Georgia Products Inc. completed and transferred 190,000 particleboard units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 16,000 units, which were 3/5 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $566,500, the direct labor cost incurred was $258,680, and factory overhead applied was $60,680.
Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.
A. Total conversion cost
B. Conversion cost per equivalent unit
C. Direct materials cost per equivalent unit
In: Accounting
Suppose that a firm uses labour and capital in production. The wage rate is $10 per unit of labour and the rental cost of capital is $10 per unit. The firm is currently producing 100 units of labour and the rental cost of capital is $10 per unit. the firm is currently producing 100 units of output by using cost minimizing input combination of 50 units of labor and 50 units of capital.
On an isoquant and iso-cost diagram, show than an increase in output from 100 units to 150 units will result in higher short-run total cost, average cost and marginal cost than in the long-run counterparts.
In: Economics
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
| Niland Company Machining Department Monthly Production Budget |
|
| Wages | $515,000 |
| Utilities | 38,000 |
| Depreciation | 63,000 |
| Total | $616,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| January | $582,000 | 126,000 | ||
| February | 553,000 | 114,000 | ||
| March | 530,000 | 103,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 616,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $15 |
| Utility cost per direct labor hour | $1.1 |
| Direct labor hours per unit | 0.25 |
| Planned monthly unit production | 137,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Niland Company | |||
| Machining Department Budget | |||
| For the Three Months Ending March 31 | |||
| January | February | March | |
| Units of production | 126,000 | 114,000 | 103,000 |
| $ | $ | $ | |
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 126,000 | 114,000 | 103,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
b. Compare the flexible budget with the actual expenditures for the first three months.
| January | February | March | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ | $ |
What does this comparison suggest?
| The Machining Department has performed better than originally thought. | |
| The department is spending more than would be expected. |
In: Accounting
Paulina's Pizza is a well-known pizzeria and has contracted with a Business Analyst to estimate its cost equation. Based on
the data provided, the Business Analyst hypothesized that total costs were a function of fixed costs and variable costs. Recalling
from her BUSI 108 class, she hypothesized the following equation to be estimated,
Estimated Total Costs = b0 + b1*Pizzas
where
b0 = total fixed costs
b1 = marginal cost to produce 1 pizza
Pizzas = the quantity of pizzas produced
Using the least squares method, her regression results are the following,
Estimated Total Cost = 1,000 + 4*Pizzas
Paulina's Pizza tells the Business Analyst that they have tracked daily customer demand and the number of Pizzas sold depends
on the day of the week. Monday through Thursday (MidWeek) a low of 140 Pizzas per day are sold but Friday through Sunday
(Weekend) a high of 220 Pizzas per day are sold.
Pizzas are sold at a price of $10 per Pizza.
a) Assemble the Parameter Sections and the Model Sections for Paulina's Pizza. Calculate Total Cost, Total Revenue and Profit/
(Loss) for 170 Pizzas sold. Starting at 140 Pizzas and increasing by 10 to a maximum of 220 Pizzas, create a One-Way Data Table
calculating the Profit/(Loss) for the range of Pizzas that are sold during a week.
An area not-for-profit organization has asked Paulina's to assist with a fundraiser for their organization. The request is to
give 20% of the Pizza Price sold their organization when a customer presents a printed coupon from the organization. From
past experience with fundraisers, the percentage of customers that present the coupon ranged from 30% to 50%.
b) Using the What-If Analysis and the associated functions, create a table to reveal the range of Profit/(Loss) from both
the range of possible Pizzas sold and the percentage of customers who present the 20% coupon. There are several ways to
approach this problem but the objective is to create a table to show the various outcomes. Remember, Paulina's Pizza will
give 20% of its Total Revenue for that one day to a range of 30% to 50% of the customers that present the coupon.
In: Finance
Static Budget versus Flexible Budget
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
| Niland Company Machining Department Monthly Production Budget |
|
| Wages | $315,000 |
| Utilities | 17,000 |
| Depreciation | 28,000 |
| Total | $360,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| January | $339,000 | 76,000 | ||
| February | 322,000 | 69,000 | ||
| March | 306,000 | 62,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 360,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $19 |
| Utility cost per direct labor hour | $1 |
| Direct labor hours per unit | 0.2 |
| Planned monthly unit production | 82,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Niland Company | |||
| Machining Department Budget | |||
| For the Three Months Ending March 31 | |||
| January | February | March | |
| Units of production | 76,000 | 69,000 | 62,000 |
| $ | $ | $ | |
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 76,000 | 69,000 | 62,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
b. Compare the flexible budget with the actual expenditures for the first three months.
| January | February | March | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ | $ |
What does this comparison suggest?
| The Machining Department has performed better than originally thought. | |
| The department is spending more than would be expected. |
In: Accounting
The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:
| Hagerstown Company Machining Department Monthly Production Budget |
|
| Wages | $863,000 |
| Utilities | 65,000 |
| Depreciation | 108,000 |
| Total | $1,036,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| May | $979,000 | 99,000 | ||
| June | 935,000 | 90,000 | ||
| July | 893,000 | 81,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for May–July have been significantly less than the monthly static budget of 1,036,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $16.00 |
| Utility cost per direct labor hour | $1.20 |
| Direct labor hours per unit | 0.50 |
| Planned monthly unit production | 108,000 |
a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Hagerstown Company | |||
| Machining Department Budget | |||
| For the Three Months Ending July 31 | |||
| May | June | July | |
| Units of production | 99,000 | 90,000 | 81,000 |
| $ | $ | $ | |
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 99,000 | 90,000 | 81,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
Feedback
For each level of production, show wages, utilities, and depreciation.
b. Compare the flexible budget with the actual expenditures for the first three months.
| May | June | July | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ |
In: Accounting
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
|
Niland Company |
|
|
Wages |
$310,000 |
|
Utilities |
17,000 |
|
Depreciation |
28,000 |
|
Total |
$355,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
|
Amount Spent |
Units Produced |
|||
|
January |
$334,000 |
71,000 |
||
|
February |
316,000 |
64,000 |
||
|
March |
303,000 |
58,000 |
||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 355,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
|
Wages per hour |
$20 |
|
Utility cost per direct labor hour |
$1.1 |
|
Direct labor hours per unit |
0.2 |
|
Planned monthly unit production |
77,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
|
Niland Company |
|||
|
Machining Department Budget |
|||
|
For the Three Months Ending March 31 |
|||
|
January |
February |
March |
|
|
Units of production |
71,000 |
64,000 |
58,000 |
|
? |
$ |
$ |
$ |
|
? |
|||
|
? |
|||
|
Total |
$ |
$ |
$ |
|
Supporting calculations: |
|||
|
Units of production |
71,000 |
64,000 |
58,000 |
|
Hours per unit |
x |
x |
x |
|
Total hours of production |
|||
|
Wages per hour |
x $ |
x $ |
x $ |
|
Total wages |
$ |
$ |
$ |
|
Total hours of production |
|||
|
Utility costs per hour |
x $ |
x $ |
x $ |
|
Total utilities |
$ |
$ |
$ |
b. Compare the flexible budget with the actual expenditures for the first three months.
|
January |
February |
March |
|
|
Total flexible budget |
$ |
$ |
$ |
|
Actual cost |
|||
|
Excess of actual cost over budget |
$ |
$ |
$ |
c. What does this comparison suggest?
|
The Machining Department has performed better than originally thought. Yes or No |
|
|
The department is spending more than would be expected. Yes or No |
In: Accounting
Static Budget versus Flexible Budget
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
| Niland Company Machining Department Monthly Production Budget |
|
| Wages | $255,000 |
| Utilities | 17,000 |
| Depreciation | 28,000 |
| Total | $300,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| January | $283,000 | 65,000 | ||
| February | 270,000 | 59,000 | ||
| March | 257,000 | 53,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 300,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $18 |
| Utility cost per direct labor hour | $1.2 |
| Direct labor hours per unit | 0.2 |
| Planned monthly unit production | 70,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Niland Company | |||
| Machining Department Budget | |||
| For the Three Months Ending March 31 | |||
| January | February | March | |
| Units of production | 65,000 | 59,000 | 53,000 |
| $ | $ | $ | |
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 65,000 | 59,000 | 53,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
b. Compare the flexible budget with the actual expenditures for the first three months.
| January | February | March | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ | $ |
What does this comparison suggest?
| The Machining Department has performed better than originally thought. | |
| The department is spending more than would be expected. |
In: Accounting
The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
| Niland Company Machining Department Monthly Production Budget |
|
| Wages | $576,000 |
| Utilities | 26,000 |
| Depreciation | 44,000 |
| Total | $646,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| January | $608,000 | 96,000 | ||
| February | 583,000 | 88,000 | ||
| March | 553,000 | 79,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 646,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $22 |
| Utility cost per direct labor hour | $1 |
| Direct labor hours per unit | 0.25 |
| Planned monthly unit production | 105,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Niland Company | |||
| Machining Department Budget | |||
| For the Three Months Ending March 31 | |||
| January | February | March | |
| Units of production | 96,000 | 88,000 | 79,000 |
| $ | $ | $ | |
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 96,000 | 88,000 | 79,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
b. Compare the flexible budget with the actual expenditures for the first three months.
| January | February | March | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ | $ |
What does this comparison suggest?
| The Machining Department has performed better than originally thought. | |
| The department is spending more than would be expected. |
In: Accounting
The production supervisor of the Machining Department for Hagerstown Company agreed to the following monthly static budget for the upcoming year:
| Hagerstown Company Machining Department Monthly Production Budget |
|
| Wages | $310,000 |
| Utilities | 15,000 |
| Depreciation | 26,000 |
| Total | $351,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
| Amount Spent | Units Produced | |||
| May | $331,000 | 71,000 | ||
| June | 312,000 | 64,000 | ||
| July | 299,000 | 58,000 | ||
The Machining Department supervisor has been very pleased with this performance because actual expenditures for May–July have been significantly less than the monthly static budget of 351,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
| Wages per hour | $20.00 |
| Utility cost per direct labor hour | $1.00 |
| Direct labor hours per unit | 0.20 |
| Planned monthly unit production | 77,000 |
a. Prepare a flexible budget for the actual units produced for May, June, and July in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
| Hagerstown Company | |||
| Machining Department Budget | |||
| For the Three Months Ending July 31 | |||
| May | June | July | |
| Units of production | 71,000 | 64,000 | 58,000 |
| Wages | $ | $ | $ |
| Utilities | |||
| Depreciation | |||
| Total | $ | $ | $ |
| Supporting calculations: | |||
| Units of production | 71,000 | 64,000 | 58,000 |
| Hours per unit | x | x | x |
| Total hours of production | |||
| Wages per hour | x $ | x $ | x $ |
| Total wages | $ | $ | $ |
| Total hours of production | |||
| Utility costs per hour | x $ | x $ | x $ |
| Total utilities | $ | $ | $ |
Feedback
For each level of production, show wages, utilities, and depreciation.
b. Compare the flexible budget with the actual expenditures for the first three months.
| May | June | July | |
| Total flexible budget | $ | $ | $ |
| Actual cost | |||
| Excess of actual cost over budget | $ | $ | $ |
In: Accounting