Factory Overhead Cost Budget

Sweet Tooth Company budgeted the following costs for anticipated production for August:

Advertising expenses	$259,400
Manufacturing supplies	14,220
Power and light	42,400
Sales commissions	290,020
Factory insurance	24,690
Production supervisor wages	124,710
Production control wages	32,420
Executive officer salaries	264,390
Materials management wages	35,670
Factory depreciation	20,210

Prepare a factory overhead cost budget, separating variable and fixed costs. Assume that factory insurance and depreciation are the only fixed factory costs.

Sweet Tooth Company
Factory Overhead Cost Budget
For the Month Ending August 31
Variable factory overhead costs:
Manufacturing supplies	$
Power and light
Production supervisor wages
Production control wages
Materials management wages
Total variable factory overhead costs		$
Fixed factory overhead costs:
Factory insurance	$
Factory depreciation
Total fixed factory overhead costs
Total factory overhead costs		$

2.

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.

	Rumble		Thunder
Estimated inventory (units), June 1	278		77
Desired inventory (units), June 30	319		67
Expected sales volume (units):
East Region	4,100		4,600
West Region	5,000		4,350
Unit sales price	$115		$185

a. Prepare a sales budget.

Sonic Inc.
Sales Budget
For the Month Ending June 30
Product and Area	Unit Sales Volume	Unit Selling Price	Total Sales
Model Rumble:
East Region		$	$
West Region
Total			$
Model Thunder:
East Region		$	$
West Region
Total			$
Total revenue from sales			$

Define the following: fixed cost, variable cost, marginal cost and marginal revenue

Why are the terms direct cost and indirect cost independent of the terms fixed cost and variable cost? Give an example to illustrate.

What generally happens to the cost of debt, cost of equity, and cost of capital when a firm increases Debt and holds Equity constant?

Cash Flow Analysis -- SAB Technology SAB Technology Corporation increased its sales from $400,000 in 2012 to $500,000 in year 2013 as is shown in the firm’s income statements presented below. Jenny Sands, chief executive officer (CEO) and founder of the firm expressed concern that the cash account and the firm’s marketable securities declined substantially between 2012 and 2013. SAB's complete balance sheets are also shown below. Ms. Sands is seeking your assistance in the preparation of a statement of cash flows for SAB Financial Statements 1 Income statement (in $ Thousands) 2013 2012 2 3 Net sales 500.00 400.00 4 Less: cogs 300.00 240.00 5 Gross profit 200.00 160.00 6 Less: operating exp 46.00 46.00 7 Less: Depr 30.00 25.00 8 EBIT 124.00 89.00 9 Less: Interest 38.50 33.50 10 Income before tax 85.50 55.50 11 Less: Income taxes 30.00 20.00 12 Net income 55.50 35.50 13 14 Cash dividend 20.00 17.00 15 Addition to retained earnings 35.50 18.50 16 17 18 Balance sheet (in $ Thousands) 2013 2012 19 20 Cash 16.00 39.00 21 Account receivable 80.00 50.00 22 Inventories 204.00 151.00 23 Current asset 300.00 240.00 24 Gross fixed asset 290.00 200.00 25 less: accumuled depr 125.00 95.00 26 Net fixed asset 165.00 105.00 27 Total assets 465.00 345.00 28 29 Account payable 45.00 30.00 30 Accrued liabilities 23.00 10.00 31 Short-term notes 27.00 20.00 32 Total current liabilities 95.00 60.00 33 Long-term debt 20.00 15.00 34 Total liabilities 115.00 75.00 35 Common stock 129.50 85.00 36 Retained earnings 220.50 185.00 37 Owners' equity 350.00 270.00 38 Total liabilities and equity 465.00 345.00 ~~~~~~~~~~~~~~~~~~ 1) Study the excel template:1 From question per unit 2 3 computer chips 70 <-- from question 4 plastic casings 15 <-- from question 5 assembly hardware 5 <-- from question 6 direct labor 5 <-- from question 7 total cost 95 <-- from question 8 price 142.5 <-- from question 9 10 Sales 11 Jan Feb Mar 1st Qtr 12 13 units of sales 200 400 800 1400 <-- from question 14 dollar sales ?? ?? ?? ?? <-- from question 15 16 Cost of production schedule 17 18 per unit Jan Feb Mar 1st Qtr 19 Production 500 500 500 1500 <-- from question 20 Production Cost 21 computer chips 70 ?? ?? ?? ?? <-- prodution * unit cost 22 plastic casings 15 ?? ?? ?? ?? <-- prodution * unit cost 23 assembly hardware 5 ?? ?? ?? ?? <-- prodution * unit cost 24 direct labor 5 ?? ?? ?? ?? <-- prodution * unit cost 25 Total production cost 95 ?? ?? ?? ?? <-- prodution * unit cost 26 27 Cost of goods sold schedule 28 29 per unit Jan Feb Mar 1st Qtr 30 Units of sales 200 400 800 1400 <-- from question 31 Sales ?? ?? ?? ?? <-- price * unit of sales 32 Cost of goods sold 95 ?? ?? ?? ?? <-- sales * unit cost 33 Gross profit ?? ?? ?? ?? <-- sales - cost of goods sold 34 35 Inventories schedule 36 Jan Feb Mar 37 Beginning finished goods ?? ?? ?? <-- previous ending inventories 38 Production 39 Materials ?? ?? ?? <-- computer + plastic + assembly 40 Direct labor ?? ?? ?? <-- labor 41 Additions ?? ?? ?? <-- sum of materials and labor cost 42 Total (beg + additions) ?? ?? ?? <-- beginning + additions 43 Less: cost of goods sold ?? ?? ?? <-- cogs 44 Ending finished goods ?? ?? ?? <-- ending inventories 45 46 47 48 49 Jan Feb Mar 1st Qtr 50 Total production cost ?? ?? ?? ?? 51 Sales ?? ?? ?? ?? 52 Cost of goods sold ?? ?? ?? ?? 53 Beginning finshed goods ?? ?? ?? 54 Ending finished goods ?? ?? ?? 2) Cash flow analysis for year 2013 cash flows from operating activities = ?? cash flow from investment activities = ?? cash flow from financing activities = ?? net cash flow = ?? cash at the end of period = ?? 3) Cash flow identity for year 2013 Operating cash flow = EBIT + D&A - Tax = ?? Change in Net Operating Working Capital = Change in NOWC = ?? Net Capital Spending = ?? Cash flow from assets = ?? Cash flow to creditors = ?? Cash flow to Shareholders = ??

Promoting the Financial Planning Cruise to Better Horizons Credit Union Members

Write a sales message to Better Horizons members to promote the financial planning cruise. Feel free to add additional details (i.e., price and dates for the cruise).

Must be Persuasive!!!

Scenario: Christine Russo works at Better Horizons and is developing several new services the credit union could offer. One idea is for credit union members to take a five-day cruise to the Bahamas. Two afternoons of the cruise will be devoted to financial planning workshops, including choices such as retirement planning, trusts and estates, insurance, charitable giving, taxes, and college savings. Also, a finance boot camp for teenagers will provide basic information about savings and checking accounts, loans, and budgeting.

In another initiative, Christine wants to set up a new rewards program for credit union members who use their Better Horizons debit or credit cards. Each purchase with the debit or credit card will contribute to their total reward points, which customers can redeem for brand-name merchandise, hotel accommodations, airline tickets, cruises, and other travel options (detailed in an online and paper merchandise and travel catalog). Members get one point for each dollar spent on their credit cards and one point for every two dollars spent on their debit cards. One advantage of the program is that points can be combined across accounts. So, family members Page 331or friends who are members of the credit union can transfer their points to one another’s accounts and more quickly gain rewards. The program involves no fee, and members with the cards are automatically enrolled in the program.

Altira Corporation provides the following information related to its merchandise inventory during the month of August 2021:

Aug.1	Inventory on hand—3,600 units; cost $6.90 each.
8	Purchased 18,000 units for $7.10 each.
14	Sold 14,400 units for $13.60 each.
18	Purchased 10,800 units for $7.20 each.
25	Sold 13,400 units for $12.60 each.
28	Purchased 5,600 units for $5.80 each.
31	Inventory on hand—10,200 units.

Required:
Using calculations based on a periodic inventory system, determine the inventory balance Altira would report in its August 31, 2021, balance sheet and the cost of goods sold it would report in its August 2021 income statement using each of the following cost flow methods.

FIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic FIFO Ending Inventory - Periodic FIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 3,600 $6.90 $24,840 $6.90 $6.90 $0 Purchases: August 8 18,000 $7.10 127,800 $7.10 $7.10 0 August 18 10,800 $7.20 77,760 $7.20 $7.20 August 28 5,600 $5.80 32,480 $5.80 Total 38,000 $262,880 0 $0 0 $0

LIFO Cost of Goods Available for Sale Cost of Goods Sold - Periodic LIFO Ending Inventory - Periodic LIFO # of units Cost per unit Cost of Goods Available for Sale # of units sold Cost per unit Cost of Goods Sold # of units in ending inventory Cost per unit Ending Inventory Beginning Inventory 3,600 $6.90 $24,840 $6.90 $0 3,600 $6.90 $24,840 Purchases: August 8 18,000 $7.10 127,800 $7.10 $7.10 August 18 10,800 $7.20 77,760 10,800 $7.20 77,760 $7.20 0 August 28 5,600 $5.80 32,480 5,600 $5.80 32,480 Total 38,000 $262,880 16,400 $77,760 3,600 $24,840

Average Cost Cost of Goods Available for Sale Cost of Goods Sold - Average Cost Ending Inventory - Average Cost # of units Unit Cost Cost of Goods Available for Sale # of units sold Average Cost per Unit Cost of Goods Sold # of units in ending inventory Average Cost per unit Ending Inventory Beginning Inventory 3,600 $6.90 $24,840 Purchases: August 8 18,000 $7.10 127,800 August 18 10,800 $7.20 77,760 August 28 5,600 $5.80 32,480 Total 38,000 $262,880 $0 $0

Lab 10-2:You've been hired by Yogurt Yummies to write a C++ console application that calculates and displays the cost of a customer’s yogurt purchase. Use a validation loop to prompt for and get from the user the number of yogurts purchased in the range 1-9. Then use a validation loop to prompt for and get from the user the coupon discount in the range 0-20%. Calculate the following:

          ● Subtotal using a cost of $3.50 per yogurt. ● Subtotal after discount

          ● Sale tax using rate of 6%.      ● Total

Use formatted output manipulators (setw, left/right) to print the following rows:

          ● Yogurts purchased       ● Yogurt cost ($) ● Discount (%)

          ● Subtotal ($)        ● Subtotal after discount ($)      ● Tax ($)

          ● Total ($)

And two columns:

          ● A left-justified label (including units)

          ● A right-justified value.

Define constants for the yogurt cost, sales tax rate, and column widths. Format all real numbers to two decimal places. Run the program with invalid and valid inputs. The output should look like this:

#include <conio.h> // For function getch()

#include <cstdlib> // For several general-purpose functions

#include <fstream> // For file handling

#include <iomanip> // For formatted output

#include <iostream> // For cin, cout, and system

#include <string> // For string data type

using namespace std;

#define t 6.0

#define Yogurt_cost 3.50

int main()

{

float Yogurts_purchased,Discount,Subtotal,after_discount,tax,total;

cout<<"Welcome to Yogurt Yummies";

cout<<"\n-------------------------\n";

while (1>0)

{

   

cout<<"Enter the number of yogurts purchased (1-9):";

// input the number of yougurts purchased

cin>>Yogurts_purchased;

//checking number of yougurts purchased is valid

if(Yogurts_purchased>=1 && Yogurts_purchased<=9)

break;

else

cout<<"\nError:'"<<Yogurts_purchased<<"'is an invalid number of yogurts.\n ";

}

while (1>0)

{

// input the percentage discount   

cout<<"Enter the percentage discount (0-20): :";

cin>>Discount;

// checking percentage discount is valid

if(Discount>=0 && Discount<=20)

break;

else

cout<<"Error:'"<<Discount<<"' is an invalid percentage discount.\n ";

}

//evaluating the Subtotal

Subtotal=Yogurts_purchased*Yogurt_cost;

//evaluating the after discount

after_discount=Subtotal-(Subtotal*(Discount/100));

//evaluating the tax

tax=after_discount*(t/100.0);

//evaluating the total

total=tax+after_discount;

//show the values

cout<<"\n Yogurts: "<<setw(26)<<Yogurts_purchased;

cout<<"\n Yogurt cost($):"<<setw(20)<< fixed << setprecision(2)<<Yogurt_cost;

cout<<"\n Discount (%):"<<setw(22)<< fixed << setprecision(2)<<Discount;

cout<<"\n Subtotal ($):"<<setw(22)<< fixed << setprecision(2)<<Subtotal;

cout<<"\n Total after discount ($):"<<setw(10)<< fixed << setprecision(2)<<after_discount;

cout<<"\n Tax ($): :"<<setw(25)<< fixed << setprecision(2)<<tax;

cout<<"\n Total ($):"<<setw(25)<< fixed << setprecision(2)<<total;

cout<<"\n\nEnd of Yogurt Yummies";

return 0;

}

Remember that great app you wrote for Yogurt Yummies (Lab 10-2). They want you to enhance the C++ console application that calculates and displays the cost of a customer’s yogurt purchase. Now they need to process multiple sales. Do not change any logic for handling a single sale. Make the following enhancements:

       ● Add "v2" to the application output header and close.

       ● Declare and initialize overall totals including:

               Number of sales.

               Overall number of yogurts sold.

               Overall sale amount after discount.

               Overall tax paid.

               Overall sale total.

       ● Enclose the logic for a single sale with a sentinel loop that continues to process sales until the user enters 'n'.

       ● After calculating sale totals, update overall totals.

       ● When the user enters the sentinel value ('n'), print overall totals using formatted output manipulators (setw, left/right). Run the program with invalid and valid inputs, and at least three sales. The output should look like this:

Welcome to Yogurt Yummies, v2

-----------------------------

Enter another yogurt purchase (y/n)? y

Sale 1

----------------------------------------

Enter the number of yogurts purchased (1-9): 11

Error: '11' is an invalid number of yogurts.

Enter the number of yogurts purchased (1-9): 2

Enter the percentage discount (0-20): 22

Error: '22.00' is an invalid percentage discount.

Enter the percentage discount (0-20): 4

Yogurts:                             2

Yogurt cost ($):                  3.50

Discount (%):                     4.00

Subtotal ($):                     7.00

Total after discount ($):         6.72

Tax ($):                          0.40

Total ($):                        7.12

Enter another yogurt purchase (y/n)? y

Sale 2

----------------------------------------

Enter the number of yogurts purchased (1-9): 5

Enter the percentage discount (0-20): 10

Yogurts:                             5

Yogurt cost ($):                  3.50

Discount (%):                    10.00

Subtotal ($):                    17.50

Total after discount ($):        15.75

Tax ($):                          0.94

Total ($):                       16.70

Enter another yogurt purchase (y/n)? y

Sale 3

----------------------------------------

Enter the number of yogurts purchased (1-9): 7

Enter the percentage discount (0-20): 20

Yogurts:                             7

Yogurt cost ($):                  3.50

Discount (%):                    20.00

Subtotal ($):                    24.50

Total after discount ($):        19.60

Tax ($):                          1.18

Total ($):                       20.78

Enter another yogurt purchase (y/n)? n

Overall totals

========================================

Sales:                               3

Yogurts:                            14

Total after discount ($):        42.07

Tax ($):                          2.52

Total ($):                       44.59

End of Yogurt Yummies, v2

 

You have been asked to look at production options for the Android01, since production methods and allocation of costs have implications for cost per unit. Two alternative methods of production are being considered. Begin by gathering data (using financial information in decision making), then determine the suitability of the project.

The production of Android01 will share some production facilities and service divisions with Processor01. Fixed costs are $5 million per year, and will be assigned at the rate of 30 percent to Android01 and 70 percent to Processor01.

The variable cost of the production facilities and service divisions is $25 million per year. The square footage of factory space and labor needed for the production of 500 units of Processor01 and 300 units of Android01 are listed below.

	Square Feet	Labor
Processor01 (500 units)	70,000	120
Android01 (300 units)	30,000	80

The remaining cost for the production of Android01 is for components, at $25,000 per unit.

Question 1: In Method B, what would be the cost per unit of producing Android01 using factory space as the allocation basis? What would be the cost per unit using labor as the allocation basis?

Before starting on your calculations, review materials on production cost allocation.

An alternate method of assigning costs is activity-based costing.The major activities for the production of both Processor01 and Android01 are fabricator setup and component assembly. There are 500 units of Processor01 and 300 units of Android01 produced every year. There will be a total of 25,000 setups per year for at a total cost of $10 million. Each unit of Android01 will require 40 setups. There will be a total of 125,000 assemblies per year at a total cost of $15 million. Each unit of Android01 will require 180 assemblies. The remaining cost for the production of Android01 is for components, at $25,000 per unit.

Question 2: What would be the cost per unit of producing Android01 using activity-based costing?

Note that in addition to the setup costs and assemblies costs there are two more costs to add: (1) fixed costs of $5 million, which are still distributed at a rate of 30 percent to Android01 and 70 percent to Processor01, and (2) the cost of Android01 components at $25,000 per unit.

Discuss the differences in the cost per unit of Android01 using space as an allocation basis, using labor as an allocation basis, and using activity-based costing. Which method do you think is the most accurate way to assign costs?

Next, suppose IPS uses markup pricing for Android01. Fixed costs are $4.5 million, and for a level of production of 300 units, the variable cost per unit is $48,000.

Question 3: What is the price of the Android01 at 30 percent markup over full cost?

Submit your Markup Pricing Report and Calculations to the dropbox below. Submit a spreadsheet showing your calculations in Excel and provide a narrative analysis in Word. Your narrative analysis should summarize the results of your analysis and make recommendations for the benefit of company.