Can anyone help me with solutions and computations?
1. HIGH-LOW METHOD The following information is available regarding the total manufacturing overhead costs of Paymore, Inc., for five months in 2012: Machine Hours Mfg Overhead Costs February 6,900 $6,250 March 5,000 $5,375 April 6,300 $6,025 May 9,333 $7,975 June 6,833 $6,050 a. Using the high-low method compute the following: i The variable element of overhead cost per machine-hour $ per machine-hour ii The fixed element of monthly overhead cost $_ Use the cost relationship determined in part a to estimate the total manufacturing overhead costs for July 2012 given that 7 250 machine-hours are scheduled b 2. LIMITED RESOURCES Portable Enterprises produces two lines of mobile homes: double-wide and single-wide Unit cost and revenue data pertaining to each product are shown below: Double-wide Single-wide Selling price $70,000 $70,000 Total variable costs. 45,000 20,000 Each double-wide home requires 350 different labor hours and 125 machine hours. Each single-wide home requires 175 direct labor hours and 150 machine hours. Demand for each line of homes far exceeds the company's total production capacity a. If Portable's production capacity is constrained by limited direct labor hours, which line of homes should it produce? If Portable's total production capacity is constrained by machine hours, which line of homes should it produce? b Computations. 3. USING A RESPONSIBILITY INCOME STATEMENT Shown below is the current monthly income statement of Metro Video, by profit centers Segments METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Equipment Sales Video Rentals % Dollars $560,000 (268.800) $291,200 (67.200) % 100 (48) 52 (12) Dollars $280,000 (198.800) $81,200 (25 200) % 100 (71) 29 (09) Dollars $280,000 (70.000) $210,000 (42.000) 100 (36) 75 (15) Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations $224,000 40 $56,000 20 $168.000 60 (61.600) $162.400 (11) 29 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions a Spending $5.000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35% S b. Closing the Equipment Sales Department and allowing the Video Rentals Department to On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: a. Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $ b. Closing the Equipment Sales Department and allowing the Video Rentals Department to expand is expected to increase the revenue of the Video Rentals Department by $105,000 per month. This action also is expected to increase fixed costs traceable to the Video Rentals Department by $40,000 per month. $ 4. STANDARD COST SYSTEM-OVERHEAD VARIANCES Assume the following data for John Company's August operations. Standard overhead per direct labor hour based on normal monthly capacity of 30,000 hours: $9 Fixed ($270,000/30,000 hours). Variable ($660,000/30,000 hours) 22 $31 Direct labor hours actually worked in August. 28,000 hours Actually overhead costs incurred (including $270,000 fixed costs) $824,000 a. Compute the amount of overhead applied to Work-in-Process during August. b. Compute the total manufacturing overhead budgeted based on hours worked during August. $ C. Compute the overhead spending variance for August. Indicate whether favorable (F) or unfavorable (U) $ d. Compute the overhead volume variance for August Indicate whether favorable (F) or unfavorable (U) $ 5. CAPITAL BUDGETING Mason Co. is evaluating two alternative investment proposals. Below are data for each proposal: Proposal A Proposal B Initial investment cost. $84,000 $96,000 Estimated useful life. 5 years 6 years Estimated salvage value. $4,000 -0- Estimated annual net income.. $8,200 $8,000 The following information was taken from present value tables: Present Value $1 due in 5 years, discounted at 12% 567 $1 due in 6 years, discounted at 12% 507 $1 received annually for 5 years discounted at 12% 3.605 4.111 $1 received annually for 6 years, discounted at 12% All revenue and expenses other than depreciation will be received and paid in cash. The All revenue and expenses other than depreciation will be received and paid in cash. The company uses a discount rate of 12% in evaluating all capital investments. Compute the following for each proposal (round payback period to the nearest tenth of a year and round return on average investment to the nearest tenth of a percent): Proposal A Proposal B a. Annual net cash flow: $ $ b. Payback period in years): A c. Average investment: CA d. Return on average investment: % % A e. Net present value: $ f. Based on your analysis, which proposal appears to be the best investment? 1. HIGH-LOW METHOD The following information is available regarding the total manufacturing overhead costs of Paymore, Inc., for five months in 2012: Machine Hours Mfg Overhead Costs February 6,900 $6,250 March 5,000 $5,375 April 6,300 $6,025 May 9,333 $7,975 June 6,833 $6,050 a. Using the high-low method compute the following: i The variable element of overhead cost per machine-hour $ per machine-hour ii The fixed element of monthly overhead cost $_ Use the cost relationship determined in part a to estimate the total manufacturing overhead costs for July 2012 given that 7 250 machine-hours are scheduled b 2. LIMITED RESOURCES Portable Enterprises produces two lines of mobile homes: double-wide and single-wide Unit cost and revenue data pertaining to each product are shown below: Double-wide Single-wide Selling price $70,000 $70,000 Total variable costs. 45,000 20,000 Each double-wide home requires 350 different labor hours and 125 machine hours. Each single-wide home requires 175 direct labor hours and 150 machine hours. Demand for each line of homes far exceeds the company's total production capacity a. If Portable's production capacity is constrained by limited direct labor hours, which line of homes should it produce? If Portable's total production capacity is constrained by machine hours, which line of homes should it produce? b Computations. 3. USING A RESPONSIBILITY INCOME STATEMENT Shown below is the current monthly income statement of Metro Video, by profit centers Segments METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Equipment Sales Video Rentals % Dollars $560,000 (268.800) $291,200 (67.200) % 100 (48) 52 (12) Dollars $280,000 (198.800) $81,200 (25 200) % 100 (71) 29 (09) Dollars $280,000 (70.000) $210,000 (42.000) 100 (36) 75 (15) Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations $224,000 40 $56,000 20 $168.000 60 (61.600) $162.400 (11) 29 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions a Spending $5.000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35% S b. Closing the Equipment Sales Department and allowing the Video Rentals Department to On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: a. Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $ b. Closing the Equipment Sales Department and allowing the Video Rentals Department to expand is expected to increase the revenue of the Video Rentals Department by $105,000 per month. This action also is expected to increase fixed costs traceable to the Video Rentals Department by $40,000 per month. $ 4. STANDARD COST SYSTEM-OVERHEAD VARIANCES Assume the following data for John Company's August operations. Standard overhead per direct labor hour based on normal monthly capacity of 30,000 hours: $9 Fixed ($270,000/30,000 hours). Variable ($660,000/30,000 hours) 22 $31 Direct labor hours actually worked in August. 28,000 hours Actually overhead costs incurred (including $270,000 fixed costs) $824,000 a. Compute the amount of overhead applied to Work-in-Process during August. b. Compute the total manufacturing overhead budgeted based on hours worked during August. $ C. Compute the overhead spending variance for August. Indicate whether favorable (F) or unfavorable (U) $ d. Compute the overhead volume variance for August Indicate whether favorable (F) or unfavorable (U) $ 5. CAPITAL BUDGETING Mason Co. is evaluating two alternative investment proposals. Below are data for each proposal: Proposal A Proposal B Initial investment cost. $84,000 $96,000 Estimated useful life. 5 years 6 years Estimated salvage value. $4,000 -0- Estimated annual net income.. $8,200 $8,000 The following information was taken from present value tables: Present Value $1 due in 5 years, discounted at 12% 567 $1 due in 6 years, discounted at 12% 507 $1 received annually for 5 years discounted at 12% 3.605 4.111 $1 received annually for 6 years, discounted at 12% All revenue and expenses other than depreciation will be received and paid in cash. The All revenue and expenses other than depreciation will be received and paid in cash. The company uses a discount rate of 12% in evaluating all capital investments. Compute the following for each proposal (round payback period to the nearest tenth of a year and round return on average investment to the nearest tenth of a percent): Proposal A Proposal B a. Annual net cash flow: $ $ b. Payback period in years): A c. Average investment: CA d. Return on average investment: % % A e. Net present value: $ f. Based on your analysis, which proposal appears to be the best investment
