Adobe Acrobat Reader DC Tools ACCT 111 SME Proj 1 / 4 134% Apple Hilly Farms Ned Hilly was an investment banker and worked in San Francisco at a large bank. As retirement got closer his wife, Sally, and him decided to spend their retirement up in the Sierra Nevada foothills by buying an apple farm in Apple Hill. All their kids were grown and their youngest daughter, Nikki, was finishing an accounting degree at Sac State, whom they were hoping would help them out with the books once she was done. A few years go by and the farm life is bustling. They had a U-Pick your own apples at the farm which cut down costs of running the farm, though they ended up with more apples than they could sell that first year. The second year, Sally came up with the idea of opening a bakery on the farm. She was an excellent baker, she makes the best apple pie west of the Mississippi, at least her family thought so. The bakery was a success that year, more so than expected. Sally made homemade apple pies and caramel apples with her special caramel sauce. In the following year, they expanded bakery operations to include more staff and an extra space for baking. Ned wasn't too sure if the expansion was going to be profitable, he had an idea of the costs involved with apple pie and caramel apple production, but he couldn't pinpoint the details. Since Apple Hill is a seasonal business he wanted to know how well his business did in the peak season to ensure that it made enough to cover the costs in the off-season. Luckily, Nikki just graduated in May and she would be able to work with Ned to work out the details and ACCT 111 SME Proj. 2 / 4 O 134% Nikki started by talking with her parents about some of the estimated sales and costs that they thought would incur for the month of September. Here are some of those estimates: Total Caramel Apples $8.00 9,000 Apple Pies $22.00 6,000 Sales price (per unit) Expected sales units (for September) 15,000 Total $20,150.00 Expected Manufacturing costs: Fixed OH (per month) Direct labor (per unit) Direct materials (per unit) Variable OH (per unit) Apple Pies $16,500.00 $3.50 $2.50 $2.00 Caramel Apples $3,650.00 $2.10 $1.75 $0.75 Expected Marketing and admin costs: Fixed costs (per month) Variable costs (per unit) $5,750.00 $4,500.00 $1.25 $1,250.00 $0.25 O to search o te 2 ACCT 111 SME Proj 114% Additionally, Sally informed her that the farm received a special order to sell their apple pies and caramel apples at the local county fair in September. Sally wanted to sell 3,250 pies and 4,250 caramel apples for a discounted price of $18.00 and $6.50, respectively. With, the amount of staff and the size of the bakery, Nikki determined that the maximum capacity for the bakery is 3,700 labor hours a month. At the current projected sale amounts she expects that they'll need 2,850 hours to meet their regular sales volume. After review of the salaries of all the staff, Nikki determined that the average hourly wage was $14.00. Ned was also concerned about how much it cost to keep apple pie inventory on hand at the end of the month, caramel apples should be sold within a couple days so no inventory is left at the end of the month. Since there is a limited shelf life for the apple pies, Ned and Sally try and keep the ending inventories in line with next month's expectations. They estimated that they'd have to start 7,000 apple pies in order to have 1,000 apple pies in-process at the end of the month and 500 finished pies. At the end of August there were 500 pies that were in-process and no finished pies. Project - Adobe Acrobat Reader DC ACCT 111 SME Proj 134% The variable costs associated with these inventories were as follows: Beginning WIP inventory September costs DM $1,400 $17,500 Conversion $3,350 $38,500 And the conversion cost for the in-process pies is 50% completed and 100% for direct materials. (Use the expected for September Apple Pie Sales for determining units started and units completed and transferred out) September was a success for the bakery! They were able to complete the special order and with some overtime baked a few more pies. Here were the results for the actual sales and costs at the end of the month. (The actuals as presented below are only to be use for Problem 6.) Caramel ACCT 111 SME Project Bipat Adobe Acrobat Reader DC e Ball View sugn Window Help Home Tools ACCT 117 SME Proj... * 1 / 4 0 134% Total Apple Pies $22.50 7,250 Caramel Apples $7.00 10,500 Actual Sales price (per unit) Actual sales units Actual variable manufacturing OH Actual variable marketing and admin cost Actual fixed manufacturing costs Actual marketing and admin costs 17,750 $81,625 $15,125 $18,000 $5,000 ACCT 111 SME Pro X LIC Pula UCL. 4. Prepare the journal entries as given on the excel workbook. 5. Using the Weighted-Average method create the Production Cost Report for Apple Pies only, to include computing the total Apple Pies to be accounted for, computing the total Apple Pie costs to be accounted for, and calculating any necessary adjustments. 6. Create a Budget Analysis Report for the month of September, to include creating a Master Budget, and calculating the variance analyses between Actuals versus the Flexible Budget and versus the Master Budget. Note those variances as either being Favorable (F) or Unfavorable (U). Problem Analysis 1. What costs are excluded from the Gross Margin calculation? Why would we exclude these costs? 2. What does the mix of the weighted-average contribution margin tell us about the impact to profits of each product? 3. Should Apple Hilly Farms complete the Special Order? Explain your answer by using pricing terms from the textbook. 4. Was manufacturing overhead under or over applied? What does over or under applied overhead mean? 4. Was manufacturing overhead under or over applied? What does over or under applied overhead mean? 5. Why would Apple Hilly Farms use standard costing since actual costing gives the actual cost? Why would they not want to wait until the actual costs are known? 6. Explain the variances calculated for Apple Hilly Farms. Why was September a good or bad month for them? ere to search o a DOLL B62 > fx H A B C D E G 1 Apple Hilly Farms 2 Journal Entries 3 4 a. Purchased $45,280 of materials on account. 5 Account DR. CR. 6 7 8 9 b. Issued $2,100 of supplies in materials inventory into production department. 10 Account DR. CR. 11 12 13 14 c. Paid for materials purchased in (a) 15 Account DR. CR. 16 17 18 19 d. Issued $35,700 in direct materials to the production department. 20 Account DR. CR. 21 22 23 24 e. Incurred wage costs of $63,000 of which $13,500 was withheld for payroll taxes, to be paid 25 next month. 26 Account DR. 27 28 Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis CR. H A B D E F G 23 24 e. Incurred wage costs of $63,000 of which $13,500 was withheld for payroll taxes, to be paid 25 next month. 26 Account DR. CR. 27 28 29 30 31 f. Analyzed the Payroll Expense account and determined that 60% represented direct labor, 32 30% indirect labor, and 10% adminstrative and marketing costs. For this entry you will need to 33 compute the amounts to be debited. 34 Account DR. CR. 35 36 37 38 39 40 g. Applied overhead on the basis of 175% of direct labor costs. For this entry you will need to 41 compute the amounts to be debited and credited. 42 Account DR. CR. 43 44 45 46 h. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the 47 bakery totalling $29,400 48 Account DR. CR. 49 50 ic Format Painter IT IM Merge & Center % Clipboard Font Alignment Num B62 3 H B D E G 46 h. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the 47 bakery totalling $29,400 48 Account DR. CR. 49 50 51 52 i. Recognized depreciation of $14,150 on the bakery property, plant and equipment. 53 54 Account DR. CR. 55 56 7 8 j. Book the over/under for manufacturing overhead to COGS. For this entry you will need to compute the amounts to be debited and credited. Account DR. CR. AutoSave CHE Insert Data Help File Draw Formulas Review QuickBooks Home View Page Layout General 23 Wrap Text Arial 12 X cut LD Copy Format Painter Clipboard - A A a. A- BIU Merge & Center $ % 9 Number Font Alignment > 18 D E B Apple Hilly Farms Production Cost Report a. Compute total Apple Pie units to be accounted for Equivalent Units Materials Conversion Physical Units Flow of production units: Units to be accounted for: Beginning WIP inventory Units started in September Total units to be accounted for Units to be accounted for: Total transferred out Units in Ending WIP inventory Total units to be accounted for + b. Compute total Apple Pie costs to be accounted for Total Costs Materials Conversion Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for Costs per equivalent unit: Materials Conversion Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search O I AutoSave SME Student worl OTT ile Home Insert Draw Page Layout Formulas Data Review View Help QuickBooks e Se Arial - 12 General X cut - ste Format Painter Clipboard AA == a. A 2 Wrap Text Merge & Center BTW $ %) Font Alignment Number D E B Total costs to be accounted for Costs per equivalent unit: Materials Conversion Costs accounted for Costs assigned to units transferred out: Materials Conversion Total costs of units transferred out Costs assigned to ending WIP inventory: Materials Conversion Total costs of ending WIP inventory Total costs to be accounted for + Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search O 81 Format Painter Clipboard Number Styles Font Alignment 1 G E H B D Apple Hilly Farms Budget Analysis a. Prepare Master Budget for September Master Budget Sales volume (in units) Sales revenue Variable costs: Manufacturing Marketing and admin Contribution margin Fixed costs: Manufacturing Marketing and admin Operating profit b. Calculate Variance Analysis between Actual vs. Flexible Budget vs. Master Budget Cost variances Sales price variances Actual Sales activity variance Flexible Budget Master Budget F/U F/U F/U Sales volume Sales revenue Variable costs: Manufacturing Marketing and admin Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis + Type here to search O ED W AutoSave OFF DE SME Student workbook - Excel File Home Insert Draw Page Layout Formulas Data Review View Help QuickBooks Search Arial - A A Xcut In Copy - Format Painter Custom HD Paste 29 Wrap Text ESSE Merge & Center BIU 38 a.A- $ - %458-93 Conditional Format as Formatting Table Styles Insert De Clipboard Font Alignment Number C21 f A B D E H 16 17 18 19 Marketing and admin Operating profit b. Calculate Variance Analysis between Actual vs. Flexible Budget vs. Master Budget Cost variances Actual Sales activity variance Sales price variances F/U Flexible Budget Master Budget F/U F/U + 20 21 2 3 4 5 5 Sales volume Sales revenue Variable costs: Manufacturing Marketing and admin Contribution margin Fixed costs: Manufacturing Marketing and admin Operating profit AutoSave ON Data View QuickBool Review Help Formulas Page Layout File Home Insert Draw Ge 23 Wrap Text Calibri - 11 - A A SH AA Merge & Center Xcut In Copy - Paste Format Painter Clipboard BTU Alignment Font 4 A18 > G H C D E B 1 Analysis for Problems 1 - 6 2. 3 1 4 5 6 7 82 9 10 11 12 13 3 14 15 16 17 184 19 20 21 22 23 5 24 25 26 27 28 6 an Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search 0 6 5:15 1 vil : ACCT 111 SME Pro... a ACC - SME Priest Part A - Problems 1-3 (60 points) Part B - Problem 4-6 plus Problems Analysis (90 points) Dee- Nov 8th Purpose: Apply real world annlysis to a problem faced by local company using the skills learned in the class. Apple Hilly Farms Ned Hilly was an investment banker and worked in San Francisco at a large bank As retirement got closer his wife, Sally, and him decided to spend their retirement up in the Sierra Nevada foothills by buying an apple farm in Apple Hal. All their kids were grown and their youngest daughter, Naki, was finishing an accounting degree at Sac State, whom they were hoping would help them out with the books once she was done A few years go by and the farm life is bustling. They had U-Pick your own apples at the farm which cut down costs of running the farm, though they ended up with more apples than they could sell that first year. The second year, Sally came up with the idea of opening a bakery on the farm. She was an excellent hake, she makes the best apple pie west of the Mississippi, at least her family thought so. The bakery was a success that year, more so than expected. Sally made homemade applegies and caramel apples with her special caramel satice. In the following year, they expanded bakery operations to include more staff and an extra space for baking Ned want to read the expansion was going to be profitable, he had an idea of the costs involved with apple pie and caramel apple production, but he couldn't pinpoint the details. Since Apple Hills Seasonal business he wanted to know how well his business in the peak season to ensure that it made enough to cover the costs in the off-Ladies Nikki just graduated in May and she would be able to work with Ned to work at the details and come up with some possible advice and solutions to his goestions Dashboard Calendar To Do Notifications Inbox 5:161 || LTE fx H A B C D E G 1 Apple Hilly Farms 2 Journal Entries 3 4 a. Purchased $45,280 of materials on account. 5 Account DR. CR. 6 7 8 9 b. Issued $2,100 of supplies in materials inventory into production department. 10 Account DR. CR. 11 12 13 14 c. Paid for materials purchased in (a) 15 Account DR. CR. 16 17 18 19 d. Issued $35,700 in direct materials to the production department. 20 Account DR. CR. 21 22 23 24 e. Incurred wage costs of $63,000 of which $13,500 was withheld for payroll taxes, to be paid 25 next month. 26 Account DR. 27 28 Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis CR. H A B D E F G 23 24 e. Incurred wage costs of $63,000 of which $13,500 was withheld for payroll taxes, to be paid 25 next month. 26 Account DR. CR. 27 28 29 30 31 f. Analyzed the Payroll Expense account and determined that 60% represented direct labor, 32 30% indirect labor, and 10% adminstrative and marketing costs. For this entry you will need to 33 compute the amounts to be debited. 34 Account DR. CR. 35 36 37 38 39 40 g. Applied overhead on the basis of 175% of direct labor costs. For this entry you will need to 41 compute the amounts to be debited and credited. 42 Account DR. CR. 43 44 45 46 h. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the 47 bakery totalling $29,400 48 Account DR. CR. 49 50 ic Format Painter IT IM Merge & Center % Clipboard Font Alignment Num B62 3 H B D E G 46 h. Paid for utilities, power, equipment maintenance, and other miscellaneous items for the 47 bakery totalling $29,400 48 Account DR. CR. 49 50 51 52 i. Recognized depreciation of $14,150 on the bakery property, plant and equipment. 53 54 Account DR. CR. 55 56 7 8 j. Book the over/under for manufacturing overhead to COGS. For this entry you will need to compute the amounts to be debited and credited. Account DR. CR. AutoSave CHE Insert Data Help File Draw Formulas Review QuickBooks Home View Page Layout General 23 Wrap Text Arial 12 X cut LD Copy Format Painter Clipboard - A A a. A- BIU Merge & Center $ % 9 Number Font Alignment > 18 D E B Apple Hilly Farms Production Cost Report a. Compute total Apple Pie units to be accounted for Equivalent Units Materials Conversion Physical Units Flow of production units: Units to be accounted for: Beginning WIP inventory Units started in September Total units to be accounted for Units to be accounted for: Total transferred out Units in Ending WIP inventory Total units to be accounted for + b. Compute total Apple Pie costs to be accounted for Total Costs Materials Conversion Costs to be accounted for: Costs in beginning WIP inventory Current period costs Total costs to be accounted for Costs per equivalent unit: Materials Conversion Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search O I AutoSave SME Student worl OTT ile Home Insert Draw Page Layout Formulas Data Review View Help QuickBooks e Se Arial - 12 General X cut - ste Format Painter Clipboard AA == a. A 2 Wrap Text Merge & Center BTW $ %) Font Alignment Number D E B Total costs to be accounted for Costs per equivalent unit: Materials Conversion Costs accounted for Costs assigned to units transferred out: Materials Conversion Total costs of units transferred out Costs assigned to ending WIP inventory: Materials Conversion Total costs of ending WIP inventory Total costs to be accounted for + Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search O 81 Format Painter Clipboard Number Styles Font Alignment 1 G E H B D Apple Hilly Farms Budget Analysis a. Prepare Master Budget for September Master Budget Sales volume (in units) Sales revenue Variable costs: Manufacturing Marketing and admin Contribution margin Fixed costs: Manufacturing Marketing and admin Operating profit b. Calculate Variance Analysis between Actual vs. Flexible Budget vs. Master Budget Cost variances Sales price variances Actual Sales activity variance Flexible Budget Master Budget F/U F/U F/U Sales volume Sales revenue Variable costs: Manufacturing Marketing and admin Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis + Type here to search O ED W AutoSave OFF DE SME Student workbook - Excel File Home Insert Draw Page Layout Formulas Data Review View Help QuickBooks Search Arial - A A Xcut In Copy - Format Painter Custom HD Paste 29 Wrap Text ESSE Merge & Center BIU 38 a.A- $ - %458-93 Conditional Format as Formatting Table Styles Insert De Clipboard Font Alignment Number C21 f A B D E H 16 17 18 19 Marketing and admin Operating profit b. Calculate Variance Analysis between Actual vs. Flexible Budget vs. Master Budget Cost variances Actual Sales activity variance Sales price variances F/U Flexible Budget Master Budget F/U F/U + 20 21 2 3 4 5 5 Sales volume Sales revenue Variable costs: Manufacturing Marketing and admin Contribution margin Fixed costs: Manufacturing Marketing and admin Operating profit AutoSave ON Data View QuickBool Review Help Formulas Page Layout File Home Insert Draw Ge 23 Wrap Text Calibri - 11 - A A SH AA Merge & Center Xcut In Copy - Paste Format Painter Clipboard BTU Alignment Font 4 A18 > G H C D E B 1 Analysis for Problems 1 - 6 2. 3 1 4 5 6 7 82 9 10 11 12 13 3 14 15 16 17 184 19 20 21 22 23 5 24 25 26 27 28 6 an Prob 1 Prob 2 Prob 3 Prob 4 Prob 5 Prob 6 Analysis Type here to search 0 6 5:15 1 vil : ACCT 111 SME Pro... a ACC - SME Priest Part A - Problems 1-3 (60 points) Part B - Problem 4-6 plus Problems Analysis (90 points) Dee- Nov 8th Purpose: Apply real world annlysis to a problem faced by local company using the skills learned in the class. Apple Hilly Farms Ned Hilly was an investment banker and worked in San Francisco at a large bank As retirement got closer his wife, Sally, and him decided to spend their retirement up in the Sierra Nevada foothills by buying an apple farm in Apple Hal. All their kids were grown and their youngest daughter, Naki, was finishing an accounting degree at Sac State, whom they were hoping would help them out with the books once she was done A few years go by and the farm life is bustling. They had U-Pick your own apples at the farm which cut down costs of running the farm, though they ended up with more apples than they could sell that first year. The second year, Sally came up with the idea of opening a bakery on the farm. She was an excellent hake, she makes the best apple pie west of the Mississippi, at least her family thought so. The bakery was a success that year, more so than expected. Sally made homemade applegies and caramel apples with her special caramel satice. In the following year, they expanded bakery operations to include more staff and an extra space for baking Ned want to read the expansion was going to be profitable, he had an idea of the costs involved with apple pie and caramel apple production, but he couldn't pinpoint the details. Since Apple Hills Seasonal business he wanted to know how well his business in the peak season to ensure that it made enough to cover the costs in the off-Ladies Nikki just graduated in May and she would be able to work with Ned to work at the details and come up with some possible advice and solutions to his goestions Dashboard Calendar To Do Notifications Inbox 5:161 || LTE