D G J K L M N P a R 1 Background Information I SEE THE LIGHT I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lamps/nightlights for use in bedrooms. These lamps are sold nationwide through a group of independent sales representatives who have an exclusive sales region. The business is in its tenth year and has asked you to assist in planning for next year's operations. The lamps are ceramic figurines of animals, boats, boys and girls playing and singing, all in delightful colors. The owner of the business, Big Al, creates a drawing for the figurine and faxes it to a plant in China where a mold is created and a sample produced and hand painted. If the mold meets the expectations of Big Al an order of 500 pieces is placed. There are presently 10 different figurines that come in six different colors; 60 models. The lamp shades and the electrical parts are supplied from domestic manufacturers. There are presently 10 workers in the plant. They are responsible for receiving the raw material, manufacturing the product, packing and shipping. In addition to Big Al there are two office workers who are responsible for all administrative duties. Big Al had his accountant prepare the Projected Income Statement and Balance Sheet presented on page two. Big Al heard about your skills in managerial accounting and would like your assistance in the following areas: 24 25 26 27 28 20 30 31 Part 1 32 Part 21 33 Part 3 Part 5 35 Part 6 37 38 30 40 411 42 49 50 51 35223 54 Fixed and Variable Cost Determinations-Unit Cost Calculations Cost Volume Relationships-Profit Planning Budgets Job Order Costing Standard Costing-Variance Analysis To upload your work to Big Al the file without changing the same. Pay attention to the specific location that Excel saves the file. Return to the bottom of the page that you downloaded the file from; Cybertext.com, The Book List, Building Blocks of Accounting-A Managerial Perspective, Enter password, Upload Your Excel File you upload an old version of the file the results will not update Keep two copies of your spreadsheet in two separate places in case one of Big Al's competitors sends someone to destroy your work or it is lost in transmission. You may find it easier to work on this project if you print a hard copy of all the pages. NOTE: If there are any questions about the project e-mail markfriedman@miami.edu or call 305.284.6296. Grade will be based upon answers entered into the shaded boxes. me Insert Draw Page Layout Formulas Data Review View Tell me X Arial 10 AA EEE ste Clipboard BIU fx A Font Alignment A B D me projected cost of a lamp is calculated based upon the projected increases or decreases to ament costs. The present costs to manufacture one lamp are Figurines Electrical Sets Lamp Shade $9.2000000 per lamp 1.2500000 per lamp 6.0000000 per lamp H Direct Labor Variable Overhead Fixed Overhead Cost per lamp 2.2500000 per lamp (4 lamps/hr.) 0.2250000 per lamp 10,0000000 per lamp (based on nommal capacity of 25,000 lamps) $28.9250000 per lamp Expected increases for 20x21 When calculating projected increases round to SEVEN decimal places,$0.0000000 1. Material Costs are expected to increase by 4.00% 2. Labor Costs are expected to increase by 3.00% 3. Variable Overhead is expected to increase by 4.50% 4. Fixed Overhead is expected to increase to $255,000, 5. Fixed seling expenses are expected to be $33,000 in 20x2. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.50% 7 Foed Administrative expenses are expected to increase by $6,000 The total administrative expenses for 20x0 were $40,625.00, when 22.500 units were sold. Use the High-Low method to calculate the total faed administrative expense. 8. Variable administrative expenses (measured on a per lamp basis) are expected to increase by 3.50% The total administrative expenses for 20x0 were $40,625.00, when 22.500 units were sold. Use the High-Low method to calculate the variable administrative expense per lamp On the following schedule develop the following figures 1- 20x2 Projected Variable Manufacturing Unit Cost of a lamp. 2- 20x2 Projected Variable Unit Cost per lamp, 3- 20x2 Projected Fixed Costs In De Cell For Ce General $ % 9 Number Conditional Format Formatting as Table Styles Styles K N Paste A1 >> Clipboard BI fx D Font See The Light For the Period Ending December 31, 201 25.000 langes45.00 un Che Cost of Goods Sai Gott $1,125,000.00 723.250.00 1401,790.00 Selling Expense $23,000.00 (Comision per un$3.15 78.750.00 $ 101.750.00 Adnisistative Expenses Tetal Balling and Administrative Expe 142.500.00 er 100 110 112 113 114 117 136 110 120 121 122 123 124 125 120 127 13 130 Cu Cash Raw Ma Ad Depa T Total Assels Curent Trial Labe TS' Equity Ready FAQ T a The Light As of December 31, 34,710.00 750000 500 500 $125 25.00 3000 D 13.300.00 $4000.00 11200000 14141000 13.410.00 Alignment P Styles: Number 5 6 27 7 Total Variable Cost Per Un 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 7 Decimal Places 89 Variable Seling 18 Vadable Administrative 20x1 49 Variable Administrative 2012 50 51 Projected Variable Manufacturing Unit Cost 52 Projected Total Variable Cost Per Unit 61 (4.07) (4.08) (4.09) (4.06) (4.10) 62 63 64 Schedule of Fired Costs 65 74 Fixed Overhead 75 (nommal capacity of. lamps @) 76 Fixed Seling 77 Fixed Administrative 20x1 78 Fixed Administrative 20x2 87 Projected Total Fixed Costs 88 90 91 100 101 FAQ 2 20x1 Cost Projected Increase 20x2 Cost Rounded to 2 Decimal Places (4.11) (4.12) (4.13) (4.14) (4.15) 9 ome th Paste OFF AutoSave Insert Draw Page Layout Formulas Data Review View Tell me X Arial 12 > AA General BIUS $ % Condit Forma Alignment Number A1 Clipboard Font fx B C D E Tak PART 2 44 Cost Volume Relationships- Profit Planning Big Al is about to begin work on the budget for 2002 and they have requested that you prepare an anty based on the following assumptions Note Remember, that we cannot sell part of a lamp, therefore to find the number of units you have to round up to the next complete unit Furthuremore, to find the required sales in dolars it may be easier to find the number of units and then multiply by the selling priceperun For 22 the selling price per lamp will be $4500. What is the projected contribution margin and contribution marginrado by each lamp sold 45 46 56 ST 50 60 Contribution Margin per unit (Round to seven places, See) 70 Contribution Margin Ratio (Round to seven places % is two of those places rs) 2 For 2012 the selling price per lamp will be $45.00 How many lamps must be sold to brave? 100 101 112 Breakeven sales in uns (Round up to to places) 113 114 115 1263 For 202 the selling price per lamp will be $45.00. The desired operating income in 202 is $278,750. Whe 127 128 129 would sales in units he be in 2012 to reach bear 130 131 132 133 134 136 137 138 130 Sales in units (Round up to zero plac 140 141 142 143 144 145 140 (500) (500) (504) 27 15 24 Home Insert Draw Page Layout Formulas Data Review View Tell me Arial 12 A A General Paste B I U $ % 9 Conditional For Formatting as T A1 Clipboard Font Alignment Number Style fx A B C D F G H K 2235 For 20x2 the selling price per lamp wit be $45.00, The company would like to have a operating income equal to 27.00% of sales. If that is to be achieved, what would be the sales in units in 20x27 34 Sales in units (Round up to zero places, as units) (6.01) 37 5 38 If the company believed that it could only sell 25,000 lamps, what would the new selling price have to be so that the new contribution margin per unit is equal to last year's contribution margin per unit? New Selling Price (Round up to two places, San..) (6.02) 60 For 20x2 the selling price per lamp will be $45.00 and the effective tax rate is 39%. How many units must be sold to generated a operating income of $200,000 after taxes? 67 68 69 70 21 78 79 60 81 Sales in units (Round up to zero places, a, units) (6.03) 89 90 If the company believes that the demand will be 27,500 units for the year. What selling price 91 per lame, rounded to two places, would generate a operating income of $823,5007 92 93 100 101 102 103 104 106 106 107 New selling price per lamp (Round up to two places.) (6.04) 108 109 110 111 FAQ D 6 Home Insert Draw Page Layout Formulas Data Review View rea me X Arial 12 A A 101 General Paste BIU v A Alignment $19 Number A1 Clipboard A fx Font C D PART 5 Job Order Costing To keep records of the actual cost of a special order job, a Job Order Cost System has been developed Overhead is applied at the rate of 50% of the direct labor cost Job Order Costing Section On January 1, 2012, Division S began Job 2407 for the Chert, THE BIG CHILDREN STORE The job called for 4,000 customized lamps. The following set of transactions occurred from 27 January Sun the job was completed 5-Jan Purchased 4,125 figurines $0.40 per figurine 6-Jan Purchased 4,225 sets of electical components $1.40 per set 7-Jan Purchased 4,000 lamp shades $45 per se -Jan 4.125 figurines were re 9-Jan 4200 s sets of electrical components were requisitioned 17-Jan Payrol of S 570 Direct Labor Hours 0 $65 per hour. 28-Jan 3,960 lamp shades were requisitioned 30-Jan Payroll of 620 Direct Labor Hours 39.50 per hour were completed and shipped All materials requsitioned were 30-Jan 3.900 lamps were com used or scrapped, and are a cost of normal processing Actual Veriatie Manufacturing Overhead Actual Fland Manufacturing Overhead $ 1,20140 $39.82345 Cost of Direct Material incurre facheng 2407 Cost of Dart Labor ngurred in Manufcr2407 Ready Cost of Maging Overheed Aged to Cost of manufacturing one lame Round to six place S (101) (18) (10 8 10 12 D + Conditional Formatting 13 14 15 16