Caden Topper
operates
Caden's
Cricket Farm in
Clarkston,
Georgia.
Caden's
raises about 18 million crickets a month. Most are sold to pet stores at
$7.30
for a box of 1,000 crickets. Pet stores sell the crickets for $0.05 to $0.10 each as live feed for reptiles.
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Part 1
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(Click the icon to view the production cost report-Parts 2/3.)Read the requirements
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Part 1
Requirement 1. What is the cost per box of crickets sold?
(Hint:
This is the cost of the boxes completed and shipped out of brooding.)
First, identify the labels to compute the average cost per box transferred out, then compute the average cost per box shipped out of brooding. (Enter your answer to the nearest cent.)
Part 2
Part 3
Requirement 2. What is the gross profit per box?
First, identify the labels to compute the gross profit per box, then compute the gross profit per box. (Enter all dollar amounts to the nearest cent.)
Part 4
Part 5
Requirement 3. How much operating income did
Caden's
Cricket Farm make in
June?
First, identify the labels to compute the operating income, then compute the operating income for
June.
Part 6
Part 7
Requirement 4. What is the return on
Topper's
investment of
$400,000
for the month of
June?
(Compute this as
June's
operating income divided by
Topper's
investment, expressed as a percentage.) (Round the return on investment to the nearest hundredth of a percent, X.XX%.)
| The return on Topper's investment of $400,000 for the month of June is | | %. |
Part 8
Requirement 5. What monthly operating income would provide a
4.1%
monthly rate of return? What price per box would
Caden's
Cricket Farm have had to charge in
June
to achieve this target monthly rate of return?
First, identify the labels to compute the desired monthly operating income, then compute the amount.
| | | | = | Monthly operating income |
Part 9
Part 10
Identify the labels to compute the selling price per box needed to achieve a
4.1%
monthly rate of return, then compute the amount.
| | + | | = | Selling price per box |
Part 11
Caden Topper operates Caden's Cricket Farm in Clarkston, Georgia. Caden's raises about 18 million crickets a month. Most are sold to pet stores at $7.30 for a box of 1,000 crickets. Pet stores sell the crickets for $0.05 to $0.10 each as live feed for reptiles. (Click on the icon to view additional information.) - More info Raising crickets requires a two-step process: incubation and brooding. In the first process, incubation, employees place cricket eggs on mounds of peat moss to hatch. In the second process, employees move the newly hatched crickets into large boxes filled with cardboard dividers. Depending on the desired size, the crickets spend approximately two weeks in brooding before being shipped to pet stores. In the brooding process, Caden's crickets consume about 16 tons of food and produce 12 tons of manure. Topper has invested $400,000 in the cricket farm, and he had hoped to earn a 49.2% annual rate of return, which works out to a 4.1% monthly return on his investment. After looking at the farm's bank balance, Topper fears he is not achieving this return. To get more accurate information on the farm's performance, Topper bought new accounting software that provides weighted average process cost information. After Topper input the data, the software provided the following reports. However, Topper needs help interpreting these reports. Topper does know that a unit of production is a box of 1,000 crickets. For example, in June's report, the 5,000 physical units of beginning work in process inventory are 5,000 boxes (each one of those boxes contains 1,000 immature crickets). The finished goods inventory is zero because the crickets ship out as soon as they reach the required size. Monthly operating expenses total $2,920 (in addition to the costs that follow). - Requirements Caden Topper has the following questions about the farm's performance during June: 1. What is the cost per box of crickets sold? (Hint: This is the cost of the boxes completed and shipped out of brooding.) 2. What is the gross profit per box? 3. How much operating income did Caden's Cricket Farm make in June? 4. What is the return on Topper's investment of $400,000 for the month of June? (Compute this as June's operating income divided by Topper's investment, expressed as a percentage.) 5. What monthly operating income would provide a 4.1% monthly rate of return? What price per box would Caden's Cricket Farm have had to charge in June to achieve this target monthly rate of return? Print Done I Data table 1 D E Step 1: Step 2: Equivalent Units Flow of Physical Transferred- Direct Conversion in Materials Costs Units N 6 5,000 Caden's Cricket Farm-Brooding Department Month Ended June 30 Production Cost Report (part 1 of 3) 3 Flow of Production 4 Units to account for: 5 Beginning work in process, June 1 6 Plus: Transferred in during June 7 Total physical units to account for 8 Units accounted for: 9 Completed and shipped out during June 10 Plus: Ending work in process, June 30 11 Total physical units accounted for 12 Total equivalent units 49,000 54,000 46,000 46,000 46,000 46,000 8,000 8,000 6,000 2,400 54,000 54,000 52,000 48,400 Data table B D E Transferred- in Total A Caden's Cricket FarmBrooding Department Month Ended June 30 2 Production Cost Report (part 2 of 3) 3 Beginning work in process, June 1 4 Plus: Costs added during June Total costs to account for 6 Divided by: Total equivalent units 7 Cost per equivalent unit Direct Conversion Materials Costs 53,000 $ 6,500 $ 181,000 54,000 $ 75,000 15,500 $ 50,920 285,920 5 $ 60,500 $ 360,920 66,420 $ 54,000 234,000 $ 52,000 48,400 $ 1.23 $ 4.50 $ 1.25 B D E Transferred- in Direct Materials Conversion Costs 2 Total 1 Caden's Cricket Farm-Brooding Department Month Ended June 30 2 Production Cost Report (part 3 of 3) 3 Assignment of total cost: 4 Completed and transferred out: 5 Equivalent units completed and transferred out Multiplied by: Cost per equivalent unit Costs assigned to units completed and transferred out 5 46,000 46,000 46,000 4.50 $ 6 EA $ 1.23 $ 1.25 7 $ 56,580 $ 207,000 $ 57,500 $ 321,080 - Data table 50,920 181,000 54,000 285,920 $ 360,920 4 Plus: Costs added during June Total costs to account for 6 Divided by: Total equivalent units 7 Cost per equivalent unit 66,420 $ 54,000 234,000 $ 52,000 60,500 $ 48,400 $ CA 1.23 $ 4.50 $ 1.25 B E Conversion Transferred- in Direct Materials Costs Total 46,000 46,000 Caden's Cricket FarmBrooding Department Month Ended June 30 2 Production Cost Report (part 3 of 3) 3 Assignment of total cost: 4 Completed and transferred out: 5 Equivalent units completed and transferred out 6 Multiplied by: Cost per equivalent unit 7 Costs assigned to units completed and transferred out 8 Ending work in process: 9 Equivalent units in ending WIP 10 Multiplied by: Cost per equivalent unit 11 Costs assigned to units in ending WIP 12 Total costs accounted for 46,000 4.50 $ $ 1.23 $ 1.25 $ 56,580 $ 207,000 $ 57,500 $ 321,080 9 2,400 8,000 1.23 $ 6,000 4.50 $ $ 1.25 EA $ $ 9,840 $ 27,000 $ 3,000 39,840 $ 360,920
