ACC 349-Mr. Beridon received your requests for information

Question # 00549205 Posted By: rey_writer Updated on: 06/20/2017 01:32 AM Due on: 06/20/2017
Subject Accounting Topic Accounting Tutorials:
Question
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Resource: Jeemp Template.

Mr. Beridon received your requests for information and returned data which you have compiled in an Microsoft® Excel® spreadsheet (see document template). He also said, "We grow sod and trees at Jeemp Farms. We sell the sod mainly to home builders in the area, although we sell to some individuals who are purchasing square footages to re-sod their yard. Many home builders will purchase to sod an entire subdivision. They then may come back to us to purchase trees for the yards. It really is a package deal. For builders like that, we are a one-stop-shop. In most cases, however, we sell the trees to orchards and some individuals. The purchaser is responsible for all shipping costs related to their product.

"Our production process is different for each product. For sod, we plant the seed, irrigate, cut, and roll the sod and then transport it. For the trees, we plant the root stock, graft the tree, water until a particular maturity and then dig it up and sell it. We inspect the plants as needed to make sure we are producing a quality product that is disease-free.

"We have delayed purchasing some machinery that reduces time for the planting of the trees because it is a large up-front cost and we don't want to have a huge outlay of cash if our profits keep going down".

"The grass does not require as much irrigation as the trees, as it is at a lower elevation than the tree acres and is closer to the creek; it gets a lot of the run off".

"Historically, we have always been able to sell everything we produce. Hopefully, that will continue since Houston is expanding rapidly".

Compute the product costs for the sod and trees under traditional and ABC costing using the Microsoft® Excel® spreadsheet.

Write a 700- to 1,050-word paper analyzing Jeemp Farms and what data and information you will consider.

Include the following:

  • Describe any factors that could skew your results. In other words, explain if there is one method of costing that could make a product look more favorable than it really is.
  • Justify whether Mr. Beridon should cut the sod portion of his company.
  • Justify whether Mr. Beridon should cut the tree portion of his company instead.
  • Describe other methods of analysis you could use to help you come to a decision.
  • Describe any other qualitative or quantitative factors or changes to Mr. Beridon's business that might be relevant to Jeemp Farms as they make the decision as to whether to use ABC and whether to cut sectors.
  • Determine any additional information you would need to have before making a recommendation.

Formatyour assignment to APA standards.


# produced and sold of each product
St. Augustine Sod in sq feet
Texas Pecan Trees January February March
April
May
140,763 178256
85,948 177,005 145,800
789
987
456
456
867 June
July
August
September October November
December TOTAL
159,626 116,407 130,832
62,790 132715
62081
164628
680
457
667
907
789
956
897 Basic Information Selling Price Per Unit
Direct Materials Per Unit
Direct Labor Per Unit
Direct Labor Hours Per Unit
Estimated Annual Production and Sales
Estimated Overhead (last year's numbers)
Planting
Irrigation
Product Support
Harvesting
Inspections
Property Taxes
TOTAL Estimated Total Direct Labor Hours
Predetermined Overhead Rate
Traditional Costing
Sales
Direct Materials
Direct Labor
Manufacturing Overhead
Product Margin
per unit $
$
$ Trees
12.99 $
0.99 $
2.00 $
0.2 Sod
0.38
0.01
0.09
0.009
units 47,000
19,000
19,046
21,567
4,564
6,754
117,931 DO NOT ROUND
DO NOT ROUND % of overhead costs by product
St. Augustine Sod in sq feet
Texas Pecan Trees year old trees Planting
20%
80% Irrigating
Product Support
20%
7%
80%
93% Overhead costs by product
St. Augustine Sod in sq feet
Texas Pecan Trees year old trees Planting Irrigating Overhead
Planting
Irrigation
Product Support
Harvesting
Inspections
Property Taxes
TOTAL
ABC Costing:
Sales
Direct Materials
Direct Labor
Manufacturing Overhead
Product Margin
per unit 47,000
19,000
19,046
21,567
4,564
6,754
117,931
Trees Sod Product Support Harvesting Harvesting Property Taxes
Inspections
40%
40%
10%
60%
60%
90%
Property Taxes Inspections TOTALS $ - Estimated Overhead (last year's numbers)
Planting
47,000
Irrigation
19,000
Product Support
19,046
Harvesting
21,567
Inspections
4,564
Property Taxes
6,754
TOTAL
117,931


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