Prepare your answers in an Excel workbook, using one worksheet per exercise or problem.
Save your workbook using the filename LastnameFirstinitial.ACC350.T# where the # represents the topic number. For example, John Doe would submit assignment #5 using the following name: DoeJ.ACC350.T5.
You are not required to submit this assignment to Turnitin.
year ended December 31, 2014.
1. Use the information to prepare a schedule of cost of goods manufactured.
2. What is the unit product cost if Knight manufactured 2,160 lamps for the year?
Problem P18-42 is the first problem in a sequence of problems for Davis Consulting, Inc.
This company was also used for the Continuing Problems in the financial accounting
chapters as the business evolved from a service company to a merchandising company.
However, it is not necessary to complete those problems prior to completing P18-42.
Davis Consulting, Inc. is going to manufacture billing software. During its first
January 31, 2016.
Details:Please complete the following exercises and/or problems from the textbook:
E21-30
E21-31
E21-37
CP21-63
Prepare your answers in an Excel workbook, using one worksheet per exercise or problem.
Save your workbook using the filename LastnameFirstinitial.ACC350.T# where the # represents the topic number. For example, John Doe would submit assignment #5 using the following name: DoeJ.ACC350.T5.
You are not required to submit this assignment to Turnitin.
E21-30 Determing mixed costs—the high-low method
The manager of Able Car Inspection reviewed the monthly operating costs for the past
year. The costs ranged from $4,000 for 1,000 inspections to $3,600 for 600 inspections.
Requirements
1. Calculate the variable cost per inspection.
2. Calculate the total fixed costs.
3. Write the equation and calculate the operating costs for 800 inspections.
4. Draw a graph illustrating the total cost under this plan. Label the axes, and
show the costs at 600, 800, and 1,000 inspections.
Learning Objective 2 E21-31 Calculating contribution margin ratio, preparing contribution margin income statements
2. $245,000 sales level, VC $73,500
For its top managers, Worldwide Travel formats its income statement as follows:
WORLDWIDE TRAVEL
Contribution Margin Income Statement
Three Months Ended March 31, 2014
Sales Revenue $ 317,500
Variable Costs $95,250
Contribution Margin $222,250
Fixed Costs $175,000
Operating Income $ 47,250
Worldwide’s relevant range is between sales of $245,000 and $364,000.
Requirements
1. Calculate the contribution margin ratio.
2. Prepare two contribution margin income statements: one at the $245,000 sales
E21-37 Using sensitivity analysis
Dependable Drivers Driving School charges $250 per student to prepare and administer
written and driving tests. Variable costs of $100 per student include trainers’
wages, study materials, and gasoline. Annual fixed costs of $75,000 include the
training facility and fleet of cars.
Requirements
1. For each of the following independent situations, calculate the contribution
margin per unit and the breakeven point in units by first referring to the
original data provided:
a. Breakeven point with no change in information.
b. Decrease sales price to $220 per student.
c. Decrease variable costs to $50 per student.
d. Decrease fixed costs to $60,000.
2. Compare the impact of changes in the sales price, variable costs, and fixed costs
on the contribution margin per unit and the breakeven point in units.
P21-63 Computing breakeven sales and sales needed to earn a target profit;
performing sensitivity analysis
This problem continues the Davis Consulting, Inc. situation from Problem P19-40
of Chapter 19. Davis Consulting provides consulting service at an average price of
$175 per hour and incurs variable cost of $100 per hour. Assume average fixed costs
are $5,250 a month.
Requirements
1. What is the number of hours that must be billed to reach the breakeven point?
2. If Davis desires to make a profit of $3,000, how many consulting hours must be
completed?
3. Davis thinks it can reduce fixed cost to $3,990 per month, but variable cost will
increase to $105 per hour. What is the new breakeven point in hours?
Please complete the following exercises and/or problems from the textbook:E22-24
E22-27
CP22-56
E22A-32
Prepare your answers in an Excel workbook, using one worksheet per exercise or problem.
Save your workbook using the filename LastnameFirstinitial.ACC350.T# where the # represents the topic number. For example, John Doe would submit assignment #5 using the following name: DoeJ.ACC350.T5.
You are not required to submit this assignment to Turnitin.\\\
E22A-32 Preparing an operating budget
Tremont, Inc. sells tire rims. Its sales budget for the nine months ended September
30, 2014, follows:
Quarter Ended Nine-Month
Total
March 31 June 30 Sept 30 Nine Mth Total
Cash sales, 20% $24,000 $34,000 $29,000 $87,000
Credit sales, 80% 96,000 136,000 116,000 348,000
Total sales $120,000 $170,000 $145,000 $435,000
In the past, cost of goods sold has been 40% of total sales. The director of marketing
and the financial vice president agree that each quarter’s ending inventory
should not be below $20,000 plus 10% of cost of goods sold for the following
quarter. The marketing director expects sales of $220,000 during the fourth quarter.
The January 1 inventory was $32,000. Prepare an inventory, purchases, and cost of
goods sold budget for each of the first three quarters of the year. Compute cost of
E22-24 Preparing an operating budget
Sales Budget
Dunbar Company manufactures drinking glasses. One unit is a package of 8 glasses,
which sells for $20. Dunbar projects sales for April will be 3,000 packages, with
sales increasing by 100 packages per month for May, June, and July. On April 1,
Dunbar has 250 packages on hand but desires to maintain an ending inventory of
10% of the next month’s sales. Prepare a sales budget and a production budget for
Dunbar for April, May, and June.
May pkg. produced 3,110\
E22-27 Preparing a financial budget
Cramer Company projects the following sales for the first three months of the
year: $12,500 in January; $13,240 in February; and $14,600 in March. The
company expects 70% of the sales to be cash and the remainder on account. Sales
on account are collected 50% in the month of the sale and 50% in the following
month. The Accounts Receivable account has a zero balance on January 1. Round
to the nearest dollar.
Requirements
1. Prepare a schedule of cash receipts for Cramer for January, February, and
March. What is the balance in Accounts Receivable on March 31?
2. Prepare a revised schedule of cash receipts if receipts from sales on account
are 60% in the month of the sale, 30% in the month following the sale, and
10% in the second month following the sale. What is the balance in Accounts
Receivable on March 31?
P22-56 Preparing a financial budget
This problem continues the Davis Consulting, Inc. situation from Problem P21-63 of
Chapter 21. Assume Davis Consulting began January with $29,000 cash. Management
forecasts that cash receipts from credit customers will be $49,000 in January and
$51,500 in February. Projected cash payments include equipment purchases ($17,000
in January and $40,000 in February) and selling and administrative expenses ($6,000
each month).
Davis’s bank requires a $20,000 minimum balance in the firm’s checking account.
At the end of any month when the account balance falls below $20,000,
the bank automatically extends credit to the firm in multiples of $5,000. Davis
borrows as little as possible and pays back loans each month in $1,000 increments,
plus 5% interest on the entire unpaid principal. The first payment occurs one
month after the loan.
Requirements
1. Prepare Davis Consulting’s cash budget for January and February 2013.
2. How much cash will Davis borrow in February if cash receipts from customers
that month total $21,500 instead of $51,500?
Details:
Please complete the following exercises and/or problems from the textbook:
- E23-16
- E23-19
- E23-20
- CP23-36
Prepare your answers in an Excel workbook, using one worksheet per exercise or problem.
Save your workbook using the filename LastnameFirstinitial.ACC350.T# where the # represents the topic number. For example, John Doe would submit assignment #5 using the following name: DoeJ.ACC350.T5.
You are not required to submit this assignment to Turnitin.
| Note: Exercise E23-19 should be completed before attempting Exercise E23-20. |
| E23-20 Computing overhead variances | | | | |
| Review the data from Great Fender given in Exercise E23-19. Consider the |
| following additional information: | | | | |
| Static budget variable overhead $ 5,500 | | | | |
| Static budget fixed overhead $ 22,000 | | | | |
| Static budget direct labor hours 550 hours | | | |
| Static budget number of units 22,000 units | | | |
| | | | | | | |
| Great Fender allocates manufacturing overhead to production based on standard |
| direct labor hours. Great Fender reported the following actual results for 2014: |
| actual variable overhead, $4,950; actual fixed overhead, $23,000. | |
| Requirements | | | | | | |
| 1. Compute the overhead variances for the year: variable overhead cost variance, |
| variable overhead efficiency variance, fixed overhead cost variance, and fixed |
| overhead volume variance. | | | | | |
| E23-19 Calculating materials and labor variances | | | | |
| Great Fender, which uses a standard cost accounting system, manufactured 20,000 | |
| boat fenders during 2014, using 144,000 square feet of extruded vinyl purchased at | |
| $1.05 per square foot. Production required 420 direct labor hours that cost $13.50 | |
| per hour. The direct materials standard was 7 square feet of vinyl per fender, at a | |
| standard cost of $1.10 per square foot. The labor standard was 0.025 direct labor | |
| hour per fender, at a standard cost of $12.50 per hour. | | | |
| Compute the cost and efficiency variances for direct materials and direct labor. | |
| Does the pattern of variances suggest Great Fender's managers have been making |
| trade-offs? Explain | | | | | | | |
|
Solution: GRAND CANYON ACC350 ALL WEEKS DISCUSSIONS AND ASSIGNMENTS