Justify to the CEO what type of costing method (job- order, process costing, variable costing and/or...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Justify to the CEO what type of costing method (job- order, process costing, variable costing and/or activity-based costing) you would recommend AFC use. Assume that all of the items produced are sold. Use the following accounting data in your analysis. Production & Cost Description Production & Cost Amounts 5000 chairs/10 batches; 4000 Annual Production tables/20 batches; 3000 dressers/20 batches Raw materials in board 1 chair = 10 BF; 1 table = 15 BF; feet (BF) per unit Raw materials price per unit Assembly labor time (hours per unit) Labor pay rate Assembly department overhead per direct labor hour 1 dresser = 20 BF $2 per BF 1 chair = 5 hours; 1 table = 7 hours; 1 dresser = 10 hours $15 per hour $5 Painting process machine hours (MH) Painting department overhead per MH Changeover cost per batch Sales price Fixed Cost 1 chair = 0.5 MH; 1 table = 1.5 MH; 1 dresser = 2 MH $20 1 chair = $100; 1 table = $150; 1 dresser = $200 1 chair $180; 1 table = $270; 1 dresser = $270 $50,000 Variable SG&A Fixed SG&A $5 per unit $25,000 Within your analysis, make sure to include the following: Briefly discuss the advantages and disadvantages of the four costing methods. Narrow the choice down to two cost methods you would most recommend and provide your justification. Demonstrate how each of the two costing methods you chose would allocate overhead and administrative costs by calculating product costs using each method. Justify to the CEO what type of costing method (job- order, process costing, variable costing and/or activity-based costing) you would recommend AFC use. Assume that all of the items produced are sold. Use the following accounting data in your analysis. Production & Cost Description Production & Cost Amounts 5000 chairs/10 batches; 4000 Annual Production tables/20 batches; 3000 dressers/20 batches Raw materials in board 1 chair = 10 BF; 1 table = 15 BF; feet (BF) per unit Raw materials price per unit Assembly labor time (hours per unit) Labor pay rate Assembly department overhead per direct labor hour 1 dresser = 20 BF $2 per BF 1 chair = 5 hours; 1 table = 7 hours; 1 dresser = 10 hours $15 per hour $5 Painting process machine hours (MH) Painting department overhead per MH Changeover cost per batch Sales price Fixed Cost 1 chair = 0.5 MH; 1 table = 1.5 MH; 1 dresser = 2 MH $20 1 chair = $100; 1 table = $150; 1 dresser = $200 1 chair $180; 1 table = $270; 1 dresser = $270 $50,000 Variable SG&A Fixed SG&A $5 per unit $25,000 Within your analysis, make sure to include the following: Briefly discuss the advantages and disadvantages of the four costing methods. Narrow the choice down to two cost methods you would most recommend and provide your justification. Demonstrate how each of the two costing methods you chose would allocate overhead and administrative costs by calculating product costs using each method.
Expert Answer:
Related Book For
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher
Posted Date:
Students also viewed these accounting questions
-
Consider the following project: Period 0 1 2 3 Net cash flow 1 5 5 0 8 4 . 5 5 1 6 0 . 5 9 The internal rate of return is 1 9 % . The NPV , assuming a 1 9 % opportunity cost of capital, is exactly...
-
Compute the operating cycle period for HTC Company Ltd for 2019 2019 2018 Revenue: $120 million $100 million Cost of Goods (COGS): $85 million $60 million Inventory: $25 million $20 million Accounts...
-
Convert this differential equation into an algebraic equation using Laplace Transforms to solve the equation and then invert the equation back into the time domain. d?x dx dt? + 4+ 3x = 1 dt Given...
-
Multiple Choice Questions: 1. Which of the following is most likely a topic of discussion in macroeconomics? a. An increase in the price of a pizza b. A decrease in the production of VCRs by a...
-
Conduct research on the Job Diagnostic Survey and the Job Characteristics Model and, after receiving information on how to interpret your score, make some predictions about the implications of your...
-
What is a coordination of benefits provision?
-
What makes the contribution of real options attractive for operations managers?
-
Time Value of Money Concept The following situations involve the application of the time value of money concept: 1. Janelle Carter deposited $9,750 in the bank on January 1, 1993, at an interest rate...
-
Monty Company acquires a delivery truck at a cost of $62,000 on January 1, 2022. The truck is expected to have a salvage value of $12,000 at the end of its 4-year useful life. Compute annual...
-
Anthea Lee was born in Beijing China in 1953. She immigrated to Australia in 1974 with her husband. Anthea worked as a teacher until she retired. She speaks English fluently. Her husband has passed...
-
Syarikat SriNuri Food Industries is a halal ovalette manufacturer in Malaysia. The ovalette production process begins with the Mixing Department, where key ingredients such as Monoglyceride,...
-
On September 1, Mr. Smith sold short 120 shares of A Inc. stock at $120 per share and also sold short 240 shares of B Corp. stock for $240 per share. The initial and maintenance margin requirement...
-
You have just finished your finance degree and struck it rich with a high paying, $75,000/year job in downtown Phoenix. Your parents have agreed to help you purchase a condo, townhome or house in the...
-
A bond pays a coupon of $21 two times each year and matures in 19 years. The yield is 3.93%. How much is it worth today? Answer:
-
HONDA Inc. is using Just-in-Time Production System and Backflush Cost Accounting System for the year ended December 31, 2016. The following information was provided for the year 2016: A. Raw...
-
Part A: Evaluate the following opinion polls. 1) evaluate whether the poll results in strong support for the pollster's conclusion, and if they don't 2) specify the source of the problem (i.e. too...
-
Tanaka Company's cost and production data for two recent months included the following: March April Production (units).........300................600 Rent.....................$1,800............$1,800...
-
Jazz Motor Company manufactures automobiles. During September 2002 the company purchased 5,000 head lamps at a cost of $9 per lamp. Jazz withdrew 4,650 lamps from the warehouse during the month....
-
The cost of goods manufactured schedule shows each of the cost elements. Complete the following schedule for Salazar Manufacturing Company. Instructions Indicate the missing amount for each letter...
-
Karpman Company is a manufacturer of personal computers. Various costs and Classify various costs into expenses associated with its operations are as follows. 1.Property taxes on the factory...
Study smarter with the SolutionInn App