Hello,

I am struggling with this project and my teacher is not helping me at all to work through this project. Can I have a tutor give me a step by step solutions for the whole project so I can learn? I am screwing things up and I need someone to show me how I am screwing up on this project. I attached the excel file. I appreciate the help!

NV5785 I SEE THE LIGHT www.cybertext.com, The Book List, Building Blocks of Accounting--A Managerial Perspective, Nicholas, when you are Enter ready password, to have your work graded you will upload this filNV5785.xls Upload Your Excel File. to the same screen that the project was downloaded from: 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. There are alternative methods of solving problems. To insure similar answers and to guarantee that you are graded correctly please follow the instructions as to rounding. 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. L830 160825 or NV5785.xlsx Elf Village Productions 50 Sheet Legal Pad Building Blocks of Accounting .. A Financial Perspective Page 1 FAQ FAQ 01 My file used to upload, why is it not uploading? Answer: Sometimes we unknowingly add items to a workbook that inhibits the upload process. The conversion to a Excel Binary Workbook (*.xlsb) version and then back to the current version generally fixes the situation. If the problem continues simple send your BINARY file as an attachment with your username and password... friedman@cybertext.com Windows Operating System Select File Select Save As Select Save As Type: Select Excel Binary Workbook (*.xlsb) Select Save Select Continue or Yes if prompted or if it indicates that there is limited memory. Select Select Select Select Select Select File Close File Open and open the .xlsb file Save As Save As Type: Excel Workbook (*.xlsx) Save Upload the file at cybertext.com Apple Operating System Select File Select Save As Select Format: Select Excel Binary Workbook (*.xlsb) Select Save Select Select Select Select Select Select File Close File Open and open the .xlsb file Save As Format: Excel Workbook (*.xlsx) Save Upload the file at cybertext.com MF1234.xlsx Elf Village Productions 50 Sheet Legal Pad Building Blocks of Accounting .. A Financial Perspective FAQ FAQ 02 Answer: What is the difference between rounding a number and rounding up a number? B 1 2 3 4 5 6 7 C D E F Cost of a Taxi $ 100.00 Number of Passengers 3 Cost per Passenger Without rounding 33.333333 =F1/F2 Rounding to two decimals 33.33 =ROUND(F1/F2,2) Roundup to two decimals 33.34 =ROUNDUP(F1/F2,2) FAQ 03 When I upload it, the results show that I have an answer wrong, yet that answer is needed for another question which is marked correct. Answer: The computer is giving you part credit. Given: Width 10 ft Length 12 ft Cost per sq. ft. $6 Find {1.1} Area ----- 100 sq ft (wrong) {1.2} Cost ---- $600 correct based on the wrong area. Note if the area is corrected,120 sq ft, the cost would be wrong. Page 2 FIRST Nicholas LAST Venuti number 5785 File NV5785 I SEE THE LIGHT Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights 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: Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Fixed and Variable Cost Determinations - Unit Cost Calculations Cost Volume Relationships - Profit Planning Budgets Process Costing Job Order Costing Standard Costing - Variance Analysis Capital Decision Making To upload your work to Big Al the file without changing the name. 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. If 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. Page 2 I See The Light Projected Income Statement For the Period Ending December 31, 20x1 Sales 25,000 lamps @ $45.00 Cost of Goods Sold @ $28.93 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.15 Administrative Expenses Total Selling and Administrative Expenses: Net Profit $ 1,125,000.00 723,250.00 $ 401,750.00 $ 23,000.00 78,750.00 $ 101,750.00 40,500.00 $ 142,250.00 259,500.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash Accounts Receivable Inventory Raw Material Figurines Electrical Sets Work in Process Finished Goods Total Current Assets Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 500 @ $9.20 500 @ $1.25 0 3000 @ $28.9250 34,710.00 67,500.00 $ 4,600.00 625.00 86,775.00 194,210.00 $ 13,200.00 207,410.00 $ $ 54,000.00 54,000.00 $ 153,410.00 207,410.00 $ 20,000.00 6,800.00 $ 12,000.00 141,410.00 Page 3 Nicholas Venuti 6171 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Figurines Electrical Sets Lamp Shade Direct Labor: Variable Overhead: Fixed Overhead: Cost per lamp: $9.2000000 1.2500000 6.0000000 2.2500000 0.2250000 10.0000000 per lamp per lamp per lamp per lamp (4 lamps/hr.) per lamp per lamp (based on normal capacity of 25,000 lamps) $28.9250000 per lamp Expected increases for 20x2 When calculating projected increases round to SEVEN decimal places,$0.0000000. 1. Material Costs are expected to increase by 5.50% . 2. Labor Costs are expected to increase by 5.00%. 3. Variable Overhead is expected to increase by 2.50%. 4. Fixed Overhead is expected to increase to $255,000. 5. Fixed selling expenses are expected to be $29,000 in 20x2. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 3.00%. 7. Fixed Administrative expenses are expected to increase by $4,000. The total administrative expenses for 20x0 were $40,320.00, when 22,000 units were sold. Use the High-Low method to calculate the total fixed administrative expense. 8. Variable administrative expenses (measured on a per lamp basis) are expected to increase by 5.50%. The total administrative expenses for 20x0 were $40,320.00, when 22,000 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. Page 4 Nicholas Venuti 6171 I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 7 Decimal Places 9.2 5.50% $9.7060000 {4.01} 7 1.25 5.50% $1.3187500 {4.02} 6 Figurines 5.50% $6.3300000 {4.03} 2.25 5% $2.3625000 {4.04} Variable Overhead 0.225 2.50% $0.2306250 {4.05} 7 7 7 7 Projected Variable Manufacturing Cost Per Unit 18.92 $19.9478750 {4.06} 7 Electrical Sets Lamp Shade Labor Total Variable Cost Per Unit 20x1 Cost Variable Selling 3.15 Variable Administrative 20x1 0.0600000 Variable Administrative 20x2 0.0600000 Projected Variable Manufacturing Unit Cost Projected Total Variable Cost Per Unit Projected Percent Increase 20x2 Cost Rounded to 7 Decimal Places $3.2445000 {4.07} 0.03 {4.08} $0.0633000 {4.09} 5.50% 7 7 7 {4.06} $19.9478750 23.3 $23.2556750 {4.10} 3% 7 Schedule of Fixed Costs 20x1 Cost Projected Increase Fixed Overhead 20x2 Cost Rounded to 2 Decimal Places $ 255,000.00 {4.11} 2 $ 29,000.00 {4.12} 2 7 2 2 (normal capacity of _________ lamps @ __ ) Fixed Selling $23,000 Fixed Administrative 20x1 39,000.00 Fixed Administrative 20x2 39000 Projected Total Fixed Costs {4.13} 4000 $ 43,000.00 {4.14} $ 327,000.00 {4.15} Page 5 Nicholas Venuti 6171 PART 2 Cost Volume Relationships Profit Planning Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis 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 dollars it may be easier to find the number of units and then multiply by the selling price per unit. 1. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? 45 Selling Price Variable cost Contribution Margin per unit (Round to seven places, $##.#######) Contribution Margin Ratio (Round to seven places,% is two of those places ##.#####%) 2. 23.255675 $21.7443250 {5.01} 7 48.32072% {5.02} 7 15,034 units {5.03} 0 {5.04} 0 For 20x2 the selling price per lamp will be $45.00. How many lamps must be sold to breakeven? Selling Price Breakeven sales in units (Round up to zero places, ###,### units) 3. For 20x2 the selling price per lamp will be $45.00. The desired operating income in 20x2 is $277,000 . What would sales in units have to be in 20x2 to reach the profit goal? Fixed Cost Desired Pft Contrib Marg Sales in units (Round up to zero places, ###,### units) $327,000 277,000 $21.7443250 27,778 units Page 6 Nicholas Venuti 6171 4. For 20x2 the selling price per lamp will be $45.00. The company would like to have a operating income equal to 30.00% of sales. If that is to be achieved, what would be the sales in units in 20x2? Fixed Cost Desired Pft Contrib Marg Sales in units (Round up to zero places, ###,### units) 5. $327,000 $337,500 21.744325 30,560 units {6.02} 2 {6.03} 0 {6.04} 2 For 20x2 the selling price per lamp will be $45.00 and the effective tax rate is 40%. How many units must be sold to generated a operating income of $240,000 after taxes? Sales in units (Round up to zero places, ###,### units) 7. 0 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, $###,###.## ) 6. {6.01} If the company believes that the demand will be 27,500 units for the year. What selling price per lamp, rounded to two places, would generate a operating income of $818,500? New selling price per lamp (Round up to two places, $###,###.## ) Page 7 Nicholas Venuti 6171 PART 3 Budgets Keep in mind that the budget section builds on work from the previous parts, including Part I as well as the Background Information (tabs 1-4). You should continue to use the same file with your previously submitted answers. Division N has decided to develop its budget based upon projected sales of 27,000 lamps at $48.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the figurines inventory to 600 pieces and increasing the finished goods by 26.00% . Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods (roundup to the next unit) Total Needed Less: Beginning Inventory Total Production {7.01} 0 Page 8 Nicholas Venuti 6171 2 Materials Budget Figurines Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) Electrical Parts Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) Lamp Shades - not inventoried they arrive from the shop next door Just-in-time. Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) {8.01} {8.02} 0 0 {8.03} {8.04} 0 0 {8.05} 2 {8.06} 0 {8.07} 2 {8.08} 2 {8.09} 2 {8.10} 2 {8.11} 2 {8.12} 7 3 Direct Labor Budget Labor Cost Per Lamp Production Total Labor Cost (Round to two places, $##.##) $ 1.00 4 Factory Overhead Budget Variable Factory Overhead: Variable Factory Overhead Cost Per Unit Number of Units to be Produced Total Variable Factory Overhead (Round to two places, $##.##) Fixed Factory Overhead Total Factory Overhead (Round to two places, $##.##) Predetermined Factory Overhead Rate based upon the budgeted total factory OH, divided by the budgeted number of units to be produced, and then rounded to seven places, $##.#######) Page 9 Nicholas Venuti 6171 5 Selling and Admin. Budget Fixed Selling Variable Selling (Round to two places, $##.##) Fixed Administrative Variable Administrative (Round to two places, $##.##) Total Selling and Administrative (Round to two places, $##.##) 6 ### 2 ### 7 ### 2 ### 2 ### 2 ### ### ### ### ### ### ### 2 2 2 2 2 2 2 Cost of Goods Sold Budget - Assume FIFO (First-In, First-Out) and overhead is applied based on the number of units to be produced. Cost of making one unit next year Material cost per unit Labor Cost Per Lamp Factory overhead per unit Round dollars to seven places, $##.####### Total cost of one unit (Round to seven places, $##.#######) Round dollars to two places, $##.## Beginning Inventory, Finished Goods Production Costs: Materials: Figurines: Beginning Inventory Purchased Available for Use Ending Inventory of Figurines Figurines Used In Production Electrical Parts Beginning Inventory Purchased Available for Use Ending Inventory of Electrical Parts Electrical Parts Used In Production Lamp Shades: Lamp Shades Used In Production Total Materials: Labor Overhead Cost of Goods Available Less: Ending Inventory, Finished Goods Cost of Goods Sold Page 10 Nicholas Venuti 6171 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Operating Income ### 2 ### ### ### 2 2 2 ### 2 ### ### 2 2 Budgeted Cash Balance before financing Needed Minimum Balance ### 2 Amount to be borrowed (if any) ### 2 Budgeted Cash Balance ### 2 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 22.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 87.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $140,000 . I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Round dollars to two places, $##.## Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available Cash Outflows: Purchases Accounts Payable (Purchases last year) Material purchases made and paid for in 20x2 Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows Page 9 Nicholas Venuti 6171 9 Variable Cost of making one unit next year - used to calculate the Ending Inventory of Finished Goods Material cost per unit Labor Cost Per Lamp Variable Factory overhead per unit 20x2 Cost Rounded to 7 Decimal Places {11.01} 7 {11.02} 2 {11.03} 2 {11.04} 2 {11.05} {11.06} 2 2 {11.07} 2 {11.08} {11.09} 2 2 Operating Income, Absorption Operating Income, Variable Costing Excess (Absorption Costing Operating Income - Variable Costing Operating Income) {11.10} 2 Budgeted Fixed Overhead Budgeted Number of Units to be Produced Budgeted Fixed Cost Per Unit (Round to 7 decimals #.#######) {11.11} 7 Fixed Manufacturing Overhead in the Ending Inventory Fixed Manufacturing Overhead in the Beginning Inventory Increase (Fixed Manufacturing Overhead in the Ending Inventory-Fixed Manufacturing Overhead in the Beginning Inventory) {11.12} {11.13} {11.14} 2 2 2 Total variable manufacturing cost of one unit 10 Budgeted Operating Income Using Variable (Direct) Costing 20x2 Cost Rounded to 2 Decimal Places Sales Variable Cost of Goods Sold - Assume FIFO (First-In, First-Out) Beginning Inventory, Finished Goods (Variable Costing) Production Costs: Materials: Figurines: Electrical Parts Lamp Shades: Labor: Variable Overhead: Total Variable Production Costs Cost of Goods Available For Sale Less: Ending Inventory, Finished Goods (Variable Costing) Variable Cost of Goods Sold Variable Selling (Round to two places, $##.##) Variable Administrative (Round to two places, $##.##) Total Variable Costs Contribution Margin Fixed Costs: Fixed Manufacturing Overhead Fixed Selling Fixed Administrative Total Fixed Operating Income, Variable Costing Page 11 Nicholas Venuti 6171 PART 4.1 Process Costing - Weighted Average General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,900 figurines at a cost of $3,683.00. Of this amount, $1,508.00 was from raw materials added, $1,450.00 for labor and $725.00 for overhead. These 2,900 figurines were assumed to be 20.00% complete as to labor and overhead. During January, 22,500 units were started, $13,050.00 of materials and $55,050.00 of labor costs were incurred. The 3,500 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overhead. All figurines in January passed inspection. Page 12 Nicholas Venuti 6171 PART 4.1 Process Costing - Weighted Average MOLDING Physical Flow of Units January Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for ### ### 0 0 Equivalent Units Material (Round to three places, ##.###.###) ### 3 Equivalent Units Conversion (Round to three places, ##.###.###) ### 3 Total cost of Material (Round to two places, ##.###.##) ### 2 Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) ### ### 2 2 Cost per equivalent unit of Material (Round to seven places, ###.#######) ### 7 Cost per equivalent unit of Conversion (Round to seven places, ###.#######) ### 7 Cost of the units transferred, material and convesion (Round to two places, $###,###.## ) ### 2 Cost of the ending inventory, material and convesion (Round to two places, $###,###.## ) ### 2 Page 11 Nicholas Venuti 6171 PART 4.2 Process Costing - First-In First-Out Mr. Jones, a consultant, has indicated that FIFO process costing would produce more meaningful cost data. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,900 figurines at a cost of $3,683.00. Of this amount, $1,508.00 was from raw materials added, $1,450.00 for labor and $725.00 for overhead. These 2,900 figurines were assumed to be 20.00% complete as to labor and overhead. During January, 22,500 units were started, $13,050.00 of materials and $55,050.00 of labor costs were incurred. The 3,500 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overhead. All figurines in January passed inspection. Page 12 Nicholas Venuti 6171 PART 4.2 Process Costing - First-In First-Out MOLDING Physical Flow of Units January Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Work-in-Process - Ending Total Accounted for ### 0 0 Equivalent Units Material (Round to three places, ##.###.###) ### 3 Equivalent Units Conversion (Round to three places, ##.###.###) ### 3 Total cost in the Beginning Inventory (Round to two places, ##,###.##) ### 2 Total cost of Material this period (Round to two places, ##.###.##) ### 2 Total cost of Conversion this period (Round to two places, ##.###.##) ### 2 Total cost to account for (Round to two places, ##.###.##) ### 2 Cost per equivalent unit of Material this period (Round to seven places, ###.#######) ### 7 Cost per equivalent unit of Conversion this period (Round to seven places, ###.#######) ### 7 Cost of the units transferred, material and convesion (Round to two places, $###,###.## ) ### 2 Cost of the ending inventory, material and convesion (Round to two places, $###,###.## ) ### 2 Page 11 Nicholas Venuti 6171 PART 4.3 Process Costing - Weighted Average With Spoilage Mr. Smith, a consultant, has indicated that the Weighted Average method is appropriate our needs. He is concerned about the number of units that failed inspection and the pricing of the good units completed. General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. The industrial engineers have studied our system and have determined that the acceptable loss for every hundred units that pass the inspection point is 5 units. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,900 figurines at a cost of $3,683.00. Of this amount, $1,508.00 was from raw materials added, $1,450.00 for labor and $725.00 for overhead. These 2,900 figurines were assumed to be 20.00% complete as to labor and overhead. During January, 22,500 units were started, $13,050.00 of materials and $55,050.00 of labor costs were incurred. The 3,500 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overhead. While normal spoilage is 5% of the good units completed, 1,533 units failed inspection in January. The units are inspected at the end of the process. Page 12 Nicholas Venuti 6171 PART 4.3 Process Costing - Weighted Average With Spoilage MOLDING Physical Flow of Units January Work-in-Process - Beginning Units Started this Period Units to Account for Total transferred out Normal spoilage (Roundup to the next unit if needed) Abnormal spoilage Work-in-Process - Ending Total Accounted for ### ### ### ### ### 0 0 0 0 0 Equivalent Units Material (Round to three places, ##.###.###) ### 3 Equivalent Units Conversion (Round to three places, ##.###.###) ### 3 Total cost of Material (Round to two places, ##.###.##) ### 2 Total cost of Conversion (Round to two places, ##.###.##) Total cost to account for (Round to two places, ##.###.##) ### ### 2 2 Cost per equivalent unit of Material (Round to seven places, ###.#######) ### 7 Cost per equivalent unit of Conversion (Round to seven places, ###.#######) ### 7 Cost of the ending inventory, material and convesion (Round to two places, $###,###.## ) ### 2 Cost of the units transferred, material and convesion (Round to two places, $###,###.## ) ### 2 Cost of the abnormal spoilage (Round to two places, $###,###.## ) ### 2 Page 13 Nicholas Venuti 6171 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, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,075 figurines @ $9.65 per figurine. 6-Jan Purchased 4,225 sets of electical components @ $1.55 per set. 7-Jan Purchased 4,000 lamp shades @ $6.40 per set. 8-Jan 4,075 figurines were requisitioned. 9-Jan 4,200 sets of electrical components were requisitioned. 17-Jan Payroll of 610 Direct Labor Hours @ $9.45 per hour. 28-Jan 3,990 lamp shades were requisitioned 30-Jan Payroll of 660 Direct Labor Hours @ $9.70 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped, and are a cost of normal processing. Month End Overhead Information Actual Variable Manufacturing Overhead Actual Fixed Manufacturing Overhead $ 1,498.60 $ 40,623.45 Round to six places, $##.###### Cost of Direct Material Incurred in Manufacturing Job 2407 ### 6 ### 6 ### 6 ### 6 Cost of Direct Labor Incurred in Manufacturing Job 2407 Cost of Manufacturing Overhead Applied to Job 2407 Cost of manufacturing one lamp Page 14 Nicholas Venuti 6171 PART 6 Standard Job Order Costing Variance Analysis Special order lamps are manufactured in division S. Because of the precise nature of the process a standard cost system has been developed. The following standards are used for the special orders: Standards Figurines Electrical Sets Lamp Shade Direct Labor Variable Overhead ** Fixed Overhead Total $ 9.500000 per lamp 1.300000 per lamp per lamp 2.400000 per lamp (4 lamps/hr.) per lamp (4 lamps/hr.) per lamp ** Fixed overhead is based on expected production of ##### customized lamps each month. To keep records of the actual cost of a job, a Job Order Cost System has been developed. Entries are made to the Job Order System at actual cost (overhead is applied based on actual labor hours) while entries are made to the accounting system at standard. Variance analysis is used to analyze the differences. Job Order Costing Section On January 1, 20x2, Division S began Job 1101 for the Client, THE BIG CHILDREN STORE. The job called for 4,000 customized lamps. The following set of transactions occurred from January 5 until the job was completed: 5-Jan Purchased 4,075 figurines @ $9.65 per figurine. 6-Jan Purchased 4,225 sets of electical components @ $1.55 per set. 7-Jan Purchased 4,000 lamp shades @ $6.40 per set. 8-Jan 4,075 figurines were requisitioned. 9-Jan 4,200 sets of electrical components were requisitioned. 17-Jan Payroll of 610 Direct Labor Hours @ $9.45 per hour. 28-Jan 3,990 lamp shades were requisitioned 30-Jan Payroll of 660 Direct Labor Hours @ $9.70 per hour. 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were used or scrapped. Month End Overhead Information Actual Variable Overhead Actual Fixed Overhead $ 1,498.60 $ 40,623.45 Page 15 Nicholas Venuti 6171 How many Lamps were completed? Note: Show favorable variances as negative numbers Round dollars to two places, $##.## What was the total material price variance for the figurines purchased? ### 2 What was the material usage variance for figurines? ### 2 What was the material price variance for the electrical components ? ### 2 What was the material usage variance for electrical components? ### 2 What was the direct labor efficiency variance ? ### 2 What was the direct labor rate variance? ### 2 Page 16 Nicholas Venuti 6171 Mary correctly completed the material variances for the lamp shades and the overhead variences. Her work is correct however, in reviewing her work the standards were crossed out. The total material price variance for the lamp shades purchased: The variable overhead efficiency variance: The variable OH spending variance: The fixed OH volume (denominator) variance: The fixed OH spending variance: $ $ $ $ $ 640.00 327.00 25.40 200.80 363.05 Favorable Unfavorable Favorable Unfavorable Unfavorable What was the standard cost of a Lamp Shade? ### 2 What was the standard cost per lamp for the variable overhead? ### 2 What was the budgeted fixed overhead? ### 2 2 What was the standard cost per lamp for the fixed overhead? ### 2 What was the monthly expected production of customized lamps that was used to determine the standard fixed overhead rate? ### 2 Page 17 Nicholas Venuti 6171 PART 7 Capital Decision Making Big Al gives his worker's a one hour lunch and two fifteen minute breaks each day. He believes that a cold soda machine would be appreciated by his workers, and an appreciated worker is a good worker. He has priced a machine at a national member only warehouse for $1,800. The machine should be usable for 3 years, after which it would be inefficient, obsolete and would have to be disposed of at the dump. Big Al believes that 10 cans a day will be purchased. The plant is open five days a week, 50 weeks per year. A case of soda (24 cans) costs $6.24 and Big Al believes that a price of $.95 per can would win him good will. What is the estimated annual sales in cans of soda? ### 0 ### 5 ### 0 ### 2 ### 2 ### 2 ### 4 What is the contribution margin per can of soda? (rounded to five places, $#.#####) How many cans of soda must be sold each year to breakeven? (Round up to zero places, ###,### cans) Annual incremental cash inflows from the soda machine? (rounded to two places, $#.##) What is the payback period in years? (rounded to two places, #.## years) If the time value of money is 12% per year what is the net present value? Use the tables on page 23. What is the internal rate of return. Pick the closest interest rate from the tables on page 23. Page 18 Interest Rate 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% 20.0% 20.5% 21.0% 21.5% 22.0% 22.5% 23.0% 23.5% 24.0% 24.5% 25.0% 25.5% 26.0% 26.5% 27.0% 27.5% 28.0% 28.5% 29.0% 29.5% 30.0% 30.5% 31.0% 31.5% 32.0% 32.5% 33.0% 33.5% 34.0% 34.5% 35.0% 35.5% 36.0% 36.5% 37.0% 37.5% 38.0% 38.5% 39.0% 39.5% 40.0% 40.5% 41.0% 41.5% 42.0% 42.5% 43.0% 43.5% 44.0% 44.5% 45.0% 45.5% 46.0% 46.5% 47.0% 47.5% 48.0% 48.5% 49.0% 49.5% 50.0% Present Value of Annuity $1.00 in Arrears 3 Periods Periods Interest 3 2.884 2.856 2.829 2.802 2.775 2.749 2.723 2.698 2.673 2.648 2.624 2.601 2.577 2.554 2.531 2.509 2.487 2.465 2.444 2.423 2.402 2.381 2.361 2.341 2.322 2.302 2.283 2.264 2.246 2.228 2.210 2.192 2.174 2.157 2.140 2.123 2.106 2.090 2.074 2.058 2.042 2.027 2.011 1.996 1.981 1.967 1.952 1.938 1.923 1.909 1.896 1.882 1.868 1.855 1.842 1.829 1.816 1.803 1.791 1.779 1.766 1.754 1.742 1.730 1.719 1.707 1.696 1.685 1.673 1.662 1.652 1.641 1.630 1.620 1.609 1.599 1.589 1.579 1.569 1.559 1.549 1.540 1.530 1.521 1.512 1.502 1.493 1.484 1.475 1.467 1.458 1.449 1.441 1.432 1.424 1.416 1.407 4 3.808 3.762 3.717 3.673 3.630 3.588 3.546 3.505 3.465 3.426 3.387 3.349 3.312 3.276 3.240 3.204 3.170 3.136 3.102 3.070 3.037 3.006 2.974 2.944 2.914 2.884 2.855 2.826 2.798 2.770 2.743 2.716 2.690 2.664 2.639 2.613 2.589 2.564 2.540 2.517 2.494 2.471 2.448 2.426 2.404 2.383 2.362 2.341 2.320 2.300 2.280 2.260 2.241 2.222 2.203 2.185 2.166 2.148 2.130 2.113 2.096 2.079 2.062 2.045 2.029 2.013 1.997 1.981 1.966 1.951 1.935 1.921 1.906 1.892 1.877 1.863 1.849 1.836 1.822 1.809 1.795 1.782 1.769 1.757 1.744 1.732 1.720 1.707 1.695 1.684 1.672 1.660 1.649 1.638 1.627 1.616 1.605 5 4.713 4.646 4.580 4.515 4.452 4.390 4.329 4.270 4.212 4.156 4.100 4.046 3.993 3.941 3.890 3.840 3.791 3.743 3.696 3.650 3.605 3.561 3.517 3.475 3.433 3.392 3.352 3.313 3.274 3.236 3.199 3.163 3.127 3.092 3.058 3.024 2.991 2.958 2.926 2.895 2.864 2.833 2.803 2.774 2.745 2.717 2.689 2.662 2.635 2.609 2.583 2.557 2.532 2.507 2.483 2.459 2.436 2.412 2.390 2.367 2.345 2.324 2.302 2.281 2.260 2.240 2.220 2.200 2.181 2.162 2.143 2.124 2.106 2.088 2.070 2.052 2.035 2.018 2.001 1.985 1.969 1.953 1.937 1.921 1.906 1.890 1.876 1.861 1.846 1.832 1.818 1.804 1.790 1.776 1.763 1.750 1.737 6 5.601 5.508 5.417 5.329 5.242 5.158 5.076 4.996 4.917 4.841 4.767 4.694 4.623 4.554 4.486 4.420 4.355 4.292 4.231 4.170 4.111 4.054 3.998 3.943 3.889 3.836 3.784 3.734 3.685 3.636 3.589 3.543 3.498 3.453 3.410 3.367 3.326 3.285 3.245 3.205 3.167 3.129 3.092 3.056 3.020 2.986 2.951 2.918 2.885 2.853 2.821 2.790 2.759 2.729 2.700 2.671 2.643 2.615 2.588 2.561 2.534 2.508 2.483 2.458 2.433 2.409 2.385 2.362 2.339 2.316 2.294 2.272 2.251 2.229 2.209 2.188 2.168 2.148 2.129 2.109 2.091 2.072 2.054 2.036 2.018 2.000 1.983 1.966 1.949 1.933 1.917 1.901 1.885 1.870 1.854 1.839 1.824 Rate 50.5% 51.0% 51.5% 52.0% 52.5% 53.0% 53.5% 54.0% 54.5% 55.0% 55.5% 56.0% 56.5% 57.0% 57.5% 58.0% 58.5% 59.0% 59.5% 60.0% 60.5% 61.0% 61.5% 62.0% 62.5% 63.0% 63.5% 64.0% 64.5% 65.0% 65.5% 66.0% 66.5% 67.0% 67.5% 68.0% 68.5% 69.0% 69.5% 70.0% 70.5% 71.0% 71.5% 72.0% 72.5% 73.0% 73.5% 74.0% 74.5% 75.0% 75.5% 76.0% 76.5% 77.0% 77.5% 78.0% 78.5% 79.0% 79.5% 80.0% 80.5% 81.0% 81.5% 82.0% 82.5% 83.0% 83.5% 84.0% 84.5% 85.0% 85.5% 86.0% 86.5% 87.0% 87.5% 88.0% 88.5% 89.0% 89.5% 90.0% 90.5% 91.0% 91.5% 92.0% 92.5% 93.0% 93.5% 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5% 100.0% Periods 3 1.399 1.391 1.383 1.375 1.368 1.360 1.352 1.345 1.337 1.330 1.323 1.315 1.308 1.301 1.294 1.287 1.280 1.273 1.266 1.260 1.253 1.247 1.240 1.234 1.227 1.221 1.214 1.208 1.202 1.196 1.190 1.184 1.178 1.172 1.166 1.160 1.155 1.149 1.143 1.138 1.132 1.127 1.121 1.116 1.111 1.105 1.100 1.095 1.090 1.085 1.079 1.074 1.069 1.064 1.060 1.055 1.050 1.045 1.040 1.036 1.031 1.026 1.022 1.017 1.013 1.008 1.004 0.999 0.995 0.991 0.986 0.982 0.978 0.974 0.969 0.965 0.961 0.957 0.953 0.949 0.945 0.941 0.937 0.933 0.930 0.926 0.922 0.918 0.914 0.911 0.907 0.903 0.900 0.896 0.893 0.889 0.885 0.882 0.878 0.875 If off the chart use 100% 4 1.594 1.584 1.573 1.563 1.553 1.542 1.532 1.523 1.513 1.503 1.494 1.484 1.475 1.466 1.457 1.447 1.439 1.430 1.421 1.412 1.404 1.395 1.387 1.379 1.371 1.362 1.354 1.347 1.339 1.331 1.323 1.316 1.308 1.301 1.293 1.286 1.279 1.272 1.265 1.258 1.251 1.244 1.237 1.230 1.224 1.217 1.210 1.204 1.198 1.191 1.185 1.179 1.172 1.166 1.160 1.154 1.148 1.143 1.137 1.131 1.125 1.120 1.114 1.108 1.103 1.097 1.092 1.087 1.081 1.076 1.071 1.066 1.061 1.055 1.050 1.045 1.040 1.036 1.031 1.026 1.021 1.016 1.012 1.007 1.002 0.998 0.993 0.989 0.984 0.980 0.975 0.971 0.967 0.962 0.958 0.954 0.950 0.946 0.942 0.938 5 1.724 1.711 1.698 1.686 1.674 1.662 1.650 1.638 1.626 1.615 1.604 1.592 1.581 1.570 1.560 1.549 1.539 1.528 1.518 1.508 1.498 1.488 1.478 1.468 1.459 1.449 1.440 1.431 1.422 1.413 1.404 1.395 1.386 1.378 1.369 1.361 1.352 1.344 1.336 1.328 1.320 1.312 1.304 1.297 1.289 1.281 1.274 1.267 1.259 1.252 1.245 1.238 1.231 1.224 1.217 1.210 1.204 1.197 1.190 1.184 1.177 1.171 1.165 1.158 1.152 1.146 1.140 1.134 1.128 1.122 1.116 1.111 1.105 1.099 1.094 1.088 1.082 1.077 1.072 1.066 1.061 1.056 1.050 1.045 1.040 1.035 1.030 1.025 1.020 1.015 1.010 1.006 1.001 0.996 0.992 0.987 0.982 0.978 0.973 0.969 6 1.810 1.795 1.781 1.767 1.753 1.740 1.726 1.713 1.700 1.687 1.674 1.662 1.649 1.637 1.625 1.613 1.602 1.590 1.579 1.567 1.556 1.545 1.534 1.524 1.513 1.503 1.492 1.482 1.472 1.462 1.452 1.443 1.433 1.424 1.414 1.405 1.396 1.387 1.378 1.369 1.361 1.352 1.344 1.335 1.327 1.319 1.311 1.303 1.295 1.287 1.279 1.272 1.264 1.256 1.249 1.242 1.235 1.227 1.220 1.213 1.206 1.199 1.193 1.186 1.179 1.173 1.166 1.160 1.153 1.147 1.141 1.135 1.129 1.123 1.117 1.111 1.105 1.099 1.093 1.087 1.082 1.076 1.071 1.065 1.060 1.054 1.049 1.044 1.039 1.033 1.028 1.023 1.018 1.013 1.008 1.003 0.999 0.994 0.989 0.984 Factor 0.878 0.882 0.885 0.889 0.893 0.896 0.900 0.903 0.907 0.911 0.914 0.918 0.922 0.926 0.930 0.933 0.937 0.941 0.945 0.949 0.953 0.957 0.961 0.965 0.969 0.974 0.978 0.982 0.986 0.991 0.995 0.999 1.004 1.008 1.013 1.017 1.022 1.026 1.031 1.036 1.040 1.045 1.050 1.055 1.060 1.064 1.069 1.074 1.079 1.085 1.090 1.095 1.100 1.105 1.111 1.116 1.121 1.127 1.132 1.138 1.143 1.149 1.155 1.160 1.166 1.172 1.178 1.184 1.190 1.196 1.202 1.208 1.214 1.221 1.227 1.234 1.240 1.247 1.253 1.260 1.266 1.273 1.280 1.287 1.294 1.301 1.308 1.315 1.323 1.330 1.337 1.345 1.352 1.360 1.368 1.375 1.383 1.391 1.399 1.407 1.416 Interest Rate 100.0% 99.5% 99.0% 98.5% 98.0% 97.5% 97.0% 96.5% 96.0% 95.5% 95.0% 94.5% 94.0% 93.5% 93.0% 92.5% 92.0% 91.5% 91.0% 90.5% 90.0% 89.5% 89.0% 88.5% 88.0% 87.5% 87.0% 86.5% 86.0% 85.5% 85.0% 84.5% 84.0% 83.5% 83.0% 82.5% 82.0% 81.5% 81.0% 80.5% 80.0% 79.5% 79.0% 78.5% 78.0% 77.5% 77.0% 76.5% 76.0% 75.5% 75.0% 74.5% 74.0% 73.5% 73.0% 72.5% 72.0% 71.5% 71.0% 70.5% 70.0% 69.5% 69.0% 68.5% 68.0% 67.5% 67.0% 66.5% 66.0% 65.5% 65.0% 64.5% 64.0% 63.5% 63.0% 62.5% 62.0% 61.5% 61.0% 60.5% 60.0% 59.5% 59.0% 58.5% 58.0% 57.5% 57.0% 56.5% 56.0% 55.5% 55.0% 54.5% 54.0% 53.5% 53.0% 52.5% 52.0% 51.5% 51.0% 50.5% 50.0% 49.5% Interest Rate 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 5.0% 5.5% 6.0% 6.5% 7.0% 7.5% 8.0% 8.5% 9.0% 9.5% 10.0% 10.5% 11.0% 11.5% 12.0% 12.5% 13.0% 13.5% 14.0% 14.5% 15.0% 15.5% 16.0% 16.5% 17.0% 17.5% 18.0% 18.5% 19.0% 19.5% 20.0% 20.5% 21.0% 21.5% 22.0% 22.5% 23.0% 23.5% 24.0% 24.5% 25.0% 25.5% 26.0% 26.5% 27.0% 27.5% 28.0% 28.5% 29.0% 29.5% 30.0% 30.5% 31.0% 31.5% 32.0% 32.5% 33.0% 33.5% 34.0% 34.5% 35.0% 35.5% 36.0% 36.5% 37.0% 37.5% 38.0% 38.5% 39.0% 39.5% 40.0% 40.5% 41.0% 41.5% 42.0% 42.5% 43.0% 43.5% 44.0% 44.5% 45.0% 45.5% 46.0% 46.5% 47.0% 47.5% 48.0% 48.5% 49.0% 49.5% 50.0% 50.5% 51.0% 51.5% 52.0% 52.5% Factor 2.884 2.856 2.829 2.802 2.775 2.749 2.723 2.698 2.673 2.648 2.624 2.601 2.577 2.554 2.531 2.509 2.487 2.465 2.444 2.423 2.402 2.381 2.361 2.341 2.322 2.302 2.283 2.264 2.246 2.228 2.210 2.192 2.174 2.157 2.140 2.123 2.106 2.090 2.074 2.058 2.042 2.027 2.011 1.996 1.981 1.967 1.952 1.938 1.923 1.909 1.896 1.882 1.868 1.855 1.842 1.829 1.816 1.803 1.791 1.779 1.766 1.754 1.742 1.730 1.719 1.707 1.696 1.685 1.673 1.662 1.652 1.641 1.630 1.620 1.609 1.599 1.589 1.579 1.569 1.559 1.549 1.540 1.530 1.521 1.512 1.502 1.493 1.484 1.475 1.467 1.458 1.449 1.441 1.432 1.424 1.416 1.407 1.399 1.391 1.383 1.375 1.368 Page 18 Interest Rate Present Value of Annuity $1.00 in Arrears 3 Periods Periods Interest 3 4 5 6 Rate Periods 3 4 5 6 Factor 1.424 1.432 1.441 1.449 1.458 1.467 1.475 1.484 1.493 1.502 1.512 1.521 1.530 1.540 1.549 1.559 1.569 1.579 1.589 1.599 1.609 1.620 1.630 1.641 1.652 1.662 1.673 1.685 1.696 1.707 1.719 1.730 1.742 1.754 1.766 1.779 1.791 1.803 1.816 1.829 1.842 1.855 1.868 1.882 1.896 1.909 1.923 1.938 1.952 1.967 1.981 1.996 2.011 2.027 2.042 2.058 2.074 2.090 2.106 2.123 2.140 2.157 2.174 2.192 2.210 2.228 2.246 2.264 2.283 2.302 2.322 2.341 2.361 2.381 2.402 2.423 2.444 2.465 2.487 2.509 2.531 2.554 2.577 2.601 2.624 2.648 2.673 2.698 2.723 2.749 2.775 2.802 2.829 2.856 2.884 2.912 2.941 2.970 2.706 Interest Rate 49.0% 48.5% 48.0% 47.5% 47.0% 46.5% 46.0% 45.5% 45.0% 44.5% 44.0% 43.5% 43.0% 42.5% 42.0% 41.5% 41.0% 40.5% 40.0% 39.5% 39.0% 38.5% 38.0% 37.5% 37.0% 36.5% 36.0% 35.5% 35.0% 34.5% 34.0% 33.5% 33.0% 32.5% 32.0% 31.5% 31.0% 30.5% 30.0% 29.5% 29.0% 28.5% 28.0% 27.5% 27.0% 26.5% 26.0% 25.5% 25.0% 24.5% 24.0% 23.5% 23.0% 22.5% 22.0% 21.5% 21.0% 20.5% 20.0% 19.5% 19.0% 18.5% 18.0% 17.5% 17.0% 16.5% 16.0% 15.5% 15.0% 14.5% 14.0% 13.5% 13.0% 12.5% 12.0% 11.5% 11.0% 10.5% 10.0% 9.5% 9.0% 8.5% 8.0% 7.5% 7.0% 6.5% 6.0% 5.5% 5.0% 4.5% 4.0% 3.5% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Interest Rate 53.0% 53.5% 54.0% 54.5% 55.0% 55.5% 56.0% 56.5% 57.0% 57.5% 58.0% 58.5% 59.0% 59.5% 60.0% 60.5% 61.0% 61.5% 62.0% 62.5% 63.0% 63.5% 64.0% 64.5% 65.0% 65.5% 66.0% 66.5% 67.0% 67.5% 68.0% 68.5% 69.0% 69.5% 70.0% 70.5% 71.0% 71.5% 72.0% 72.5% 73.0% 73.5% 74.0% 74.5% 75.0% 75.5% 76.0% 76.5% 77.0% 77.5% 78.0% 78.5% 79.0% 79.5% 80.0% 80.5% 81.0% 81.5% 82.0% 82.5% 83.0% 83.5% 84.0% 84.5% 85.0% 85.5% 86.0% 86.5% 87.0% 87.5% 88.0% 88.5% 89.0% 89.5% 90.0% 90.5% 91.0% 91.5% 92.0% 92.5% 93.0% 93.5% 94.0% 94.5% 95.0% 95.5% 96.0% 96.5% 97.0% 97.5% 98.0% 98.5% 99.0% 99.5% 100.0% Factor 1.360 1.352 1.345 1.337 1.330 1.323 1.315 1.308 1.301 1.294 1.287 1.280 1.273 1.266 1.260 1.253 1.247 1.240 1.234 1.227 1.221 1.214 1.208 1.202 1.196 1.190 1.184 1.178 1.172 1.166 1.160 1.155 1.149 1.143 1.138 1.132 1.127 1.121 1.116 1.111 1.105 1.100 1.095 1.090 1.085 1.079 1.074 1.069 1.064 1.060 1.055 1.050 1.045 1.040 1.036 1.031 1.026 1.022 1.017 1.013 1.008 1.004 0.999 0.995 0.991 0.986 0.982 0.978 0.974 0.969 0.965 0.961 0.957 0.953 0.949 0.945 0.941 0.937 0.933 0.930 0.926 0.922 0.918 0.914 0.911 0.907 0.903 0.900 0.896 0.893 0.889 0.885 0.882 0.878 0.875 NV5785 www.cybertext.com, The Book List, Building Blocks of Accounting--A Managerial Perspective, Enter password, Upload Your Excel File. I SEE THE LIGHT Nicholas, when of you arespreadsheet ready to have Keep two copies your in twoyour work graded you will upload this filNV5785.xls to the same screen project separate places in casethat one the of Big Al's was downloaded from: 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. There are alternative methods of solving problems. To insure similar answers and to guarantee that you are graded correctly please follow the instructions as to rounding. 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. L830 160825 or NV5785.xlsx Elf Village Productions 50 Sheet Legal Pad Building Blocks of Accounting .. A Financial Perspective Page 1 FAQ FAQ 01 My file used to upload, why is it not uploading? Answer: Sometimes we unknowingly add items to a workbook that inhibits the upload process. The conversion to a Excel Binary Workbook (*.xlsb) version and then back to the current version generally fixes the situation. If the problem continues simple send your BINARY file as an attachment with your username and password... friedman@cybertext.com Windows Operating System Select File Select Save As Select Save As Type: Select Excel Binary Workbook (*.xlsb) Select Save Select Continue or Yes if prompted or if it indicates that there is limited memory. Select Select Select Select Select Select File Close File Open and open the .xlsb file Save As Save As Type: Excel Workbook (*.xlsx) Save Upload the file at cybertext.com Apple Operating System Select File Select Save As Select Format: Select Excel Binary Workbook (*.xlsb) Select Save Select Select Select Select Select Select File Close File Open and open the .xlsb file Save As Format: Excel Workbook (*.xlsx) Save Upload the file at cybertext.com MF1234.xlsx Elf Village Productions 50 Sheet Legal Pad Building Blocks of Accounting .. A Financial Perspective FAQ FAQ 02 Answer: What is the difference between rounding a number and rounding up a number? B 1 2 3 4 5 6 7 C D E F Cost of a Taxi $ 100.00 Number of Passengers 3 Cost per Passenger Without rounding 33.333333 =F1/F2 Rounding to two decimals 33.33 =ROUND(F1/F2,2) Roundup to two decimals 33.34 =ROUNDUP(F1/F2,2) FAQ 03 When I upload it, the results show that I have an answer wrong, yet that answer is needed for another question which is marked correct. Answer: The computer is giving you part credit. Given: Width 10 ft Length 12 ft Cost per sq. ft. $6 Find {1.1} Area ----- 100 sq ft (wrong) {1.2} Cost ---- $600 correct based on the wrong area. Note if the area is corrected,120 sq ft, the cost would be wrong. Page 2 FIRST Nicholas LAST Venuti number 5785 File NV5785 I SEE THE LIGHT Background Information I SEE THE LIGHT (ISTL) is a subchapter S corporation that manufactures children's lampsightlights 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: Part 1 Part 2 Part 3 Part 4 Part 5 Part 6 Part 7 Fixed and Variable Cost Determinations - Unit Cost Calculations Cost Volume Relationships - Profit Planning Budgets Process Costing Job Order Costing Standard Costing - Variance Analysis Capital Decision Making To upload your work to Big Al the file without changing the name. 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. If 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. Page 2 I See The Light Projected Income Statement For the Period Ending December 31, 20x1 Sales 25,000 lamps @ $45.00 Cost of Goods Sold @ $28.93 Gross Profit Selling Expenses: Fixed Variable (Commission per unit) @ $3.15 Administrative Expenses Total Selling and Administrative Expenses: Net Profit $ 1,125,000.00 723,250.00 $ 401,750.00 $ 23,000.00 78,750.00 $ 101,750.00 40,500.00 $ 142,250.00 259,500.00 I See The Light Projected Balance Sheet As of December 31, 20x1 Current Assets Cash Accounts Receivable Inventory Raw Material Figurines Electrical Sets Work in Process Finished Goods Total Current Assets Fixed Assets Equipment Accumulated Depreciation Total Fixed Assets Total Assets Current Liabilities Accounts Payable Total Liabilities Stockholder's Equity Common Stock Retained Earnings Total Stockholder's Equity Total Liabilities and Stockholder's Equity $ 500 @ $9.20 500 @ $1.25 0 3000 @ $28.9250 34,710.00 67,500.00 $ 4,600.00 625.00 86,775.00 194,210.00 $ 13,200.00 207,410.00 $ $ 54,000.00 54,000.00 $ 153,410.00 207,410.00 $ 20,000.00 6,800.00 $ 12,000.00 141,410.00 Page 3 Nicholas Venuti 6171 PART 1 Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Figurines Electrical Sets Lamp Shade Direct Labor: Variable Overhead: Fixed Overhead: Cost per lamp: $9.2000000 1.2500000 6.0000000 2.2500000 0.2250000 10.0000000 per lamp per lamp per lamp per lamp (4 lamps/hr.) per lamp per lamp (based on normal capacity of 25,000 lamps) $28.9250000 per lamp Expected increases for 20x2 When calculating projected increases round to SEVEN decimal places,$0.0000000. 1. Material Costs are expected to increase by 5.50% . 2. Labor Costs are expected to increase by 5.00%. 3. Variable Overhead is expected to increase by 2.50%. 4. Fixed Overhead is expected to increase to $255,000. 5. Fixed selling expenses are expected to be $29,000 in 20x2. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 3.00%. 7. Fixed Administrative expenses are expected to increase by $4,000. The total administrative expenses for 20x0 were $40,320.00, when 22,000 units were sold. Use the High-Low method to calculate the total fixed administrative expense. 8. Variable administrative expenses (measured on a per lamp basis) are expected to increase by 5.50%. The total administrative expenses for 20x0 were $40,320.00, when 22,000 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. Page 4 Nicholas Venuti 6171 I See The Light, Inc Schedule of Projected Costs Variable Manufacturing Unit Cost 20x1 Cost Projected Percent Increase 20x2 Cost Rounded to 7 Decimal Places 9.2 5.50% $9.7060000 {4.01} 7 1.25 5.50% $1.3187500 {4.02} 6 Figurines 5.50% $6.3300000 {4.03} 2.25 5% $2.3625000 {4.04} Variable Overhead 0.225 2.50% $0.2306250 {4.05} 7 7 7 7 Projected Variable Manufacturing Cost Per Unit 18.92 $19.9478750 {4.06} 7 Electrical Sets Lamp Shade Labor Total Variable Cost Per Unit 20x1 Cost Variable Selling 3.15 Variable Administrative 20x1 0.0600000 Variable Administrative 20x2 0.0600000 Projected Variable Manufacturing Unit Cost Projected Total Variable Cost Per Unit Projected Percent Increase 20x2 Cost Rounded to 7 Decimal Places $3.2445000 {4.07} 0.03 {4.08} $0.0633000 {4.09} 5.50% 7 7 7 {4.06} $19.9478750 23.3 $23.2556750 {4.10} 3% 7 Schedule of Fixed Costs 20x1 Cost Projected Increase Fixed Overhead 20x2 Cost Rounded to 2 Decimal Places $ 255,000.00 {4.11} 2 $ 29,000.00 {4.12} 2 7 2 2 (normal capacity of _________ lamps @ __ ) Fixed Selling $23,000 Fixed Administrative 20x1 39,000.00 Fixed Administrative 20x2 39000 Projected Total Fixed Costs {4.13} 4000 $ 43,000.00 {4.14} $ 327,000.00 {4.15} Page 5 Nicholas Venuti 6171 PART 2 Cost Volume Relationships Profit Planning Big Al is about to begin work on the budget for 20x2 and they have requested that you prepare an analysis 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 dollars it may be easier to find the number of units and then multiply by the selling price per unit. 1. For 20x2 the selling price per lamp will be $45.00. What is the projected contribution margin and contribution margin ratio for each lamp sold? 45 Selling Price Variable cost Contribution Margin per unit (Round to seven places, $##.#######) Contribution Margin Ratio (Round to seven places,% is two of those places ##.#####%) 2. $21.7443250 {5.01} 7 48.32072% {5.02} 7 {5.03} 0 {5.04} 0 For 20x2 the selling price per lamp will be $45.00. How many lamps must be sold to breakeven? Fixed Costs CM per unit 327000 $21.7443250 15,039 units Breakeven sales in units (Round up to zero places, ###,### units) 3. 23.255675 For 20x2 the selling price per lamp will be $45.00. The desired operating income in 20x2 is $277,000 . What would sales in units have to be in 20x2 to reach the profit goal? Fixed Cost Desired Pft Contrib Marg Sales in units (Round up to zero places, ###,### units) $327,000 277,000 $21.7443250 27,778 units Page 6 Nicholas Venuti 6171 4. For 20x2 the selling price per lamp will be $45.00. The company would like to have a operating income equal to 30.00% of sales. If that is to be achieved, what would be the sales in units in 20x2? Fixed Cost Desired Pft Contrib Marg $327,000 $337,500 21.744325 30,560 units Sales in units (Round up to zero places, ###,### units) 5. New Selling Price (Round up to two places, $###,###.## ) {6.02} 2 {6.03} 0 {6.04} 2 45 18.92 19.94875 1.02875 $ 47.00 For 20x2 the selling price per lamp will be $45.00 and the effective tax rate is 40%. How many units must be sold to generated a operating income of $240,000 after taxes? OI after tax 240000 Tax 160000 OI before ta 400000 FC 327000 Desired CM 727000 CM per unit 21.744325 33,435 units Sales in units (Round up to zero places, ###,### units) 7. 0 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? Old selling pr Old VC per un New VC per u Invrease in V 6. {6.01} If the company believes that the demand will be 27,500 units for the year. What selling price per lamp, rounded to two places, would generate a operating income of $818,500? Desired Oi FC Desired CM VC Required Sal New selling price per lamp (Round up to two places, $###,###.## ) 818500 327000 1145500 548566.5625 1694066.5625 $ 62.00 Page 7 Nicholas Venuti 6171 PART 3 Budgets Keep in mind that the budget section builds on work from the previous parts, including Part I as well as the Background Information (tabs 1-4). You should continue to use the same file with your previously submitted answers. Division N has decided to develop its budget based upon projected sales of 27,000 lamps at $48.00 per lamp. The company has requested that you prepare a master budget for the year. This budget is to be used for planning and control of operations and should be composed of: 1. Production Budget 2. Materials Budget 3. Direct Labor Budget 4. Factory Overhead Budget 5. Selling and Administrative Budget 6. Cost of Goods Sold Budget 7. Budgeted Income Statement 8. Cash Budget Notes for Budgeting: The company wants to maintain the same number of units in the beginning and ending inventories of work-in-process, and electrical parts while increasing the figurines inventory to 600 pieces and increasing the finished goods by 26.00% . Complete the following budgets 1 Production Budget Planned Sales Desired Ending Inventory of Finished Goods (roundup to the next unit) Total Needed Less: Beginning Inventory Total Production 27000 3780 30780 3000 27,780 units {7.01} 0 Page 8 Nicholas Venuti 6171 2 Materials Budget Figurines Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) 27,780 units 600 units 28,380 units 500 units 27,880 units 9.706 $ 270,603.28 Electrical Parts Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) 27780 500 28,280 units 500 27,780 units 1.3187 $ 36,634.00 Lamp Shades - not inventoried they arrive from the shop next door Just-in-time. Needed for Production Desired Ending Inventory Total Needed Less: Beginning Inventory Total Purchases Cost per piece Cost of Purchases (Round to two places, $##.##) {8.01} {8.02} 0 0 {8.03} {8.04} 0 0 {8.05} 2 {8.06} 0 {8.07} 2 27780 0 27780 0 27780 6.33 $ 175,847.40 {8.08} 2 2.3625 27780 65,630.25 {8.09} 2 {8.10} 2 $ 261,406.76 {8.11} 2 $ 9.40989060 {8.12} 7 3 Direct Labor Budget Labor Cost Per Lamp Production Total Labor Cost (Round to two places, $##.##) $ 4 Factory Overhead Budget Variable Factory Overhead: Variable Factory Overhead Cost Per Unit Number of Units to be Produced Total Variable Factory Overhead (Round to two places, $##.##) Fixed Factory Overhead Total Factory Overhead (Round to two places, $##.##) $ 0.230625 27780 6,406.76 255000 Predetermined Factory Overhead Rate based upon the budgeted total factory OH, divided by the budgeted number of units to be produced, and then rounded to seven places, $##.#######) Page 9 Nicholas Venuti 6171 5 Selling and Admin. Budget Fixed Selling Variable Selling (Round to two places, $##.##) Fixed Administrative Variable Administrative (Round to two places, $##.##) Total Selling and Administrative (Round to two places, $##.##) 6 29000 90132.21 43000 1758.474 $163,890.68 ### 2 Cost of Goods Sold Budget - Assume FIFO (First-In, First-Out) and overhead is applied based on the number of units to be produced. Cost of making one unit next year Material cost per unit Labor Cost Per Lamp Factory overhead per unit Total cost of one unit (Round to seven places, $##.#######) Beginning Inventory, Finished Goods Production Costs: Materials: Figurines: Beginning Inventory Purchased Available for Use Ending Inventory of Figurines Figurines Used In Production Electrical Parts Beginning Inventory Purchased Available for Use Ending Inventory of Electrical Parts Electrical Parts Used In Production Lamp Shades: Lamp Shades Used In Production Total Materials: Labor Overhead Cost of Goods Available Less: Ending Inventory, Finished Goods Cost of Goods Sold Round dollars to seven places, $##.####### 17.35475 2.3625 $5.90 ### 7 Round dollars to two places, $##.## $ 86,775.00 ### 2 4600 270,603.28 275,203.28 5823.6 269,379.68 ### 2 625 36,634.00 37,259.00 659.35 36,599.65 ### 2 ### ### ### ### ### ### ### 2 2 2 2 2 2 2 $ $ $ $ $ $ $ $ $ $ $ $ $ $ 25.61684250 175,847.40 481,826.73 65,630.25 261,406.76 808,863.74 96,831.66 712,032.08 Page 10 Nicholas Venuti 6171 7 Budgeted Income Statement Sales Cost of Goods Sold Gross Profit Selling Expenses & Admin. Expenses Net Operating Income $ $ $ 1296000 712,032.08 583,967.92 $163,890.68 420,077.24 ### 2 8 Cash Budget Assume actual cash receipts and disbursements will follow the pattern below: (Note: Receivables and Payables of 12/31/x1 will have a cash impact in 20x2.) 1. 22.00% of sales for the year are made in November and December. Since our customers have 60 day terms those funds will be collected be collected in January and February. 2. 87.00% of material purchases will be paid during the year, the remaining portion will be paid in Januay or February. 3. All other manufacturing and operating costs are paid for when incurred. 4. The budgeted depreciation expense is equal to 0.6% of the fixed manufacturing, selling and administrative expenses. 5. Minimum Cash Balance needed for 20x2, $140,000 . I See The Light Projected Cash Budget For the Year Ending December 31, 20x2 Beginning Cash Balance Cash Inflows: Sales Collections: Account Receivable (Sales last year not collected) Sales made and collected in 20x2 Cash Available Cash Outflows: Purchases Accounts Payable (Purchases last year) Material purchases made and paid for in 20x2 Other Manufacturing Costs Direct Labor Total Manufacturing Overhead Selling and Administrative Less: Depreciation Total Cash Outflows Round dollars to two places, $##.## 34710 $ $ $ 67,500.00 1,010,880.00 1,113,090.00 ### ### ### 2 2 2 $ 54000 420,283.67 ### 2 65,630.25 261,406.76 $163,890.68 432.00 910,779.36 ### ### 2 2 ### 2 ### 2 ### 2 $ $ $ $ Budgeted Cash Balance before financing Needed Minimum Balance $ Amount to be borrowed (if any) $ Budgeted Cash Balance $ 202,310.64 140000 202,310.64 Page 9 Nicholas Venuti 6171 9 Variable Cost of making one unit next year - used to calculate the Ending Inventory of Finished Goods Material cost per unit Labor Cost Per Lamp Variable Factory overhead per unit Total variable manufacturing cost of one unit 10 Budgeted Operating Income Using Variable (Direct) Costing Sales Variable Cost of Goods Sold - Assume FIFO (First-In, First-Out) Beginning Inventory, Finished Goods (Variable Costing) Production Costs: Materials: Figurines: Electrical Parts Lamp Shades: Labor: Variable Overhead: Total Variable Production Costs Cost of Goods Available For Sale Less: Ending Inventory, Finished Goods (Variable Costing) Variable Cost of Goods Sold Variable Selling (Round to two places, $##.##) Variable Administrative (Round to two places, $##.##) Total Variable Costs Contribution Margin Fixed Costs: Fixed Manufacturing Overhead Fixed Selling Fixed Administrative Total Fixed Operating Income, Variable Costing 20x2 Cost Rounded to 7 Decimal Places 17.35475000 2.36250000 0.23062500 $ 19.94787500 {11.01} 7 20x2 Cost Rounded to 2 Decimal Places $ $ $ $ $ $ 1,296,000.00 56,760.00 {11.02} 269,632.68 36,634.88 175,847.40 65,630.25 $6,406.76 $554,151.97 610,911.97 75,402.97 535,509.00 87,601.50 1,709.10 624,819.60 671,180.40 2 {11.03} 2 {11.04} 2 {11.05} {11.06} 2 2 {11.07} 2 $ $ $ $ $ 255,000.00 29,000.00 43,000.00 327,000.00 {11.08} 344,180.40 {11.09} 2 2 $ $ $ 420,077.24 344,180.40 75,896.84 {11.10} 2 Budgeted Fixed Overhead Budgeted Number of Units to be Produced Budgeted Fixed Cost Per Unit (Round to 7 decimals #.#######) $ 327,000.00 27,780.00 11.77 {11.11} 7 Fixed Manufacturing Overhead in the Ending Inventory Fixed Manufacturing Overhead in the Beginning Inventory Increase (Fixed Manufacturing Overhead in the Ending Inventory-Fixed Manufacturing Overhead in the Beginning Inventory) $ $ $ 44,494.60 {11.12} 42,720.00 {11.13} 1,774.60 {11.14} 2 2 2 Operating Income, Absorption Operating Income, Variable Costing Excess (Absorption Costing Operating Income - Variable Costing Operating Income) $ $ $ $ $ $ $ Page 11 Nicholas Venuti 6171 PART 4.1 Process Costing - Weighted Average General Information The I See The Light Company has a related company that produces the figurines. They use process costing in the molding department. The factory overhead is applied at a rate of 50% of direct labor dollars. The material is added at the beginning of the process. The labor and overhead costs are assumed to be added uniformly throughout. Month of January Selected information for January is presented below. Note that the applied overhead rate was 50% of direct labor costs in the molding department. Molding Department Goods in-process as of January 1 were 2,900 figurines at a cost of $3,683.00. Of this amount, $1,508.00 was from raw materials added, $1,450.00 for labor and $725.00 for overhead. These 2,900 figurines were assumed to be 20.00% complete as to labor and overhead. During January, 22,500 units were started, $13,050.00 of materials and $55,050.00 of labor costs were incurred. The 3,500 figurines that were in-process at the end of January were assumed to be 20.00% complete to labor and overhead. All figurines in January passed inspection. Page 12 Nicholas Venuti 6171 PART 4.1 Process Costing - Weighted Average MOLDING Physical Flow of Units January Work-in-Process - Beginning Units Started this Period Units to Account for 2900 22500 25400 ### ### 0 0 0 21,900 units 3,500 units 25,400.000 ### 3 21,900 units 700 units 22,600.000 ### 3 Total transferred out Work-in-Process - Ending Total Accounted for 21,900 units 3,500 units 25400 WIP beg Units transferred out Ending WIP Equivalent U