Exercise 15-06 (Part Level Submission) A job cost sheet of Sandoval Company is given below. Job Cost Sheet JOB NO. 469 Quantity 2,000 ITEM White Lion Cages Date Requested 7/2 FOR Todd Company Date Completed 7/31 Date Direct Materials Direct Labor Manufacturing Overhead 7/10 700 12 900 15 400 480 22 300 360 24 1,640 27 1,560 31 700 840 Cost of completed job: Direct materials Direct labor Manufacturing overhead Total cost Unit cost (a) Your answer is partially correct. Try again. Answer the following questions. (1) What are the source documents for direct materials, direct labor, and manufacturing overhead costs assigned to this job? Source Documents Direct materials select the source documents Direct labor select the source documents Manufacturing overhead select the source documents (2) Overhead is applied on the basis of direct labor cost. What is the predetermined manufacturing overhead rate? Predetermined manufacturing overhead rate enter the predetermined manufacturing overhead rate in percentages % (3) What are the total cost and the unit cost of the completed job? (Round unit cost to 2 decimal places, e.g. 1.25.) Total cost of the completed job $ enter a dollar amount Unit cost of the completed job $ enter a dollar amount rounded to 2 decimal places Click if you would like to Show Work for this question: Open Show Work

Allocating Joint Costs Using the Physical Units Method

Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 30,000 pounds of apples is as follows:

  Total joint cost is $25,500.

Required:

1. Allocate the joint cost to the four grades of apples using the physical units method.

2. Allocate the joint cost to the four grades of apples by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent.

Average cost = $ per pound.

3. What if there were 3,000 pounds of Grade A apples and 5,400 pounds of Grade B? How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades?

Allocating Joint Costs Using the Physical Units Method

Orchard Fresh, Inc., purchases apples from local orchards and sorts them into four categories. Grade A are large blemish-free apples that can be sold to gourmet fruit sellers. Grade B apples are smaller and may be slightly out of proportion. These are packed in boxes and sold to grocery stores. Apples for slices are even smaller than Grade B apples and have blemishes. Apples for applesauce are of lower grade than apples for slices, yet still suitable for canning. Information on a recent purchase of 20,000 pounds of apples is as follows:

  Total joint cost is $18,000.

Required:

1. Allocate the joint cost to the four grades of apples using the physical units method.

2. Allocate the joint cost to the four grades of apples by finding the average joint cost per pound and multiplying it by the number of pounds in the grade. Round the average cost answer to the nearest cent.

Average cost = $ per pound.

3. What if there were 2,000 pounds of Grade A apples and 4,600 pounds of Grade B? How would that affect the allocation of cost to these two grades? How would it affect the allocation of cost to the remaining common grades?

The board of directors of Metlock Corporation is considering whether or not it should instruct the accounting department to shift from a first-in, first-out (FIFO) basis of pricing inventories to a last-in, first-out (LIFO) basis. The following information is available.

Prepare a condensed income statement for the year on both bases for comparative purposes.

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

It is expected that 8,400 units will be sold at a price of $288 a unit. Maximum sales within the relevant range are 11,000 units.

Required:

1. Prepare an estimated income statement for 20Y7.

2. What is the expected contribution margin ratio? Round to the nearest whole percent.
%

3. Determine the break-even sales in units and dollars.

4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$

5. What is the expected margin of safety in dollars and as a percentage of sales?

6. Determine the operating leverage. Round to one decimal place.

Contribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage

Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:

1. Estimated Fixed Cost			Estimated Variable Cost (per unit sold)
   Production costs:
   	Direct materials				$28
   	Direct labor				19
   	Factory overhead	$377,400			14
   Selling expenses:
   	Sales salaries and commissions	78,400			6
   	Advertising	26,500
   	Travel	5,900
   	Miscellaneous selling expense	6,500			6
   Administrative expenses:
   	Office and officers' salaries	76,700
   	Supplies	9,400			2
   	Miscellaneous administrative expense	8,880			3
   	Total	$589,680			$78

   It is expected that 11,760 units will be sold at a price of $156 a unit. Maximum sales within the relevant range are 15,000 units.

   Required:

   1. Prepare an estimated income statement for 20Y7.

   Belmain Co.
   Estimated Income Statement
   For the Year Ended December 31, 20Y7
   			$
   Cost of goods sold:
   		$
   Cost of goods sold
   Gross profit			$
   Expenses:
   Selling expenses:
   	$
   Total selling expenses		$
   Administrative expenses:
   	$
   Total administrative expenses
   Total expenses
   Income from operations			$

   2. What is the expected contribution margin ratio? Round to the nearest whole percent.
   %

   3. Determine the break-even sales in units and dollars.

   Units	units
   Dollars	units

   4. Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
   $

   5. What is the expected margin of safety in dollars and as a percentage of sales?

   Dollars:	$
   Percentage: (Round to the nearest whole percent.)		%

   6. Determine the operating leverage. Round to one decimal place.

Exercise 10-3 Make or Buy a Component [LO10-3]

Make Buy

Total Relevant Cost (14,200 units)

Make Buy

Total Relevant Cost (14,200 units)

Jobs, Inc. has recently started the manufacture of Tri-Robo, a three-wheeled robot that can scan a home for fires and gas leaks and then transmit this information to a smartphone. The cost structure to manufacture 21,300 Tri-Robos is as follows.

Jobs is approached by Tienh Inc., which offers to make Tri-Robo for $113 per unit or $2,406,900.

Following are independent assumptions.

(a1)

Assume that $405,000 of the fixed overhead cost can be avoided. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Using incremental analysis, determine whether Jobs should accept this offer.