1) Computer parts cost to make each computer is $200

2) The computers are made by assembly worker who get paid $25 for each computer

3) Utility cost for making each computer is $5 per machine hour, 2 machine hour per computer

4) If the business have had purchased a new machine, the benefit should have been $15,000 more than current one

5) Rent expenses of the computer factory

6) Machine equipment depreciation for computer factory

7) Sales manager's monthly salary $3500

8) Sales department copier machine depreciation $2,000 per year

9) Sales person get paid $35 each computer--- based on the number of computer sold

Please use the note format to complete the assignment

Chapter1 Chapter2 Group 1 Group2 Financial Accounting about Financial History financial transaction already happened Financial Accounting regarding how to record the financial transactions. that already happened (financial history) User of financial statements Internal mgmt Owners/Shareholders/stockholders 3 Lenders or creditors (bank) Tax authorities (CRA in Canada) 5 Regulators Accuracy is the key to financial accounting focus on financial summary. Variable Cost: must follow GAAP (Generally Accepted Accounting Priciples) Revenue Recognition principle: when to record sales matching principle Cost Concepts ( 5 group of the cost concepts) Fixed Cost: Differential Cost Sunk Cost Opportunity Cost Internal users external users different costs Upper Canada Law Society variable cost increases/decreases when the production volume increase/decreases always remain stable doesn't matter how many cars the businesses are making there. Managerial Accounting about future forecast the future controll the current cost Managerial Accountir controll the current cost, forecast the future 1)regarding the financial transaction that will happen in the future--- by estimating or forecasting the future 2) control the current cost User of financial statements Internal management relatively accurate is fine, the most important thing is the timelineness 31-Dec-20 not mandatory focus on detailed segmental break-down financial data Ex. Auto manufacturing business Ex: auto factory monthly rent $5000 per month comparing the differential profit, that means which option gives us higer differential profit, then we will go with it is cost that once it happened no matter how hard the mgmt tries, this cost can not be reduced or increased or controlled ex: depreciation exp $60,000 machine can be used for 5years Amortizaion exp direct sales Retail sales 60,000/5year-12,000 per yr---used-up value giving up one choice and going for another choice, the given-up cost of the 1st choice is called opportunity cost Ex: $1000 per week Auto battery cost $100 per Car 100% of revenue b share the revenue 50/50 depreciation exp ads, Ins, salary $3,000 0 auto battery $3 differencial profit Group4 Group 5 group 3 Direct Cost Indirect Cost Office Non-manufacturing cost buildings period cost manufacturing cost Factory (production, warehouse, worker) buildings direct cost is the cost directly related to the production process and can be easily traced (is the cost directly related the production process and can be counted on the per product basis) indirect cost is the cost indirectly related to the production process and can be very hard to be traced (is the cost indirectly related the production process and very hard to be counted the per product basis) Product cost manufacturing cost (Factory building cost) Non-manufacturing cost ( office building cost) 1 2 Ex: Auto Battery cost: $100 per car Direct materials. Direct Labour Auto Assembly line worker's pay $200 per car Manufacturing overhea Factory building indirect cost: ABC business is making computers 1. the harddrive cost to make the computer is $550 per computer 2. the person who assembly the computer will get paid $200 per computer Variable cost Fixed Cost almost everything in office building is indirect cost (office overhead) reception, sales dep, marketing dep, financial dep, ceo, cfo) Period Cost Direct cost Indirect cost Direct Materials. Ex: Auto Battery cost: $100 per car Auto Assembly line worker's pay $200 per car Direct Labour Ex: Lubricant cost Factory supervisor's mthly salary $5000 Ex: Lubricant cost Factory supervisor's mthly salary $5000 Direct cost Manufacturing Overhead Indirect cost Sunk cost Auto Battery cost Auto Tire Auto wheels Steel sheet Auto Assebly line w X X X Total cost per car Opportunity cost $100 $400 200 $1,000 $200 $15,000 Chapter1 Chapter2 Group 1 Group2 Financial Accounting about Financial History financial transaction already happened Financial Accounting regarding how to record the financial transactions. that already happened (financial history) User of financial statements Internal mgmt Owners/Shareholders/stockholders 3 Lenders or creditors (bank) Tax authorities (CRA in Canada) 5 Regulators Accuracy is the key to financial accounting focus on financial summary. Variable Cost: must follow GAAP (Generally Accepted Accounting Priciples) Revenue Recognition principle: when to record sales matching principle Cost Concepts ( 5 group of the cost concepts) Fixed Cost: Differential Cost Sunk Cost Opportunity Cost Internal users external users different costs Upper Canada Law Society variable cost increases/decreases when the production volume increase/decreases always remain stable doesn't matter how many cars the businesses are making there. Managerial Accounting about future forecast the future controll the current cost Managerial Accountir controll the current cost, forecast the future 1)regarding the financial transaction that will happen in the future--- by estimating or forecasting the future 2) control the current cost User of financial statements Internal management relatively accurate is fine, the most important thing is the timelineness 31-Dec-20 not mandatory focus on detailed segmental break-down financial data Ex. Auto manufacturing business Ex: auto factory monthly rent $5000 per month comparing the differential profit, that means which option gives us higer differential profit, then we will go with it is cost that once it happened no matter how hard the mgmt tries, this cost can not be reduced or increased or controlled ex: depreciation exp $60,000 machine can be used for 5years Amortizaion exp direct sales Retail sales 60,000/5year-12,000 per yr---used-up value giving up one choice and going for another choice, the given-up cost of the 1st choice is called opportunity cost Ex: $1000 per week Auto battery cost $100 per Car 100% of revenue b share the revenue 50/50 depreciation exp ads, Ins, salary $3,000 0 auto battery $3 differencial profit Group4 Group 5 group 3 Direct Cost Indirect Cost Office Non-manufacturing cost buildings period cost manufacturing cost Factory (production, warehouse, worker) buildings direct cost is the cost directly related to the production process and can be easily traced (is the cost directly related the production process and can be counted on the per product basis) indirect cost is the cost indirectly related to the production process and can be very hard to be traced (is the cost indirectly related the production process and very hard to be counted the per product basis) Product cost manufacturing cost (Factory building cost) Non-manufacturing cost ( office building cost) 1 2 Ex: Auto Battery cost: $100 per car Direct materials. Direct Labour Auto Assembly line worker's pay $200 per car Manufacturing overhea Factory building indirect cost: ABC business is making computers 1. the harddrive cost to make the computer is $550 per computer 2. the person who assembly the computer will get paid $200 per computer Variable cost Fixed Cost almost everything in office building is indirect cost (office overhead) reception, sales dep, marketing dep, financial dep, ceo, cfo) Period Cost Direct cost Indirect cost Direct Materials. Ex: Auto Battery cost: $100 per car Auto Assembly line worker's pay $200 per car Direct Labour Ex: Lubricant cost Factory supervisor's mthly salary $5000 Ex: Lubricant cost Factory supervisor's mthly salary $5000 Direct cost Manufacturing Overhead Indirect cost Sunk cost Auto Battery cost Auto Tire Auto wheels Steel sheet Auto Assebly line w X X X Total cost per car Opportunity cost $100 $400 200 $1,000 $200 $15,000