Question
Acc 207 Final Project consist of the creation of a quantitative analysis with a memo to management. Can I get some ideas of how to
Acc 207 Final Project consist of the creation of a quantitative analysis with a memo to management. Can I get some ideas of how to write this memo?
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QUESTION: NEEDS TO BE SOLVED: (2-3 PAGES ANSWERING THE FOLLOWING QUESTIONS)
For Milestone Three, you will make a recommendation to the MDE management team on whether the company should switch from process costing to activitybased costing (ABC) for the bird feeder division. This is an exploratory discussion, but management would like to know more about the differences between the two costing systems and if a different costing system might work better for the company. Submit a 23 page Word document that addresses all of the critical elements below of Section III. Specifically, the following critical elements must be addressed: III. Main Costing Systems Activity-Based Costing vs. Process Costing a) Identify the cost allocation system that would benefit this company most. Justify your response. b) Does this cost allocation system meet management planning and control goals? Explain. c) What are the ethical implications that should be considered with this cost allocation system? d) Describe the ethical implications of direct costs versus indirect costs. What considerations should be made when selecting one of these two? Guidelines for Submission: Your paper must be submitted as a 23 page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins.
Below are tables with calculations figured out already. I just need help writing the 2-3 pages answering the above questions. thank you!
CHARTS BELOW TO REFER SO YOU CAN ANSWER THE ABOVE QUESTIONS
ACC 207 MDE Manufacturing Budget: Bird Feeder
I. Sales and Manufacturing Expenses: Budget and Actual(2014)
You will use this table to complete Milestones One and Two.
Budget ($) | Actual ($) | |
Sales | 1,050,000 | 991,700 |
Expenses | ||
Materials Cedar | 225,000 | 248,160 |
Materials Plastic | 37,500 | 37,741 |
Factory Worker Labor | 300,000 | 332,760 |
Materials Indirect | 3,000 | 2,585 |
Factory Depreciation | 78,000 | 78,000 |
Factory Utilities | 12,000 | 12,000 |
Factory Maintenance and Repairs | 5,000 | 4,500 |
Shipping ($2.25/each) | 112,500 | 105,750 |
Sales Commissions ($2.00/unit sold) | 100,000 | 94,000 |
Office Rent | 12,000 | 12,000 |
Advertising | 20,000 | 20,000 |
Liability insurance | 5,000 | 5,000 |
Office Depreciation | 1,000 | 1,000 |
Office Salaries | 48,000 | 48,000 |
Total Expenses | 959,000 | 1,001,496 |
II. Contribution Margin: Static Budget and Actual Results (2014)
You will use this table to complete Milestone Two.
Actual Results | Static Budget Amount | |
Units Sold | 47,000 | 50,000 |
Revenues ($) | 991,700 | 1,050,000 |
Manufacturing Costs ($) | ||
Variable | 621,246 | 565,500 |
Fixed | 94,500 | 95,000 |
Gross Margin | 275,954 | 389,500 |
III. Standard Variable Manufacturing Costs (2014)
You will use this table to complete Milestone Two.
Static Budget Costs | Standard Input | |
Direct Materials: Cedar | 225,000 | 3.0 ft/unit |
Direct Materials: Plastic | 37,500 | 1.0 ft/unit |
Direct Manufacturing Labor | 300,000 | 0.5 hrs/unit |
Variable Manufacturing Overhead | 3,000 | 0.3 ft/unit |
IV. Actual Variable Manufacturing Costs (2014)
You will use this table to complete Milestone Two.
Actual Costs | Actual Input | |
Direct Materials: Cedar | 248,160 | 3.2 ft/unit |
Direct Materials: Plastic | 37,741 | 1.1 ft/unit |
Direct Manufacturing: Labor ($) | 332,760 | 11.80/hr |
Variable Manufacturing Overhead | 2,585 | 0.2 ft/unit |
ANSWERS FOR MILESTONE 1& 2
Fixed Manufacturing Overhead | ||||||||||||||||||||||||||||
Total Manufacturing Costs | ||||||||||||||||||||||||||||
Gross Margin | ||||||||||||||||||||||||||||
Development of Flexible Budget - Calculations | ||||||||||||||||||||||||||||
Budgeted Cost per Feet/Hour | Static Budget Cost | Static Budget Units | Budgeted Unit | Actual Volume | Flexible Budget | |||||||||||||||||||||||
Amounts | Amount | |||||||||||||||||||||||||||
Revenues | $ 21.00 | 47,000 | $987,000 | |||||||||||||||||||||||||
Variable Costs | ||||||||||||||||||||||||||||
DM-Plastic | 4.50 | 47,000 | 211,500 | |||||||||||||||||||||||||
DM-Cedar | 0.75 | 47,000 | 35,250 | |||||||||||||||||||||||||
Direct Manuf. Labor | 6.00 | 47,000 | 282,000 | |||||||||||||||||||||||||
Variable Manuf. Overhead | 0.06 | 47,000 | 2,820 | |||||||||||||||||||||||||
Total Variable Manufacturing Costs | 11.31 | 531,570 | ||||||||||||||||||||||||||
Fixed Manufacturing Overhead | 95,000 | |||||||||||||||||||||||||||
Total Manufacturing Costs | 626,570 | |||||||||||||||||||||||||||
Gross Margin | $360,430 | |||||||||||||||||||||||||||
Milestone One, Part II | ||||||||||||||||||||||||||||
Use Table I on the MDE Manufacturing Budget to complete your calculations. | ||||||||||||||||||||||||||||
Totals | Totals | |||||||||||||||||||||||||||
Budget | Actual | |||||||||||||||||||||||||||
Sales Price per Unit | $ 21.00 | $ 21.00 | ||||||||||||||||||||||||||
Variable Costs | ||||||||||||||||||||||||||||
Materials - Cedar | 225,000 | 248,160 | ||||||||||||||||||||||||||
Materials - Plastic | 37,500 | 37,741 | ||||||||||||||||||||||||||
Factory Worker Labor | 300,000 | 332,760 | ||||||||||||||||||||||||||
Materials - Indirect | 3,000 | 2,585 | ||||||||||||||||||||||||||
Shipping ($2.25/ea) | 112,500 | 105,750 | ||||||||||||||||||||||||||
Sales Commissions ($2/unit sold) | 100,000 | 94,000 | ||||||||||||||||||||||||||
778,000 | 820,996 | |||||||||||||||||||||||||||
Variable Cost per Unit | 778,000 / 50,000 | $15.56 | 820,996/47,000 | $ 17.47 | ||||||||||||||||||||||||
Contribution Margin | $ 5.44 | $3.63 | ||||||||||||||||||||||||||
Using Budgeted Amounts | ||||||||
Breakeven Point - | 181,000 | 33272 units | 49,697 units | |||||
$5.44 | ||||||||
Using Actual Amounts | 180,500 | 52,450 units | ||||||
+ 10,000 profit | 190,500 | |||||||
Using actual amounts | ||||||||
+ 10,000 profit |
New Contribution Margin | $4.05 | |
Current Variable Costs | $17.47 | |
New Sales Price | $21.52 | |
Development of Price and Efficiency Variances - Calculations
Actual Ounces per Unit | Actual Units | Actual Ounces Used | Actual Cost | Actual Cost per Unit | ||
DM-Plastic | 3 | 47,000 | 150,400 | 248,160 | $ 1.65 | |
DM-Cedar | 1 | 47,000 | 51,700 | 37,741 | $ 0.73 | |
Actual Labor Cost per Hour | Actual Labor Costs | Actual Labor Hours | Actual Units | Actual Labor Hours per Unit | ||
Direct Manuf. Labor | $ 11.80 | $ 332,760 | 28,200 | 47,000 | 0.60 | |
Direct Material Plastic ($22,560) U price variance
($14,100) U efficiency variance
Direct Material Cedar $1034 F Price variance.
($3525) U efficiency variance
Direct Manufacturing Labor $5640 F Price Variance
($56,400) U Efficiency Variance
Variable Manufacturing Overhead ($235 ) U Spending Variance
$470 F Efficiency Variance
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