Recall that classifying costs on the basis of the following, can be very beneficial to support decision making. 1.Behaviour - fixed or variable 1.Traceability -
Recall that classifying costs on the basis of the following, can be very beneficial to support decision making.
1.Behaviour - fixed or variable
1.Traceability - direct or indirect
2.Financial reporting - product or period
3.For product costs classify as DM, DL, MOH
Following is a list of costs that Sydney's Bakery incurs for one of the most popular baked goods -Cinnamon Buns.
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AaBbCCD AaBE AaBb( AaBbC PA - AB - X' X2 A - 37 - A IEX BAJWPS XY EVE Case Assignment LO 1 - 5 .docx + Sydney's Bakery operates a small business that bakes and sells a variety of goods within a major city. Sydney is trying to gain a better understanding of the business's profits with the goal of identifying opportunities. Sydney has hired you to examine the operations and the respective financial data and to provide your expertise and recommendations. Analysis of business operations and profitability requires an understanding of the types of costs that are incurred. Sydney has not had the opportunity to evaluate costs from a management accounting perspective. | Recall that classifying costs on the basis of the following, can be very beneficial to support decision making. Behaviour - fixed or variable Traceability - direct or indirect 2. Financial reporting - product or period 3. For product costs classify as DM, DL, MOH Following is a list of costs that Sydney's Bakery incurs for one of the most popular baked goods Cinnamon Buns. Costs Annual business license fee Rent for bakery Utilities for bakery Flour Sugar Yeast Butter Eggs Vegetable Oil ( spraying pans) Accounting Consultant Wages - Baker Wages - Dish Washer Wages - Counter sales staff Insurance for baker T: 9 51: 15 0: 1138 565 0- 100 9 W CH 6 05Case Assignment LO 1 - 5 . dock - WPS KE Calibri (EX) - 11 AAA B J U - AB - X X. A-ay - A AaBbCCD AaBY AaBb AaBbC W HAJWPS x Case Assignment LO 1 - 5 .docx Case Assignment - LO 1- 5 Sydney's Bakery has received an order for 50 dozen cinnamon buns to be delivered to a local post- secondary institution. Following is information relevant to this order. Materials Traceable Materials Non-traceable materials * $28 - Flour Water $12 - sugar Yeast $8 - milk Ground cinnamon $5 - Butter Brown Sugar $3 - eggs Oil for baking pans *Note: The non-traceable materials have a total estimated cost of $27 for this order. Labour Following is information for the staff working on the day the order is produced & sold. All staff support the production, sales and delivery of all baked products except the baker whose work time is dedicated to this order. Baker - $35/hr for 6 hours Support staff (dishwasher, counter sales) - $15/hour for 8 hours Delivery staff - $15/hour - 3 hours Manager - $260/day /8 7: 2/3| 47: 1 31: 14 32: 1138 MASE 8 7 0 100 % - MB I U - AB - X' X2 A- 37 - A - IFY W HASWPS XY AXE X Case Assignment LO 1 - 5 .docx X + Operational information Sydney's Bakery applies overhead on the basis of Baker's Direct Labour hours. The estimated Baker DL hours for the year are 1,500 hours. The estimated manufacturing overhead is $126,000. Forthe reporting period, the actual overhead costs totalled $132,480 and actual Baker DL hours were recorded as 1,560. Operational results Sydney's Bakery has provided you with activity and respective costs for three months be low. B January February March Sales in units 2,800 per unit 3,400 per unit 3,000 per unit Sales revenue $ 18,480 $ 6.60 $ 22,440 $ 6.60 $ 19,800 6.60 Less: COGS $ (6,160) $ (2.20) $ (7,480) $ (2.20) $ (6,600) $ (2.20) Gross Margin $ 12,320 $ 14,960 $ 13,200 Less Operating XP Insurance $ 800 $ 0.29 $ 800 $ 0.24 $ 800 0.27 Rent 1,800 $ 0.64 $ 1,800 $ 0.53 $ 1,800 0.60 Dep'n 700 $ 0.25 S 700 $ 0.21 S 700 0.23 Advertising $ 640 $ 0.23 670 $ 0.20 650 0.22 Salaries $ 7,100 $ 2.54 $ 7,850 $ 2.31 $ 7,350 2.45 O:0 Total Oper XP $ (11,040) $ (11,820) $ (11,300) Net Income $ 1,280 $ 3,140 $ 1,900 2/3 CH 20
