BA 510 Week 3 Assignment Problem

BA 510 Week 3 Assignment Problem in $40 OnlyBA 510 Week 3 Assignment Problem

Week 3   ABSORPTION COST
PROBLEMS 5-17  Nickelson Company
Variable and Absorption Costing Unit Product Costs and Income Statements

Nickleson Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operation:

Variable costs per unit:
Manufacturing:
Direct materials …………………………………….   $ 25
Direct labor ……………………………………………    $16
Variable manufacturing overhead …………       $5
Variable selling and administrative………………..       $2
Fixed costs per year:
Fixed manufacturing overhead……………………..   $ 300, 000
Fixed selling and administrative expenses…….   $ 180, 000

During its first year of operations Nickelson produced 60, 000 units and sold 60,000 units.
During its second year of operations it produced 75, 000 units and sold 50,000 units.
In its third year, Nickelson produced 40, 000 units and sold 65, 000 units. The selling price of the company’s product is $ 56 per unit.

REQUIRED:
Compute the company’s break-even-point in units sold.
Assume the company uses variable costing:
Compute the unit product cost for year 1, year 2, and year 3.
Prepare an Income statement for year 1, year,  2, and year 3.
Assume the company uses absorption costing:
Compute the unit product cost for year 1, year 2, and year 3.
Prepare an income statement for year 1, year 2, and year 3.
Compare the net operating income figures that you computed in requirements 2 and 3 to the break-even point that you computed in requirement 1 . Which net operating income figure seem counterintuitive? Why?

PROBLEM 5-21 Prepare and Reconcile Variable Costing Statements
(LO 5-1, LO 5-2, LO 5-3)

Linden Company manufactures and sells a single product. Cost data for the product follow:

Variable costs per unit:
Direct materials……………………………………………. $  6
Direct labor ………………………………………………….   12
Variable factory overhead…………………………..       4
Variable selling and administrative……………..       3
Total variable costs per unit……………………………………. $ 25

Fixed costs per month :
Fixed manufacturing overhead ……………………..  $ 240, 000
Fixed selling and administrative ……………………. $ 180, 000

Total fixed cost per month ………………………………………. $ 420, 000

The product sells for $40 per unit. Production and sales data for May and June, the first two months of operation, are as follows:

Units                     Units
Produced                   Sold
May………………………      30, 000                     26, 000
June……………………..      30, 000                  34, 000

Income statements prepared by the accounting department, using absorption costing, are presented below:
May                            June
Sales………………………………………………………. $ 1, 040, 000      $ 1, 360, 000
Cost of goods sold…………………………………..           780, 000         1, 020, 000
Gross margin………………………………………….         260, 000             340,  000
Selling and administrative expense……….          260, 000             282,  000
Net operating income……………………………  $          2, 000      $      58,  000

REQUIRED:
Determine the unit product cost under:
Absorption costing
Variable costing
Prepare contribution formal variable costing income statements for May and June.
Reconcile the variable costing and absorption costing net operating incomes.
The company’s Accounting Department has determined the break-even point to be 28,000 units per month, computed as follows:

Fixed cost per month   =   $ 420,000        =  28,000 units
Unit contribution margin       $ 15 per unit
Upon receiving this figure, the president commented. “There’s something peculiar here. The controller says that the break-even point is 28,000 units per month.  Yet we sold only 26, 000 units in May, and the income statement we received showed a $ 2, 000 profit.

Which figure do we believe?”   Prepare a brief explanation of what happened on the May income statement.

PROBLEM 5-22 SANDI SCOTT
Absorption and Variable Costing: Production Constant, Sales Fluctuate (LO 5-1, LO 5-2, LO 5-3)

Sandi Scott obtained a patent on a small electronic device and organized Scott Products, Inc. to produce and sell the device. During the first month of operations, the device was very well received on the market, so Ms. Scott looked forward to healthy profit. For this reason, she was surprised to see a loss for the month on her income statement.

This statement was prepared by her accounting service which takes great pride in providing its timely financial data. The statement follows:

Scott Products, Inc.
Income Statement
Sales (40,000 units)…………………………………………………                                    $200, 000
Variable expenses
Variable cost of goods sold……………………………….   $ 80,000
Variable selling and administrative expenses …         30,000                    110,  000
Contribution margin…………………………………………                                           90,  000
Fixed expenses
Fixed  manufacturing overhead ……………………….       75, 000
Fixed selling and administrative expenses……….        20, 000                     95,  000
Net operating loss …………………………………………………                                     $   (5, 000)

Ms. Scott is discouraged over the loss for the month because she had planned to use the statement to encourage investors to purchase stock in the new company. A friend who is a CPA, insists that the company should be using absorption costing rather than variable costing.  He argues that if absorption costing had been used, the company would have reported a profit for the month.

Selected cost data relating to the product and to the first month of operation follow:

Units produced ……………………………………………………………………… 50, 000
Units sold ………………………………………………………………………………. 40, 000
Variable cost per unit:
Direct materials………………………………………………………… $     1.00
Direct labor …………………………………………………………..…. $     0.80
Variable manufacturing overhead ……………………………  $     0.20
Variable selling and administrative expenses…………..  $      0.75

REQUIRED: also does realistic computer animation for special effect in movies.

Complete the following:
Complete the product cost under absorption cost.
Redo the company’s income for the month using the absorption costing.
Reconcile the variable and absorption costing net operating income (loss) figures.
Was the CPA correct in suggesting that the company really earned a “profit” for the month?
Explain?
During the second month of operations, the company again produced 50,000 units but sold
60,000 units (Assume no change in total fixed costs).
Prepare a contribution format income statement for the month using variable costing.
Prepare an income statement for the month using the absorption costing.
Reconcile the variable costing net operating incomes.

PROBLEM 6-16 Second – Stage Allocation and Product Margins (LO 6-4, LO 6-5)
AnimPix, Inc.  is a small company that creates computer-generated animation for films and television. Much of the company’s work consists of short commercials for television, but the company

The young founders of the company have become increasingly concerned with the economics of the business-particularly because many competitors have sprung up recently in the local area.
To help understand the company’s cost-structure, an activity-based costing system has been designed.
Three major activities carried out in the company; animation concept, animation production, and contract administration. The animation concept activity is carried out at the contract proposal stage when the company bids on projects. This is an intensive activity that involves individuals from all parts of the company bids on the projects. This is an intensive activity that involves individuals from all parts of the company in creating storyboards and prototype stills to be shown to the prospective client. After the client has accepted a project, the animation goes into production and contract administration begins.

Technical staff do almost all the work involved in animation production, whereas the administrative staff is largely responsible for contract administration. The activity cost pools and their activity measure and rates are listed below:

Activity Cost Pool                     Activity Measure                      Activity Rate
Animation concept………………… Number of proposals           $ 6, 000 per proposal
Animation production……………. Minutes of animation          $ 7, 700 per minute of animation
Contract administration…………  Number of contracts            $ 6, 600 per contract

These activity rates include all of the costs of the company, except for the costs of idle capacity and re-organization-sustaining costs. There are no direct labor or indirect materials costs.
Preliminary analysis using these activity rates has indicated that the local commercials segment of the market maybe unprofitable. This segment is higly competitive. Producers of local commercials may ask several companies like Anim Pix to bid which results in an unusually low ratio of accepted contracts to bids.

Furthermore, the animation sequences tend to be much shorter for local commercials than for other work. Because animation work is billed at standard rates according to the running time of the completed animation, the revenues from these short projects tend to be below average. Data concerning activity in the local commercials market appear below:

Local
Activity  Measure                                Commercials
Number of proposals ……………………..        20
Minutes of animation …………………….        12
Number of contracts ………………………          8

The total sales for local commercials amounted to $240,000.

REQUIRED:
Determined the cost of serving the local commercial market.
Prepare a report showing the margin earned serving the local commercial market. (Remember, this company has no direct materials or direct labor costs.)
What would you recommend to management concerning the local commercial market?

PROBLEM 6-17  Precision Manufacturing , Inc.
Comparing Traditional and Activity – Based Product Margins (LO 6-1, LO 6-3)

Precision Manufacturing Inc. (PMI)  makes two type of industrial component parts – the EX300 and the TX500. An absorption costing income statement for the most recent period is shown below:

Precision Manufacturing Inc.
Income Statement
Sales ………………………………………………………..  $ 1, 700, 000
Cost of goods sold……………………………………      1, 200, 000
Gross margin……………………………………………          500, 000
Selling and administrative expenses…………          550, 000
Net operating loss …………………………………..  $      ( 50, 000)

PMI produced and sold 60,000 units of EX300 at a price of $20 per unit and 12, 500 units of TX500 at a price of $40 per unit. The company’s traditional cost system allocated manufacturing overhead to products using a plantwide overhead rate and direct labor dollar as the allocation base. Additional information relating to the company’s two product lines is shown below:

EX300                          TX500              Total

Direct materials………………… $ 366, 325                      $ 162, 550         $ 528, 875
Direct labor………………………. $ 120, 000                      $    42, 500            162, 500
Manufacturing overhead…..                                                                   508, 625
Cost of goods sold……………..                                                                      $ 1, 200, 000

The company has created an activity-based costing system to evaluate the profitability of its products. PMI’s ABC implementation team concluded that $50,000 and $100,000 of the company’s advertising expenses could directly traced to EX300 and TX500, respectively. The remainder of the selling and administrative expenses was organization – sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below:

Manufacturing                                           Activity
Activity cost Pool (and activity measure)           Overhead           EX 300    TX 500   Total
Machining (machine-hours)…………………       $198, 250                  90,000  62,500     152,500
Setups (setup hours)…………………………….         150, 000                         75        300             375
Product-sustaining costs………………………          100, 000                        1            1                   2
Other ( organization-sustaining costs)                60, 375                        NA          NA               NA
Total manufacturing overhead cost……..     $ 508,   625

REQUIRED:
Using Exhibit 6-12 as a guide, compute the product margins for the EX300 and TX500 under the company’s traditional costing system.
Using  Exhibit 6-10 as a guide, compute the product margins for EX300 and TX500 under the activity-based costing system.
Using Exhibit 6-13 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignments. Explain why the traditional and activity – based cost assignments differ.

PROBLEM 6-18  Comparing Traditional and Activity-Based Product Margin (LO 6-1, LO 6-3,
LO 6-4, LO 6-5).

Rocky mountain corporation makes two types of hiking boots – Xactive and the Pathbreaker . Data concerning these two product lines appear below:

Xactive                        Pathbreaker
Selling price per unit……………………………………………  $ 127. 00                         $ 89. 00
Direct materials per unit……………………………………..       64. 80                              51.00
Direct labor per unit ……………………………………………       18. 20                              13.00
Direct labor hours per unit …………………………………          1. 4 DLHs                             1.0 DLHs
Estimated annual production and sales………………        25, 000 units                  75, 000 units

The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear below:

Estimated total manufacturing overhead……………………….. $2, 200, 000
Estimated total direct labor-hours ………………………………….        110, 000 DLHs

REQUIRED:

Using Exhibit 6-12 as a guide, compute the product margins for the Xactive and the Path breaker products under the company’s traditional costing system.

The company I considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following four activity cost pools (Other cost pool includes organization-sustaining costs and idle capacity costs):

Estimated                   Expected Activity
Activities and Activity Measures                  Overhead cost       Xactive   Pathbreaker     Total
Supporting direct labor (direct labor-hours)       $ 797, 500       35,000        75,000          110, 000
Batch setups (setups)………………………………..           680, 000            250              150                   400
Batch setups……………………………………………..            650, 000                1                  1                        2
Other………………………………………………………..               72, 500             NA               NA                      NA
Total manufacturing overhead cost…………..     $2, 200, 000

Using Exhibit 6-10 as a guide, compute the product margins for the Xactive and the Path-breaker products under the activity-based costing system.

Using Exhibit 6-13 as a guide, prepare a quantitative comparison of the traditional and activity-based cost assignment. Explain why the traditional and activity-based cost assignments differ,….

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MBAA 523 Problem Set 6 Key

MBAA 523 Problem Set 6 Key in $17 only

1. Chevrolet offers five cars: the Spark, Sonic, Cruze, Malibu, and Impala with suggested retail prices of $12,270; $14,245; $16,170; $22,565, and $27,060 respectively. Is this price discrimination? Explain why or why not.
2. You sell consumer products in the Americas. The price sensitivity of South American consumers seems greater than for those in North America. An economic consulting firm has estimated the own-price elasticity for your most profitable product is -1.25 in North America and -1.50 in South America. Your marginal cost is constant at $75 across most of your production volume capability. What prices will maximize profits? Show the computation.
3. Define the 3 types of price discrimination and explain why 1st degree discrimination is very difficult to practice. Provide 1 example where a form of 1st degree discrimination is practiced.
4. You are a pricing analyst at a global network airline. Using historical data, you have determined that the demand for coach seats for passengers traveling for business and those traveling for leisure are: 1) business demand: P = 200 – 3Q, and 2) leisure demand: P = 120 – 0.6Q. The marginal cost for a passenger in coach class is $20. What price should you set for each type of passenger and how many seats should be sold to each? Show the computations.
5. Complete and label the diagram showing the numbers of seats sold and price for leisure and business passengers. Answer the following questions:

ECON385 Labor Economics Problem Set 2

ECON385 Labor Economics Problem Set 2 in $20 only

Short Run Labor Demand

Suppose that the firm has a production function described by
q=
(
L3
6
0
if L < 5
2
+ KL + 26K if L 5
Further suppose that we are concerned only in the short run and that the units of capital employed are currently fixed at 8. Suppose that the price of each unit produced by the firm is 2.
1. Graph the M PL and the APL . Show your work.
2. At what level of labor will this firm start facing diminishing marginal returns?
(Approximations to the nearest unit are admissible)
3. When will the M PL and the APL intersect?
4. Further suppose w = 145 2 . How many workers will the firm hire?
5. If w = 235 2 . How many workers will the firm hire?
6. Graph the labor demand curve for wages above 14. (Nine evenly distributed evaluation points will suffice)
7. Repeat question 6 with a price of each unit produced by the firm equal to 3.
8. How many more workers can the firm afford after the price increase of the produced good (from 2 to 3) if w = 145 2 ?
9. Calculate the elasticity of labor demand in the short run when price of each unit produced by the firm is 2 and w changed from 145 2 to 99 2 . Show your work.

Problem 9.7A Millar Inc

Problem 9.7A Millar Inc in $4 only

Problem 9.7A Millar, Inc., purchased a truck to use for deliveries and is attempting to determine how much depreciation expense would be recognized under three different methods. The truck cost $20,000 and is expected to have a value of $4,000 at the end of its five-year life. The truck is expected to be used at the rate of 10,000 miles in the first year, 20,000 miles in the second and third years, and 15,000 miles in the fourth and fifth years.

a. Determine the amount of depreciation expense that will be recognized under each of the following depreciation methods in the first and second years of the truck’s useful life. A full year’s depreciation will be recognized in the first year the truck is used. (Omit the “$” sign in your response.)

Accounting 211 Comprehensive Problem 4

Accounting 211 Comprehensive Problem 4 in $19 only

This problem has a value of 10% of the final grade.

Jumpin-JehoSaphats is owned by Jessica Jean (JJ) Saphats. Jessica wants to incorporate her business but is not sure of the differences between the current form of sole proprietorship and changing to a corporation. She has come to you to discuss the future of her company.

Part 1. 10% Discuss in detail the requirements of incorporating JJ’s company. What are the advantages and disadvantages of this plan? What must she do to become a corporation?

Problem Prevention Plan

Problem Prevention Plan372

Problem Prevention Plan Instructions

The Problem Prevention Plan will help you use your knowledge of effective classroom management. Develop a 250–500-word document that explains your plans for the week as if it were for the first week of school. Choose a grade (high school preferably) and create classroom rules reflecting best practices in classroom management. Describe who would be involved in making the rules. If the rules are stated in a particular way, state why as well as your reasoning for including each rule. Be sure to include why these rules are best for the grade you chose.

Your Problem Prevention Plan should be in APA format including a reference page, introduction, and conclusion.

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Thomas ACC102 Module 1 Assignment

Thomas ACC102 Module 1 Assignment in $8 Only (Instant Download)Thomas ACC102 Module 1 Assignment

Complete the following end-of-chapter exercises and problems, and submit your answers to your mentor.

Chapter 13:

  • Exercise 13.10, page 600
  • Exercise 13.12, pages 600–601
  • Problem 13.2A, pages 602–603
  • Problem 13.4A, pages 604–605

When preparing your answers, please identify each exercise and problem clearly by textbook chapter and exercise or problem number. Arrange your answers by chapter, with the exercises first followed by the problems. To receive full credit for your answers, show all work and include complete solutions.

Sample Answer:

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Individual Tax Return Problem 6

Individual Tax Return Problem 6 in $39 only (Instant Download)Individual Tax Return Problem 6

Required:

· Use the following information to complete Paige Turner’s 2013 federal income tax return. If information is missing, use reasonable assumptions to fill in the gaps.

· Any required forms, schedules, and instructions can be found at the IRS Web site (www.irs.gov). The instructions can be helpful in completing the forms.

Facts:

1. Paige Turner is single and has two children from her previous marriage. Ali lives with Paige, and Paige provides more than half of her support. Leif lives with his father, Will (Lief lived with Will for all of 2013). Will provides more than half of Leif’s support. Paige pays “alimony” of $400 per month to Will. The payments are to continue until Leif reaches age 18, when they will be reduced to $150. Paige provides you with the following additional information:

Accounting Module 6 P6-1 and P6-2 Problem

Accounting Module 6 P6-1 and P6-2 Problem in $12 only

Financial Accounting and the Entrepreneur

CellBase Technologies manufactures capacitors for cellular base stations and other communication applications. The company’s December 2011 flexible budget income statement for show output levels of 7,500, 9,000, and 11,000  Units.

The company sold 11,000 units during December and its actual operating income was as follows:

Requirements

1. Prepare an income statement performance report for December.

2. What was the effect on CellBase Technologies operating income of selling 2,000 units more than the static budget levels of sales?

3. What is CellBase Technologies’ static budget variance? Explain why the income statement performance report provides more useful information to CellBase Technologies’ managers than the simple static budget variance. What insights can CellBase Technologies’ managers draw from this performance report.

Requirement 1

Prepare the income statement performance report.

CellBase Technologies

Income Statement Performance Report

Month Ended December 31, 2011

Actual Results at Actual Prices Flexible Budget Variance Flexible Budget for Actual Number of Output Units Sales Volume Variance Static (Master) Budget

Output units

Sales revenue

Variable expense

Fixed expenses

Total expense –

Operating income $-

Requirement 2

What was the effect on CellBase Technologies operating income of selling 2,000 units more than the static budget levels of sales?

Requirement 3

What is CellBase Technologies’ static budget variance? Explain why the income statement performance report provides more useful information to CellBase Technologies’ managers than the simple static budget variance. What insights can CellBase Technologies’ managers draw from this performance report.

Financial Accounting and the Entrepreneur

SmartSound manufacturers headphone cases. During September 2011, the company produced 105,000 cases and recorded the following data:

Requirements

1. Compute the price variance and efficiently variance for direct materials and for direct labor.

2. For manufacturing overhead, compute the total variance, the flexible budget variance, and the production volume variance.

3. Prepare a standard cost income statement through gross profit to report all variances to management. Sale price of the headset cases was $1.50 each.

4. SmartSound’s management used more-expensive workers during September. Explain the trade-off between the two direct labor variances.

Requirement 1

First compute the price variances for direct materials and direct labor. Indicate favorable or unfavorable.

Organize the data first:

Direct Materials Direct Labor

Actual price part /hour

Standard price part /hour

Actual quantity parts hours

Standard quantity parts hours

PRICE VARIANCE:

Direct materials $-

Direct labor $-

Next compute the efficiency variances for direct materials and direct labor and select if the amount is favorable or unfavorable.

EFFICIENCY VARIANCE:

Direct materials $-

Direct labor $-

Requirement 2

Compute the total variance, the flexible budget variance, and the production volume variance for manufacturing overhead.

Smart Sound

Computation of Overhead Variances

Total overhead variance:

Actual overhead cost

Standard overhead allocated to production

Total overhead variance

Overhead flexible budget variance:

Actual overhead costs

Flexible budget overhead for actual outputs

Overhead flexible budget variance

Production volume variance:

Flexible budget overhead for actual outputs

Standard overhead allocated to production

Production volume variance

Requirement 3

Prepare the standard cost income statement.

SmartSound

Standard Cost Income Statement

Month Ended September 30, 2011

Sales revenue

Cost of goods sold at standard cost

Manufacturing cost variances:

Direct materials price variance

Direct materials efficiency variance

Direct labor price variance

Direct labor efficiency variance

Overhead flexible budget variance

Production volume variances

Total manufacturing variances

Cost of goods sold at actual cost

Gross Profit

Requirement 4

SmartSound’s management used more-expensive workers during September. Explain the trade-off between the two direct labor variances.

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If you need any type of help regarding Homework, Assignments, Projects,  Case study, Essay writing or any thing else then just email us at question@solvemyquestion.com.  We will get back to you ASAP. Do not forget to maintain the time frame you need you work to be done.

Accounting Problems and MCQs with A+ Answers

Accounting Problems and MCQs with A+ Answers in $24 only

In essence, capital budgeting is the process of:
Deciding what to do with the firm’s money
Deciding how much capital the firm needs
Deciding where to get the money for capital investment projects
Deciding when to invest in a new project

Question 2 2 pts
Which of the following cash flows is an “incremental cash flow” for the purposes of capital budgeting?
Expenditures on plant and equipment for a new project
R& D expenditures for a new project during the last three years
Dividend payments
Reduction of a competitor’s sales as a result of the your company’s introduction of a new product

ACC Tax Problem – Robert and Susan (both 39)

ACC Tax Problem – Robert and Susan (both 39)

Robert and Susan (both 39) are married and have 2 children. Their son, Dylan, is 8 and their daughter, Harper, is 3. Susan sells pharmaceuticals for the Bendigo Drug Company. Robert is a teacher at the local junior high school. In the summer, Robert earns extra money as a self-employed house painter. Their income from their jobs is as follows:

Salary Federal Tax State Tax

Withheld Withheld
Susan $80,000 $5,000 $5,400
Robert 45,000 6,100 3,150

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