Required information
[The following information applies to the questions displayed below.]
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 12,000 | $ | 16,200 | $ | 28,200 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 2.20 | $ | 3.00 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 21,000 | $ | 12,000 | ||
| Direct labor cost | $ | 27,400 | $ | 10,700 | ||
| Actual machine-hours used: | ||||||
| Molding | 2,500 | 1,600 | ||||
| Fabrication | 1,400 | 1,700 | ||||
| Total | 3,900 | 3,300 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)
4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)
6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)
10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)
13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
In: Accounting
Suppose you have been given responsibility for developing the six-month aggregate production plan at Soda Galore, a manufacturer of soft drinks. Your company makes three types of soft drinks: regular, diet, and super-caffeinated. Fortunately, all three types are made using the same production process, and the costs related to switching between the three types are so minimal that they can be ignored. Thus, you can treat your problem as an aggregate planning exercise where the planning unit is cases of soft drinks, regardless of what types of drinks they are.
The S&OP team has developed a forecast of demand for the first six months of the year as shown in Table 13-3. The S&OP team has also provided you with the cost data shown in Table 13-4.
The material cost of a case of soda is the same regardless of whether it is produced in regular time or overtime.
TABLE 13-3 Monthly Demand at Soda Galore
| Month | Demand Forecast | |
| January | 16,000 | cases |
| February | 32,000 | cases |
| March | 32,000 | cases |
| April | 32,000 | cases |
| May | 24,000 | cases |
| June | 80,000 | cases |
| Total Demand | 216,000 | cases |
| Average Monthly Demand | 36,000 | cases |
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TABLE 13-4 Soda Galore Planning Data
| Current workforce | 10 | workers | |
| Average monthly output per worker | 2,000 | cases per month | |
| Inventory holding cost | $ | 0.40 | per case per month |
| Regular wage rate | $ | 36 | per hour |
| Regular production hours/month/worker | 235 | hours | |
| Overtime wage rate | $ | 54.00 | per hour |
| Hiring cost | $ | 1,000 | per worker |
| Subcontracting cost | $ | 7.00 | per case |
| Firing/layoff cost | $ | 1,500 | per worker |
| Beginning inventory | 5,000 | (all safety stock) | |
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Assume that employees negotiate an increase in the regular
production wage rate to $40 per hour and $60 per hour for overtime.
Also assume that Soda Galore always plans to hold at least 5,000
cases of safety stock to meet unanticipated customer demand. Assume
that hiring and layoff/firing, if necessary, occur at the beginning
of the month.
a. Using the planning information and the newly negotiated wage rates, develop a six-month production plan based on level production. (Leave no cells blank - be certain to enter "0" wherever required.)
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b. Determine the cost of the level production
plan.
c. Using the planning information and the newly
negotiated wage rates, develop a six-month production plan based on
chase production. For the Overtime or Subcontract Plan, use the
lowest monthly demand value to compute the size of the fixed
workforce. (Leave no
cells blank - be certain to enter "0" wherever
required.)
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d. Determine the cost of the chase production
plan.
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e. After much internal discussion, the company
decides to maintain a permanent workforce of 10 production workers.
Given the same planning information and this new requirement,
develop a six-month production plan based on hybrid
production.(Leave no cells blank - be certain to enter "0" wherever
required.)
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f. Determine the cost of the hybrid production
plan. Use the overtime
cost.
In: Operations Management
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments—Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 12,250 | $ | 16,350 | $ | 28,600 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 2.30 | $ | 3.10 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 22,000 | $ | 12,500 | ||
| Direct labor cost | $ | 28,200 | $ | 11,100 | ||
| Actual machine-hours used: | ||||||
| Molding | 2,600 | 1,700 | ||||
| Fabrication | 1,500 | 1,800 | ||||
| Total | 4,100 | 3,500 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-9, assume that Sweeten Company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments and Job P included 20 units and Job Q included 30 units. For questions 10-15, assume that the company uses a plantwide predetermined overhead rate with machine-hours as the allocation base.
1. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)
2. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
3. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
4. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)
5. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
6. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)
7. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
8. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
9. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
10. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
11. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
In: Accounting
The following transactions were selected from among those completed by Bear’s Retail Store:
| Nov. | 20 | Sold two items of merchandise to Cheryl Jahn, who paid the $410 (total) sales price in cash. The goods cost Bear’s $310. | ||
| 25 | Sold 20 items of merchandise to Vasko Athletics at a selling price of $4,100 (total); terms 3/10, n/30. The goods cost Bear’s $2,550. | |||
| 28 | Sold 10 identical items of merchandise to Nancy’s Gym at a selling price of $6,100 (total); terms 3/10, n/30. The goods cost Bear’s $4,050. | |||
| 29 | Nancy’s Gym returned one of the items purchased on the 28th. The item was in perfect condition and credit was given to the customer. | |||
| Dec. | 6 | Nancy’s Gym paid the account balance in full. | ||
| 30 | Vasko Athletics paid in full for the invoice of November 25. |
Required:
Compute the net sales revenue to be reported over the two months. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
In: Accounting
We project unit sales for a new household-use laser-guided cockroach search and destroy system as follows: Year Unit Sales 1 98,000 2 110,000 3 133,000 4 139,000 5 92,000 The new system will be priced to sell at $445 each. The cockroach eradicator project will require $1,600,000 in net working capital to start, and total net working capital will rise to 15% of the change in sales. The variable cost per unit is $315, and total fixed costs are $1,900,000 per year. The equipment necessary to begin production will cost a total of $19 million. This equipment is mostly industrial machinery and thus qualifies for CCA at a rate of 20%. In five years, this equipment will actually be worth about 20% of its cost. The relevant tax rate is 35%, and the required return is 17%. Based on these preliminary estimates, what is the NPV of the project? (Enter the answer in dollars. Do not round your intermediate calculations. Round the final answer to 2 decimal places. Omit $ sign in your response.) NPV $ 99793260 99793260 Incorrect
In: Finance
1.
Tempo Company's fixed budget (based on sales of 12,000 units)
for the first quarter reveals the following.
| Fixed Budget | ||||||||
| Sales (12,000 units × $211 per unit) | $ | 2,532,000 | ||||||
| Cost of goods sold | ||||||||
| Direct materials | $ | 276,000 | ||||||
| Direct labor | 528,000 | |||||||
| Production supplies | 324,000 | |||||||
| Plant manager salary | 76,000 | 1,204,000 | ||||||
| Gross profit | 1,328,000 | |||||||
| Selling expenses | ||||||||
| Sales commissions | 96,000 | |||||||
| Packaging | 192,000 | |||||||
| Advertising | 100,000 | 388,000 | ||||||
| Administrative expenses | ||||||||
| Administrative salaries | 126,000 | |||||||
| Depreciation—office equip. | 96,000 | |||||||
| Insurance | 66,000 | |||||||
| Office rent | 76,000 | 364,000 | ||||||
| Income from operations | $ | 576,000 | ||||||
(1) Compute the total variable cost per
unit.
(2) Compute the total fixed costs.
(3) Compute the income from operations for sales
volume of 10,000 units.
(4) Compute the income from operations for sales
volume of 14,000 units.
|
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Income from operations at sales of 10,000 units:
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In: Accounting
Make-or-Buy, Traditional Analysis
Wehner Company is currently manufacturing Part ABS-43, producing 56,900 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows:
| Direct materials | $47.35 |
| Direct labor | 10.50 |
| Variable overhead | 2.55 |
| Fixed overhead | 3.45 |
| Total | $63.85 |
Of the total fixed overhead assigned to ABS-43, $12,404 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $60.29. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.
Required:
1. Should Wehner Company make or buy Part
ABS-43?
Wehner should buy the part. This
will produce total cost savings of $.
2. What is the maximum amount per unit that
Wehner would be willing to pay to an outside supplier? Round your
answer to the nearest cent.
$ per unit
In: Accounting
Make-or-Buy, Traditional Analysis
Wehner Company is currently manufacturing Part ABS-43, producing 53,200 units annually. The part is used in the production of several products made by Wehner. The cost per unit for ABS-43 is as follows:
| Direct materials | $45.25 |
| Direct labor | 8.55 |
| Variable overhead | 2.15 |
| Fixed overhead | 4.00 |
| Total | $59.95 |
Of the total fixed overhead assigned to ABS-43, $15,800 is direct fixed overhead (the annual lease cost of machinery used to manufacture Part ABS-43), and the remainder is common fixed overhead. An outside supplier has offered to sell the part to Wehner for $55.77. There is no alternative use for the facilities currently used to produce the part. No significant non-unit-based overhead costs are incurred.
Required:
1. Should Wehner Company make or buy Part
ABS-43?
Wehner should buy the part. This will produce total cost
savings of $.
2. What is the maximum amount per unit that
Wehner would be willing to pay to an outside supplier? Round your
answer to the nearest cent.
$ per unit
In: Accounting
| Part 2 | ||||||||
| Communications Unlimited provides support services to its clients. | ||||||||
| This company expects to earn an annual return on the assets invested at a rate of: | 20% | |||||||
| The company has the following amount invested in the business: | $8,000,000 | |||||||
| The annual budgeted costs for next year are: | ||||||||
| Variable costs | Fixed costs | |||||||
| Support Services | $600,000 | 1,900,000 | ||||||
| The annual budgeted hours for next year are: | ||||||||
| Consulting services | 60,000 | hours | ||||||
| Required: | You must use cell references for all calculations. | |||||||
| 5. Determine the markup on total costs in percentage terms. | ||||||||
| 6. Determine the total cost per hour. | ||||||||
| 7. Determine the revenue per hour that will be charged if total costs is the basis for markup. | ||||||||
| 8. Explain why answers 2-4 in comparison to 5-7 are the same or different. | ||||||||
| 9. Discuss the advantages and disadvantages of using a cost-based pricing model. | ||||||||
| You need to include an outside reference that supports your discussion on advantages and disadvantages of using a cost-based pricing model. | ||||||||
| Make sure you include the reference in APA style. Enter your response in the textbox below. | ||||||||
In: Accounting
Your Corporation has received a request for a special order of 9,500 units of product AB1 for $54.00 each. The normal selling price of this product is $60.99 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product AB1 is computed as follows:
| Unit product costs, current | ||||
| Direct Materials | $ 19.50 | |||
| Direct Labor | $ 8.10 | |||
| Variable MOH | $ 5.00 | |||
| Fixed MOH | $ 5.50 | |||
| Total unit product cost | $ 38.10 | |||
Direct labor is a variable cost. The special order would have no
effect on the company's total fixed manufacturing overhead costs.
The customer would like some modifications made to product AB1 that
would increase the variable costs by $4.00 per unit and that would
require a one-time investment of $40,000 in a special jig that
would have no salvage value. This special order would have no
effect on the company's other sales. The company has ample spare
capacity for producing the special order.
Directions: Determine the effect on the
company's total net operating income of accepting the special
order. Show your work!
In: Accounting