a)(b)(c)(d)(e)(f)(g) (Click to select)(a)(b)(c)(d)(e)(f)(g)
(Click to select)(a)(b)(c)(d)(e)(f)(g)
(Click to select)(a)(b)(c)(d)(e)(f)(g)
(Click to select)(a)(b)(c)(d)(e)(f)(g)



Work in Process


(Click to select)(a)(b)(c)(d)(e)(f)(g)
(Click to select)(a)(b)(c)(d)(e)(f)(g)
(Click to select)(a)(b)(c)(d)(e)(f)(g)



3. Prepare a journal entry for item (g) above.(Do not round intermediate calculations.)



General Journal Debit Credit
g. (Click to select)Work in processWages and salaries payableAccumulated depreciationFinished goodsManufacturing overheadAccounts payableAccounts receivableRaw materials
(Click to select)Raw materialsManufacturing overheadFinished goodsWork in processWages and salaries payableAccounts receivableAccumulated depreciationAccounts payable



4.

Compute the unitproduct costthat will appear on the job cost sheet for Job 382.(Do not round intermediate calculations. Round your answer to 2 decimal places.)



Unit product cost $per unit
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Managerial Accounting

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Use the following information to answer questions 1 and 2:

At a law firm, overhead is assigned to clients based on direct labor hours. At the beginning of 20×7, estimated overhead costs were $156,000 and estimated direct labor hours were 20,800. Actual overhead costs amounted to $166,400, and 20,904 direct labor hours were worked.

1. What predetermined overhead rate should the law firm use
to apply overhead to clients? (Round to the nearest cent.)
A. $7.46
B. $7.50
C. $7.96
D. $8.00

2. How much overhead should be applied to a client whose
file notes 120 direct labor hours in 20×7? (Round to the
nearest cent.)
A. $895.20
B. $900.00
C. $955.20
D. $960.00

3. Which of the following statements accurately describes cost flows in a manufacturing
firm utilizing JIT?
A. Direct labor and direct materials are maintained in a WIP account for long periods
of time.
B. Manufacturing overhead is recorded in the raw materials account.
C. ThereÂ’s little need to maintain raw materials, WIP, or finished-goods accounts.
D. ThereÂ’s no need to maintain a cost of goods sold account.

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ACCT310-Managerial Accounting
AssignmentName: Unit 3 Individual Project
Deliverable Length:

Excel spreadsheet and 1-2 pages

Details:

Consider the following scenario:

The Ski Pro Corporation, which produces and sells to wholesalers a highly successful line of water skis, has decided to diversify to stabilize sales throughout the year. The company is considering the production of cross-country skis.

After considerable research, a cross-country ski line has been developed. Because of the conservative nature of the company management, however, Minnetonka’s president has decided to introduce only one type of the new ski for this coming winter. If the product is a success, further expansion in future years will be initiated.

The ski selected is a mass-market ski with a special binding. It will be sold to wholesalers for $80 per pair. Because of availability capacity, no additional fixed charges will be incurred to produce the skis. A $100,000 fixed charge will be absorbed by the skis, however, to allocate a fair share of the company’s present fixed costs to the new product.

Using the estimated sales and production of 10,000 pairs of skis as the expected volume, the accounting department has developed the following cost per pair of skis and bindings:

Direct Labor: $35
Direct Material: $30
Total Overhead: $15
Total: $80

Ski Pro has approached a subcontractor to discuss the possibility of purchasing the bindings. The purchase price of the bindings from the subcontractor would be $5.25 per binding, or $10.50 per pair. If the Ski Pro Corporation accepts the purchase proposal, it is predicted that direct-labor and variable-overhead costs would be reduced by 10% and direct-material costs would be reduced by 20%.

Write a 1–2 page paper, and create a spreadsheet that answers the following questions:

  1. Should the Ski Pro Corporation make or buy the bindings? Show calculations to support your answer.
  2. What would be the maximum purchase price acceptable to the Ski Pro Corporation for the bindings? Support your answer with an appropriate explanation.
  3. Instead of sales of 10,000 pairs of skis, revised estimates show sales volume at 12,500 pairs. At this new volume, additional equipment, at an annual rental of $10,000 must be acquired to manufacture the bindings. This incremental cost would be the only additional fixed cost required even if sales increased to 30,000 pairs. (This 30,000 level is the goal for the third year of production.) Under these circumstances, should the Ski Pro Corporation make or buy the bindings? Show calculations to support your answer.
  4. What qualitative factors (that is, issues with vendors, customers, or within the product itself) should the Ski Pro Corporation consider in determining whether they should make or buy the bindings?
  1. Should the Ski Pro Corporation make or buy the bindings? Show calculations to support your answer.
  2. What would be the maximum purchase price acceptable to the Ski Pro Corporation for the bindings? Support your answer with an appropriate explanation.
  3. Instead of sales of 10,000 pairs of skis, revised estimates show sales volume at 12,500 pairs. At this new volume, additional equipment, at an annual rental of $10,000 must be acquired to manufacture the bindings. This incremental cost would be the only additional fixed cost required even if sales increased to 30,000 pairs. (This 30,000 level is the goal for the third year of production.) Under these circumstances, should the Ski Pro Corporation make or buy the bindings? Show calculations to support your answer.
  4. What qualitative factors (that is, issues with vendors, customers, or within the product itself) should the Ski Pro Corporation consider in determining whether they should make or buy the bindings?

Grading Criteria

Percentage

Should the Ski Pro Corporation make or buy the bindings?

25%

What would be the maximum purchase price acceptable to the Ski Pro Corporation for the bindings?

20%

Under these circumstances, should the Ski Pro Corporation make or buy the bindings?

25%

What qualitative factors should the Ski Pro Corporation consider in determining whether they should make or buy the bindings?

30%

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Wind Fall, a manufacturer of leaf blowers, began operations this year. During this year, the company produced 10,000 leaf blowers and sold 8,500. At year-end the
company reported the following income statement using absorption costing.



Sales (8,500 x $45) 382,500

cost of goods sold (8,500 x $20) 170,000

gross margin $212,500

selling and administrative expenses 60,000

net income $152,500



Production costs per leaf blower total $20, which consists of $16 in variable production costs and $4 in fixed production costs (based on the 10,000 units
produced). Fifteen percent of total selling and administrative expenses are variable.

Compute net income under variable costing.



$146,500

$158,500

$237,500

$206,500

$246,500

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(Ignore income taxes in this problem.) Norris Company is considering investing in automated equipment with a ten-year useful life. Managers have estimated the cash flows associated with the tangible costs and benefits of automation, but have been unable to estimate the cash flows associated with the…

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multiple choice
*****explain the solution******

Barrus Company makes 30,000 motors to be used in the productions of its power lawn mowers. The manufacturing cost per motor at this level of activity is as follows:
Direct materials $9.50
Direct labor $8.60
Variable manufacturing overhead $3.75
Fixed manufac…

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Managerial Accounting

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Brothers Manufacturing applies overhead to production at a predetermined rate of 90% based on direct labor cost.Job No. 250, the only job stills in process at the
en of August, has been charged with manufacturing overhead of $3600. What was the amount of direct materials charged to Job 250 assuming the balance in Work in
Process inventory is $15,000?

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Managerial Accounting

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Use the following information to answer question 18:

Lil Chicken Farm calculates predetermined overhead rates for each department using
the number of pens as the cost driver. In the feeding department, total overhead costs
were $4,410 in 20×7, and are expected to total $5,060 in 20×8. There were 420 pens
in 20×7 and plans for 460 pens in 20×8.

18. If the actual number of pens in 20×8 was 450 and actual overhead was $5,000, what
was the amount of under- or overapplied overhead?
A. $50 underapplied
B. $275 underapplied
C. $422.50 overapplied
D. $684.50 overapplied

Use the following wage and salary expense information for a dress shop to answer
question 19:

Machine operators $200,000
Quality control supervisors $100,000
Fabric cutters $75,000
Factory janitor $18,000
Company president $150,000

19. What is the amount of indirect labor incurred?
A. $75,000
B. $118,000
C. $250,000
D. $543,000

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Managerial Accounting

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Use the following information to answer question 14:

All information is for one month, and direct labor hours are the allocation base.

Direct material used—2,500 pounds @ $0.75 per pound
Direct labor—200 hrs; wage rate, $7.50 per hour; benefits, $1.50 per hour
Estimated monthly overhead—$5,000
Estimated monthly direct labor hours—250

Actual expenses:
Factory rent $1,750
Factory utilities $1,850
Advertising $1,250
Factory equipment depreciation $1,500
Sales commissions $1,250

14. What was the actual overhead?
A. $7,600
B. $6,350
C. $5,100
D. $5,000






15. Peterson Upholstery manufactures custom furniture. Peterson has just completed a job
that required 20 yards of fabric at a cost of $15 per yard. Out of the 20 yards of fabric,
18 yards actually became a part of the completed project. The remaining 2 yards
were considered normal spoilage in the production process. Which of the following
statements is correct regarding the fabric cost for this job?
A. Direct materials cost of $270 should be allocated to the job.
B. Direct materials cost of $300 should be allocated to the job.
C. Indirect materials cost of $270 should be allocated to the job.
D. Indirect materials cost of $30 should be allocated to the job.

16. In its initial year of operation, Montoya Manufacturing started and completed 4,000
identical widgets and had 1,000 widgets that were 40% complete in work-in-process at
the end of the year. Total production costs for the year were $55,000. What is the cost
per equivalent unit?
A. $11.00
B. $11.96
C. $12.50
D. $13.75

17. Which of the following scenarios best describes an operational decision for an
auto manufacturer?
A. Building a new assembly facility overseas to capture greater market share
B. Establishing a quality control program to build customer satisfaction and
brand loyalty
C. Hiring and training welders to meet an annual production target
D. Diversifying the product line by acquiring a computer chip manufacturer

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managerial accounting

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2. Wisteria Companyprovided the following data: Overhead is based on Direct Labor Hours.

Budgeted overhead

$80,000

Budgeted direct labor hours

10,000

Actual overhead

$86,000

Actual direct labor hours

10,860

What is applied overhead in total dollars?

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–Managerial Accounting

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Marwick’s Pianos, Inc., purchases pianos from a large manufacturer and sells them at the retail level. The pianos cost, on the average, $2,450 each from the manufacturer. Marwick’s Pianos, Inc., sells the pianos to its customers at an average price of $3,125 each. The selling and adminis…

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managerial accounting

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Lewis Company’s standard labor cost of producing one unit of Product DD is 3.60 hours at the rate of $14.00 per hour. During August, 40,400 hours of labor are
incurred at a cost of $14.13 per hour to produce 11,000 units of Product DD. (a) Compute the total labor variance. Total labor variance $ (b) Compute the labor
price and quantity variances. Labor price variance $ Labor quantity variance $ (c) Compute the labor price and quantity variances, assuming the standard is 3.88
hours of direct labor at $14.33 per hour. Labor price variance $ Labor quantity variance $

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