I need help with the following questions. Please see attached documents.

1.(20 points)

Brunswick Corporation sells bowling balls and has developed the following

information:

Sales price $70 per unit

Variable cost of goods sold $26 per unit

Fixed cost of goods sold $500,000

Variable operating expenses $950,000

Fixed operating expenses $650,000

For the year ended December 31, 2015, Brunswick Corporation produced and

sold 100,000 bowling balls.

Instructions-show all computations

Prepare a detailed CVP income statement using the contribution

margin format for Brunswick Corporation for 2015.

(b) Compute the contribution margin per unit.

(c) Compute the contribution margin ratio.

(d) Compute the break-even point in dollars.

(e) Compute the margin of safety in dollars.

(f) Compute the margin of safety ratio.

(g) Compute the number of bowling bag to be sold to earn a target

income of $1,500,000.

2. Malibu Boats Inc. uses a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations:

Purchased raw materials on account, $160,000.

2. An analysis of the requisitions shows the following: Direct materials

requisitioned during the month:

Job 101 $25,000

Job 102 19,000

Job 103 30,000

$74,000

Factory labor costs incurred were $85,000 of which $71,000 pertained

to factory wages payable and $14,000 pertained to employer payroll taxes payable.

4. An analysis of the time tickets indicated the following: Direct labor

incurred and charged to jobs during the month was:

Job 101 $31,000

Job 102 27,000

Job 103 22,000

$80,000

Incurred manufacturing overhead costs as follows: indirect labor $11,000, indirect materials $6,000, and depreciation $9,000. Also, incurred $65,000 of manufacturing overhead costs on account.

Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 101% of direct labor costs.

Job 101 and Job 103 were completed during the month. (Note: show your work in part b. below.)

Job 101 was sold on account for $107,000.

Instructions:

Prepare journal entries to record the above transactions.

Compute the cost of Job 101, Job 102 and Job 103.

Compute the balance in the Work-in-Process account at the end of the month.

Compute the amount of over/under applied overhead.

3. Callaway Golf Company has two departments and information for each one is shown below. Each department allocates overhead using a different base. NOTE: ALL INFORMATION BELOW IS FOR THE ENTIRE YEAR.

Estimated Actual Estimated Actual

Dept. Activity Base Overhead Overhead Activity Base Act.Base

A Direct labor cost $160,000 $175,000 $ 40,000 $39,000

B Machine hours $100,000 $101,000 10,000hrs 11,000hrs

Instructions (SHOW ALL COMPUTATIONS or no credit given)

(a) Compute the predetermined overhead rate for each department.

(b) Compute the amount of overhead applied for each department for the year.

(c) Compute the amount of under- or over-applied overhead for each department.

(d) Record the journal entry to adjust the amount determined in part (c). for Department *A* ONLY assuming it is adjusted at year-end.

4. General Motors Corporation produces a product which requires several departments. Two of those departments are the (1) Cutting and (2) Assembly departments. The company uses a process cost accounting system. During March the company had the following transactions for these departments:

(a) Manufacturing overhead is applied to the product based on

the following for each department:

Cutting department--200 machine hours at $30 per machine hour.

Assembly department350 direct labor hours at $20 per hour.

(b) Units costing $80,000 were completed in the Cutting Department

and were transferred to the Assembly Department.

(c) Units costing $58,000 were completed in the Assembly Department

and were transferred to Packaging Department.

Instructions

Prepare the journal entries to record the above transactions (a,b,c) for

General Motors Corporation.

5. The Mondelez International Company uses a process cost accounting system

and a weighted average cost flow assumption. A production department adds

materials at the beginning of the process and incurs conversion costs

uniformly throughout the process.

Data for the month of May are as follows:

Beginning work in

process inventory, 5/1 10,000 units (20% complete)

Units started into

Production 340,000 units

Ending work in

process inventory, 5/31 25,000 units (60% complete)

Instructions

Answer the following questions and show computations to support your

answers.

a. Prepare a schedule for May showing the physical unit flow and the

units to account for.

b. Compute the equivalent units of production for materials and

conversion costs for the month of May.

6. (9 points)show computations

Vera Bradley Inc. reports the following results for the month of

June:

Sales Revenue (20,000 units) $1,200,000

Variable costs 800,000

Fixed costs 300,000

Net income $ 100,000

Management of Vera Bradley has been assessing possible course of action

and have developed the following independent scenarios to pursue:

1. Reduce variable costs to 70% of sales.

2. Reduce fixed costs by $25,000.

3. Increase selling price by 6% with no change in total variable costs.

Instructions

Vera Bradley would like to select the scenario that would result in the

highest net income. Which scenario would you recommend and why? You must

show computations for each one and then state your conclusion.

7.(10 points) J.M Smucker Company operates two divisions, the Fruit Preserves Division and the Snack Foods Division. The Fruit Preserves Division manufactures and sells jelly and jams to supermarkets. The Snack Foods Division sells its products to theme parks. The company is considering disposing of the Snack Foods Division since it has been consistently unprofitable for a number of years. The income statements for the two divisions for the year ended December 31, 2015 are presented below:

Fruit Preserves Snack Foods

Division Division Total

Sales revenue $1,500,000 $500,000 $2,000,000

Cost of goods sold 900,000 350,000 1,250,000

Gross profit 600,000 150,000 750,000

Selling & admin expenses 250,000 180,000 430,000

Net income $ 350,000 $(30,000) $ 320,000

In the Snack Foods Division, 60% of the cost of goods sold are variable costs and 25% of selling and administrative expenses are variable costs. The management of the company feels it can save $60,000 of fixed cost of goods sold and $50,000 of fixed selling expenses if it discontinues operation of the Snack Foods Division.

Instructions

(a) Determine whether the company should discontinue operating the Snack Foods Division. Prepare a schedule which supports your decision.

(b) If the company had discontinued the division for 2015, determine what net income would have been.

8. (6 points) Pfizer Company produced and sold 50,000 units of product and is operating at 75% of plant capacity. Unit information about its product is as follows:

Sales Price $70

Variable manufacturing cost $45

Fixed manufacturing cost ($500,000 50,000) 10 55

Profit per unit $15

The company received a proposal from a foreign company to buy 15,000 units of Pfizer Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Pfizer Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order.

Instructions

a) Prepare a schedule reflecting an incremental analysis of this special order.

b) Should Pfizer accept/reject this order and why?

9. (8 points) General Electric Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs:

Direct materials $35,000

Direct labor 15,000

Variable manufacturing overhead 10,000

Fixed manufacturing overhead 20,000

$80,000

Another company has offered to sell the same component part to the company for $12 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, General Electric Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $14,000.

Instructions

Prepare an incremental analysis report for this make or buy decision.

Should General Electric make or buy this component part and why?

10. Goodrich Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produces 5,000 nubby tires and 10,000 smooth tires each year and incurs $167,000 of overhead costs. The following information is available:

Activity Total Cost Cost Driver

Materials handling $60,000 Number of requisitions

Machine setups 50,000 Number of setups

Quality inspections 57,000 Number of inspections

For the nubby tires, the company has 400 requisitions, 200 setups, and 200 inspections. The smooth tires require 600 requisitions, 300 setups, and 400 inspections.

Instructions

Determine the overhead rate for each activity.

11. Caterpiller Manufacturing has five activity cost pools and two products (a budget lawnmower and a deluxe lawnmower). Information is presented below:

Cost Drivers by Product

Activity Cost Pool Cost Driver Est. Overhead Budget Deluxe

Ordering and Receiving Orders $ 120,000 600 400

Machine Setup Setups 297,000 500 400

Machining Machine hours 1,000,000 150,000 100,000

Assembly Parts 1,400,000 1,200,000 800,000

Inspection Inspections 300,000 550 450

Instructions

Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent.

Activity Cost Pool	Cost Driver	Est. Overhead	Cost Drivers by Product Budget Deluxe	Overhead Rate
Ordering and Receiving	Orders	$120,000	600	400	$120/order
Machine Setup	Setups	297,000	500	400	$330/setup
Machining	Machine hours	1,000,000	150,000	100,000	$4/machine hour
Assembly	Parts	1,400,000	1,200,000	800,000	$0.70/part
Inspection	Inspections	300,000	550	450	$300/inspection

Spring 2016 Exam 2 Name(2 points) Problem 1 20 points Date (a) Brunswick Corporation CVP Income Statement For the Year Ending December 31, 2015 1 2 3 4 5 6 7 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 8 9 10 11 12 13 14 15 SHOW ALL COMPUTATIONS 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 (b) c) (d) (e) (f) (g) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 Name Problem 2a 25 points 2a. Date 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Account Titles and Explanation 1 2 Debit Credit 1 2 3 4 5 4 6 7 8 9 10 11 5 12 13 14 3 6 7 8 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 Name Problem 2b & 2c 8 points 2b. Job No. 101 Beginning WIP Job Cost Sheet Direct Direct Materials Labor Job No. 102 Beginning WIP Job Cost Sheet Direct Direct Materials Labor Manufact. Overhead Total Beginning WIP Job Cost Sheet Direct Direct Materials Labor Manufact. Overhead Total Job No. 103 Manufact. Overhead Total 2c. WORK IN PROCESS INVENTORY 2d. Amount of over/under appled (show work). Name SHOW ALL COMPUTATIONS OR NO CREDIT A. Problem 3 14 points Predetermined Overhead Rate Formula (1) Answer Clubs - direct labor cost Balls - machine hours (2) Overhead applied: Answer Clubs Balls (3) Compute under/over applied Actual MOH Applied MOH (from part 2) Amount Over or Under? Clubs Balls B. Date Account Titles Debit Credit Name Problem 4--- 7 points Date 1 (a) 2 3 4 5 (b) 6 7 8 9 c. Problems 4 & 5 Account Titles and Explanation Debit 1 2 3 4 5 6 7 8 9 Problem 5----- 9 points (a) b. 1 2 3 4 5 6 7 8 9 10 11 Credit Physical Units Equivalent Units Conversion Materials Costs Name Problem 6 9 points Date June Results (Base Amounts) Sales State conclusion: 1 Reduce Variable Costs to 70% of Sales Alternative 2 Reduce Fixed Costs by $25,000 3 Increase Selling Price by 6% Name Section Date (a) 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 (b) 17 18 19 20 21 22 23 24 25 26 27 28 29 30 Problem 7 10 points Name Section Date Problem 8 -6 points 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 Problem9-8 points 20 21 a) 22 23 b) Problems 8 & 9 Name Section Problems 10 & 11 Date Problem 10-6 points Make sure you label your answer or clearly label the column headings. 1 2 Purchasing 3 Testing 4 Inspections 5 6 7 8 9 10 11 12 13 Problem 11 10 points 14 15 16 17 18 cost driver 19 20 Purchasing 21 Processing 22 Packaging 23 Testing 24 Inspection 25 26 27 28 29 30 Floor rate Window Cost Assigned cost driver rate Cost Assigned ACC102-SL1 Spring 2016 Chapters 16-21 Name _________________________ ***SHOW ALL COMPUTATIONS OR NO CREDIT GIVEN**** 1.(20 points) Brunswick Corporation sells bowling balls and has developed the following information: Sales price Variable cost of goods sold Fixed cost of goods sold Variable operating expenses Fixed operating expenses $70 per unit $26 per unit $500,000 $950,000 $650,000 For the year ended December 31, 2015, Brunswick Corporation produced and sold 100,000 bowling balls. Instructions-show all computations (a) Prepare a detailed CVP income statement using the contribution margin format for Brunswick Corporation for 2015. (b) Compute the contribution margin per unit. (c) Compute the contribution margin ratio. (d) Compute the break-even point in dollars. (e) Compute the margin of safety in dollars. (f) Compute the margin of safety ratio. (g) Compute the number of bowling bag to be sold to earn a target income of $1,500,000. 2. Malibu Boats Inc. uses a job order cost accounting system and keeps perpetual inventory records. The following transactions occurred in the first month of operations: 1. Purchased raw materials on account, $160,000. 2. An analysis of the requisitions shows the following: Direct materials requisitioned during the month: Job 101 Job 102 Job 103 2. $25,000 19,000 30,000 $74,000 Factory labor costs incurred were $85,000 of which $71,000 pertained to factory wages payable and $14,000 pertained to employer payroll taxes payable. 4. An analysis of the time tickets indicated the following: Direct labor incurred and charged to jobs during the month was: Job 101 Job 102 Job 103 $31,000 27,000 22,000 $80,000 5. Incurred manufacturing overhead costs as follows: indirect labor $11,000, indirect materials $6,000, and depreciation $9,000. Also, incurred $65,000 of manufacturing overhead costs on account. 6. Manufacturing overhead was applied to jobs worked on using a predetermined overhead rate based on 101% of direct labor costs. 7. Job 101 and Job 103 were completed during the month. (Note: show your work in part b. below.) 8. Job 101 was sold on account for $107,000. Instructions: a. Prepare journal entries to record the above transactions. b. Compute the cost of Job 101, Job 102 and Job 103. c. Compute the balance in the Work-in-Process account at the end of the month. d. Compute the amount of over/under applied overhead. 3. Callaway Golf Company has two departments and information for each one is shown below. Each department allocates overhead using a different base. NOTE: ALL INFORMATION BELOW IS FOR THE ENTIRE YEAR. Dept. A B Activity Base Estimated Overhead Actual Overhead Direct labor cost Machine hours $160,000 $100,000 $175,000 $101,000 Estimated Activity Base $ 40,000 10,000hrs Actual Act.Base $39,000 11,000hrs Instructions (SHOW ALL COMPUTATIONS or no credit given) (a) Compute the predetermined overhead rate for each department. (b) Compute the amount of overhead applied for each department for the year. (c) Compute the amount of under- or over-applied overhead for each department. (d) Record the journal entry to adjust the amount determined in part (c). for Department *A* ONLY assuming it is adjusted at year-end. 4. General Motors Corporation produces a product which requires several departments. Two of those departments are the (1) Cutting and (2) Assembly departments. The company uses a process cost accounting system. During March the company had the following transactions for these departments: (a) Manufacturing overhead is applied to the product based on the following for each department: Cutting department--200 machine hours at $30 per machine hour. Assembly department350 direct labor hours at $20 per hour. (b) Units costing $80,000 were completed in the Cutting Department and were transferred to the Assembly Department. (c) Units costing $58,000 were completed in the Assembly Department and were transferred to Packaging Department. Instructions Prepare the journal entries to record the above transactions (a,b,c) for General Motors Corporation. 5. The Mondelez International Company uses a process cost accounting system and a weighted average cost flow assumption. A production department adds materials at the beginning of the process and incurs conversion costs uniformly throughout the process. Data for the month of May are as follows: Beginning work in process inventory, 5/1 10,000 units (20% complete) Units started into Production 340,000 units Ending work in process inventory, 5/31 25,000 units (60% complete) Instructions Answer the following questions and show computations to support your answers. a. Prepare a schedule for May showing the physical unit flow and the units to account for. b. Compute the equivalent units of production for materials and conversion costs for the month of May. 6. (9 points)show computations Vera Bradley Inc. reports the following results for the month of June: Sales Revenue (20,000 units) $1,200,000 Variable costs 800,000 Fixed costs 300,000 Net income $ 100,000 Management of Vera Bradley has been assessing possible course of action and have developed the following independent scenarios to pursue: 1. Reduce variable costs to 70% of sales. 2. Reduce fixed costs by $25,000. 3. Increase selling price by 6% with no change in total variable costs. Instructions Vera Bradley would like to select the scenario that would result in the highest net income. Which scenario would you recommend and why? You must show computations for each one and then state your conclusion. 7.(10 points) J.M Smucker Company operates two divisions, the Fruit Preserves Division and the Snack Foods Division. The Fruit Preserves Division manufactures and sells jelly and jams to supermarkets. The Snack Foods Division sells its products to theme parks. The company is considering disposing of the Snack Foods Division since it has been consistently unprofitable for a number of years. The income statements for the two divisions for the year ended December 31, 2015 are presented below: Sales revenue Cost of goods sold Gross profit Selling & admin expenses Net income Fruit Preserves Division $1,500,000 900,000 600,000 250,000 $ 350,000 Snack Foods Division $500,000 350,000 150,000 180,000 $(30,000) Total $2,000,000 1,250,000 750,000 430,000 $ 320,000 In the Snack Foods Division, 60% of the cost of goods sold are variable costs and 25% of selling and administrative expenses are variable costs. The management of the company feels it can save $60,000 of fixed cost of goods sold and $50,000 of fixed selling expenses if it discontinues operation of the Snack Foods Division. Instructions (a) Determine whether the company should discontinue operating the Snack Foods Division. Prepare a schedule which supports your decision. (b) If the company had discontinued the division for 2015, determine what net income would have been. 8. (6 points) Pfizer Company produced and sold 50,000 units of product and is operating at 75% of plant capacity. Unit information about its product is as follows: Sales Price Variable manufacturing cost Fixed manufacturing cost ($500,000 50,000) Profit per unit $70 $45 10 55 $15 The company received a proposal from a foreign company to buy 15,000 units of Pfizer Company's product for $50 per unit. This is a one-time only order and acceptance of this proposal will not affect the company's regular sales. The president of Pfizer Company is reluctant to accept the proposal because he is concerned that the company will lose money on the special order. Instructions a) Prepare a schedule reflecting an incremental analysis of this special order. b) Should Pfizer accept/reject this order and why? 9. (8 points) General Electric Company manufactured 6,000 units of a component part that is used in its product and incurred the following costs: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $35,000 15,000 10,000 20,000 $80,000 Another company has offered to sell the same component part to the company for $12 per unit. The fixed manufacturing overhead consists mainly of depreciation on the equipment used to manufacture the part and would not be reduced if the component part was purchased from the outside firm. If the component part is purchased from the outside firm, General Electric Company has the opportunity to use the factory equipment to produce another product which is estimated to have a contribution margin of $14,000. Instructions a) Prepare an incremental analysis report for this make or buy decision. b) Should General Electric make or buy this component part and why? 10. Goodrich Tires manufactures tires for dune buggies and has two different products, nubby tires and smooth tires. The company produces 5,000 nubby tires and 10,000 smooth tires each year and incurs $167,000 of overhead costs. The following information is available: Activity Total Cost Materials handling $60,000 Machine setups 50,000 Quality inspections 57,000 Cost Number of Number of Number of Driver requisitions setups inspections For the nubby tires, the company has 400 requisitions, 200 setups, and 200 inspections. The smooth tires require 600 requisitions, 300 setups, and 400 inspections. Instructions Determine the overhead rate for each activity. 11. Caterpiller Manufacturing has five activity cost pools and two products (a budget lawnmower and a deluxe lawnmower). Information is presented below: Activity Cost Pool Ordering and Receiving Machine Setup Machining Assembly Inspection Cost Drivers by Product Cost Driver Est. Overhead Budget Deluxe Orders $ 120,000 600 400 Setups 297,000 500 400 Machine hours 1,000,000 150,000 100,000 Parts 1,400,000 1,200,000 800,000 Inspections 300,000 550 450 Instructions Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. Round your answer to the nearest cent. Activity Cost Pool Ordering and Receiving Machine Setup Est. Overhead Cost Driver Overhead Rate $120,000 Orders Setups Machine hours Machining Assembly Inspection Cost Drivers by Product Budget Deluxe 600 297,000 1,000,000 Parts Inspections 1,400,000 300,000 400 $120/order 500 400 100,000 $330/setup 150,000 1,200,000 550 $4/machine hour 800,000 450 $0.70/part $300/inspection