Bluebird Inc. 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:
Variable costs: $2.50
Direct Materials 4.25
Direct Labor 1.25
Factory Overhead 0.50
Total: 8.50
Fixed Costs $25,000
Selling and Administrative expenses 17,000
Bluebird 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 of Product K
d) determine the selling price of Product K
Round your markup percentage to one decimal place, and other intermediate calculations and final answer to two decimal places. SHOW WORK
In: Accounting
discuss the concept of cost transformation and how management accountants can contribute towards the cost transformation of an organisation.
In: Accounting
COST ACCOUNTING
COST OF PRODUCTION SUMMARY: WEIGHTED AVERAGE AND FIFO METHODS
The Company uses a single department production process.
Materials are added at the start of the production process and
labor and overhead are added as indicated. For January 2015, the
Company records have the following information:
UNITS:
Beginning
WIP:
10,000 units
100% complete for materials, 50% complete for labor; 30% complete for overhead
Units started in process 50,000 units
Units completed 49,000 units
Ending WIP: 11,000 units
100% complete for materials, 60% complete for labor; 20% complete for overhead
PRODUCTION COSTS:
Work in Process, Beginning of the
Month:
Materials
$ 22,000
Labor
18,000
Overhead
11,000
51,000
Current Month Costs:
Materials
$ 320,000
Labor
180,160
Overhead
152,840
653,000
Total Costs:
$
704,000
REQUIRED:
Prepare a Cost of Production Summary using the weighted average method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.
Prepare the appropriate journal entries at month end.
Prepare a Cost of Production Summary using the FIFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for WIP, beginning, units started and completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately.
Prepare the appropriate journal entries at month end.
You need to present your work in an excel spreadsheet and you need to create your own formatting (templates).
In: Accounting
Cost of Trade Credit Calculate the nominal annual cost of nonfee trade credit under each of the following terms. Assume that payment is made either on the discount date or on the due date. 1/10 net 20; 2/10 net 60; 3/10 net 45; 2/10 net 45; 2/10 net 40
In: Finance
I'm having trouble calculating total cost.
The question is: Calculate the total cost for next February when 1,300 tons are expected to be extracted. I understand that trucking and hauling will be 144,970, and I also add 20,000 for depreciation, im not sure about the other costs and how to add.
Antioch Extraction, which mines ore in Montana, uses a calendar year for both financial-reporting and tax purposes. The following selected costs were incurred in December, the low point of activity, when 1,000 tons of ore were extracted:
| Straight-line depreciation | $ | 20,000 | |
| Charitable contributions* | 5,000 | ||
| Mining labor/fringe benefits | 135,000 | ||
| Royalties | 145,000 | ||
| Trucking and hauling | 144,970 | ||
*Incurred only in December.
Peak activity of 2,300 tons occurred in June, resulting in mining labor/fringe benefit costs of $310,500, royalties of $301,000, and trucking and hauling outlays of $174,970. The trucking and hauling outlays exhibit the following behavior:
| Less than 1,000 tons | $ | 129,970 | |
| From 1,000–1,499 tons | 144,970 | ||
| From 1,500–1,999 tons | 159,970 | ||
| From 2,000–2,499 tons | 174,970 | ||
Antioch uses the high-low method to analyze costs.
Required:
1. Classify the five costs listed in terms of their behavior: variable, step-variable, committed fixed, discretionary fixed, step-fixed, or semivariable.
2. Calculate the total cost for next February when 1,300 tons are expected to be extracted.
3-a. Is hauling 1,000 tons with respect to Antioch’s trucking/hauling cost behavior cost-effective?
3-b. Given the current scenario at what number of tons can cost-effectiveness be achieved?
4. Distinguish between committed and discretionary fixed costs. If Antioch were to experience severe economic difficulties, which of the two types of fixed costs should management try to cut?
5. Speculate as to why the company’s charitable contribution cost arises only in December.
In: Accounting
Wu Company incurred $44,200 of fixed cost and $54,600 of variable cost when 2,100 units of product were made and sold.
If the company's volume increases to 2,600 units (within relevant range), the total cost per unit will be:
$17.00.
$21.00.
$43.00.
$38.00.
In: Accounting
The Assembly Department uses a process cost accounting system and a weighted-average cost flow assumption. The department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. During July, $190,000 of materials costs and $137,100 in conversion costs were charged to the department. The beginning work in process inventory was $93,000 on July 1, comprised of $80,000 of materials costs and $13,000 of conversion costs.
Other data for the month of July are as follows:
Beginning work in process inventory, 7/1 25,000 units (40% complete)
Units completed and transferred out 70,000 units
Ending work in process inventory, 7/31 30,000 units (30% complete)
Answer the following questions and show computations to support your answers.
1. How many physical units have to be accounted for in July?
2. What are the equivalent units of production for materials and for conversion costs for the month of July?
3. What is the total cost assigned to the 70,000 units that were transferred out of the process in July?
4. What is the total cost of the July 31 inventory?
In: Accounting
1. Ordering cost only consists of the shipping cost from supplier to customer.
True or False
2. Ordering cost is which type of cost?
Multiple Choice
Fixed
Variable
Overhead
3.
Which of the following would be considered part of Ordering Cost? (choose all that apply)
Check All That Apply
Minimum shipping chargeMinimum shipping charge
Postage to mail the order to a supplier (who still lives in the early 20th century)Postage to mail the order to a supplier (who still lives in the early 20th century)
Renting a truck to haul the order (and only this order, no other business is used for this truck’s one time rental)Renting a truck to haul the order (and only this order, no other business is used for this truck’s one time rental)
Cost of the office building housing your employees.
4.
Safety stock is inventory held to guard against uncertainty
True or False
5.
Which two things drive the need for safety stock? (choose two)?
Check All That Apply
Demand variabilityDemand variability
Warehouse spaceWarehouse space
DelaysDelays
Manufacturing speedManufacturing speed
Customer choice
6.
The “right” amount of safety stock is often a function of Service Level. Service Level is:
Multiple Choice
The probability of making the right product
The probability of delay
The probability of meeting demand during a delay
The probability of delay causing more demand
7.
The standard deviation of demand during lead time is the same whether or not lead time is variable.
True or False
8.
Finding average demand during lead time involves doing which of the following?
Multiple Choice
Squaring average demand per day and summing
Summing the square root of average demand per day and summing
Summing the daily average demand per day
Integrating average daily demand from zero to four
9.
Since standard deviations don’t sum, we have to sum which thing instead?
Multiple Choice
Average
Median
Kurtosis
Variance
10.
When lead time and demand are both variable, the formula we use consists of which two parts? (select two)
Check All That Apply
Demand variabilityDemand variability
Lead time variabilityLead time variability
Order period variabilityOrder period variability
Accounting irregularities
11.
The P-system of inventory submits inventory orders at random times.
True or False
12.
What is another name for the “P-system” of inventory?
Multiple Choice
Partial Request Inventory Order System
Poorly Routed Inventory Ordering System
Particularly Responsive Complicated Ordering System
Periodic Review Inventory System
13.
What are the two main challenges of the P-system? (select two)
Check All That Apply
Unhappy customersUnhappy customers
Length of review periodLength of review period
Figuring out when to orderFiguring out when to order
ComputersComputers
Amount of inventory to have
14.
What is the great benefit of the P-system?
Multiple Choice
A name that is easy to remember
Customer satisfaction is guaranteed
Simplicity in managing the system
Complicated mathematical requirements
15.
An offered discount makes no change to determining optimal order quantity.
True or False
16.
Which of the following statements is true when comparing the total cost curve for a product without discounting and the total cost curve with discounting?
Multiple Choice
The discounted curve is always below the undiscounted curve
The undiscounted curve is always below the discounted curve
The discounted curve is always below the undiscounted curve but does not really exist for values less than the minimum order amount to receive the discount.
The undiscounted curve is always below the discounted curve but does not really exist for values less than the minimum order amount to receive the discount.
17.
If I calculate the EOQ with the new, discounted material cost and the resulting quantity is enough to get the discount, what should I do?
Multiple Choice
Order the discounted EOQ amount
Order the regular EOQ amount
Average the discounted and undiscounted EOQ amounts and order that
Compare total costs of the two EOQ amounts
18.
In the end, the point of using the EOQ formula is to:
Multiple Choice
Properly enter the values we have calculated
Identify the number that is best under any condition
Point us toward the possible lowest cost option
Keep people who create math models employed
In: Operations Management
What is the relationship between inventory cost and transportation cost? Explain.
Question 13
What is one specific way you would recommend a bowling alley take advantage of revenue management?
Question 14
Complete the MRP planning schedule below and answer the THREE questions below. Lead time is 1 week, safety stock is 0, order policy is EOQ of 75.
In each blank put only the number as your answer. (There is no partial credit for each individual part, so no need to show your work.)
| Period: | 1 | 2 | 3 | 4 | 5 |
| Gross requirements | 20 | 80 | |||
| Scheduled receipts | |||||
| Projected available balance | 10 | ||||
| Net requirements | |||||
| Planned order receipts | |||||
| Planned order releases |
1. What are the NET REQUIREMENTS in time period *3*? (Put the answer in the first blank below.)
2. What are the PLANNED ORDER RELEASES in time period *1*? (Put the answer in the second blank below.)
3. What are the PROJECTED AVAILABLE BALANCE in time period *3*? (Put the answer in the third blank below.)
Question 15
A particular raw material is available at the following prices:
1) $3.10 for orders of less than 1000
2) $3.08 for orders between 1000 and 1999
3) $3.07 for orders 2000 and larger
Annual demand is 12000 items, order cost is $25, and holding cost is 20% of the item's cost per year. What is the economic order quantity? Show work.
In: Operations Management
I wanna know what is different between fixed cost and variable cost what it change and what it cannot be change between them ?
In: Accounting