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PLS HELP. All the questions i need answered are in the last photo. thank you! all the data you need should be there ALL QUESTIONS
PLS HELP.
All the questions i need answered are in the last photo. thank you! all the data you need should be there
ALL QUESTIONS ARE IN THE LAST PHOTO
If possible showing the what numbers you used to get everytbing would be great!
No need for new info everything you need js right here. PLS HELP !
Exhibit 2 ZAUNER ORNAMENTS Calculation of Product Costs: DM-and DL-Based Costing System Exhibits ZAUNER ORNAMENTS Plant Data by Product Line In the third week of January, Yu called the sales department to inquire about price-setting procedures for the different product lines. She quickly discovered that the sales department investignted the prices of similar products available in the martetplace and set Zauner's prices accordingly. Yu knew that the company was profitable overall. but wondered if the prices set by the sales department were sufficient to ensure that the individual product lines were profitable. She decided to have one of her senior analysts. Yung Chen, prepare an analysis of umit-product costs for each of Zatuner's three products. She thought this might be helpful in determining whether any adjystments in the product prices were warranted. To assist Chen in his task, Yu provided him with a sehedule of the factory's annual overhead costs, as follows: Later that day, Chen returned to Yu's office with a schedule showing his calculation of product costs for each of Zauner's three products (Exhibit 1). Chen calculated the cost per box for each product, using a traditional volume-bused couting system. Budgeted overhead was allocated to each product line, bused on the planned production of ornaments. Chen and Yu were dismayed by the results of Chen's analysis; according to his calculations. Zauner was selling small glass ornaments for $9.00 a box, but it was costing the company $21.12 a box to produce thote omaments! Yu took these results to the director of Operations, David Mete. Trm really worricd about our pricing and the efficiency of our manufacturing precesses. Yu told Metz. "According to this product-cost analysis, we are losing money on both the small and targe glass omaments we produce, whife making moncy on the rpeciafity omaments. Surely, that can't be the case, can it? Are our costs really that much higher than other firms in the industry? Metz looked at Chen's schedule and shook his head. "I think I see the problem here," he told Yu. "You've allocated overliead to each product bused on production units. Why don't your try this antatysis again, this time allocating overticad to each produet based upon direct materials and direct labor? I think that method betiet approximates the actual use of the overhead resource by each product line, and it should fix your problem. Yut returned to her office and instructed Chen to redo his anslysis usine direct materials plus direct labor as the allocation base for overhead expenses. Chen soon returned with the product-cost schedule shown in Exhibit 2. "Look!" he told Ytu. 1 Exhibit 4 ZAUNER ORNAMENTS Historical Five-Year Phant-Administration Costs and Other Data Calculation of Product Costs: Volume-Based Costing System Exhibit 3 ZAUNER ORNAMENTS Activity Data by Product As she put the finishing touches on the annual financial statements for Zauner Omaments, Chia-yi Yu contemplated her schedule for the next few weeks. As the new controller for Zuiner Omaments in Taiwan, Yu thought the slow-sales period in January would be the perfect time for her to focus on Zauner's manigement-accounting procedures. Yu had recently returned to Taiwan from gaduate business school in Europe, and she was anxious to apply the knowledge she had gained at school to her new: job. As a first step, Yut decided to research Zuner"s current costing methods. BACKGROUND Zauner. Omaments was a wholly owned subsidiary of Zauner Crystal, Inc., a large manufacturer of crystal and glass products headquartered in Vienna, Austria. Although originally established as atn industriat-gtiss producer, Zauner Crystal relinvented itself after the Second World War as a producer of fine crystal, glass tableware, and other similar products. The company enjoyed an intemational reputation as a producer of highquality glass and crystal at affordable prices owing to the skills of its master articans, as wett as the appilication of innovative technology in the manuficturing proces. Zaunet crystal was used in fine restaurants, hotels, and residences throughout the world. ZAUNER ORNAMENTS Several years previously, management at Zauner Crystal recogenized that growth in the fine-crystal and glass-tableware markets was beginning to slow, forcing the company to search for other growth opportunities. Aner extensive research, managenient concluded that expanding into glass Christmastree ornaments would allow the company not only to continue to grow, but also to take advantage of Zauner Crystal's unique capabilities. The company leased a small manufacturing facility in Taiwan, and began producing the following three products there: -Note: All monetary arnounts are expressed in U.S. dollars 1) Calculate the ABC costs for each product on a per-box basis. Use the ending inventory costs as the cost driver to allocate the plant-administrative overhead cost. All other overhead cost drivers are explained in the case-study. Please prepare a table similar to those used in chapter 17 showing the details of your overhead cost allocations to each product. As shown in the chapter the table should include columns for the 1) activity cost pool, 2) cost driver, 3) estimated overhead \$, 4) estimated use of cost driver per activity, 5) overhead rate by activity, 6) estimated use of cost driver by product, and 7) total overhead allocated to each product by activity. If possible, use Excel, Word or a similar software to prepare the table. 2) What do these results tell you about activity-based costing versus costing based on the traditional methods of standard volume or direct materials plus direct labor? 3) Calculate each product's contribution margin per unit (box) and the tot contribution margin per product using ABC, volume-based and DM plus DL based costing. Based on the ABC costing results, what changes, if any, should management make to Zauner's pricing strategy? think Metz was correct. Allocating overhead based on direct materials and direct labor gives us product costs that are below our current sales price for each product line. I think we're fine now:- Yu felt better after secing Chen's second analysis, but she was not fully convinced that the revised schedule captured Zauner's product costs in the most accurate manner. While Chen was working on his analysis, Yu met with the manufacturing department to gain a better understanding of Zauner's operations. The resufts of these meetings are summarized in Exhibit 3. She leamed that, while all three omaments were made on the same production lines, specialty ornaments underwent an additional paiating process. In the specialty-painting department, 24 fully utilized workers hand-painted intricate designs on the inside of each speciafty omament. Yu also discussed with Manufacturing the types of overhead at Zauner and the specific activities that could be generating the company's overhead costs. She discovered that both productionscheduling and machine-setup costs appeared to be driven primarily by the number of batches required for the annual production volume. Because the number of batches varied by product type, Yu concluded that total yearly batches might be an appropriate means of allocating production-scheduling and machine-setup costs to the different product lines. In addition, she had a little more difficulty ascertaining the root cause of equipment depreciation. It was unclear whether equipment depreciation occurred because of the number of machine operations performed or because of the machine run time. Based on feedback from the manufacturing department, she decided that the number of machine operations was the better indicator of equipment depreciation. She also thought that plant depreciation could reasonably be based on the factory square footage used to manufacture, paint, and store each box. Her discussions also led her to conclude that the number of inspections performed drove inspection costs, while the number of boxes used drove paclaging costs. Plant administration (which included supervision, labor relations, and clerical costs) appeared to be the most problematic in deciding how best to allocate these costs. Yu would have to make that decision soon, and in the meantime, had gathered the data in Exhibits 4 and 5 , which she thought might be useful in her deliberntions After secing Zauner's manufacturing process, Yu recalled reading about activitybased costing (ABC) in graduate school. She remembeted that companies used ABC systems to assign indirect manufacturing costs to products based on the activities performed on those products. Yu thought she might be able to use ABC to reflect Zauner's product costs more accurately, thereby improving product-pricing decisions. RED 1. Determine the best base for allocating plant-administration costs 2. Calculate the ABC costs for cach product on a per-box basis. 3. What do these results tell you about activity-bused costing versus costing based on standard volume or direct materials plas direct labon 4. What changes, if any, should management make to Zauner's pricing strategy Step by Step Solution
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