In February 2020, Cullumber Construction signed a contract and commenced construction on a parking garage. The total contract price was $89.4 million and was expected to be completed in July 2024 at a total estimated cost of $82.1 million. Payment by the customer was to be made in several stages, based on significant events and dates throughout the construction timeline. The customer was to have control over the parking garage and was able to make major changes to the project during the construction process. Cullumber’s year-end was September 30.
By the end of September, 2020, Cullumber had incurred $20,525,000 in costs and had invoiced $10,000,000 in progress billings. $7,700,000 of the progress billings had been collected.

By September 30, 2021, Cullumber had incurred $35,190,000 in total costs and had invoiced $45,900,000 in progress billings, including the progress billings in 2020. Of the total billings, $30,700,000 in total had been collected. Also, Cullumber reviewed its cost estimates on the project, and now believed the parking garage would cost $78.2 million in total to complete.

Prepare all journal entries required for the year ended September 30, 2020. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Prepare all journal entries required for the year ended September 30, 2021. Use Materials, Cash, Payables for costs incurred to date. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)

Question 1

Muzi Corporation produces three products at two different plants. The cost of producing a unit at each plant is given in the following table.

Each plant has the capacity to produce a total of 10 000 units. Demand for at least 6 000 units of product 1, at least 8 000 units of product 2 and at least 5 000 units of product 3 must be met. Muzi wishes to minimise costs. The decision variables are defined as follows:

Pij = the number of units of product j produced at plant i, where i = A, B and j = 1, 2, 3.

(a) Formulate the problem as a linear programming (LP) model.

(b) Solve the model using LINDO \ SOLVER.

Using only the initial printout of the optimal solution, answer the following questions. (This means that you may not change the relevant parameters in the model and do reruns.) Explain how you arrive at your answers.

(c) Write down the optimal solution and the associated total costs.

(d) Give the optimal solution and total costs if

(i) Plant B has 9 000 units of capacity;

(ii) Plant A has 12 000 units of capacity. (2 x 2 = 4 marks)

(e) What would the total costs be if the demand for product 2 reduces to 4 000 units?

(f) What would the cost of producing product 2 at plant A have to be for the firm to make this choice?

(g) What would the new optimal solution and total costs be if

(i) The new cost of producing a unit of product 3 at plant A is R8, 50?

(ii) A new production process is introduced at plant B which reduces the cost of production of all products by R1 per unit?

(h) The workers at plant B have just completed a course on product 1 and the production manager suggests that 1 000 units of product 1 be produced at plant B. How will this affect the total cost?

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

Antuan Company set the following standard costs for one unit of its product.

The predetermined overhead rate ($18.50 per direct labor hour) is based on an expected volume of 75% of the factory’s capacity of 20,000 units per month. Following are the company’s budgeted overhead costs per month at the 75% capacity level.

The company incurred the following actual costs when it operated at 75% of capacity in October.

rev: 03_28_2018_QC_CS-122864

3. Compute the direct materials cost variance, including its price and quantity variances.

AQ = Actual Quantity
SQ = Standard Quantity
AP = Actual Price
SP = Standard Price

Compute the direct labor cost variance, including its rate and efficiency variances.

AH = Actual Hours
SH = Standard Hours
AR = Actual Rate
SR = Standard Rate

ANTUAN COMPANYOverhead Variance ReportFor Month Ended October 31Expected production volumeProduction level achievedVolume varianceFlexible BudgetActual ResultsVariancesFav. / Unfav.Variable costsFixed costsTotal overhead costs

Question 3 – Better Than That, Co. provides the following information:

• October 31 inventory of raw materials is $35,000.
• Raw materials purchases in November are $240,000.
• Total factory payroll cost (includes both direct and indirect labor) in November is $105,850.
• Actual factory overhead costs incurred in November are as follows: indirect materials, $15,900; indirect labor, $9,000; factory rent, $25,000; factory utilities, $23,880; and factory equipment depreciation, $42,000.
• The predetermined overhead rate is 120% of direct labor cost.
• Job L5 is sold to a customer in November for $255,000 on account.
• Costs related to the three jobs worked on in November follow.
  

1. Determine:
   1. The WIP inventory account balance as of October 31^st.
   2. Total direct materials cost for November
   3. Total direct labor cost for November
   4. Total Applied factory OH cost for November
   5. The total costs assigned to each job as of November 30^th (including any balances from October 31).
2. Prepare journal entries for the month of November to record the below transactions (make sure to use proper journal entry formatting and include a brief description of each entry).

1. Raw materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid in cash and assigned to Work in Process Inventory.
4. Overhead costs applied to Work in Process Inventory.
5. Indirect materials used and assigned to Factory Overhead.
6. Indirect labor paid in cash and assigned to Factory Overhead.
7. Actual other overhead costs incurred (assume Factory rent and utilities are paid in cash).
8. Transfer of Jobs L5 and T2 to Finished Goods Inventory.
9. Revenue from the sale of Job L5.
10. Cost of goods sold for Job L5.
11. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account (Assume the amount is not material).

Worley Company buys surgical supplies from a variety of manufacturers and then resells and delivers these supplies to hundreds of hospitals. Worley sets its prices for all hospitals by marking up its cost of goods sold to those hospitals by 7%. For example, if a hospital buys supplies from Worley that cost Worley $100 to buy from manufacturers, Worley would charge the hospital $107 to purchase these supplies.

For years, Worley believed that the 7% markup covered its selling and administrative expenses and provided a reasonable profit. However, in the face of declining profits, Worley decided to implement an activity-based costing system to help improve its understanding of customer profitability. The company broke its selling and administrative expenses into five activities as shown:

Worley gathered the data below for two of the many hospitals that it serves—University and Memorial (each hospital purchased medical supplies that had cost Worley $33,000 to buy from manufacturers):

Required:

1. Compute the total revenue that Worley would receive from University and Memorial.

2. Compute the activity rate for each activity cost pool.

3. Compute the total activity costs that would be assigned to University and Memorial.

4. Compute Worley’s customer margin for University and Memorial. Hint - Do not overlook the $33,000 cost of goods sold that Worley incurred serving each hospital. The company provides service to customers (instead of selling products), so there will be no direct material or direct labor costs.

Antioch Company makes eBook readers. The company had the following amounts at the beginning of 2018: Cash, $662,000; Raw Materials Inventory, $61,000; Work in Process Inventory, $27,000; Finished Goods Inventory, $61,000; Common Stock, $584,000; and Retained Earnings, $227,000. Antioch experienced the following accounting events during 2018. Other than the adjusting entries for depreciation, assume that all transactions are cash transactions.

1. Paid $31,000 of research and development costs.

2. Paid $57,000 for raw materials that will be used to make eBook readers.

3. Placed $83,000 of the raw materials cost into the process of manufacturing eBook readers.

4. Paid $65,000 for salaries of selling and administrative employees.

5. Paid $99,000 for wages of production workers.

6. Paid $97,000 to purchase equipment used in selling and administrative offices.

7. Recognized depreciation on the office equipment. The equipment was acquired on January 1, 2018. It has a $17,000 salvage value and a eight-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($97,000 – $17,000) ÷ 8 = $10,000.

8. Paid $106,000 to purchase manufacturing equipment.

9. Recognized depreciation on the manufacturing equipment. The equipment was acquired on January 1, 2018. It has a $22,000 salvage value and a seven-year life. The amount of depreciation is computed as [(Cost – salvage) ÷ useful life]. Specifically, ($106,000 – $22,000) ÷ 7 = $12,000.

10. Paid $45,000 for rent and utility costs on the manufacturing facility.

11. Paid $72,000 for inventory holding expenses for completed eBook readers (rental of warehouse space, salaries of warehouse personnel, and other general storage cost).

12. Completed and transferred eBook readers that had total cost of $249,000 from work in process inventory to finished goods.

13. Sold 850 eBook readers for $430,000.

14. It cost Antioch $161,500 to make the eBook readers sold in Event 13.

Prepare a balance sheet for the year.

Use the following data on median values of single detached houses of Canadian residents in 20 census metropolitan areas in British Columbia and Ontario in 2017 (source: Statistics Canada) to prepare a statistical report. The data are reported in units of a hundred thousand dollars rounded to the nearest ten thousand dollars (so, for example, 5.7 represents $570,000).

Data: 5.7, 5.2, 12.6, 6.4, 3.7, 2.1, 2.9, 2.4, 4.2, 4.3, 2.9, 3.6, 2.6, 4.2, 4.2, 2.7, 2.5, 2.2, 7.2, 1.9. ):

1. A dotplot or a histogram of the data. Note that you’ll have to group the data into suitable, equal-sized intervals before drawing your graph.

2. A pie graph of the data showing the percentages of the sample in the following categories: 1-3, 3-5, 5-7, 7-10, and 10 or higher.

3. The mean and the median, together with a brief discussion of which of these is the more appropriate measure of what is typical or representative for this dataset.

4. The 5-number summary of the data (i.e., the minimum, lower quartile, median, upper quartile, and maximum

5. The range of the data and the inter-quartile range of the data, together with a brief discussion of exactly what the inter-quartile range represents for this dataset.

6. The following probability calculations, including reasoning. Suppose we select one census metropolitan area at random from the sample of 20. What is the probability that it has a single detached house median value greater than $500k?

7. Suppose we select one census metropolitan area at random from the sample of 20. What is the probability that it has a single detached house median value greater than $500k or less than $200k? (2) Suppose we select two census metropolitan areas at random from the sample of 20. What is the probability that both have a single detached house median value greater than $500k?

Break-Even Sales Under Present and Proposed Conditions

Darby Company, operating at full capacity, sold 139,000 units at a price of $72 per unit during the current year. Its income statement is as follows:

The division of costs between variable and fixed is as follows:

Management is considering a plant expansion program for the following year that will permit an increase of $792,000 in yearly sales. The expansion will increase fixed costs by $105,600, but will not affect the relationship between sales and variable costs.

Required:

1. Determine the total variable costs and the total fixed costs for the current year.

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.

3. Compute the break-even sales (units) for the current year.
units

4. Compute the break-even sales (units) under the proposed program for the following year.
units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $3,624,000 of income from operations that was earned in the current year.
units

6. Determine the maximum income from operations possible with the expanded plant.
$

7. If the proposal is accepted and sales remain at the current level, what will the income or loss from operations be for the following year?
$ Income