The total overhead cost incurred by a factory producing screw-machine products last year was $5,800,000 of which $800,000 was assigned to five automated screw-machine centres. These expensive advanced machining centres ran for a total of 20,000 machine-hours. Direct material consumption during that period cost $9,062,500. Direct labour was composed of general hands and tradespeople. The general hands worked a total of 100,000 hours, and the tradespeople worked 50,000 hours. The general hands were paid a total of $2,700,000, and the tradespeople were paid $1,800,000.
A new product is estimated to require $3.12 worth of direct material and components, 6 minutes of direct labour by a general hand, and 10 minutes of screw-machine time per unit. The same product can be produced manually, requiring a total of one hour of direct labour. A tradesperson would be required for 40 minutes and a general hand would be needed for 20 minutes.

a) Estimate the factory cost per unit of this new product if (i) machine made, and (ii) handmade.
For each case, allocate the unassigned overhead by each of the following methods: (1) direct labour cost; (2) direct labour hours; (3) direct material cost; (4) prime cost; and (5) machine hours. (It is suggested you initially calculate the overhead factors for each method; and use a table to show your cost estimates for each method).

b) Which estimates do you think are realistic? Give reasons for your opinion. What additional information would be useful to perform more reliable cost estimation?

c) Discuss how the cost of the initial set-up of the screw-machine (estimated to take 8 hours of a tradesperson’s time) could be incorporated into your estimates of the proposed product in a). Discuss whether allowing for the cost of the initial set-up could impact the decision to produce the product by machine or by hand.

"Assuming that your estimated total cost will grow by 2.5% per year (due to inflation), demonstrate how you would compute the expected future cost of your dream vacation.

Suppose that you can invest money every month into a fee-free mutual fund and that this fund is expected to have a 10% nominal annual rate of return. Using your estimated future cost (including inflation) as a future value, determine the amount of money you must save each month for the next 10 years (i.e., 120 months) to achieve your goal. Then, determine the monthly amount you must save if you delay your trip for an additional 5 years (that is, you will take the trip 15 years from today = 180 months) instead of 10 years from today. (Note: Be sure to add the 5 additional years of inflation to the estimated future cost.)"

I have identified the total cost of my vacation for $1287.

Question 3: Variance Analysis (20 marks in total) The following standard cost data relate to the operation of Dragon Company for 2016. The standard cost per unit is based on the normal annual production of 15,000 units. Standard cost per unit Direct materials 4kg @ $5.00 per kg $ 20.00 Direct labour 2hrs @ $12.50 per hr $ 25.00 Variable overhead 2hrs @ $3.00 per hr $ 6.00 Fixed overhead 2 labour hrs @ $5.00 per hr $ 10.00 Total $ 61.00 Actual production in 2016 was 10,000 units. The following data was obtained from Dragon Company’s records: Direct material purchases 45,000 Kilograms Cost of direct materials purchases $ 202,500 Actual direct labour hours 25,000 Hours Actual direct labour costs $ 325,000 Actual variable overhead costs $ 100,000 Actual fixed overhead $ 125,000 Required: 3a. Calculate and show flexible budget variance for each cost item. 3b. Calculate the following variances and indicate whether they are favourable or unfavourable. i.Direct material price variance ii.Direct material efficiency variance iii.Direct labour price variance iv.Direct labour efficiency variance v.Variable manufacturing overhead spending variance vi.Variable manufacturing overhead efficiency variance vii.Fixed manufacturing overhead spending variance viii.Fixed manufacturing overhead efficiency variance

4) Assume that revenue is $180 million, cost of goods sold is $50 million, total assets are $800 million and inventories are $80million. On the common size statements, inventories would have an approximate value of ___ and cost of goods sold would have an approximate value of ___

During 2020, GR Engineering Company constructed a building for its own use at a total cost of $14,700,000.

The weighted average accumulated expenditures on assets qualifying for capitalization of interest during 2020 were $10,200,000. The company had the following debt outstanding at December 31, 2020: 1. 10%, 5-year note to finance construction of this building, dated January 1, 2020, with interest payable annually on January 1 $6,300,000 2. 12%, ten-year bonds issued at par on December 31, 2014, with interest payable annually on December 31 7,000,000 3. 9%, 4-year note payable, dated January 1, 2019, with interest payable annually on January 1 3,500,000 Compute the amounts of each of the following (show computations). 1. Avoidable interest 2. Actual interest 3. Total interest to be capitalized during 2020  

Departures from Acquisition Cost Determine the proper total inventory value for each of the following items in Packer Company’s ending inventory:

1. Packer has 60 model X3 cameras in stock. The cameras cost $260 each, but their year-end replacement cost is only $240. Packer has been selling the cameras for $310, but competitors are now selling them for $280. Packer plans to match the selling price at $280. Packer’s normal gross profit on cameras is 35 percent.
2. Packer has 550 rolls of film that are past the expiration date since film is now a slow moving item. The film cost $1.90 each and normally sells for $3.90. New replacement film still costs $1.90. Packer has put the expired film on clearance and is selling it for $1.40 per roll. There are no related selling costs.
3. Packer has four computers in stock that have been used as demonstration models. These computers cost $500 and normally sell for $650. Because they are used, Packer is selling them for $450 each. Expected selling costs are $60 per computer. New models of the computer (on order Z) will cost Packer $520 and will be priced to sell at $690.

1) Modern Décor Furniture began June with merchandise inventory of 40 sofas that cost a total of $28,000. During the month, Modern Décor purchased and sold merchandise on account as follows:  

Prepare a perpetual inventory record, using the LIFO inventory costing method, and determine the company's cost of goods sold (COGS), ending merchandise inventory, and gross profit. (20pts)

2) Taco Hell Inc. had the following balances and transactions during 2017:

What is the amount of the company's Merchandise Inventory and COGS, as disclosed in the December 31, 2017 balance sheet, using the periodic FIFO inventory costing method? (10pts)

3) Magras Gas uses a perpetual inventory system. Journalize the following sales transactions. (20pts)

At the beginning of the year, Learer Company’s manager estimated total direct labor cost assuming 45 persons working an average of 2,000 hours each at an average wage rate of $25 per hour. The manager also estimated the following manufacturing overhead costs for the year.

At year-end, records show the company incurred $1,820,000 of actual overhead costs. It completed and sold five jobs with the following direct labor costs: Job 201, $610,000; Job 202, $569,000; Job 203, $304,000; Job 204, $722,000; and Job 205, $320,000. In addition, Job 206 is in process at the end of the year and had been charged $23,000 for direct labor. No jobs were in process at the beginning of the year. The company’s predetermined overhead rate is based on direct labor cost.

Required
1-a. Determine the predetermined overhead rate for the year.
1-b. Determine the total overhead cost applied to each of the six jobs during the year.
1-c. Determine the over- or underapplied overhead at the year-end.
2. 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 the year.

cost per available seat mile

Break-even load factor =

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2. Given total operating cost of $1.6 million and 8.5 million available seat miles, calculate the cost per available seat mile (CASM).

3. What is the break-even load factor if CASM is $0.21 and the fare is $0.35 per mile? For this calculation, the yield is the same as the fare.

A company would like to estimate its total cost equation. It has collected 48 months of monthly production output and corresponding total production costs.  The collected data is in the file Production Cost Data Only.xlsx. Recall that

TOTAL COST = Fixed Costs + Variable Cost per Unit *Output.

Use the data to estimate a function that describes total cost for this company. (Round answers to 2 decimal places)

Develop a scatterplot of the two variables: monthly output and monthly total costs. Describe the relationship.

Estimate a total cost curve for this company.  State the estimated total cost function.

Based on your estimated total cost curve what is the estimated Fixed Cost for the Company?

Based on your estimated total cost curve what is the estimated average unit variable cost for the Company?

Develop a 95% confidence interval for the true average variable cost per unit.

What percent of the variation in monthly production costs is “explained” by the monthly production output?

Suppose the plant manager is interested in mean costs for several monthswhere output averages 30,000 units (i.e., Xp = 30). What is the predicted monthly total costs when output averages 30?  Construct a 95% confidence interval for the mean production costs for months that average 30,000 units of output.