The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows:

chart of accounts ensure to use the exact lables

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in

Exhibit 3

, using the first-in, first-out method.

3. Determine the gross profit from sales for the period.

4. Determine the ending inventory cost as of March 31.

5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?

Lower

Higher

1. Flexible Budget for Assembly Department

Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the following information for the Assembly Department:

Prepare a flexible budget for 10,000, 13,000, and 15,000 filing cabinets for the month of March in the Assembly Department similar to Exhibit 5. Enter all amounts as positive numbers.

2.

Production Budget

Weightless Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows:

The finished goods inventory estimated for October 1, for the Bath and Gym scale models is 1,800 and 2,600 units, respectively. The desired finished goods inventory for October 31 for the Bath and Gym scale models is 1,300 and 2,800 units, respectively.

Prepare a production budget for the small and large scales for the month ended October 31. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

3.

Sales and Production Budgets

Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget:

a. Prepare a sales budget.

b. Prepare a production budget. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Market Forms

The following questions address some of the price and output decisions faced by firms other than those found in perfect competition. Some numbers may be rounded.

Questions:

1. Complete Table 1. Summarize your calculations and use Microsoft Excel.
2. Using Excel, draw one graph showing average fixed costs, average variable costs, average total costs, marginal revenue, and marginal costs.
3. Using the data in the table and on your graph, what is the profit maximizing, or loss minimizing level of output? Explain and justify your answers.
4. What is a normal profit? What is an economic profit? Explain your answer using examples. Are normal profits being earned in this example? Are economic profits present for this firm in this example? Explain your answers.
5. Given the data in the table and the graph, how could you determine or identify the optimal plant size?
6. What is the difference between explicit and implicit cost? Explain your answers.
7. How would we determine if a cost is a fixed cost or a variable cost?

1. A manufacturer of base units for home sensor protection (security, water, carbon monoxide, etc.) produces these units in a small facility in northern Indiana. The firm’s engineer has set up “assembly cells” in the facility that she believes will be the most efficient means of producing the units. The following table displays the various costs per hour for producing the units.

Outputs per hour Total Cost Fixed Cost Variable Cost Avg Total Cost Avg Fixed Cost Avg Var Cost Marg Cost

0 $100 $100 $30

1 $130 $100 $30 $130    $100 30 $28

2 $158 $100 $58 $79 $50 $29 $25

3 $183 $100 $83 $61 $33.33 $27.67 $21

4 $204 $100 $104 $51 $25 $26.00 $18

5 $222 $100 $122 $44.40 $20 $24.40 $20

6 $242 $100 $142 $40.33 $16.67 $23.67 $23

7 $265 $100 $165 $37.86 $14.29 $23.57 $30

8 $295 $100 $195 $36.88 $12.50 $24.38 $38

9 $333 $100 $233 $37 $11.11 $25.89 $40

10 $373 $100 $273 $37.30 $10.00 $27.30

1. Explain why Average Total Costs (ATC) declines through the production quantities. Only with the tenth unit per hour does the firm see a minor increase in ATC.
2. Explain why Average Fixed Cost (AFC) declines across all levels of production. What do you call this phenomenon?
3. Explain why Marginal Costs initially decline but then increase with the sixth unit of production. Which short run production principle is at work here in creating this pattern of Marginal Costs?

The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cindy​ Kramer, road maintenance​ director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Kramer estimates that the labor hours required for the next four quarters are 7,000​, 12,000​, 19,500​, and 9,000​, respectively. Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $ 17 for each overtime hour. Overtime is limited to 20 percent of the​ regular-time capacity in any quarter. Although unused overtime capacity has no​ cost, unused regular time is paid at $ 12 per hour. The cost of hiring a worker is $4,000​, and the cost of laying off a worker is $2,000.

Subcontracting is not permitted. ​(Hint: When calculating the number of​ workers, make sure to round up to the next whole number before proceeding with any further​ calculations.)

a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the​ plan?

b. Use a chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this​ plan?

c.

. Consider the following proposed​ plan, for a different demand​ schedule, that combines the strategy of​ hiring, layoffs, and utilizing overtime. Payroll costs are

$6,000

in wages per worker for regular time​ worked, with an overtime pay rate of

$ 17

for each overtime hour. The cost of hiring a worker is

$4,000

and the cost of laying off a worker is

$2,000.

The total cost for this plan would be

​(Enter your response as an​ integer.)

During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 40,000 mini refrigerators, of which 36,000 were sold. Operating data for the month are summarized as follows:

Green Furniture (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets. The production process for desks and cabinets is similar, although machines must be retooled for each product. Both materials and labour costs are directly traceable to individual products; however, overhead is a common cost and allocated using direct labour-hours as the allocation base. GF’s accountant is considering the use of activity-based costing (ABC) and has suggested evaluating the system by applying it to the two office use products (desks and cabinets). The following data are available for a typical quarter.

Each product consumed 360 direct labour-hours.

Required:

1. Determine the total manufacturing cost and cost per unit for each of the two product lines for the quarter, using activity-based costing to allocate overhead costs. (Round "Cost per unit" answers to 2 decimal places.)

2. Redo the above using direct labour-hours as the allocation base. (Round "Cost per unit" answers to 2 decimal places.)

Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at year-end. Variances associated with direct materials are prorated based on the balances of direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to Finished Goods Inventory and to Cost of Goods Sold (CGS) on the basis of the relative direct labor cost in these accounts at year-end.

The following information is for the year ended December 31:

The company had no beginning inventories and no ending Work-in-Process (WIP) Inventory. It applies manufacturing overhead at 80% of standard direct labor cost.

Required:

1. Compute the amount of Direct Materials Price Variance to be prorated to Finished Goods Inventory at December 31.

2. Compute the total amount of direct materials cost in the Finished Goods Inventory at December 31, after all materials variances have been prorated.

3. Compute the total amount of direct labor cost in the Finished Goods Inventory at December 31, after all variances have been prorated.

4. Compute the total Cost of Goods Sold (CGS) for the year ended December 31, after all variances have been prorated.

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

1. Raw materials were purchased on account, $654,000.
2. Raw materials use in production, $618,800. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $417,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,539,250 to manufacture according to their job cost sheets were completed during the year.
8. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,549,250 to manufacture according to their job cost sheets.

Required :

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

Part A

Furniture Specialties is a company that make two types of dining tables: Simple and Futuristic. There are two types of direct materials: Pine and Mahogany woods. Direct manufacturing labour workers are hired on an hourly basis; no overtime is worked. In terms of manufacturing overhead costs, there are two manufacturing overhead cost pools and two cost drivers. The two manufacturing overhead cost pools are manufacturing operations overhead and machine setup overhead. The cost drivers for manufacturing overhead are: direct manufacturing labour-hours for manufacturing operations overhead cost and setup labour-hours for machine setup overhead cost. Nonmanufacturing costs consist of product design, marketing, and distribution costs.

The following data are available for the 2018 budget:

Required:

Based on the above information provided by the various department managers, prepare the following budgets:

C. Direct Material Usage Budget in quantity and dollars (6 points)