Complete the following table by calculating the sawmills cost per board foot for each grade using both the physical units method and the sales-value-at-split-off method (round to three decimal places):

Sawmill Cost and Production Data
Grade	Physical Units Method: Cost per Board Foot	Sales-Value-at-Split-Off Method: Cost per Board Foot
Firsts and seconds
No. 1 common
No. 2 common
No. 3 common

Given that the sawmill provides lumber at cost to the furniture plant, using the sales-value-at-split-off method (select: increases, decreases) the cost of Job A500 by $________ and (select: increases, decreases) the cost of Job B75 by $__________.

The physical units method, often used in the lumber industry, essentially assumes that it costs (select: the same, more) to produce each board foot (select: regardless of, depending on) the grade. Thus, (select: the same, a higher) cost of lumber would be assigned to a sofa or chair (select: regardless of, depending on) which grade is used. This approach has some drawbacks. Intuitively, the higher grades should cost (select: the same, more). Certainly, if the company was buying this input from suppliers, there would be (select: a cost difference, no cost difference) for sofas and chairs (select: regardless of, depending on) the grade of lumber purchased, because the higher grades have a (select: higher, lower) selling price.

The relative sales value method assigns (select: the same, a higher) cost to grades that have a (select: lower, higher) market value. Thus, the cost assigned to sofas and chairs (select: would differ, be the same) (select: according to, regardless of) the grade of lumber used.

Review the data analytic concepts and metrics found in Exhibits 2.5 and 2.6. What are the data analytic models being considered for the Sawmill? Which of the data analytic types is being used in Part a of Requirement 1? And for Part b? Part c? Note: More than one data analytic type may apply. Which of the data analytic models in play would you recommend for assigning the joint manufacturing sawmill costs? Explain.

Calculate the following for the fabric plant:

The plantwide overhead rate

The amount of under- or overapplied overhead

Using the weighted average method, complete the following information regarding the Weaving and Pattern production process:

Physical flow schedule (measured in yards)

Equivalent units schedule (measured in yards)

Unit cost

Cost of goods transferred out

To convert the output of the Weaving and Pattern Department to the output of the Coloring and Bolting Department, yards transferred is (select: multiplied, divided) by _____.

Using the weighted average method, complete the following for the Coloring and Bolting Department:

Physical flow schedule (measured in bolts)

Equivalent units schedule (measured in bolts)

Unit cost

Currently, the three types of fabrics are produced simultaneously in different locations of the fabric plant using similar processes. Process costing methods are used to determine the unit cost of each fabric. Historically, the plant has never fully utilized any of the three processes. The maximum historical utilization of the capacity has been about 50 percent. Juana Sandoval, the fabric plant manager, is confident that the three operations can be consolidated in a way that there would be sufficient capacity to produce all three fabrics while capturing significant savings by reducing labor and overhead costs. In fact, total direct labor and variable overhead costs would be reduced by 25 percent and fixed overhead costs by 50 percent. Production of the three fabrics can be managed by using a batch production approach; however, one problem is that the yarn used for each fabric differs significantly in cost. Conversion activity is the same for each fabric regardless of the type of yarn. The cost accounting manager has assembled the following budgeted annual data for each process that reflects the expected reductions:

	Weaving and Pattern	Coloring and Bolting
Conversion cost	$900,000	$570,000
Expected activity (direct labor hours)	60,000	30,000

Calculate the conversion rate for each process using direct labor hours (round to whole dollars):

Weaving and Pattern Process: $______ per hour

Coloring and Bolting Process: $_______ per hour

Assume a batch of 400 bolts of FB70 is produced. The cost of yarn requisitioned for the batch is $40,000. The batch used 2,550 direct labor hours in Weaving and Pattern and 1,200 hours in Coloring and Bolting. In Coloring and Bolting, another $10,000 of materials (dyes) were requisitioned for the batch. Calculate the cost per bolt for the production run of 400 bolts (round to the nearest cent).

In the Coloring and Bolting Department, 400,000 ounces of other materials were purchased and used to produce Fabric FB70s output of the period.

Using the proposed standard cost sheet for Fabric FB70, calculate the following variances for the Coloring and Bolting Department (round actual unit costs and prices to three decimal places; round variances to the nearest dollar):

Materials price variance (for other materials only)

Materials usage variance (for other materials only)

Labor rate variance

Labor efficiency variance

Prepare the journal entries for materials and labor:

Purchase of 400,000 ounces of other materials

Usage of 400,000 ounces of other materials

Assignment of direct labor costs

Assume that the standard hours allowed for the actual total output of the fabric plant are 115,000. Calculate the following variances (round to whole dollar):

Fixed overhead spending variance

Fixed overhead volume variance

Variable overhead spending variance

Variable overhead efficiency variance

Suppose that the fabric plant has 500 bolts of FB70 in beginning finished goods inventory. The current-year plan is to have 1,000 bolts of FB70 in finished goods inventory at the end of the year. This fabric has an external market price of $400 per bolt. If the fabric plant is set up as a profit center, it could sell 3,000 bolts per year to outside customers and supply 2,000 bolts per year internally to Beauvilles furniture plant. If the fabric plant were designated as a profit center, the plant would transfer all goods internally at market price. Using the proposed standard cost sheet (as needed) and any other relevant data, prepare the following for Fabric FB70:

Sales budget

Production budget

Direct labor budget

Cost of goods sold budget

Calculate the following overhead rates for the furniture plant: (1) plantwide rate and (2) departmental rates. Use the direct method for assigning service costs to producing departments.

For each of the overhead rates computed in Requirement 7, calculate unit bid prices for Jobs A500 and B75. Assume that the companys aggressive bidding policy is unit cost plus 50 percent. Did departmental overhead rates have any effect on Beauvilles winning or losing bids? What recommendation would you make? Explain. Now, adjust the costs and bids for departmental rate bids using the proposed standard costs for the Coloring and Bolting Department. Did this make a difference? What does this tell you?