All information is provided.

***FINISH REQUIREMENT 9, 10, and 17

Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis based on the following assumptions. Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the number of units and then multiply by the selling price per unit. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? Contribution Margin per unit (Round to two places, $##.##) $18.80 {5.01) Contribution Margin Ratio (Round to four places,% is two of those places ##.##%) 41.78% {5.02) For 20x2 the selling price per lamp will be $45.00. The desired net income in 20x2 is $190,000. What would sales in units have to be in 20x2 to reach the profit goal? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 29,043 units {5.03) For 20x2 the selling price per lamp will be $45.00. If the fixed cost increase by $55,000.00 how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 21,862 units {5.04) For 20x2 the selling price per lamp will be $45.00. If the variable cost increase by $5.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 26,767 units {6.01) For 20x2 the selling price per lamp will be $45.00. If the variable cost decreased by $5.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 14,651 units {6.02) If for 20x2 the selling price per lamp is increased to $50.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 14,651 units {6.03) If for 20x2 the selling price per lamp is decreased to $39.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 26,767 units (6.04) Division N has decided to develop its budget based upon projected sales of 25,000 lamps at $53.00 per lamp The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 575 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods Total Needed Less: Beginning Inventory Total Production 24,400 units {7.01} PART 4 Process Costing - Weighted Average General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,800 figurines at a cost of $78,450.00. Of this amount, $4,200.00 was from raw materials added, $49,500.00 for labor and $24,750.00 for overhead. These 2,800 figurines were assumed to be 90.00% complete as to labor and overhead. During January, 25,000 units were started, $39,168.00 of materials and $25,130.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 10.00% complete to labor and overhead. All figurines in January passed inspection. Work-in-Process - Beginning Units Started this Period Units to Account for 2,800 units 25,000 units 27,800 units Total transferred out Work-in-Process - Ending Total Accounted for 21,300 units 6,500 units 27,800 units {12.01} {12.02) Equivalent Units Material (Round to two places, ###**#.##) 27,800.00 {12.03} Equivalent Units Conversion (Round to two places, ####.##) 21,950.00 {12.04} Total cost of Material (Round to two places, ##.###.##) $ 43,368.00 {12.05) Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) $ $ 111,945.00 155,313.00 {12.06) {12.07) Cost per equivalent unit of Material (Round to two places, ###.##) $ 1.56 {12.08) Cost per equivalent unit of Conversion (Round to two places, ##.##) $ 5.10 {12.09) Cost of the ending inventory, material and convesion (Round to two places, $#*#,###.##) $ 13,455.00 {12.10) Cost of the units transferred, material and convesion (Round to two places, $#*#,###.##) $ 141,858.00 {12.11} Job Order Costing Section On January 1, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The ob called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,050 Lamp Kits @ $16.65 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 600 Direct Labor Hours @ $9.75 per hour. 30-Jan Payroll of 650 Direct Labor Hours @ $10.00 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped, and are a cost of normal processing. Month End Overhead Information Actual Variable Manufacturing Overhead Actual Fixed Manufacturing Overhead $ 1,375.00 $ 40,373.45 Round to two places, $##.## Cost of Direct Material incurred in Manufacturing Job 2407 $ 67,848.75 {13.01} Cost of Direct Labor Incurred in Manufacturing Job 2407 $ 12,350.00 {13.02) Cost of Manufacturing Overhead Applied to Job 2407 $ 6,175.00 {13.03) Cost of manufacturing one lamp $ 21.65 {13.04; standard cost system has been developed. The following standards are used for the special orders: Standards Lamp Kits Direct Labor Variable Overhead ** Fixed Overhead Total $ 16.000000 per lamp 2.400000 per lamp (4 lamps/hr.) 0.250000 per lamp (4 lamps/hr.) 10.000000 per lamp $ 28.650000 ** Fixed overhead is based on expected production of 4,006 customized lamps each month. To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) while entries are made to the accounting system at standard. Variance analysis is used to analyze the differences. Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,050 Lamp Kits @ $16.65 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 600 Direct Labor Hours @ $9.75 per hour. 30-Jan Payroll of 650 Direct Labor Hours @ $10.00 per hour. 30-Jan 3,994 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,375.00 $ 40,373.45 How many Lamps were completed? Note: Show favorable variances as negative numbers Round dollars to two places, $##.## What was the total material price variance for the Lamp Kits purchased? $ 2,632.50 {15.01} What was the material usage variance for Lamp Kits? $ 1,296.00 {15.02} What was the direct labor efficiency variance ? $ 2,414.40 {15.03} What was the direct labor rate variance? $ 350.00 {15.04} Note: Show favorable variances as negative numbers What was the variable overhead efficiency variance ? $ 251.50 {16.01} What was the variable OH spending variance ? $ 125.00 {16.02} What is the fixed OH volume (denominator) variance? $ 120.00 {16.03} What is the fixed OH spending variance? $ 313.45 {16.04} 4 Factory Overhead Budget Overhead Allocation rate based on: 1. Number of Units Total Factory Overhead / Number of Units (Round to two places, $#*#.##) 336484) 24400 $13.79 {9.01} 5 Cost of making one unit next year Cost of one Lamp Kit Labor Cost Per Lamp Factory overhead per unit 16.72 $2.09 13.79 {9.02) 32.60 {9.03) Total cost of one unit (Round to two places, $#.###) 6 Selling and Admin. Budaet 27000 {9.04) Fixed Selling Variable Selling (Round to two places, $##.##) Fixed Administrative Variable Administrative (Round to two places, $#.##) Total Selling and Administrative (Round to two places, $##.###) 44000 {9.05) {9.06) VUL Round dollars to two places, $##.## $ 90,000.00 {9.07) Goods Sold Budget- Beginning Inventory, Finished Goods Production Costs: Materials: Lamp Kits: Beginning Inventory Purchased Available for Use Ending Inventory of Lamp Kits Lamp Kits Used In Production $ 9,614.00 {9.08) $ 407,608.00 Total Materials: Labor Overhead Cost of Goods Available Less: Ending Inventory, Finished Goods Cost of Goods Sold {9.09) {9.10) {9.11} {9.12} {9.13) {9.14) 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income (10.01) 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattem below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 17.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February 2. 85.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $185,000. I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available {10.02) (10.03) (10.04) {10.05) Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows (10.06) (10.07) Budgeted Cash Balance before financing Needed Minimum Balance {10.08) Amount to be borrowed (if any) (10.09) Budgeted Cash Balance (10.10) Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day. He believes that a cold soda machine would be appreciated by his workers, and an appreciated worker is a good worker. He has priced a machine at a national member only warehouse for $2,100. The machine should be usable for 6 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 6 cans a day will be purchased. The plant is open five days a week, 50 weeks per year. A case of soda (24 cans) costs $6.00 and Big Al believes that a price of $.95 per can would win him good will. What is the estimated annual sales in cans of soda? {17.01) What is the contribution margin per can of soda? (rounded to two places, $#.## {17.02) How many cans of soda must be sold each year to breakeven? (Round up to zero places, ### ### cans) {17.03) Annual incremental cash inflows from the soda machine? (rounded to two places, $#.##) {17.04) What is the payback period in years? (rounded to two places, #.## years) {17.05) If the time value of money is 12% per year what is the net present value? Use the tables on page 18 {17.06) What is the internal rate of retum. Pick the closest interest rate from the tables on page 18. {17.07) 2 Materials Budget Lamp Kits Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) 24,400 units 575 units 24,975 units 500 units {8.01} {8.02} {8.03} {8.04} $ 16.72 409,222.00 {8.05} {8.06} 3 Direct Labor Budget $ 2.09 {8.07} Labor Cost Per Lamp Production Total Labor Cost (Round to two places, $##.##) $ 50,996.00 {8.08} 4 Factory Overhead Budget $ Variable Factory Overhead: Variable Factory Overhead Cost Per Unit Number of Units to be produced Total Variable Factory Overhead (Round to two places, $##.##) Fixed Factory Overhead 2.1100000 24,400 units 51,484.00 285,000.00 $ $ {8.09} {8.10} Total Factory Overhead (Round to two places, $##.##) $ 336,484.00 {8.11} I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 213,410.00 $ $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 213,410.00 $ The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor: Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.50%. 2. Labor Costs are expected to increase by 4.50%. 3. Variable Overhead is expected to increase by 5.50%. 4. Fixed Overhead is expected to increase to $285,000. 5. Fixed Administrative expenses are expected to increase to $44,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.50%. 7. Fixed selling expenses are expected to be $27,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 5.50%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places 16 Projected Percent Increase 4.50% 4.50% 5.50% $16.72 Lamp Kit Labor ariable Overhead 2 $2.09 {4.01) {4.02} {4.03) 2 $2.11 Projected Variable Manufacturing Cost Per Unit $20.92 {4.04) Cotal Variable Cost Per Unit 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places Projected Percent Increase 5.50% 5.50% 3 3.17 ariable Selling ariable Administrative Projected Variable Manufacturing Unit Cost 2 2.11 {4.05) {4.06) {4.04) Projected Total Variable Cost Per Unit 26.20 {4.07) Schedule of Fixed Costs 20x 1 Cost 20x2 Cost Projected Percent Increase 10 $ 285,000.00 {4.08) lamps @_) Fixed Overhead (normal capacity of Fixed Selling ixed Administrative $ 27,000.00 44,000.00 {4.09) {4.10) $ Projected Total Fixed Costs $ 356,000.00 {4.11} Present Value of Annuity $1.00 in Arrears Interest Periods Interest Periods 4 3 Rate 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 10 50/- 3 2.884 2.856 2.829 2.802 2.775 2.749 2.723 2.698 2.673 2.648 2.624 2.601 2.577 2.554 2.531 2.509 2.487 2.465 2.444 2.423 2.402 2.381 2.361 2.341 2.322 2.302 2.283 2.264 2.246 2.228 2.210 2.192 2.174 2157 3.808 3.762 3.717 3.673 3.630 3.588 3.546 3.505 3.465 3.426 3.387 3.349 3.312 3.276 3.240 3.204 3.170 3.136 3.102 3.070 3.037 3.006 2.974 2.944 2.914 2.884 2.855 2.826 2.798 2.770 2.743 2.716 2.690 2961 5 4.713 4.646 4.580 4.515 4.452 4.390 4.329 4.270 4.212 4.156 4.100 4.046 3.993 3.941 3.890 3.840 3.791 3.743 3.696 3.650 3.605 3.561 3.517 3.475 3.433 3.392 3.352 3.313 3.274 3.236 3.199 3.163 3.127 2 na 6 5.601 5.508 5.417 5.329 5.242 5.158 5.076 4.996 4.917 4.841 4.767 4.694 4.623 4.554 4.486 4.420 4.355 4.292 4.231 4.170 4.111 4.054 3.998 3.943 3.889 3.836 3.784 3.734 3.685 3.636 3.589 3.543 3.498 2152 Rate 50.5% 51.0% 51.5% 52.0% 52.5% 53.0% 53.5% 54.0% 54.5% 55.0% 55.5% 56.0% 56.5% 57.0% 57.5% 58.0% 58.5% 59.0% 59.5% 60.0% 60.5% 61.0% 61.5% 62.0% 62.5% 63.0% 63.5% 64.0% 64.5% 65.0% 65.5% 66.0% 66.5% 67 / 1.399 1.391 1.383 1.375 1.368 1.360 1.352 1.345 1.337 1.330 1.323 1.315 1.308 1.301 1.294 1.287 1.280 1.273 1.266 1.260 1.253 1.247 1.240 1.234 1.227 1.221 1.214 1.208 1.202 1.196 1.190 1.184 1.178 1 172 4 1.594 1.584 1.573 1.563 1.553 1.542 1.532 1.523 1.513 1.503 1.494 1.484 1.475 1.466 1.457 1.447 1.439 1.430 1.421 1.412 1.404 1.395 1.387 1.379 1.371 1.362 1.354 1.347 1.339 1.331 1.323 1.316 1.308 1 201 5 1.724 1.711 1.698 1.686 1.674 1.662 1.650 1.638 1.626 1.615 1.604 1.592 1.581 1.570 1.560 1.549 1.539 1.528 1.518 1.508 1.498 1.488 1.478 1.468 1.459 1.449 1.440 1.431 1.422 1.413 1.404 1.395 1.386 1 278 6 1.810 1.795 1.781 1.767 1.753 1.740 1.726 1.713 1.700 1.687 1.674 1.662 1.649 1.637 1.625 1.613 1.602 1.590 1.579 1.567 1.556 1.545 1.534 1.524 1.513 1.503 1.492 1.482 1.472 1.462 1.452 1.443 1.433 1121 Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis based on the following assumptions. Note: Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit. Furthuremore, to find the required sales in dollars it may be easier to find the number of units and then multiply by the selling price per unit. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? Contribution Margin per unit (Round to two places, $##.##) $18.80 {5.01) Contribution Margin Ratio (Round to four places,% is two of those places ##.##%) 41.78% {5.02) For 20x2 the selling price per lamp will be $45.00. The desired net income in 20x2 is $190,000. What would sales in units have to be in 20x2 to reach the profit goal? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 29,043 units {5.03) For 20x2 the selling price per lamp will be $45.00. If the fixed cost increase by $55,000.00 how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 21,862 units {5.04) For 20x2 the selling price per lamp will be $45.00. If the variable cost increase by $5.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 26,767 units {6.01) For 20x2 the selling price per lamp will be $45.00. If the variable cost decreased by $5.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 14,651 units {6.02) If for 20x2 the selling price per lamp is increased to $50.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 14,651 units {6.03) If for 20x2 the selling price per lamp is decreased to $39.50 a unit how many lamps must be sold to breakeven? Breakeven sales in units (Since we cannot sell part of a unit round up to the next unit if needed) 26,767 units (6.04) Division N has decided to develop its budget based upon projected sales of 25,000 lamps at $53.00 per lamp The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the inventory of Lamp Kits to 575 pieces and decreasing the finished goods by 20%. Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods Total Needed Less: Beginning Inventory Total Production 24,400 units {7.01} PART 4 Process Costing - Weighted Average General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,800 figurines at a cost of $78,450.00. Of this amount, $4,200.00 was from raw materials added, $49,500.00 for labor and $24,750.00 for overhead. These 2,800 figurines were assumed to be 90.00% complete as to labor and overhead. During January, 25,000 units were started, $39,168.00 of materials and $25,130.00 of labor costs were incurred. The 6,500 figurines that were in-process at the end of January were assumed to be 10.00% complete to labor and overhead. All figurines in January passed inspection. Work-in-Process - Beginning Units Started this Period Units to Account for 2,800 units 25,000 units 27,800 units Total transferred out Work-in-Process - Ending Total Accounted for 21,300 units 6,500 units 27,800 units {12.01} {12.02) Equivalent Units Material (Round to two places, ###**#.##) 27,800.00 {12.03} Equivalent Units Conversion (Round to two places, ####.##) 21,950.00 {12.04} Total cost of Material (Round to two places, ##.###.##) $ 43,368.00 {12.05) Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) $ $ 111,945.00 155,313.00 {12.06) {12.07) Cost per equivalent unit of Material (Round to two places, ###.##) $ 1.56 {12.08) Cost per equivalent unit of Conversion (Round to two places, ##.##) $ 5.10 {12.09) Cost of the ending inventory, material and convesion (Round to two places, $#*#,###.##) $ 13,455.00 {12.10) Cost of the units transferred, material and convesion (Round to two places, $#*#,###.##) $ 141,858.00 {12.11} Job Order Costing Section On January 1, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The ob called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,050 Lamp Kits @ $16.65 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 600 Direct Labor Hours @ $9.75 per hour. 30-Jan Payroll of 650 Direct Labor Hours @ $10.00 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped, and are a cost of normal processing. Month End Overhead Information Actual Variable Manufacturing Overhead Actual Fixed Manufacturing Overhead $ 1,375.00 $ 40,373.45 Round to two places, $##.## Cost of Direct Material incurred in Manufacturing Job 2407 $ 67,848.75 {13.01} Cost of Direct Labor Incurred in Manufacturing Job 2407 $ 12,350.00 {13.02) Cost of Manufacturing Overhead Applied to Job 2407 $ 6,175.00 {13.03) Cost of manufacturing one lamp $ 21.65 {13.04; standard cost system has been developed. The following standards are used for the special orders: Standards Lamp Kits Direct Labor Variable Overhead ** Fixed Overhead Total $ 16.000000 per lamp 2.400000 per lamp (4 lamps/hr.) 0.250000 per lamp (4 lamps/hr.) 10.000000 per lamp $ 28.650000 ** Fixed overhead is based on expected production of 4,006 customized lamps each month. To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) while entries are made to the accounting system at standard. Variance analysis is used to analyze the differences. Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,050 Lamp Kits @ $16.65 per kit. 9-Jan 4,075 sets of Lamp Kits were requisitioned. 17-Jan Payroll of 600 Direct Labor Hours @ $9.75 per hour. 30-Jan Payroll of 650 Direct Labor Hours @ $10.00 per hour. 30-Jan 3,994 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,375.00 $ 40,373.45 How many Lamps were completed? Note: Show favorable variances as negative numbers Round dollars to two places, $##.## What was the total material price variance for the Lamp Kits purchased? $ 2,632.50 {15.01} What was the material usage variance for Lamp Kits? $ 1,296.00 {15.02} What was the direct labor efficiency variance ? $ 2,414.40 {15.03} What was the direct labor rate variance? $ 350.00 {15.04} Note: Show favorable variances as negative numbers What was the variable overhead efficiency variance ? $ 251.50 {16.01} What was the variable OH spending variance ? $ 125.00 {16.02} What is the fixed OH volume (denominator) variance? $ 120.00 {16.03} What is the fixed OH spending variance? $ 313.45 {16.04} 4 Factory Overhead Budget Overhead Allocation rate based on: 1. Number of Units Total Factory Overhead / Number of Units (Round to two places, $#*#.##) 336484) 24400 $13.79 {9.01} 5 Cost of making one unit next year Cost of one Lamp Kit Labor Cost Per Lamp Factory overhead per unit 16.72 $2.09 13.79 {9.02) 32.60 {9.03) Total cost of one unit (Round to two places, $#.###) 6 Selling and Admin. Budaet 27000 {9.04) Fixed Selling Variable Selling (Round to two places, $##.##) Fixed Administrative Variable Administrative (Round to two places, $#.##) Total Selling and Administrative (Round to two places, $##.###) 44000 {9.05) {9.06) VUL Round dollars to two places, $##.## $ 90,000.00 {9.07) Goods Sold Budget- Beginning Inventory, Finished Goods Production Costs: Materials: Lamp Kits: Beginning Inventory Purchased Available for Use Ending Inventory of Lamp Kits Lamp Kits Used In Production $ 9,614.00 {9.08) $ 407,608.00 Total Materials: Labor Overhead Cost of Goods Available Less: Ending Inventory, Finished Goods Cost of Goods Sold {9.09) {9.10) {9.11} {9.12} {9.13) {9.14) 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Income (10.01) 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattem below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 17.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February 2. 85.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $185,000. I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available {10.02) (10.03) (10.04) {10.05) Cash Outflows: Purchases Accounts Payable (Purchases last year) Purchases made and paid for in 20x2 Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows (10.06) (10.07) Budgeted Cash Balance before financing Needed Minimum Balance {10.08) Amount to be borrowed (if any) (10.09) Budgeted Cash Balance (10.10) Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day. He believes that a cold soda machine would be appreciated by his workers, and an appreciated worker is a good worker. He has priced a machine at a national member only warehouse for $2,100. The machine should be usable for 6 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 6 cans a day will be purchased. The plant is open five days a week, 50 weeks per year. A case of soda (24 cans) costs $6.00 and Big Al believes that a price of $.95 per can would win him good will. What is the estimated annual sales in cans of soda? {17.01) What is the contribution margin per can of soda? (rounded to two places, $#.## {17.02) How many cans of soda must be sold each year to breakeven? (Round up to zero places, ### ### cans) {17.03) Annual incremental cash inflows from the soda machine? (rounded to two places, $#.##) {17.04) What is the payback period in years? (rounded to two places, #.## years) {17.05) If the time value of money is 12% per year what is the net present value? Use the tables on page 18 {17.06) What is the internal rate of retum. Pick the closest interest rate from the tables on page 18. {17.07) 2 Materials Budget Lamp Kits Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) 24,400 units 575 units 24,975 units 500 units {8.01} {8.02} {8.03} {8.04} $ 16.72 409,222.00 {8.05} {8.06} 3 Direct Labor Budget $ 2.09 {8.07} Labor Cost Per Lamp Production Total Labor Cost (Round to two places, $##.##) $ 50,996.00 {8.08} 4 Factory Overhead Budget $ Variable Factory Overhead: Variable Factory Overhead Cost Per Unit Number of Units to be produced Total Variable Factory Overhead (Round to two places, $##.##) Fixed Factory Overhead 2.1100000 24,400 units 51,484.00 285,000.00 $ $ {8.09} {8.10} Total Factory Overhead (Round to two places, $##.##) $ 336,484.00 {8.11} I See The Light Projected Balance Sheet As of December 31, 20x1 $ 34,710.00 67,500.00 Current Assets Cash Accounts Receivable Inventory Raw Material Lamp Kits Work in Process Finished Goods Total Current Assets 8,000.00 500 @ $16.00 0 3000 @ $30.00 90,000.00 $ 200,210.00 Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets $ 20,000.00 6,800.00 13,200.00 213,410.00 $ $ $ 54,000.00 54,000.00 Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 12,000.00 147,410.00 159,410.00 213,410.00 $ The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: Direct Labor: Variable Overhead: Fixed Overhead: $16.0000000 per lamp 2.0000000 per lamp (4 lamps/hr.) 2.0000000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 1. Material Costs are expected to increase by 4.50%. 2. Labor Costs are expected to increase by 4.50%. 3. Variable Overhead is expected to increase by 5.50%. 4. Fixed Overhead is expected to increase to $285,000. 5. Fixed Administrative expenses are expected to increase to $44,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.50%. 7. Fixed selling expenses are expected to be $27,000 in 20x2. 8. Variable administrative expenses (measured a per lamp basis) are expected to increase by 5.50%. On the following schedule develop the following figures: 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp. 3- 20x2 Projected Fixed Costs. I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places 16 Projected Percent Increase 4.50% 4.50% 5.50% $16.72 Lamp Kit Labor ariable Overhead 2 $2.09 {4.01) {4.02} {4.03) 2 $2.11 Projected Variable Manufacturing Cost Per Unit $20.92 {4.04) Cotal Variable Cost Per Unit 20x1 Cost 20x2 Cost Rounded to 2 Decimal Places Projected Percent Increase 5.50% 5.50% 3 3.17 ariable Selling ariable Administrative Projected Variable Manufacturing Unit Cost 2 2.11 {4.05) {4.06) {4.04) Projected Total Variable Cost Per Unit 26.20 {4.07) Schedule of Fixed Costs 20x 1 Cost 20x2 Cost Projected Percent Increase 10 $ 285,000.00 {4.08) lamps @_) Fixed Overhead (normal capacity of Fixed Selling ixed Administrative $ 27,000.00 44,000.00 {4.09) {4.10) $ Projected Total Fixed Costs $ 356,000.00 {4.11} Present Value of Annuity $1.00 in Arrears Interest Periods Interest Periods 4 3 Rate 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 10 50/- 3 2.884 2.856 2.829 2.802 2.775 2.749 2.723 2.698 2.673 2.648 2.624 2.601 2.577 2.554 2.531 2.509 2.487 2.465 2.444 2.423 2.402 2.381 2.361 2.341 2.322 2.302 2.283 2.264 2.246 2.228 2.210 2.192 2.174 2157 3.808 3.762 3.717 3.673 3.630 3.588 3.546 3.505 3.465 3.426 3.387 3.349 3.312 3.276 3.240 3.204 3.170 3.136 3.102 3.070 3.037 3.006 2.974 2.944 2.914 2.884 2.855 2.826 2.798 2.770 2.743 2.716 2.690 2961 5 4.713 4.646 4.580 4.515 4.452 4.390 4.329 4.270 4.212 4.156 4.100 4.046 3.993 3.941 3.890 3.840 3.791 3.743 3.696 3.650 3.605 3.561 3.517 3.475 3.433 3.392 3.352 3.313 3.274 3.236 3.199 3.163 3.127 2 na 6 5.601 5.508 5.417 5.329 5.242 5.158 5.076 4.996 4.917 4.841 4.767 4.694 4.623 4.554 4.486 4.420 4.355 4.292 4.231 4.170 4.111 4.054 3.998 3.943 3.889 3.836 3.784 3.734 3.685 3.636 3.589 3.543 3.498 2152 Rate 50.5% 51.0% 51.5% 52.0% 52.5% 53.0% 53.5% 54.0% 54.5% 55.0% 55.5% 56.0% 56.5% 57.0% 57.5% 58.0% 58.5% 59.0% 59.5% 60.0% 60.5% 61.0% 61.5% 62.0% 62.5% 63.0% 63.5% 64.0% 64.5% 65.0% 65.5% 66.0% 66.5% 67 / 1.399 1.391 1.383 1.375 1.368 1.360 1.352 1.345 1.337 1.330 1.323 1.315 1.308 1.301 1.294 1.287 1.280 1.273 1.266 1.260 1.253 1.247 1.240 1.234 1.227 1.221 1.214 1.208 1.202 1.196 1.190 1.184 1.178 1 172 4 1.594 1.584 1.573 1.563 1.553 1.542 1.532 1.523 1.513 1.503 1.494 1.484 1.475 1.466 1.457 1.447 1.439 1.430 1.421 1.412 1.404 1.395 1.387 1.379 1.371 1.362 1.354 1.347 1.339 1.331 1.323 1.316 1.308 1 201 5 1.724 1.711 1.698 1.686 1.674 1.662 1.650 1.638 1.626 1.615 1.604 1.592 1.581 1.570 1.560 1.549 1.539 1.528 1.518 1.508 1.498 1.488 1.478 1.468 1.459 1.449 1.440 1.431 1.422 1.413 1.404 1.395 1.386 1 278 6 1.810 1.795 1.781 1.767 1.753 1.740 1.726 1.713 1.700 1.687 1.674 1.662 1.649 1.637 1.625 1.613 1.602 1.590 1.579 1.567 1.556 1.545 1.534 1.524 1.513 1.503 1.492 1.482 1.472 1.462 1.452 1.443 1.433 1121