Weller Industrial Gas Corporation supplies acetylene and other compressed gases to industry. Data regarding the store's operations follow:

• Sales are budgeted at $350,000 for November, $370,000 for December, and $360,000 for January.
• Collections are expected to be 80% in the month of sale and 20% in the month following the sale.
• The cost of goods sold is 69% of sales.
• The company desires an ending merchandise inventory equal to 80% of the cost of goods sold in the following month.
• Payment for merchandise is made in the month following the purchase.
• Other monthly expenses to be paid in cash are $20,100.
• Monthly depreciation is $19,900.
• Ignore taxes.

Required:
a. Prepare a Schedule of Expected Cash Collections for November and December.

b. Prepare a Merchandise Purchases Budget for November and December.

c. Prepare Cash Budgets for November and December.

d. Prepare Budgeted Income Statements for November and December.

e. Prepare a Budgeted Balance Sheet for the end of December

Work in Process Account Data for Two Months; Cost of Production Reports Pittsburgh Aluminum Company uses a process cost system to record the costs of manufacturing rolled aluminum, which consists of the smelting and rolling processes. Materials are entered from smelting at the beginning of the rolling process. The inventory of Work in Process—Rolling on September 1 and debits to the account during September were as follows: Bal., 2,600 units, ¼ completed: Direct materials (2,600 x $15.50) $40,300 Conversion (2,600 x ¼ x $8.50) 5,525 $45,825 From Smelting Department, 28,900 units $462,400 Direct labor 158,920 Factory overhead 101,402 During September, 2,600 units in process on September 1 were completed, and of the 28,900 units entering the department, all were completed except 2,900 units that were 4/5 completed. Charges to Work in Process—Rolling for October were as follows: From Smelting Department, 31,000 units $511,500 Direct labor 162,850 Factory overhead 104,494 During October, the units in process at the beginning of the month were completed, and of the 31,000 units entering the department, all were completed except 2,000 units that were 2/5 completed. Required: 1. Enter the balance as of September 1 in a four-column account for Work in Process—Rolling. Record the debits and the credits in the account for September. Construct a cost of production report and present computations for determining (a) equivalent units of production for materials and conversion, (b) costs per equivalent unit, (c) cost of goods finished, differentiating between units started in the prior period and units started and finished in September, and (d) work in process inventory. If an amount box does not require an entry, leave it blank. ACCOUNT Work in Process-Rolling Department ACCOUNT NO. BALANCE DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT Sept. 1 Bal., 2,600 units, 1/4 completed 45,825 Sept. 30 Smelting Dept., 28,900 units at $16.00/unit 462,400 508,225 Sept. 30 Direct labor 158,920 667,145 Sept. 30 Factory overhead 101,402 768,547 Sept. 30 Finished goods 702,195 66,352 Sept. 30 Bal., 2,900 units, 4/5 completed 66,352 If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent. Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended September 30 Whole Units Equivalent Units Units Direct Materials (a) Conversion (a) Units charged to production: Inventory in process, September 1 2,600 Received from Smelting Department 28,900 Total units accounted for by the Rolling Department 31,500 Units to be assigned costs: Inventory in process, September 1 2,600 1,950 Started and completed in September 26,000 26,000 26,000 Transferred to finished goods in September 28,600 26,000 27,950 Inventory in process, September 30 2,900 2,900 2,320 Total units to be assigned costs 31,500 28,900 30,270 Costs Costs Direct Materials Conversion Total Costs Cost per equivalent unit: Total costs for September in Rolling Department $ 462,400 $ 260,322 Total equivalent units 28,900 30,270 Cost per equivalent unit (b) $ 16.00 $ 8.60 Costs assigned to production: Inventory in process, September 1 $ 45,825 Costs incurred in September 722,722 Total costs accounted for by the Rolling Department $ 768,547 Costs allocated to completed and partially completed units: Inventory in process, September 1 balance (c) $ 45,825 To complete inventory in process, September 1 (c) $ $ 16,770 16,770 Cost of completed September 1 work in process $ 62,595 Started and completed in September (c) 416,000 223,600 639,600 Transferred to finished goods in September (c) $ 702,195 Inventory in process, September 30 (d) 46,400 19,952 66,352 Total costs assigned by the Rolling Department $ 768,547 2. Provide the same information for October by recording the October transactions in the four-column work in process account. Construct a cost of production report, and present the October computations (a through d) listed in part (1). If an amount box does not require an entry, leave it blank. ACCOUNT Work in Process-Rolling Department ACCOUNT NO. Balance DATE ITEM POST. REF. DEBIT CREDIT DEBIT CREDIT Oct. 1 Balance Oct. 31 Smelting Dept., 31,000 units at $16.50/unit 511,500 577,852 Oct. 31 Direct labor 162,850 740,702 Oct. 31 Factory overhead 104,494 845,196 Oct. 31 Finished goods 805,156 40,040 Oct. 31 Bal., 2,000 units, 2/5 completed 40,040 If an amount is zero, enter in a zero "0". Round cost per unit answers to the nearest cent. Pittsburgh Aluminum Company Cost of Production Report-Rolling Department For the Month Ended October 31 Whole Units Equivalent Units Units Direct Materials (a) Conversion (a) Units charged to production: Inventory in process, October 1 2,900 Received from Smelting Department 31,000 Total units accounted for by the Rolling Department 33,900 Units to be assigned costs: Inventory in process, October 1 2,900 580 Started and completed in October 29,000 29,000 29,000 Transferred to finished goods in October 31,900 29,000 29,580 Inventory in process, October 31 2,000 2,000 800 Total units to be assigned costs 33,900 31,000 30,380 Costs Costs Direct Materials Conversion Total Costs Cost per equivalent unit: Total costs for October in Rolling Department $ 511,500 $ 267,344 Total equivalent units 31,000 30,380 Cost per equivalent unit (b) $ 16.50 $ 8.80 Costs assigned to production: Inventory in process, October 1 $ 66,352 Costs incurred in October 778,844 Total costs accounted for by the Rolling Department $ 845,196 Costs allocated to completed and partially completed units: Inventory in process, October 1 balance (c) $ 66,352 To complete inventory in process, October 1 (c) $ $ 5,104 5,104 Cost of completed October 1 work in process $ 71,456 Started and completed in October (c) 478,500 255,200 733,700 Transferred to finished goods in October (c) $ 805,156 Inventory in process, October 31 (d) 33,000 7,040 40,040 Total costs assigned by the Rolling Department $ 845,196 3. The cost per equivalent unit for direct materials increased from August to October. The cost per equivalent unit for conversion costs increased from August to October. These changes should be investigated for their underlying causes, and any necessary corrective actions should be taken.

Q-Constructions has tasked you to investigate the number of construction projects per year for which the company would need to break-even and make a profit of $500,000 per year. The average price of a building contract is $700,000 per project. The following are the fixed and variable costs of Q-Constructions in Table 2:

Table 2: Associated Costs of Q-Constructions

Use this information above to complete the requested analyses below.

1. (5 marks) Calculate:
   1. The break-even number of projects needed by the company.
   2. The income made by the company at break-even.

Show all working out including the modelling and solution steps.

2. (3 marks) Q-Constructions is interested in making a profit per year to ensure the company has a positive financial outlook and new ventures can be done in the future. Calculate how many projects per year need to be completed to make a profit of $500,000 per year.
3. (6 marks) Q-Constructions workers’ have approached the building union and been informed they could be paid a higher salary and want their salaries to be determined based on a percentage of the project price. The company has reviewed their historical records on the number of projects per year and has made the decision to respect the workers’ demands and notice that the company would maintain a positive financial outlook if they set their break-even target at 4 projects per year. Determine the new salary percentage for the onsite workers’ on a project price based on the company’s average project price and associated costs in Table 2.

4. (3 marks) Based on the new on-site workers’ cost per project from part (c), calculate the new number of projects that need to be completed to maintain a profit of $500,000 per year.
5. (3 marks) Due to the change in the on-site workers’ salaries, what is the effect on contribution margin in relation to the variable cost? Explain the effect of this change on the break-even number in part (a).  

Hint! Your discussion should focus on the impact made by the contribution margin. You can show the calculation of the contribution margin to support your discussion, but no other calculations should be used.

6. (4 marks) In Excel, produce a break-even graph for Q-Constructions and include it here – you will also include a copy in the infographic where requested.

There will be 3 lines on the Q-Constructions Break-Even graph: one for total revenue for Q-Constructions and two representing the original total cost and the new total cost for Q- Constructions.

On the graph, identify the general regions corresponding to profits and losses. The units along the x-axis will be the number of projects. The units along the y-axis gives the revenue in dollars.

Excel Instructions:

1. Create a column called Number of Projects and enter values from 0 to 20 in single unit increments for Q-Constructions analysis. This column plays the role of ‘x’ in break-even calculations.

2. Create four more columns: Total Original Cost, Total New Cost, Total Revenue, Total Profit and add your initials to these column names. In each of these columns, enter appropriate formulae in EXCEL to obtain the total cost and total revenue corresponding to each value in the Number of Projects column.

3. Highlight all the columns and go to Insert  Charts Scatter to obtain a graph. Label the graph appropriately (i.e. title, axis labels, legend) and ensure the chart title includes your network ID (the part of your email address before @ e.g. [email protected] has the network ID jbloggs).

TOTAL 24 MARKS

A project has the following total (or net) cash flows.

               ________________________________________

                Year         Total (or net) cash flow

               ________________________________________

1 $50,000
2 70,000
3 80,000
4 100,000
_______________________________________   

The required rate of return on the project is 13 percent. The initial investment (or initial cost or initial outlay) of the project is $100,000.
a) Find the (regular) payback period of the project.
b) Compute the discounted payback period of the project.

6. A project has the following total (or net) cash flows.

Create an application that allows the user to place an order at a coffee shop named Zips Coffee.

Create a coffee order form that looks like a table
with columns for coffee type, price and quantity.
Provide values for at least three rows of data.
Provide a row for the total cost of your order.
Create Javascript code to calculate the total of your order
and present the total to the user.
Provide a button to initiate the Javascript described above.
Provide a button to clear the form data.
Provide a button to submit the form. Create Javascript code
to prevent the form from being submitted if the total cost is 0.

When the user hovers the mouse over one of the images in the menu, another image
should be displayed with the description and price of the item. The id attribute of
each image identifies the image to be displayed when it’s rolled over.
 The rollover images should be preloaded.
 When the user clicks on an image, the order list and order total should be updated and
displayed.
 If the user clicks the Place Order button, the checkout.html page should be displayed.
 If the user clicks the Clear Order button, all of the items should be removed from the
order list and the total should be cleared.

Complete the table using the figures provided for the three products: A, B and C.

Last month’s budget for sales

Last month’s sales (actuals)

1.      Several years ago, the Partners HealthCare System of Boston, MA, conducted a cost-benefit analysis of instituting electronic medical records technology into all of their primary care practices. They computed total benefits and total costs to decide whether the project should proceed at that point. They considered benefits to the different providers in their practices, which consists of 3 physicians: Physician A, Physician B, and Physician C. Each of them has a marginal benefit of computerizing their patients’ medical records. Thus, think of “Quantity” in this market as the quantity of patient records that would be computerized by the physicians, which will depend on the price. Suppose the marginal benefit of digitizing patient records is given by:

MB=25-2Q for Physician A,

MB=20-3Q for Physician B,

MB=15-4Q for Physician C.

Please use this information to derive the “market” wide demand curve for medical record digitization for Partners Healthcare.

(Recall, MB=P in the Demand Curve, and you can re-write the Demand curve as Q=a function of P to help you with this step.)

Once you have derived the relevant market demand curve, please calculate the total benefit of providing digitization of medical records. (Hint—to know what total market Q would be, you can set P=0 and see what total quantity the market would want. Then, use that as the base of the triangle for which you would calculate the area; this would be the area under the market demand curve).

Next please calculate the total cost of this project. We’ll assume here that there are two vendors in the market, so we will need to add their supply curves to come up with the market supply curve. One vendor has MC=0.25Q and the other has MC=0.75Q. Please add up the supply curves to show the market supply curve. (hint—remember we first have to write Q=function of P (which is MC) to be able to add the supply curves, just as we did with the demand curves). Once you have done that, please add up the area under the market supply curve to show the total cost of this proposal. Please use the typical decision rule (adopt project if total benefit>total cost) to state whether the project will be adopted by the health care system.

Kansas Supplies is a manufacturer of plastic parts that uses the weighted-average process costing method to account for costs of production. It produces parts in three separate departments: Molding, Assembling, and Packaging. The following information was obtained for the Assembling Department for the month of April.

Work in process on April 1 had 120,000 units made up of the following.

During April, 520,000 units were transferred in from the Molding Department at a cost of $774,800. The Assembling Department added the following costs.

Assembling finished 420,000 units and transferred them to the Packaging Department.

At April 30, 220,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at April 30 was as follows.

Required:

a. Prepare a production cost report using the weighted-average method.

*Please help my numbers are wrong!

Kansas Supplies is a manufacturer of plastic parts that uses the weighted-average process costing method to account for costs of production. It produces parts in three separate departments: Molding, Assembling, and Packaging. The following information was obtained for the Assembling Department for the month of April.

Work in process on April 1 had 111,000 units made up of the following:

During April, 511,000 units were transferred in from the Molding Department at a cost of $715,400. The Assembling Department added the following costs:

Assembling finished 411,000 units and transferred them to the Packaging Department.

At April 30, 211,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at April 30 was as follows:

Required:

a. Prepare a production cost report using the weighted-average method.

Shelly's Boutiques and Crafts had revenue of $5,700,000 this year on sales of 575,000 units. Variable costs were 35% and fixed costs totaled $3,150,000. Although the first five years were relatively profitable, increases in competition have led to a negative trend in profitability that has led them to the point where they have to make some changes to stay afloat. The company is evaluating two options to stay afloat.

Option 1: Purchase machinery to automate their operations. this machinery cost $625,000 but will decrease variable costs by 9%

Option 2: Outsource the production of one of their main components that requires a substantial amount of machinery and skilled labor. This will reduce fixed costs by $425,000, but increases variable costs from their current 35% of sales to 40% of sales.

a. determine break even points in units before changes. what is fixed cost total? what is the contribution margin per unit? what is the break even point in units?

b.) Assuming an income tax rate of 35%, what dollar value of sales is required to earn an after tax profit of $800,000 What before tax profit would be needed to earn an after tax profit of $800,000? what is the contribution margin raton? What dollar amount of sales would be required to earn the after tax profit described above?

c.) Calculate the operating leverage before applying any of the options: What is the contribution margin in Total? What is the operating income in total? what is the operating leverage factor?

d.) Calculate the break even point in units after applying Option 1: What is the new fixed cost in total? What is the new contribution margin per unit? What is the new break even point in units?

e.) Calculate the operating leverage after applying Option 1: What is the new contribution margin in Total? What is the new operating income in total? what is the new operating leverage factor?

f.) Calculate the break even point in units after applying Option 2: What is the new fixed cost in total? What is the new contribution margin per unit? What is the new break even point in units?

g.) Calculate the operating leverage after applying Option 2: What is the new contribution margin in Total? What is the new operating income in total? what is the new operating leverage factor?