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Posie Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in...

Posie

Bags (PB) is a designer of high-quality backpacks and purses. Each design is made in small batches. Each spring, PB comes out with new designs for the backpack and the purse. The company uses these designs for a year and then moves on to the next trend. The bags are all made on the same fabrication equipment that is expected to operate at capacity. The equipment must be switched over to a new design and set up to prepare for the production of each new batch of products. When completed, each batch of products is immediately shipped to a wholesaler. Shipping costs vary with the number of shipments. Budgeted information for the year is as follows:

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Requirement 1. Identify the cost hierarchy level for each cost category.

*Cost*	Cost Hierarchy Level
Direct materials—purses	Output unit-level cost
Direct materials—backpacks	Output unit-level cost
Direct labor—purses	Output unit-level cost
Direct labor—backpacks	Output unit-level cost
Setup	Batch-level cost
Shipping	Batch-level cost
Design	Product-sustaining cost
Plant utilities and administration	Facility-sustaining cost

Requirement 2. Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver.

*Cost*	Cost Driver	Reason
Direct materials—purses	Number of purses
Direct materials—backpacks	Number of backpacks
Direct labor—purses	Number of purses
Direct labor—backpacks	Number of backpacks
Setup	Number of batches
Shipping	Number of batches
Design	Number of designs
Plant utilities and administration	Hours of production

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Data Table

Posie Bags
Budget for Costs and Activities
For the Year Ended February 29, 2020
Direct materials—purses	$342,200
Direct materials—backpacks	470,850
Direct manufacturing labor—purses	87,000
Direct manufacturing labor—backpacks	116,100
Setup	90,675
Shipping	71,370
Design	165,000
Plant utilities and administration	221,000
Total	$1,564,195

Other budget information follows:

	Backpacks	Purses	*Total*
Number of bags	6,450	2,900	9,350
Hours of production	1,665	2,585	4,250
Number of batches	115	80	195
Number of designs	4	2	6

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Requirements

1.	Identify the cost hierarchy level for each cost category.
2.	Identify the most appropriate cost driver for each cost category. Explain briefly your choice of cost driver.
3.	Calculate the budgeted cost per unit of cost driver for each cost category.
4.	Calculate the budgeted total costs and cost per unit for each product line.
5.	Explain how you could use the information in requirement 4 to reduce costs.

In: Accounting

Sweeten Company had no jobs in progress at the beginning ofMarch and no beginning inventories....

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	$	14,500	$	17,700	$	32,200
Estimated variable manufacturing overhead per machine-hour	$	3.20	$	4.00

	Job P		Job Q
Direct materials	$	31,000	$	17,000
Direct labor cost	$	35,400	$	14,700
Actual machine-hours used:
Molding		3,500		2,600
Fabrication		2,400		2,700
Total		5,900		5,300

Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.

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.

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

In: Accounting

Lansing, Inc. provides the following information for one of its department’s operations for June (no new...

Lansing, Inc. provides the following information for one of its department’s operations for June (no new material is added in Department T):


WIP inventory—Department T
Beginning inventory (15,000 units, 60% complete with respect to Department T costs)
Transferred-in costs (from Department S)	$	116,000
Department T conversion costs		53,150
Current work (35,000 units started)
Prior department costs		280,000
Department T costs		209,050

The ending inventory has 5,000 units, which are 20 percent complete with respect to Department T costs and 100 percent complete for prior department costs.

Required:

a. Complete the production cost report using the weighted-average method. (Round "Cost per equivalent unit" to 2 decimal places.)

	Physical Units	Equivalent Units
		Prior Department	Department T
Flow of units:
Units to be accounted for:
Beginning WIP inventory	15,000
Units started this period	35,000
Total units to account for	50,000
Units accounted for:
Completed and transferred out
Units in ending inventory
Prior department
Department T
Total units accounted for	0	0	0

	Total	Prior Department	Department T
Flow of costs:
Costs to be accounted for:
Costs in beginning WIP inventory
Current period costs
Total costs to be accounted for	$0	$0	$0
Cost per equivalent unit
Prior department
Department T
Costs accounted for:
Costs assigned to units transferred out
Costs of ending WIP inventory
Total costs accounted for	$0	$0	$0

In: Accounting

A manufacturing company employs job order costing to account for its costs. There are two production...

A manufacturing company employs job order costing to account for its costs. There are two production departments, and separate departmental overhead application rates are employed because the operations of the departments are distinct. All jobs generally pass through both production departments. Data regarding the hourly direct labor rates, overhead application rates, and three jobs on which work was done during the month appear below. Job 101 and Job 102 were completed during the current month. (CIA Examination adapted)

Production Departments	Direct Labor Rate / hr	MOH Rate
Department 1	$21.00	50%	of direct materials
Department 2	$26.00	75%	of direct labor cost

	Job 101	Job 102
Beginning Work-in-Process	$25,500	$32,400
Direct materials added:
Department 1	$40,000	$26,000
Department 2	$3,000	$5,000
Direct labor hours added:
Department 1	500	400
Department 2	200	250

QUESTION: What is the total manufacturing cost of Job 102? (Round to the nearest dollar.)

QUESTION: What are the total manufacturing costs added to Job 101 in Department 2? (Round to the nearest dollar.)

QUESTION: What is the total manufacturing cost of Job 101? (Round to the nearest dollar.)

QUESTION: What are the total manufacturing costs added to Job 102 in Department 2? (Round to the nearest dollar.)

QUESTION: What are the total manufacturing costs added to Job 101 in Department 1? (Round to the nearest dollar.)

In: Accounting

COST MANAGEMENT: PLEASE SHOW ALL COMPUTATIONS IN DETAIL PLEASE AND THANK YOU 4. Lau & Lau,...

COST MANAGEMENT: PLEASE SHOW ALL COMPUTATIONS IN DETAIL PLEASE AND THANK YOU

4. Lau & Lau, Ltd. of Hong Kong manufacture two products for the same market. Its budget and operating results for the year just completed follow:

Actual Budget

Unit of sales

Product A 30,000 35,000

Product B 60,000 65,000

Contribution per unit

Product A $4.00 $3.00

Product B 10.00 12.00

Selling price per unit

Product A $10.00 $12.00

Product B 25.00 24.00

At the time of budget preparation, the budgeting department and sales department agreed that the industry volume for the year would likely be 1,500,000 units. Actual industry volume turned out to be 2,000,000 units.

Required:(you may round fractions to three decimal places)

A. What is the average budgeted contribution margin per unit?

B. What is the sales volume contribution margin variance for each product?

C. What is the sales mix contribution margin variance for each product?

D. What is the sales quantity contribution margin variance for each product?

E. What is the market size contribution margin variance?

F. What is the market share contribution margin variance?

G. What is the total flexible budget contribution margin variance?

H. What is the total variable cost price variance if the total contribution margin price variance is $50,000 favorable?

I. What is the total variable cost efficiency variance if the total contribution margin price variance is $50,000 favorable?

In: Accounting

Calculate the following based on 2018 numbers using the attached financial statements for XYZ Corp. Assume...

Calculate the following based on 2018 numbers using the attached financial statements for XYZ Corp. Assume the only variable cost is the cost of goods sold.

Survival revenues (EBITDA breakeven – includes interest).
B.NOPAT Breakeven

c) Interpret these values and indicate what you would expect to happen to them if a large addition is made to fixed assets.

Financial Statements for XYZ Corp.

Balance Sheet for Period Ending December 31.

Assets	2017	2018
Cash and Marketable Securities	40	15
Accounts Receivable	160	80
Inventories	250	370
Total Current Assets	450	465

Gross Plant and Equipment	675	855
less: Accumulated Depreciation	250	300
Net Plant and Equipment	425	555

Total Assets	875	1020

Liabilities and Equity
Accounts Payable	15	30
Short-term Bank Loans	35	40
Accrued Liabilities	55	60
Total Current Liabilities	105	130

Long-Term Debt	265	360

Common Stock	180	180
Retained Earnings	325	350
Total Equity	505	530

Total Liabilities and Equity	875	1020

Income Statement for the Period Ending December 31.

	2018
Sales	1500
Cost of Goods Sold	1272
Gross Profit Margin	228

Administrative Expense	40
Marketing Expense	30
Research and Development	20
Depreciation	50
Earnings before Interest and Taxes	88

Interest Expense	39
Income before Taxes	49
Income Taxes @ 40%	20
Net Income	29

In: Finance

Assume that a bus company increased costs and fears that it will make a loss. What...

Assume that a bus company increased costs and fears that it will make a loss. What should it do, if to rise the fares may be a wrong policy.
To help it decide what to do it commissions a survey to estimate passenger demand at three different fares: the current face of 10c per km, a higher fare of 12c per km, and a lower fare of 8c. The results of the survey are shown in the first two columns:

Fares	Estimated Demand	Total Revenue	Old total cost	New total cost
8	6	480000	360000	440000
10	4	400000	360000	440000
12	3	360000	360000	440000

Demand turns to be elastic. TR can be increased by reducing the price from current 10 to 8$.

What will happen to the company profits? Its profit is the difference between the total revenue from passengers and its total costs of operating the service. If buses are currently under-utilised , then is possible that the extra passengers can be carried without the need for extra buses with no extra cost..

At the fare of 10c , old profit was 40000. After the rase, a 10c now gives a loss of 40.000$. By raising the fare to 12c- loss increased to 80000$.

Questions:

1) Estimate the price elasticity of demand between 8c and 10c and between 10c and 12c. Show all detailed calculations.

2) 10c fare the best fare originally? Explain your answer detailed.

3) If the company considers lowering the fare to 6c and estimates the demand will be 8.5 million passenger km. What is your opinion, it is good idea? How should it decide?

In: Economics

Wesley power tools manufactures a wide variety of tools and accessories. One of its more popular...

Wesley power tools manufactures a wide variety of tools and accessories. One of its more popular items is a cordless power handisaw. Each handisaw for $60. Wesley expects the following unit sales:

January: 5200

February: 5400

March: 5900

April: 5700

May: 5100

Wesley's ending finished goods inventory policy is 20% over the next month sales. Suppose each handsaw takes approximately .75 hours to manufacture, and Wesley pays an average labor wage of $22 per hour.

Each handsaw requires a plastic housing that Wesley purchases from my supplier at a cost of $7 each. The company has an ending raw materials inventory policy of 20% of the following months production requirements. Materials other than the housing unit total of $4.50 per handisaw.

manufacturing overhead for this product includes $72,000 annual fixed overhead (based on production of 27,000 units). and $1.20 per unit variable manufacturing overhead. Wesley selling expenses are 7% of sales dollars, and administrative expenses are fixed at $18,000 per month.

required:

1. Compute the following for the first quarter:

-budgeted sales revenue for January, February, March and first quarter total

-budgeted production in units for January, February, March, and first quarter total

-budgeted cost of raw material purchases for the plastic housings for January, February, March, and first quarter total

-budgeted direct labor cost for January, February, March, and first quarter total

In: Accounting

Home furnishings reports inventory using the lower of cost and net realizable value (NRV).

Home furnishings reports inventory using the lower of cost and net realizable value (NRV). Below is information related to its year-end inventory.

Required:

1. Calculate the total recorded cost of ending inventory before any adjustments.

2. Calculate ending inventory using the lower of cost and net realizable value.

3. Record any necessary adjustment to inventory.

4. Explain the impact of the adjustment in the financial statements.

In: Accounting

You are appraising a five-year-old, single-family residence. The total square footage of the livable area is...

You are appraising a five-year-old, single-family residence. The total square footage of the livable area is 2,700. The garage is 500 square feet. According to figures obtained from a cost-estimating service, the base construction cost per square foot of livable area is $125 and $80 per square foot for the garage. The lot is valued at $98,000. What is the reproduction cost of the new structure?

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In: Finance