starting with part D (Cost reconciliation report) till the end... The parts before that I have completed.

Prepare a Cost Reconciliation report for JTL MANUFACTURING using the weighted-average method.

JTL MANUFACTURING

Part 1

JTL MANUFACTURING mass-produces a special connector unit that it normally sells for $3.90. It sells approximately 35,000 of these units each year. The variable costs for each unit are $2.30. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 15,000 of these units at $2.60 per unit. The production of these units is near full capacity at JTL MANUFACTURING, so to accept the offer from the Canadian company would require temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit.

An irrigation company has asked for a special order of 2,000 of the connectors. To meet this special order, JTL MANUFACTURING would not need an additional shift, and the irrigation company is willing to pay $3.10 per unit.

Instructions

Given the information above:

(a) What are the consequences of JTL MANUFACTURING agreeing to provide the 15,000 units to the Canadian company? Would this be a wise ?special order? to accept?

(b) Should JTL MANUFACTURING accept the special order from the irrigation company?

Part 2

JTL MANUFACTURING has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could be bought elsewhere for $0.82 per unit. JTL MANUFACTURING has fixed costs of $0.20 per unit that cannot be eliminated by buying this unit. JTL MANUFACTURING needs 460,000 of these units each year.

If JTL MANUFACTURING decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company. JTL MANUFACTURING uses approximately 500 of these units each year. The cost of the unit is $12.66. To aid in the production of this unit, JTL MANUFACTURING would need to purchase a new machine at a cost of $2,345, and the cost of producing the units would be $9.90 a unit.

Instructions

Given the information above:

(a) Without considering the possibility of making the timing unit, evaluate whether JTL MANUFACTURING should buy or continue to make the small fitting.

(b) (1) What is JTL MANUFACTURING? opportunity cost if it chooses to buy the small fitting and start manufacturing the timing unit?

(2) Would it be wise for JTL MANUFACTURING to buy the fitting and manufacture the timing unit? Explain.

JTL MANUFACTURING

JTL MANUFACTURING puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, JTL MANUFACTURING then uses different methods to determine the best decisions for making capital outlays.

In 2014 JTL MANUFACTURING is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes.

The following information is available to use in deciding whether to purchase the new backhoes.

	Old Backhoes		New Backhoes
Purchase cost when new	$90,000		$200,000
Salvage value now	$42,000
Investment in major overhaul needed in next year	$55,000
Salvage value in 8 years	$15,000		$90,000
Remaining life	8 years		8 years
Net cash flow generated each year	$30,425		$43,900

Instructions

(a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.)

(1) Using the net present value method for buying new or keeping the old.

(2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.)

(3) Comparing the profitability index for each choice.

(4) Comparing the internal rate of return for each choice to the required 8% discount rate.

(b) Are there any intangible benefits or negatives that would influence this decision?

(c) What decision would you make and why?

Assignment Last Name T-Z JTL MANUFACTURING Problem JTL MANUFACTURING Corporation is a private corporation formed for the purpose of providing the products and the services needed to irrigate farms, parks, commercial projects, and private homes. It has a centrally located factory in a U.S. city that manufactures the products it markets to retail outlets across the nation. It also maintains a division that provides installation and warranty servicing in six metropolitan areas. The mission of JTL MANUFACTURING is to manufacture quality parts that can be used for effective irrigation projects that also conserve water. By that effort, the company hopes to satisfy its customers, provide rapid and responsible service, and serve the community and the employees who represent them in each community. The company has been growing rapidly, so management is considering new ideas to help the company continue its growth and maintain the high quality of its products. JTL MANUFACTURING was founded by Tom Keats who is the company president and chief executive officer (CEO). Working with him from the company's inception was Tom's brother, Mark, whose sprinkler designs and ideas about the installation of proper systems have been a major basis of the company's success. Ben is the vice president who oversees all aspects of design and production in the company. The factory itself is managed by Sandra Spencer who hires his line managers to supervise the factory employees. The factory makes all of the parts for the irrigation systems. The purchasing department is managed by Hector Hines. The installation and training division is overseen by vice president Ali Salem, who supervises the managers of the six local installation operations. Each of these local managers hires his or her own local service people. These service employees are trained by the home office under Ali Salem's direction because of the uniqueness of the company's products. There is a small Human Resources department under the direction of Anatoly Rushivsky, a vice president who handles the employee paperwork, though hiring is actually performed by the separate departments. Marcia Bennett is the vice president who heads the sales and marketing area; she oversees 10 well-trained salespeople. The accounting and finance division of the company is headed by Kevin Hall, who is the chief financial officer (CFO) and a company vice president; he is a member of the Institute of Management Accountants and holds a certificate in management accounting. He has a small staff of Certified Public Accountants, including a controller and a treasurer, and a staff of accounting input operators who maintain the financial records. A partial list of JTL MANUFACTURING accounts and their balances for the month of November 2012 follows. Accounts Receivable Advertising Expenses Cash DepreciationFactory Equipment DepreciationOffice Equipment Direct Labor Factory Supplies Used Factory Utilities Finished Goods Inventory, November 30 Finished Goods Inventory, October 31 Indirect Labor Office Supplies Expense Other Administrative Expenses Prepaid Expenses Raw Materials Inventory, November 30 Raw Materials Inventory, October 31 Raw Materials Purchases RentFactory Equipment RepairsFactory Equipment $ 275,000 54,000 260,000 16,800 2,400 42,000 16,800 10,200 68,800 72,550 48,000 1,600 72,000 41,250 52,700 38,000 184,500 47,000 4,500 Salaries Sales Sales Commissions Work In Process Inventory October 31 Work In Process Inventory, November 30 325,000 1,350,000 40,500 52,700 42,000 Instructions (a) A list of accounts and their values are given above. From this information, prepare a cost of goods manufactured schedule, an income statement, and the current assets section of the balance sheet for JTL MANUFACTURING Corporation for the month of November 2012. JTL MANUFACTURING Because most of the parts for its irrigation systems are standard, JTL MANUFACTURING handles the majority of its manufacturing as a process cost system. There are multiple process departments. Three of these departments are the Molding, Cutting, and Welding departments. All items eventually end up in the Package department which prepares items for sale in kits or individually. The following information is available for the Molding department for January. Work in process beginning: Units in process 22,000 Stage of completion for materials 80% Stage of completion for labor and overhead 30% Costs in work in process inventory: Materials $168,360 Labor 67,564 Overhead 17,270 Total costs in beginning work in process $253,194 Units started into production in January 60,000 Units completed and transferred in January 58,000 Costs added to production: Materials $264,940 Labor 289,468 Overhead 60,578 Total costs added into production in January $614,986 Work in process ending: Units in process 24,000 Stage of completion for materials 50% Stage of completion for labor and overhead 10% Instructions (a) Prepare a Equivalent Units of Production report for JTL MANUFACTURING using the weighted-average method. (b) Prepare a Cost Per Equivalent Unit report for JTL MANUFACTURING using the weightedaverage method. (c) Prepare a Costs of Ending Work in Process Inventory and Units Transferred Out report for JTL MANUFACTURING using the weighted-average method. (d) Prepare a Cost Reconciliation report for JTL MANUFACTURING using the weightedaverage method. 3 JTL MANUFACTURING Part 1 JTL MANUFACTURING mass-produces a special connector unit that it normally sells for $3.90. It sells approximately 35,000 of these units each year. The variable costs for each unit are $2.30. A company in Canada that has been unable to produce enough of a similar connector to meet customer demand would like to buy 15,000 of these units at $2.60 per unit. The production of these units is near full capacity at JTL MANUFACTURING, so to accept the offer from the Canadian company would require temporarily adding another shift to its production line. To do this would increase variable manufacturing costs by $0.30 per unit. However, variable selling costs would be reduced by $0.20 a unit. An irrigation company has asked for a special order of 2,000 of the connectors. To meet this special order, JTL MANUFACTURING would not need an additional shift, and the irrigation company is willing to pay $3.10 per unit. Instructions Given the information above: (a) What are the consequences of JTL MANUFACTURING agreeing to provide the 15,000 units to the Canadian company? Would this be a wise \"special order\" to accept? (b) Should JTL MANUFACTURING accept the special order from the irrigation company? Part 2 JTL MANUFACTURING has discovered that a small fitting it now manufactures at a cost of $1.00 per unit could be bought elsewhere for $0.82 per unit. JTL MANUFACTURING has fixed costs of $0.20 per unit that cannot be eliminated by buying this unit. JTL MANUFACTURING needs 460,000 of these units each year. If JTL MANUFACTURING decides to buy rather than produce the small fitting, it can devote the machinery and labor to making a timing unit it now buys from another company. JTL MANUFACTURING uses approximately 500 of these units each year. The cost of the unit is $12.66. To aid in the production of this unit, JTL MANUFACTURING would need to purchase a new machine at a cost of $2,345, and the cost of producing the units would be $9.90 a unit. Instructions Given the information above: (a) Without considering the possibility of making the timing unit, evaluate whether JTL MANUFACTURING should buy or continue to make the small fitting. (b) (1) What is JTL MANUFACTURING' opportunity cost if it chooses to buy the small fitting and start manufacturing the timing unit? (2) Would it be wise for JTL MANUFACTURING to buy the fitting and manufacture the timing unit? Explain. JTL MANUFACTURING JTL MANUFACTURING puts much emphasis on cash flow when it plans for capital investments. The company chose its discount rate of 8% based on the rate of return it must pay its owners and creditors. Using that rate, JTL MANUFACTURING then uses different methods to determine the best decisions for making capital outlays. In 2014 JTL MANUFACTURING is considering buying five new backhoes to replace the backhoes it now has. The new backhoes are faster, cost less to run, provide for more accurate trench digging, have comfort features for the operators, and have 1-year maintenance agreements to go with them. The old backhoes are working just fine, but they do require considerable maintenance. The backhoe operators are very familiar with the old backhoes and would need to learn some new skills to use the new backhoes. The following information is available to use in deciding whether to purchase the new backhoes. Old Backhoes $90,000 $42,000 $55,000 $15,000 8 years $30,425 Purchase cost when new Salvage value now Investment in major overhaul needed in next year Salvage value in 8 years Remaining life Net cash flow generated each year New Backhoes $200,000 $90,000 8 years $43,900 Instructions (a) Evaluate in the following ways whether to purchase the new equipment or overhaul the old equipment. (Hint: For the old machine, the initial investment is the cost of the overhaul. For the new machine, subtract the salvage value of the old machine to determine the initial cost of the investment.) (1) Using the net present value method for buying new or keeping the old. (2) Using the payback method for each choice. (Hint: For the old machine, evaluate the payback of an overhaul.) (3) Comparing the profitability index for each choice. (4) Comparing the internal rate of return for each choice to the required 8% discount rate. (b) Are there any intangible benefits or negatives that would influence this decision? (c) What decision would you make and why? 5