Cost Accounting Ltd manufactures three products. The company allocates overhead costs as a rate per total direct labour hour.

The following cost driver values have been identified:

Machine hours / unit Production units Percentage of expert work Number of orders packed Labour hours

Alpha

0.70 5 000 30% 4
1 200

Beta

0.30 3 500 20% 8 800

Gamma

0.50 8 000 50% 23 1 500

An analysis of the manufacturing overhead cost for the period shows the following:

Activities

Machine costs Expert consultation Packing
Total

Overhead cost

265 000 98 500 15 000

378 500

Tidewater Company uses the product cost concept of applying the cost-plus approach to product pricing. The cost and expenses of producing and selling 50,000 units of Product K are as follows:

Tidewater desires a profit equal to a 10% rate of return on invested assets of $1,285,000.

a. Determine the amount of desired profit from the production and sale of Product K.
$ 128,500

b. Determine the total manufacturing costs and the cost amount per unit for the production and sale of 50,000 units of Product K.

c. Determine the markup percentage for Product K.
%

d. Determine the selling price of Product K. Round your answer to two decimal places.
$21.25

I'm having trouble with C.

Owners of an economy motel chain are considering building a new 200-unit motel in Riverside, CA. The present worth cost of building the motel is $8,000,000; the firm estimates furnishings for the motel will cost an additional $800,000 and will require replacement every 5 years. Annual operating and maintenance costs for the facility are estimated to be $800,000. The average rate for a unit is anticipated to be $60/day. A 15-year planning horizon is used by the firm in evaluating new ventures of this type; a terminal salvage value of 15% of the original building cost is anticipated; furnishings are estimated to have no salvage value at the end of each 5-year replacement interval. Assume an average daily occupancy percentage of 80%, a MARR of 12%, 365 operating days/year, and ignore the cost of the land. (Assume the furnishings are not replacement at EOY 15.)

What is the present worth, internal rate of return, external rate of return?

Please answer all parts of the question, and include a cashflow diagram.

2. Cost-Volume-Profit (CVP) Relationships

Bilco Fabrication manufactures one product, a low-cost car battery. Cost analysis by the accounting department has determined that the variable cost per unit is $12. Bilco’s fixed costs amount to $792,480 annually. The company is projecting data based on a sales price of $20. Use the above data to answer the following:

* Calculate Bilco’s break-even point in number of units.

* Figure the level of sales that Bilco would have to achieve to reach a target income of $150,000. Indicate your answer in dollars of sales.

* What is Bilco’s Degree of operating leverage at 125,000 batteries? If sales were to increase by 8%, how much would Net Income increase by (b-% c-$)?

a. _______________               b. _________________        c. _________________

* Indicate the company’s margin of safety at a projected level of sales of 125,000 units sold, stated in (a) dollars of sales, and (b) as a percentage of sales and (c) units.

         a. _______________               b. _________________       c. _________________

Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Because both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $21,500, whereas the gas-powered truck will cost $17,960. The cost of capital that applies to both investments is 13%. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,860 per year, and those for the gas-powered truck will be $4,600 per year. Annual net cash flows include depreciation expenses. Calculate the NPV and IRR for each type of truck, and decide which to recommend.

Do not round intermediate calculations. Round the monetary values to the nearest dollar and percentage values to two decimal places.

Hummingbird Company uses the product cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing 25,000 units of Product K are as follows:

Hummingbird desires a profit equal to a 5% rate of return on invested assets of $642,500.

a. Determine the amount of desired profit from the production and sale of Product K.
$_________

b. Determine the total manufacturing costs and the cost amount per unit for the production of 25,000 units of Product K.

c. Determine the markup percentage for Product K. Round your answer to one decimal place.
%__________

d. Determine the selling price of Product K. Round your answer to two decimal places.
$_________

In this problem you will calculate the CPI for the average urban consumer and for Jane using the prices for year 1 and year 2. The basket numbers represent the percentage of each dollar that is devoted to each good (written in decimal form). Assume year 1 is the base year. Round to two decimal places.

For the average person, the cost of the basket in year 1 is $ __ and the cost of the basket in year 2 is $ __ .

For the average person, the CPI in year 1 is __ and the CPI in year 2 is __ .

For the Jane, the cost of the basket in year 1 is $ __ and the cost of the basket in year 2 is $ __ .

For the Jane, the CPI in year 1 is __ and the CPI in year 2 is __ .

The coronavirus is hitting businesses and their employees. Some businesses are still open and millions of employees are working to serve customers. Some of the employees work in their workplaces while some others work from home. Almost all employees worry whether they will lose their jobs or if they will have a pay cut. It is obvious that unemployment will rise because millions of employees will lose their jobs and the remaining employees may have a pay cut (10, 20, 30, 50%) depending on the position in his/her workplace.

Because of the coronavirus, the business environment has started to change. It is becoming a challenging fast-changing environment. Currently, many managers are faced with difficulties. In the near future and in the long run, they will need to deal with important issues.

Lastly, you have to remember that one can easily manage firms during prosperous times but effective managers flourish during difficult times.

Below is a sample list of terms that you can use when answering the questions.

Job security and protection; Employee morale; Employee stress; Anxiety; Employee wellness; Effective decision making; Work performance; Key competencies; Productive employees; Quality of work produced; Work-life balance; Mental health; Employees in a high-risk health category; Illness; Government sector; Health sector; Security forces.

Q1-What should managers do to manage employees and minimize the negative effects of the coronavirus on employees? Discuss the major OB issues faced by managers when dealing with employees who are currently working and the major OB issues that managers need to handle in the near future.

Q2-What would be the possible changes and developments in the workforce and workplace diversity in the near future and in the long run? Discuss.

Q3-How should managers handle an employee that is unable to work due to age or health issues?

ForestLand Wood Products manufactures lumber and wood components. The company has two main product lines: Hardwood and Softwood. Hardwoods are used for flooring, cabinetry, paneling, doors and trimwork. Softwoods are used for wall studs, joists, planks, rafters, beams, stringers, posts, decking, subflooring and concrete forms. ForestLand also sells a by-product, wood shavings and saw dust. Shavings are purchased for farm and industrial use as well as for further processing into wood pellets and fiber board. The revenue is allocated to each product line based on the percentage of thousand board feet produced by the product line.

Your accounting firm has been retained by ForestLand for three years. You have been assigned to properly allocate support department costs. Your manager wants the allocation to be as accurate as possible and has instructed you to use the reciprocal services method. She reminds you that revenue from by-products are used to offset costs.

You begin your research and learn that there are four production departments: log yard, milling, drying, and packaging. The Hardwood line produces 300 thousand board feet of product while the Softwood produces 900 thousand board feet. The milling department direct costs, direct labor and overhead per thousand board feet for Hardwood is two times that of Softwood. You have been instructed to use the weighted average method to allocate the costs in the milling department between the two product lines. The remaining department costs are the same for both product lines, per thousand board feet.

There are two support departments: maintenance and administration. The maintenance department is responsible for maintaining all equipment and janitorial duties. Because the equipment is used more extensively for hardwoods, the department cost driver is hours worked. The administration department includes the company president and his staff. Their duties include accounting, human resources, and information technology. The cost driver for the administration department is number of employees.

In your first step, you determine the costs traced to each department and the usage of the support department cost drivers. You have created the following table:

Your next step is to determine the proportional usage of each support department's cost driver by the other departments to which its costs are to be allocated. Complete the following tables.

Using the cells below, create the formulas that will simultaneously allocate support department costs among the departments. "M" represents Maintenance and "A" represents Administration.

M = $ + (% A )

A = $ + (% M )

Solve the equations, If required round any decimal to three places in your computations. For example, .0183 would be rounded to .018. Round your final answer to the nearest dollar.

M = $

A = $

Feedback

There are two support departments and four production departments. The total cost of each support department is allocated to the other support department and the four production departments on the basis of a cost driver. What is the cost driver for the Maintenance Department? For the Administrative Department?

For each support department, find the units of its cost driver related to the other support department and each of the four production departments. Add these to find the total units of the cost driver consumed by the five departments. Then calculate the percentage of the total consumed by each department.

Review the Reciprocal Services Method in your text. Remember the total cost to be allocated from a support department is the sum of its original departmental costs and its share of the costs allocated from the other support department. How would this be expressed in an equation?

Use the following table to allocate the support cost departments. Round allocated amounts to the nearest whole dollar. If an amount is zero, enter "0".

Feedback

Multiply the total cost to be allocated from a support department by the percentage of that cost consumed by the other support department and each of the production departments to find the amount allocated to each department. What should be the total cost remaining in a support department when the allocation process is finished?

How do figure out what percentage to use