Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

nEED HELP CableTech Bell Corporation (CTB) operates in the telecommunications industry. CTB has two divisions: the Phone Division and the Cable Service Division. The Phone

nEED HELP

CableTech Bell Corporation (CTB) operates in the telecommunications industry. CTB has two divisions: the Phone Division and the Cable Service Division. The Phone Division manufactures telephones in several plants located in the Midwest. The product lines run from relatively inexpensive touch-tone wall and desk phones to expensive, high-quality cellular phones. CTB also operates a cable TV service in Ohio. The Cable Service Division offers three products: a basic package with 25 channels; an enhanced package, which is the basic package plus 15 additional channels and two movie channels; and a pre- mium package, which is the basic package plus 25 additional channels and three movie channels. The Cable Service Division reported the following activity for the month of March: Basic Enhanced Premium Sales (units) 50,000 500,000 300,000 Price per unit $16 $30 $40 Unit costs: Directly traced $ 3 $ 5 $ 7 Driver traced $ 2 $ 4 $ 6 Allocated $10 $13 $15 The unit costs are divided as follows: 70 percent production and 30 percent marketing and customer service. Direct labor cost is the only driver used for tracing. Typically, the division uses only production costs to dene unit costs. The preceding unit product cost information was provided at the request of the marketing manager and was the result of a special study. Bryce Youngers, the president of CTB, is reasonably satised with the performance of the Cable Service Division. March's performance is fairly typical of what has been happening over the past two years. The Phone Division, however, is another matter. Its overall prot performance has been declin- ing. Two years ago, income before income taxes had been about 25 percent of sales. March's dismal performance was also typical for what has been happening this year and is expected to continue unless some action by management is taken to reverse the trend. During March, the Phone Division reported the following results: Inventories: Materials, March 1 $ 23,000 Materials, March 31 40,000 Work in process, March 1 130,000 Work in process, March 31 45,000 Finished goods, March 1 480,000 Finished goods, March 31 375,000 Costs: Direct labor $117,000 Plant and equipment depreciation 50,000 Materials handling 85,000 Inspections 60,000 Scheduling 30,000 Power 30,000 Plant supervision 12,000 Manufacturing engineering $ 21,000 Sales commissions 120,000 Salary, sales supervisor 10,000 Supplies 17,000 Warranty work 40,000 Rework 30,000 During March, the Phone Division purchased materials totaling $312,000. There are no signicant inventories of supplies (beginning or ending). Supplies are accounted for separately from materials. CTB's Phone Division had sales totaling $1,170,000 for March.

To further analyze the results of March, Bryce requested both the Cable Services and Phone Divisions to complete the below:

a.Using the information above, complete the below table with the appropriate product costs for the Cable Service Division

2.Using the above March financial information, an income statement and a supporting cost of goods manufactured schedule for the Phone Division (Round to whole dollars)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting

Authors: Horngren, Harrison, Oliver

3rd Edition

978-0132497992, 132913771, 132497972, 132497999, 9780132913775, 978-0132497978

More Books

Students also viewed these Accounting questions