Hi minxhere, I have a case study (see attached) due by Saturday and will like your assistance if possible.I hope you can help.

ACCT505 - Managerial Accounting Instructions- Case Study 1 Chapter 3 - Job Order Costing CASE 3-29 Ethics and the Manager [Course Objective B] Terri Ronsin had recently been transferred to the Home Security Systems Division of National Home Products. Shortly after taking over her new position as divisional controller, she was asked to develop the division's predetermined overhead rate for the upcoming year. The accuracy of the rate is important because it is used throughout the year and any overapplied or underapplied over- head is closed out to Cost of Goods Sold at the end of the year. National Home Products uses direct labor-hours in all of its divisions as the allocation base for manufacturing overhead. To compute the predetermined overhead rate, Terri divided her estimate of the total manufacturing overhead for the coming year by the production manager's estimate of the total direct labor-hours for the coming year. She took her computations to the division's general manager for approval but was quite surprised when he suggested a modification in the base. Her conversation with the general manager of the Home Security Systems Division, Harry Irving, went like this: Ronsin: Here are my calculations for next year's predetermined overhead rate. If you approve, we can enter the rate into the computer on January 1 and be up and running in the job-order costing system right away this year. Irving: Thanks for coming up with the calculations so quickly, and they look just fine. There is, however, one slight modification I would like to see. Your estimate of the total direct labor-hours for the year is 440,000 hours. How about cutting that to about 420,000 hours? Ronsin: I don't know if I can do that. The production manager says she will need about 440,000 direct labor-hours to meet the sales projections for the year. Besides, there are going to be over 430,000 direct labor-hours during the current year and sales are projected to be higher next year. Irving: Teri, I know all of that. I would still like to reduce the direct labor-hours in the base to some- thing like 420,000 hours. You probably don't know that I had an agreement with your predecessor as divisional controller to shave 5% or so off the estimated direct labor-hours every year. That way, we kept a reserve that usually resulted in a big boost to net operating income at the end of the fiscal year in December. We called it our Christmas bonus. Corporate headquarters always seemed as pleased as punch that we could pull off such a miracle at the end of the year. This system has worked well for many years, and I don't want to change it now. Required: Assume the following information: Direct Materials Direct Labor Total Estimated Manufacturing Overhead $40 $20 $8,400,00 per unit per unit 0 Manufacturing overhead is allocated based on estimated direct-labor hours. Each unit of product requires 1 direct labor hour. 1. Calculate the cost of one unit of product, assuming that the overhead per unit is based on Terri Ronson's estimate of 440,000 hours. (Round all dollar figures to two decimal places.) a. If 441,000 units were produced, how much overhead was applied to work in process. 2. Calculate the cost of one unit of product, assuming that the overhead per unit is based on her supervisors preferred estimate of 420,000 hours. (Round all dollar figures to two decimal places.) a. If 441,000 units were produced, how much overhead was applied to work in process. 3. During the year, the company produced and sold 441,000 units, and incurred actual overhead of $8,500,000, what is the under/overapplied overhead if: a. The estimated Direct Labor Hours is 440,000. b. The estimated Direct Labor Hours is 420,000. c. All over-applied and under-applied overhead applied directly to cost of goods sold. Assume that the company had $1,000,000 in net operating income before the over/under applied overhead adjustment is made. What is the revised net income after the over/underapplied overhead adjustment? 4. Should Terri Ronson go along with the general manager's request to reduce the direct labor hours in the predetermined overhead rate computation to 420,000 hours? Be sure to discuss the operational and ethical issues related to this decision. Deliverables: 1. Submit an Excel spreadsheet that documents the calculations made for steps 1-3 above. All items should be clearly labeled, and appropriate formulas should be used to perform your calculations. 2. For step 4, submit a 5-7 minute narrated PowerPoint (preferably using VoiceThread) that highlights your discussion of the operational and ethical issues that Teri is facing as a result of the request to reduce the direct labor hours. Be sure to make a recommendation in regard to making this decision. The presentation should be 3-4 slides. 3. Post your PowerPoint and workbook on behalf of your team to the Week 2 Dropbox for the case study. 4. NOTE: as a team project, a team collaboration tool (such as Cisco Spark) should be used for the students to collaborate on the project! Direct Materials Direct Labor Total Estimated Manufacturing Overhead $40 per unit $20 per unit $8,400,000 Solution 440,000 Hours Steps 1 and 2 Direct Materials Direct Labor Manufacturing Overhead a. $8,400,000 / 440,000 b. $8,400,000 / 420,000 $ $ 40.00 20.00 $ 19.09 420,000 Hours $ $ 40.00 20.00 $ 20.00 Product Cost Per Unit $ 79.09 $ 80.00 Overhead Applied (assuming 441,000 units) $ 8,419,091 $ 8,820,000 Actual Overhead Incurred $ 8,500,000 $ 8,500,000 Overhead Over/(Under) Applied $ (80,909) $ 320,000 Step 3 Net Income Before Adjustment Over/(Under) Applied Overhead Adjustment Revised Net Income 840,000 Units $ $ 1,000,000 (80,909) 919,091 820,000 Units $ $ 1,000,000 320,000 1,320,000 This question may generate lively debate. Where should Terri Ronsin's loyalties lie? Is she working for the general ma for the corporate controller? Is there anything wrong with the \"Christmas bonus\"? How far should Terri go in bucking her While individuals can certainly disagree about what Terri should do, some of the facts are indisputable. First, underst artificially inflates the overhead rate. This has the effect of inflating the Cost of Goods Sold in all months prior to Decemb costs of inventories. In December, the huge adjustment for overapplied overhead provides a big boost to net operating in practice results in distortions in the pattern of net operating income over the year. In addition, because all of the adjustm Goods Sold, inventories are still overstated at year-end. This means, of course, that the net operating income for the enti While Terri is in an extremely difficult position, her responsibilities under the IMA's Statement of Ethical Professional The Credibility Standard states that management accountants have a responsibility to \"disclose all relevant information th expected to influence an intended user's understanding of the reports, analyses or recommendations.\" In our opinion, Te situation with her immediate supervisor in the controller's office at corporate headquarters. This step may bring her into general manager of the division, so it would be a very difficult decision for her to make. In the actual situation that this case is based on, the corporate controller's staff were aware of the general manager' top management of the company supported the general manager because \"he comes through with the results\" and coul annual profit targets for his division. Personally, we would be very uncomfortable supporting a manager who will resort t achieve \"results.\" If the manager will pull tricks in this area, what else might he be doing that is questionable or even perh e working for the general manager of the division or hould Terri go in bucking her boss on a new job? e indisputable. First, understating direct labor-hours all months prior to December and overstating the big boost to net operating income. Therefore, the n, because all of the adjustment is taken to Cost of perating income for the entire year is also overstated. ment of Ethical Professional Practice seem to be clear. se all relevant information that could reasonably be ndations.\" In our opinion, Terri should discuss this This step may bring her into direct conflict with the are of the general manager's accounting tricks, but h with the results\" and could be relied on to hit the a manager who will resort to deliberate distortions to is questionable or even perhaps illegal