Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help with part 4-9. I will highly apprecite it. The Business Situation Concrete Helmet Company is a newly formed company that manufactures bicycle helmets.

Please help with part 4-9. I will highly apprecite it.

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

image text in transcribed

The Business Situation Concrete Helmet Company is a newly formed company that manufactures bicycle helmets. The company began operations January 1, 2020. Its accountant quit the second week of operations, and the company is searching for a replacement. The company has decided to test the knowledge and ability of all candidates interviewing for the position Each candidate will be provided with the information below and then asked to prepare a series of reports, schedules, and budgets based on the information The information provided to each candidate is as follows: Cost Items and Account Balances Administrative salaries.............................$10.500 10.500.00 Advertising for helmet......... $11,000 11 000 00 Cash January 1.... Depresia lon on factory building................. $1.500 1,500.00 Depreciation on office equipment......... Seno 800.00 Insurance on factory building......................$1.200 1.200,00 Miscellaneous expenses-factory................. 5500 500.00 Office supplies expense... . . .$300 300.00 Professional fees......... ...SCOO 800.00 Property taxes on factory building..................$400 400.00 Raw Materials used in production, .$60.000 60.000,00 Renton production equipment.........................35,000 5.000.00 Research & Development..........................$10,000 10.000.00 Sales commissions (10% of sales)............ $32,000 32.000.00 Utility costs-factory................................ $900 900.00 Wages - Factory direct labor....................... $87500 87.500.00 Work in process. January 1............................. $0 Work in process, January 31...................... Raw materials inventory, January 1.............$0 Raw materials inventory, January 31.... .. 12.000 12.000.00 Raw materials purchases. ........372 000 72.000.00 Finished goods inventory, January 1.............50 Production and Sales Data Number of halmats produced Expected sales in units for January Expected sales in units for February Desired ending inventory Direct materials needed per 1 finished unit Direct materials cost Desired direct materials inventory Direct labor hours per unit Direct labor hourly rate 10.000 8.000 540 Unit sel price $40 Undset 10.000 20% of next month's sales 1 Kilogram $6 per klogram 20% of next months' production 0.35 hour $25 per hour Cash Flow Data Cash collection from customers. 70% in month of sale and 30% the following month Cash payments to suppliers: 75% in month of purchase and 25% the following month Income tax rate: 36% Manufacturing overhead and selling and administratve costs are paid as incurred. Desired ending cash balance: 20,000 (financing is necessary if cash balance alls below the $20.000 minimum) Instructions Using the data presented above, complete the following 10 parts using this Excel workbook. 1. Classify the costs as either product costs or period costs using the five-column table in the Excel Workbook for part 1. Enter the dollar amount of each cost in the appropriate column and total each classification. 2. Classify the costs as either variable or fixed costs. Assume there are no mixed costs. Enter the dollar amount of each cost in the appropriate column and total each classification. Assume Misc. expense-factory and Utility costs-factory are fixed costs. 3. Prepare a schedule of cost of goods manufactured for the month of January. Don't forget the proper heading. 4. Determine the cost of producing a helmet (production cost per unit). 5. Identify the type of cost accounting system that Concrete Helmet Company is probably using at this time. EXPLAIN. 6. Under what circumstances might Concrete Helmet Company use a different cost accounting system? Explain. 7. Compute the unit variable cost per helmet. 8. Compute the unit contribution margin AND the contribution margin ratio (%). 9. Calculate the break-even point in sales dollars AND the break-even point in units. 10. Prepare the following budgets for the month of January. a) Sales b) Production c) Direct materials d) Direct labor e) Selling & Administrative expenses f) Cash g) Budgeted income statement PROJECT CHECK FIGURES: Total costs $222,400 Total Period costs = $65,400 Cost of Goods Manufactured = $157,000 Total cash disbursements = $214,100 Net Income = $83,850 PART 1 AND 2 INFORMATION FILLED 1.500 S Part-1 Production Costs Direct Direct Manufacturing Item Material Labor Ovehead Period Cost Administartive salaries $ 10,500 Advertising for helmets $ 11,000 Depreciation on Factory Building Depreciation on Office Equipment $ 800 Insurance on Factory Building 1.200 Miscellanious expenses -factory 500 office supplies 300 Professional fees Property taxes on factory buiding 400 Raw Material used in production $ 60,000 Rent on Production equipment $ 5,000 Research and Development $ 10.000 Sales Commission $ 32,000 Utility Cost-Factory 900 Wages Factory Direct labor $ 87,500 Total IS 60,000 S 87,500S 9,500S 65,400 $ 800 $ Part-2 Item Administartive salaries Advertising for helmets Depreciation on Factory Building Depreciation on Office Equipment Insurance on Factory Building Miscellanious expenses -factory office supplies Professional fees Property taxes on factory buiding Raw Material used in production Rent on Production equipment Research and Development Sales Commission Utility Cost-Factory Wages Factory Direct labor Total Variable Cost Fixed Cost Total Cost $ 10,500 $ 10,500 $ 11,000 $ 11,000 $ 1,500 $ 1,500 $ 800 $ 800 1.200 1,200 $ 500 $ 500 300 $ 300 $ 800 $ $ 400 $ 400 60,000 60,000 $ 5,000 5,000 $ 10,000 10,000 $ 32,000 32,000 $ 900 $ 900 $ 87,500 $ 87,500 $ 1,79,500 $ 42,900 $ 2.22,400 800 1$ $ UE EL HIJ Part 3 - Prepare a schedule of cost of goods manufactured for the month of January, 2020. (Don't forget the heading) 1 Concrete Helmet Company Cost of Goods Manufactured Schedule For the month Ended January, 2020 6 Work in process inventory, Febuary 1,2020 Direct materials: Raw materials inventory, February 1,2020 Raw materials purchase 72,000 Total Cost of Materials Available for Use 72,000 Ending raw materials S (12,000) Direct Materials Used $ 60,000 + Direct labor: $ 87,500 S + Manufacturing overhead: Depreciation on factory building Insurance on factory building Miscellaenous expenses-factory Property taxes on factory building Rent on production equipment Utility costs-factory Total manufacturing overhead Total manufacturing costs incurred during the period Total manufacturing costs in Work-in-process Less = Cost of Goods Manufactured 1,500 1,200 500 400 5,000 900 9,500 24 25 $ $ 157,000 157,000 27 157,000 1 Part 4 - Determine the cost of producing a helmet 6 Part 5 - Identify the type of cost accounting system that Concrete Helmet Company is probably using at this time. Explain. 11 Part 6 - Under what circumstances migt Concrete use a different cost accounting system? Explain. Part 7 - Compute the unit variable cost for a helmet. Part 8 - Compute the unit contribution margin AND the contribution margin ratio. Part 9 - Calculate the break-even point in sales dollars AND the break-even point in units

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

Contemporary Auditing

Authors: Michael C. Knapp

10th edition

978-1285066608, 128506660X, 978-1305445161, 1305445163, 978-1305970816

More Books

Students also viewed these Accounting questions