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Posted on Sep 10, 2024

L19 TABLE 4 How Kay Estimates Cost and Profitability Per Bar B E F G C D Table 5 Additional Estimated Data 3.0 oz. 25

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L19 TABLE 4 How Kay Estimates Cost and Profitability Per Bar B E F G C D Table 5 Additional Estimated Data 3.0 oz. 25 Oz. 4 Job-Specific Information H I J K L M N O P PROBLEM QUESTION: Compute New Standard Product Costs a: S.T. does not currently track actual cost information, but William has estimated some additional production data provided in Table 5. Using the approach(es) you recommended in Part A and the estimated data provided in Tables 1-5 and the Case, use Excel to compute estimated total cost, profit margin, and margin percentage for each of the four jobs identified in Table 5, Panel A. USE PROCESS COSTING $0.44 NA Job 3 3.0 Nonorg Job 4 3.25 Org Other Jobs Panel A: Compute Estimated Materials Costs Per Bar Material 1.25 oz. Non-Organic Chocolate $0.18 Organic Chocolate 0.33 Fod 0.03 Label 003 Total Non-Organic $0.24 Total Organic $0.39 Total Month NA $0.83 $0.06 $0.08 0.06 6 No. of Bars 7 Cost of Chocolate 8 Cost of Foil 9 Cost of Label 10 Totals Job 1 1.25 oz 10,000 $ 3,135.00 $ 274.00 $ 347.00 $ 3,756.00 $ $ $ $ Job 2 1.25 5,000 945.00 133.00 163.00 1,241.00 $ $ $ $ 84.00 11.00 16.00 111.00 $ $ $ $ 274.00 18.00 21.00 313.00 $ $ $ $ 3,162.00 374.00 283.00 3,819.00 $ $ $ $ 7,600.00 810.00 830.00 9,240.00 SO.58 NA NA $0.97 b: Compare your costs and profitability per bar to William's estimates in Table 4. What is the potential financial impact of using your method instead of William's? again, USING PROCESS COSTING There would be additional costs for certain flavor additives. 12 Beginning YIP, DL, and OH Costs Added (per month BVIP- Materials BYIP-CC DL Added 14 Pouring/Inspection $ 1,550.00 $ 757.00 $ 2,348.00 15 Foiling $ - $ - $ 1.430.00 16 Labeling $ - $ - $ 1,016.00 17 Total Area Costs Added Total OH Added Added $ 1,800.00 $ 4,148.00 $ 400.00 $ 1.830.00 $ 1,400.00 $ 2,416.00 $ 3,600.00 $ 8,394.00 Panel B: Compute Estimated Labor Costs Per Bar (Labor Rate + Bars Per Hour from Table 2) Labor Area 1.25 oz. 3.0 oz. 3.25 oz. Pouring Area $0.03 $0.08 S0.08 Inspection Area 0.05 0.02 0.02 Foiling Area Labeling Area 0.06 0.06 Total Labor Cost Per Bar $0.20 S0.22 006 006 0.06 19 Other OH Costs 20 Supplies 21 Admin 22 Salaries 23 Customer Service 24 Lease Payments 25 Total Other OH 26 Costs Added $0.22 200 1000 10000 3000 2000 16200 $ 19,800.00 200 1000 10000 3000 2000 16200 $ 24,594.00 $ 1550.00 $ 757.00 $ 4,794.00 $19.800 Panel C: Compute Estimated Overhead Cost Per Bar Total Overhead Costs Bottleneck Bars/Hour 175.0 Hours/Day X 8.0 Avg. Work Days Per Month x 20.5 Capacity Volume Per Month Overhead Cost Per Bar 2500 28.700 $0.69 356 Panel D: Compute Estimated Profitability Per Bar 1.25 oz. 1.25 oz. Organic Non-Organic 3.0 oz. Non-Organic 3.25 oz. Organic 28 Expected Monthly Production Yolume (in bars) 29 Type of Production: Total Bars: 1.25 oz 3.0/3.25 oz EYIP % Comp 30 BWIP in Pouring/Inspection 3000 500 31 Bars started in Pouring/Inspection 26000 25000 1000 32 Bars completed in Pouring/Inspect 27000 26500 500 33 Bars Foiled 26600 26125 475 0% 34 Bars Labeled (assume 25% bright s 19950 19594 35 36 Activity Based Information 37 Activity Actual Amd Level Driver Actual Yolume 38 Area Supplies $ 3,600.00 Unit level Trace to areas 39 Setting Up Melting Pots $ 2,000.00 Batch Setups 100 40 Purchasing $ 2,000.00 Batch Purchase order: 41 Filing Orders $ 6,300.00 Customer #Orders 500 42 Designing Labels $ 4,000.00 Customer Design Hours 43 Facility Related Costs $ 1,900.00 Facility Square Foot 3000 44 Total OH Costs $ 19,800.00 45 46 Area Specific Activity 47 Pouring Inspection Foiling Labeling Total 48 Purchase Orders 600 1680 49 Square Feet 750 750 750 750 3000 $1.50 $1.40 $2.40 $2.55 Price Per Bar Cost Per Bar Total Materials Cost" Total Labor Cost 0.39 0.20 0.24 0.20 0.58 0.22 0.97 0.22 Overhead Cost Per Bar 0.69 0.69 0.69 0.69 Total Cost Per Bar $1.28 $1.49 $1.88 4 $1.13 $0.27 Profit Per Bar $0.22 $0.91 $0.67 Profit Percentage 14.7% 19.3% 37.9% 26.3% Job 2 1.25 Job 3 3.0 Nonorg Job 4 3.25 Org * Additional costs required for certain flavor additives. 51 Job Specific Activity Yolume Job 1 1.25 Org 52 Activity 53 Setups 54 Design Hours 55 Labor Hours 56 Pouring 57 Inspection 58 Foiling 2 1.75 0.75 05 1.2 59 Labeling 1.75 1.75 L19 TABLE 4 How Kay Estimates Cost and Profitability Per Bar B E F G C D Table 5 Additional Estimated Data 3.0 oz. 25 Oz. 4 Job-Specific Information H I J K L M N O P PROBLEM QUESTION: Compute New Standard Product Costs a: S.T. does not currently track actual cost information, but William has estimated some additional production data provided in Table 5. Using the approach(es) you recommended in Part A and the estimated data provided in Tables 1-5 and the Case, use Excel to compute estimated total cost, profit margin, and margin percentage for each of the four jobs identified in Table 5, Panel A. USE PROCESS COSTING $0.44 NA Job 3 3.0 Nonorg Job 4 3.25 Org Other Jobs Panel A: Compute Estimated Materials Costs Per Bar Material 1.25 oz. Non-Organic Chocolate $0.18 Organic Chocolate 0.33 Fod 0.03 Label 003 Total Non-Organic $0.24 Total Organic $0.39 Total Month NA $0.83 $0.06 $0.08 0.06 6 No. of Bars 7 Cost of Chocolate 8 Cost of Foil 9 Cost of Label 10 Totals Job 1 1.25 oz 10,000 $ 3,135.00 $ 274.00 $ 347.00 $ 3,756.00 $ $ $ $ Job 2 1.25 5,000 945.00 133.00 163.00 1,241.00 $ $ $ $ 84.00 11.00 16.00 111.00 $ $ $ $ 274.00 18.00 21.00 313.00 $ $ $ $ 3,162.00 374.00 283.00 3,819.00 $ $ $ $ 7,600.00 810.00 830.00 9,240.00 SO.58 NA NA $0.97 b: Compare your costs and profitability per bar to William's estimates in Table 4. What is the potential financial impact of using your method instead of William's? again, USING PROCESS COSTING There would be additional costs for certain flavor additives. 12 Beginning YIP, DL, and OH Costs Added (per month BVIP- Materials BYIP-CC DL Added 14 Pouring/Inspection $ 1,550.00 $ 757.00 $ 2,348.00 15 Foiling $ - $ - $ 1.430.00 16 Labeling $ - $ - $ 1,016.00 17 Total Area Costs Added Total OH Added Added $ 1,800.00 $ 4,148.00 $ 400.00 $ 1.830.00 $ 1,400.00 $ 2,416.00 $ 3,600.00 $ 8,394.00 Panel B: Compute Estimated Labor Costs Per Bar (Labor Rate + Bars Per Hour from Table 2) Labor Area 1.25 oz. 3.0 oz. 3.25 oz. Pouring Area $0.03 $0.08 S0.08 Inspection Area 0.05 0.02 0.02 Foiling Area Labeling Area 0.06 0.06 Total Labor Cost Per Bar $0.20 S0.22 006 006 0.06 19 Other OH Costs 20 Supplies 21 Admin 22 Salaries 23 Customer Service 24 Lease Payments 25 Total Other OH 26 Costs Added $0.22 200 1000 10000 3000 2000 16200 $ 19,800.00 200 1000 10000 3000 2000 16200 $ 24,594.00 $ 1550.00 $ 757.00 $ 4,794.00 $19.800 Panel C: Compute Estimated Overhead Cost Per Bar Total Overhead Costs Bottleneck Bars/Hour 175.0 Hours/Day X 8.0 Avg. Work Days Per Month x 20.5 Capacity Volume Per Month Overhead Cost Per Bar 2500 28.700 $0.69 356 Panel D: Compute Estimated Profitability Per Bar 1.25 oz. 1.25 oz. Organic Non-Organic 3.0 oz. Non-Organic 3.25 oz. Organic 28 Expected Monthly Production Yolume (in bars) 29 Type of Production: Total Bars: 1.25 oz 3.0/3.25 oz EYIP % Comp 30 BWIP in Pouring/Inspection 3000 500 31 Bars started in Pouring/Inspection 26000 25000 1000 32 Bars completed in Pouring/Inspect 27000 26500 500 33 Bars Foiled 26600 26125 475 0% 34 Bars Labeled (assume 25% bright s 19950 19594 35 36 Activity Based Information 37 Activity Actual Amd Level Driver Actual Yolume 38 Area Supplies $ 3,600.00 Unit level Trace to areas 39 Setting Up Melting Pots $ 2,000.00 Batch Setups 100 40 Purchasing $ 2,000.00 Batch Purchase order: 41 Filing Orders $ 6,300.00 Customer #Orders 500 42 Designing Labels $ 4,000.00 Customer Design Hours 43 Facility Related Costs $ 1,900.00 Facility Square Foot 3000 44 Total OH Costs $ 19,800.00 45 46 Area Specific Activity 47 Pouring Inspection Foiling Labeling Total 48 Purchase Orders 600 1680 49 Square Feet 750 750 750 750 3000 $1.50 $1.40 $2.40 $2.55 Price Per Bar Cost Per Bar Total Materials Cost" Total Labor Cost 0.39 0.20 0.24 0.20 0.58 0.22 0.97 0.22 Overhead Cost Per Bar 0.69 0.69 0.69 0.69 Total Cost Per Bar $1.28 $1.49 $1.88 4 $1.13 $0.27 Profit Per Bar $0.22 $0.91 $0.67 Profit Percentage 14.7% 19.3% 37.9% 26.3% Job 2 1.25 Job 3 3.0 Nonorg Job 4 3.25 Org * Additional costs required for certain flavor additives. 51 Job Specific Activity Yolume Job 1 1.25 Org 52 Activity 53 Setups 54 Design Hours 55 Labor Hours 56 Pouring 57 Inspection 58 Foiling 2 1.75 0.75 05 1.2 59 Labeling 1.75 1.75