Managerial Accounting

Problem set attached

Due July 3rd

Consumption Ratios Zapato Company produces two types of boots: cowboy and cowgirl. There are four activities associated with the two products. Drivers for the four activities are as follows: Cowboy Cowgirl Cutting hours 2,180 3,900 Assembly hours 1,500 2,250 705 1,575 75 225 Inspection hours Rework hours Required: 1. Calculate the consumption ratios for the four drivers. Round your answers to two decimal places. Activity Driver Cowboy Cowgirl Cutting hours Assembly hours Inspection hours Rework hours 2. Is there evidence of product diversity? YES or NO? Activity Rates Zapato Company produces two types of boots: cowboy and cowgirl. There are four activities associated with the two products. Drivers for the four activities are as follows: Cowboy Cowgirl Cutting hours 2,200 3,900 Assembly hours 1,700 2,250 635 1,575 Inspection hours Rework hours 95 225 The following activity data have been collected: Cutting $62,000 Assembling 75,000 Inspecting 18,000 Reworking 9,000 Required: Calculate the activity rates that would be used to assign costs to each product. If required, round your answers to the nearest cent. $ per cutting hour $ per assembling hour $ per inspecting hour $ per reworking hour Cutting: Assembling: Inspecting: Reworking: Calculating ABC Unit Costs Perry National Bank has collected the following information for four activities and two types of credit cards: Activity Driver Classic Gold Activity Rate ($) Processing transactions Transactions processed 8,000 4,800 0.15 Preparing statements Number of statements 8,000 4,800 0.90 Answering questions Number of calls 16,000 24,000 3.00 Providing ATMs ATM transactions 32,000 9,600 1.20 There are 4,900 holders of Classic cards and 20,800 holders of the Gold cards. Required: Calculate the unit cost for Classic and Gold credit cards. Round your answers to the nearest cent. Unit cost $ Classic $ Gold Assigning Costs to Activities Golding produces small engines for lawnmower producers. The accounts payable department at Golding has five clerks who process and pay supplier invoices. The total cost of their salaries is $276,800. The work distribution for the activities that they perform is as follows: Activity Percentage of Time on Each Activity Comparing source documents 10 % Resolving discrepancies 45 % Processing payment 45 % Required: Assign the cost of labor to each of the three activities in the accounts payable department. Round your answers to the nearest dollar. Activity Cost Assignment $ Comparing source documents $ Resolving discrepancies $ Processing payment 1. Activity-Based Customer Costing Dormirbien Company produces mattresses for 20 retail outlets. Of the 20 retail outlets, 19 are small, separately owned furniture stores and one is a retail chain. The retail chain buys 60% of the mattresses produced. The 19 smaller customers purchase mattresses in approximately equal quantities, where the orders are about the same size. Data concerning Dormirbien's customer activity are as follows: Large Retailer Smaller Retailers 36,000 34,000 12 1,300 6 294 $14,400,000 $9,600,000 Order filling costs allocated* $484,800 $323,200 Sales force costs allocated* $240,000 $160,000 Units purchased Orders placed Number of sales calls Manufacturing costs *Currently allocated on sales volume (units sold). Currently, customer-driven costs are assigned to customers based on units sold, a unit-level driver. Required: Assign costs to customers by using an ABC approach. Round your answers and all intermediate calculations to the nearest dollar. $ per order $ per sales call Order filling rate Selling call rate Cost assignment: $ Large retailer $ Smaller retailers Activity-Based Supplier Costing LissenComputers uses Alpha Electronics and La Paz Company to buy two electronic components used in the manufacture of its computers: Component 125X and Component 30Y. Consider two activities: testing and reordering components. After the two components are inserted, testing is done to ensure that the two components in the computers are working properly. Reordering occurs because one or both of the components have failed the test and it is necessary to replenish component inventories. Activity cost information and other data needed for supplier costing are as follows: I. Activity Costs Caused by Suppliers (testing failures and reordering as a result) Activity Costs Testing components $1,500,000 Reordering components 375,000 II. III. Supplier Data Alpha Electronics La Paz Company 125X 30Y 125X 30Y $10 $26 $12 $28 150,000 80,300 18,750 18,750 1,100 975 13 12 75 50 0 0 Unit purchase price Units purchased Failed tests Number of reorders IV. Required: Determine the cost of each supplier by using ABC. Round Test and Reorder rates to the nearest dollar, and final answers to the nearest cent. Alpha Electronics 125X $ Unit cost: La Paz Company 30Y $ 125X $ 30Y $ Nonvalue-Added Costs Boothe Inc. has the following two activities: (1) Retesting reworked products, cost: $508,000. The retesting cost of the most efficient competitor is $150,000. (2) Welding subassemblies, cost: $936,000 (45,000 welding hours). A benchmarking study reveals that the most efficient level for Boothe would use 36,000 welding hours and entail a cost of $748,800. Required: Determine the nonvalue-added cost of each activity. Do not round values in intermediate calculations, but round your final answers to the nearest dollar. Retesting $ Welding $ Nonvalue-added cost: Velocity and Cycle Time Karsen Company takes 6,200 hours to produce 28,800 units of a product. Required: What is the velocity? Cycle time? Round your answers to two decimal places. units per hour Velocity: hour(s) Cycle time