CARNEGIE HALL, INC.

Create a spreadsheet with an output section that: (a) determines the overhead application rate per direct labor hour under conventional costing, (b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (show material, labor and overhead separately to enhance manager usefulness) (c) determines the total cost to manufacture one unit digital piano using conventional costing (show material, labor and overhead separately to enhance manager usefulness) as well as (d) the current per-unit gross profit generated by the sale of an electronic keyboard, and (e) the current per-unit gross profit generated by the sale of a digital piano.

Create a spreadsheet with an output section that: (i) determines the six overhead application rates to use under activity-based costing (be sure to label these!) (j) determines the total cost to manufacture one unit electronic keyboard using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (k) determines the total cost to manufacture one unit digital piano using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (L) calculates a suggested new selling price for each item based on recent industry reports that indicate most companies similar to ours determine selling price by taking cost and adding 20 percent of cost as markup.

Then add to your formal memo to Vera an explanation of (m) how activity-based costing results in a more accurate allocation of overhead costs to products. Be sure to include (n) other benefits of adopting activitybased costing, and (o) one disadvantage to adopting activity-based costing. Finally, (p) make a recommendation to Vera as to whether you think the firm should adopt activity-based costing AND justify your position. Be sure to include a few lines offering additional assistance upon request and providing your contact information in the form of an email address or phone number. (You can use made-up contact information for this project . . . I mostly want you to have practice explaining accounting information to a coworker using written communication.) This is a formal business documentplease write your memo in a professional format and tone

Create a spreadsheet with an output section that: (q) calculates the cost of Job #900 (manager will want to see labels/detail on the types of costs included) ( r) calculates the cost of Job #901 (manager will want to see labels/detail on the types of costs included) (s) calculates the amount of overapplied or underapplied overhead (be sure to label which) (t) calculates the ending balance of Work-in-Process Inventory (provide detail with Job number) (u) calculates the ending balance of Finished Goods (provide detail with Job number) (v) calculates the ending balance of Cost of Goods Sold (provide detail with Job number)

Company: CARNEGIE HALL, INC. You are a middle manager of Carnegie Hall, Inc., a manufacturer and seller of electronic keyboard instruments, digital pianos, and other musical electronics. You are primarily responsible for two products sold by Carnegie Hall, Inc., made in Dallas. One is a standard electronic keyboard that sells for $920 and in constructed from medium-grade materials. The other model is a customized digital piano. The digital piano sells for $1,275. Both instruments require 14 hours of direct labor to produce, but the digital piano is manufactured by more experienced workers who are paid at a higher rate. Selected information regarding sales, production, and cost information for last year is as follows: The company allocates overhead costs using conventional costing using direct labor hours. You are concerned that the conventional cost-allocation system the company is using may not be generating accurate information so the resulting sales prices may also be improperly determined. You decide to perform some computations and report your results to your superior, Vera Wilson. Create a spreadsheet with an output section that: (a) determines the overhead application rate per direct labor hour under conventional costing, (b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (show material, labor and overhead separately to enhance manager usefulness) (c) determines the total cost to manufacture one unit digital piano using conventional costing (show material, labor and overhead separately to enhance manager usefulness) as well as (d) the current per-unit gross profit generated by the sale of an electronic keyboard, and (e) the current per-unit gross profit generated by the sale of a digital piano. Then (f) refer to your spreadsheet in your formal memo to Vera as you explain what conventional (i.e. traditional) costing is, (g) why it has been popular over the years, but also (h) why it might not be an accurate way to assign overhead costs to products. While you were working, the comptroller (i.e. head accountant) of the company, Sharon Garvin, provides you with additional information that you requested from her to be used in activity-based costing: Create a spreadsheet with an output section that: (i) determines the six overhead application rates to use under activity-based costing (be sure to label these!) (j) determines the total cost to manufacture one unit electronic keyboard using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (k) determines the total cost to manufacture one unit digital piano using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (L) calculates a suggested new selling price for each item based on recent industry reports that indicate most companies similar to ours determine selling price by taking cost and adding 20 percent of cost as markup. Then add to your formal memo to Vera an explanation of (m) how activity-based costing results in a more accurate allocation of overhead costs to products. Be sure to include (n) other benefits of adopting activitybased costing, and (o) one disadvantage to adopting activity-based costing. Finally, ( p ) make a recommendation to Vera as to whether you think the firm should adopt activity-based costing AND justify your position. Be sure to include a few lines offering additional assistance upon request and providing your contact information in the form of an email address or phone number. (You can use made-up contact information for this project. . I mostly want you to have practice explaining accounting information to a coworker using written communication.) This is a formal business document-please write your memo in a professional format and tone. This month, you have been working remotely with Paula Profit on two batches (i.e. Job #900 and #901) of new products developed by the company at facilities in St. Paul, MN. These musical electronics are being made in response to special, customized orders from two different touring bands. You and Paula will report the results to Mel Margin, who manages the New Products Division. Paula's part was to determine costs incurred this month that were related to the two jobs. Your part is to put together the final report. Paula's costs and other relevant information are as follows: (continued, next page) Materials requisitioned: $5,000 for Job #900 and $6,250 for Job #901 and $400 for indirect materials. Labor used: 675 hours for Job #900 and 720 hours for Job #901 and 180 hours for indirect labor. (Assume a labor rate of $24 per hour for all of these workers.) In addition, the factory supervisor who oversaw these operations earned $6,400 during the period. Rent and utilities for the factory used for this production for the period were $3,780 and $890 respectively. Depreciation on factory equipment was $2,300 for the period. Manufacturing overhead was applied at a rate of $11.92 per direct labor hour. Job #900 was completed this month and sold. The selling price was 140% of manufactured cost for the job. Job #901 still needs to be finished and packaged so is not done. Any overapplied or underapplied overhead should be closed directly to Cost of Goods Sold for the period. Create a spreadsheet with an output section that: (q) calculates the cost of Job #900 (manager will want to see labels/detail on the types of costs included) ( r ) calculates the cost of Job #901 (manager will want to see labels/detail on the types of costs included) (s) calculates the amount of overapplied or underapplied overhead (be sure to label which) (t) calculates the ending balance of Work-in-Process Inventory (provide detail with Job number) ( u) calculates the ending balance of Finished Goods (provide detail with Job number) (v) calculates the ending balance of Cost of Goods Sold (provide detail with Job number) Realize that labels are very important to managers who will receive your report in terms of enhancing understandability to make decisions. Then write a formal memo to Mel that (w) explains why the company used Job Order instead of Process Costing for these situations, (x) explains what the normal flows of costs through the accounts in a Job Order system, (y) explains why overhead is applied instead of actual overhead costs being assigned to products as they are incurred, and (z) identifies the common bases for applying overhead to products and why these are commonly used. (Why might direct labor hours have been chosen for these jobs?) Briefly refer to the spreadsheet you are attaching to your email, offer to help more as needed, and provide contact information. (You can type up false contact information for purposes of doing this case.) Company: CARNEGIE HALL, INC. You are a middle manager of Carnegie Hall, Inc., a manufacturer and seller of electronic keyboard instruments, digital pianos, and other musical electronics. You are primarily responsible for two products sold by Carnegie Hall, Inc., made in Dallas. One is a standard electronic keyboard that sells for $920 and in constructed from medium-grade materials. The other model is a customized digital piano. The digital piano sells for $1,275. Both instruments require 14 hours of direct labor to produce, but the digital piano is manufactured by more experienced workers who are paid at a higher rate. Selected information regarding sales, production, and cost information for last year is as follows: The company allocates overhead costs using conventional costing using direct labor hours. You are concerned that the conventional cost-allocation system the company is using may not be generating accurate information so the resulting sales prices may also be improperly determined. You decide to perform some computations and report your results to your superior, Vera Wilson. Create a spreadsheet with an output section that: (a) determines the overhead application rate per direct labor hour under conventional costing, (b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (show material, labor and overhead separately to enhance manager usefulness) (c) determines the total cost to manufacture one unit digital piano using conventional costing (show material, labor and overhead separately to enhance manager usefulness) as well as (d) the current per-unit gross profit generated by the sale of an electronic keyboard, and (e) the current per-unit gross profit generated by the sale of a digital piano. Then (f) refer to your spreadsheet in your formal memo to Vera as you explain what conventional (i.e. traditional) costing is, (g) why it has been popular over the years, but also (h) why it might not be an accurate way to assign overhead costs to products. While you were working, the comptroller (i.e. head accountant) of the company, Sharon Garvin, provides you with additional information that you requested from her to be used in activity-based costing: Create a spreadsheet with an output section that: (i) determines the six overhead application rates to use under activity-based costing (be sure to label these!) (j) determines the total cost to manufacture one unit electronic keyboard using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (k) determines the total cost to manufacture one unit digital piano using activity-based costing (show material, labor and overhead separately to enhance manager usefulness) (L) calculates a suggested new selling price for each item based on recent industry reports that indicate most companies similar to ours determine selling price by taking cost and adding 20 percent of cost as markup. Then add to your formal memo to Vera an explanation of (m) how activity-based costing results in a more accurate allocation of overhead costs to products. Be sure to include (n) other benefits of adopting activitybased costing, and (o) one disadvantage to adopting activity-based costing. Finally, ( p ) make a recommendation to Vera as to whether you think the firm should adopt activity-based costing AND justify your position. Be sure to include a few lines offering additional assistance upon request and providing your contact information in the form of an email address or phone number. (You can use made-up contact information for this project. . I mostly want you to have practice explaining accounting information to a coworker using written communication.) This is a formal business document-please write your memo in a professional format and tone. This month, you have been working remotely with Paula Profit on two batches (i.e. Job #900 and #901) of new products developed by the company at facilities in St. Paul, MN. These musical electronics are being made in response to special, customized orders from two different touring bands. You and Paula will report the results to Mel Margin, who manages the New Products Division. Paula's part was to determine costs incurred this month that were related to the two jobs. Your part is to put together the final report. Paula's costs and other relevant information are as follows: (continued, next page) Materials requisitioned: $5,000 for Job #900 and $6,250 for Job #901 and $400 for indirect materials. Labor used: 675 hours for Job #900 and 720 hours for Job #901 and 180 hours for indirect labor. (Assume a labor rate of $24 per hour for all of these workers.) In addition, the factory supervisor who oversaw these operations earned $6,400 during the period. Rent and utilities for the factory used for this production for the period were $3,780 and $890 respectively. Depreciation on factory equipment was $2,300 for the period. Manufacturing overhead was applied at a rate of $11.92 per direct labor hour. Job #900 was completed this month and sold. The selling price was 140% of manufactured cost for the job. Job #901 still needs to be finished and packaged so is not done. Any overapplied or underapplied overhead should be closed directly to Cost of Goods Sold for the period. Create a spreadsheet with an output section that: (q) calculates the cost of Job #900 (manager will want to see labels/detail on the types of costs included) ( r ) calculates the cost of Job #901 (manager will want to see labels/detail on the types of costs included) (s) calculates the amount of overapplied or underapplied overhead (be sure to label which) (t) calculates the ending balance of Work-in-Process Inventory (provide detail with Job number) ( u) calculates the ending balance of Finished Goods (provide detail with Job number) (v) calculates the ending balance of Cost of Goods Sold (provide detail with Job number) Realize that labels are very important to managers who will receive your report in terms of enhancing understandability to make decisions. Then write a formal memo to Mel that (w) explains why the company used Job Order instead of Process Costing for these situations, (x) explains what the normal flows of costs through the accounts in a Job Order system, (y) explains why overhead is applied instead of actual overhead costs being assigned to products as they are incurred, and (z) identifies the common bases for applying overhead to products and why these are commonly used. (Why might direct labor hours have been chosen for these jobs?) Briefly refer to the spreadsheet you are attaching to your email, offer to help more as needed, and provide contact information. (You can type up false contact information for purposes of doing this case.)