Can someone help me with these exercises please? Column F are the numbers I'm working with. Any
Question:
Can someone help me with these exercises please? Column F are the numbers I'm working with. Any help is appreciated.
4.
Jobcostingandoverheadapplication
Uniflexappliesoverheadonthebasisofdirectlaborcost.InDecember20X4,thecompany'scostaccountantmadethefollowingpredictionsfor20X5operations:directlaborcost,$620,000;factoryoverhead,$961,000.
UniflexworkedonjobNos.241and242inJanuary.Thecostsincurredandproductionstatusofthesetwojobsappearinthetablethatfollows.
JobNo.241 | JobNo.242 | ||
Directmaterials | $26,000 | $47,000 | |
Directlabor | 18,000 | 24,000 | |
Productionstatus | Inprocess | Inprocess |
Bytheendof20X5,actualdirectlaborcostamountedto$612,500,andfactoryoverheadincurredtotaled$967,500.TherewasnoworkinprocessonJanuary1,20X5.
Computethefollowing:
- Uniflex'soverheadapplicationrate.
- ThebalanceoftheWorkinProcessaccountonJanuary31,20X5.
- Theamountofover-orunderappliedoverheadfor20X5.Besuretoindicatewhetheroverheadwasoverappliedorunderapplied.
Prob 2.
Computationsusingajobordersystem
GeneralCorporationemploysajobordercostsystem.OnMay1,thefollowingbalanceswereextractedfromthegeneralledger:
Workinprocess | $35,200 |
Finishedgoods | 86,900 |
Costofgoodssold | 128,700 |
WorkinProcessconsistedoftwojobs,No.101($20,400)andNo.103($14,800).DuringMay,directmaterialsrequisitionedfromthestoreroomamountedto$96,500,anddirectlaborincurredtotaled$114,500.Thesefiguresaresubdividedasfollows:
DirectMaterials | DirectLabor | ||
JobNo. | Amount | JobNo. | Amount |
101 | $5,000 | 101 | $7,800 |
115 | 19,500 | 103 | 20,800 |
116 | 36,200 | 115 | 42,000 |
Other | 35,800 | 116 | 18,000 |
$96,500 | Other | 25,900 | |
$114,500 |
JobNo.115wastheonlyjobinprocessattheendofthemonth.JobNo.101andthree"other"jobsweresoldduringMayataprofitof20%ofcost.The"other"jobscontainedmaterialandlaborchargesof$21,000and$17,400,respectively.
Generalappliesoverheaddailyattherateof150%ofdirectlaborcostaslaborsummariesarepostedtojoborders.Thefirm'sfiscalyearendsonMay31.
Instructions
- ComputethetotaloverheadappliedtoproductionduringMay.
- Computethecostoftheendingworkinprocessinventory.
- ComputethecostofjobscompletedduringMay.
- ComputethecostofgoodssoldfortheyearendedMay31.
Prob. 2
- Break-evenandotherCVPanalysisHodgeandBestmanufacturesasingleproduct.Theinformationthatfollowsrelatestocurrentoperations:
InstructionsSales(80,000units@$15) $1,200,000 Less:Variablecost $720,000 Fixedcost 360,000 1,080,000 Netincome $120,000 - Thesalesoutlookfornextyearisbleak.Calculatethenumberofunitsthatmustbesoldtobreakevenifcurrentrevenueandcostbehaviorpatternscontinue.
- IfHodgeandBestwishestoearnatargetincomeof$90,000duringthenextaccountingperiod,whatlevelofdollarsalesmustbegenerated?
- Managementisstudyinganincreaseinthesellingpriceto$18perunit.Ifconsumers balkandvolumedrops,calculatethenumberofunitsthatmustbesoldtoearnthetargetincomeof$90,000.Shouldthechangebeimplemented?Why?
- HodgeandBest'sprojectedbreak-evenpointandtargetincomearetheresultofinteractionsofnumerousfinancialeventsandtransactions.Determinetheimpactofthefollowingoperatingchangesbyfillingintheblanksbelowwith"increase,""decrease,"or"notaffect."
- 1)Anincreaseindirectlaborcostwill_______________________totalvariablecosts,_______________________thecontributionmargin,and_______________________thebreak-evenpoint.
- 2)Anincreaseinplantinsurancewill_______________________thebreak-evenpointand_______________________thedollarsaleslevelcalculatedinpart(b).
- 3. StraightforwardCVPanalysisFRBInc.sellsasingleproductfor$40.ThefollowingcostsandexpenseswereincurredatstoreNo.504:
Thecompanysold8,200unitsduring20X4.InstructionsVariablecostsperunit Annualfixedcosts Invoicecost $24 Salaries $60,000 Salescommission 4 Advertising 14,000 Other 16,000 - Computethe20X4break-evenpointinbothdollarandunitsales.
- Byhowmuchwillsaleshavetoincreasein20X5over20X4levelsifmanagementwishestoearnatargetincomeof$14,400?
- Atpresent,howmuchdoeseachunitprovidetowardcoveringFRB'sfixedcostsandgeneratingincome?Assumethatmanagementbelievesthisamountistoolow.WhatalternativesareavailabletoFRB?
- Whatwouldbetheeffectonthebreak-evenpointifmanagementreducedsalarycostsby$11,600andincreasedthe$4salescommissionby20%?
- 4. BreakevenandotherCVPanalysisQuebecInc.manufacturesandsellsasingleproduct.Theinformationthatfollowsrelatestotheyearjustended,when230,000unitsweresold:
InstructionsSalespriceperunit $ 10 Variablecostperunit 4 Fixedcosts 930,000 - DeterminethenumberofunitsthatQuebecsoldinexcessofitsbreak-evenpoint.
- Ifcurrentrevenueandcostpatternscontinue,computethedollarsalesneedednextyeartoproduceatargetincomeof$492,000.
- Assumethatadifferentcompensationplanwasineffectduringthecurrentyear.Ratherthanpaysixsalespeopleanaveragesalaryof$36,000each,managementhasproposedthatthesalespeoplereceivea$10,000basesalaryanda6%commissionbasedongrosssales.
- 1)Wouldthecompanyhavebeenbetterofffinanciallyifthenewplanhadbeenadoptedfortheyearjustended?Byhowmuch?
- 2)Whateffectmightpayingacommissionhaveongrosssales?Brieflyexplain.
- Inadditiontothecompensationplandescribedinpart(c),Quebecisstudyingtheimpactofotheroperatingchangesaswell.Statewhetheryouagreeordisagree withthefollowingfindingsofanewlyhiredstaffaccountant:1)Ariseinpropertytaxeswillincreasethebreak-evenpoint.2)Adecreaseinrawmaterialcostwillincreasethecontributionmarginanddecreasetotalfixedcosts.
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Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill