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............. ...... $ 10.500.00 Advertising for helmets...... $ 11,000.00 Cash, January 1... Depreciation on factory building................... $ 1.500.00 Depreciation on office equipment............... 800.00 Insurance on factory building..... 1,200.00 Miscellaneous expenses - factory................ $ 500.00 Office supplies expense..................... $ 300.00 Professional fees.... $ 800.00 Property taxes on factory building................ $ 400.00 Raw Materials used in production................. $ 60,000.00 Rent on production equipment..................... $ 5.000.00 Research & Development... $ 10.000.00 Sales commissions (10% of sales)............... $ 32.000.00 Utility costs - factory.... ....................$ 900.00 Wages - Factory direct labor....................... $ 87,500.00 Work in process, January 1... Work in process, January 31....... Raw materials inventory, January 1............... S Raw materials inventory, January 31............ $12.000.00 Raw materials purchases.. .............. $72.000.00 Finished goods inventory, January 1............ Production and Sales Data Number of helmets 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 $40 Unit sell price 10.000 20% of next month's sales 1 Kilogram S6 per kilogram 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: 35% Manufacturing overhead and selling and administrative costs are paid as incurred. Desired ending cash balance: $ 20,000 (financing is necessary if cash balance falls 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. 3. Prepare a schedule of cost of goods manufactured for the month of January. Don't forget the proper heading. Assume Misc. expense-factory and Utility costs-factory are fixed costs. 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 (%). 2. 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 9) Budgeted income statement PROJECT CHECK FIGURES: Total costs = 5222,400 Total Period costs = 565,400 Cost of Goods Manufactured = $157,000 Total cash disbursements = $214,100 Net Income = 583,850 Part 1 - Classify the COSTS as either product costs or period costs using the below 5 column table. Enter the dollar amount of each cost in the appropriate column and total each classification Product Costs Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Totals Concrete Helmet Company - Case project Part 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 the Misc expense-factory and Utility costs-factory are a fixed cost. Item Variable Costs Fixed Costs Total Costs Totals Part 3 - Prepare a schedule of cost of goods manufactured for the month of January, 2020. (Don't forget the heading) Cost of Goods Manufactured Schedule Work in process inventory Direct materials: Total Cost of Materials Available for Use Direct Materials Used + Direct labor: + Manufacturing overhead: Total manufacturing overhead Total manufacturing costs incurred during the period Total manufacturing costs in Work-in-process Less = Cost of Goods Manufactured Part 4 - Determine the cost of producing a helmet Part 5 - Identify the type of cost accounting system that Concrete Helmet Company is probably using at this time. Explain. 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 Part 10 (a through d) (a) (c) Sales budget Direct Materials Budget Total Sales Total kilograms needed for production Total materials required Armstrong Helmet Company Production Budget For the month ended December 31, 2013 Total cost of direct materials purchases Total Required units (d) Direct Labor Budget Required production units Total required direct labor hours Total direct labor cost Part 10 ) (e) Selling & Administrative Budget Variable Expenses: Fixed Expenses: Total Fixed Expenses: Total Selling & Administrative Expenses: Part 10 (F-9) Cash Budget Budgeted Income Statement Beginning cash balance Add: Receipts Gross Profit Total available cash Less: Disbursements Income Tax Expense Net Income Total Disbursements Excess (deficiency) of available cash over disbursements Financing (if any): Ending cash balance 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............. ...... $ 10.500.00 Advertising for helmets...... $ 11,000.00 Cash, January 1... Depreciation on factory building................... $ 1.500.00 Depreciation on office equipment............... 800.00 Insurance on factory building..... 1,200.00 Miscellaneous expenses - factory................ $ 500.00 Office supplies expense..................... $ 300.00 Professional fees.... $ 800.00 Property taxes on factory building................ $ 400.00 Raw Materials used in production................. $ 60,000.00 Rent on production equipment..................... $ 5.000.00 Research & Development... $ 10.000.00 Sales commissions (10% of sales)............... $ 32.000.00 Utility costs - factory.... ....................$ 900.00 Wages - Factory direct labor....................... $ 87,500.00 Work in process, January 1... Work in process, January 31....... Raw materials inventory, January 1............... S Raw materials inventory, January 31............ $12.000.00 Raw materials purchases.. .............. $72.000.00 Finished goods inventory, January 1............ Production and Sales Data Number of helmets 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 $40 Unit sell price 10.000 20% of next month's sales 1 Kilogram S6 per kilogram 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: 35% Manufacturing overhead and selling and administrative costs are paid as incurred. Desired ending cash balance: $ 20,000 (financing is necessary if cash balance falls 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. 3. Prepare a schedule of cost of goods manufactured for the month of January. Don't forget the proper heading. Assume Misc. expense-factory and Utility costs-factory are fixed costs. 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 (%). 2. 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 9) Budgeted income statement PROJECT CHECK FIGURES: Total costs = 5222,400 Total Period costs = 565,400 Cost of Goods Manufactured = $157,000 Total cash disbursements = $214,100 Net Income = 583,850 Part 1 - Classify the COSTS as either product costs or period costs using the below 5 column table. Enter the dollar amount of each cost in the appropriate column and total each classification Product Costs Item Direct Materials Direct Labor Manufacturing Overhead Period Costs Totals Concrete Helmet Company - Case project Part 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 the Misc expense-factory and Utility costs-factory are a fixed cost. Item Variable Costs Fixed Costs Total Costs Totals Part 3 - Prepare a schedule of cost of goods manufactured for the month of January, 2020. (Don't forget the heading) Cost of Goods Manufactured Schedule Work in process inventory Direct materials: Total Cost of Materials Available for Use Direct Materials Used + Direct labor: + Manufacturing overhead: Total manufacturing overhead Total manufacturing costs incurred during the period Total manufacturing costs in Work-in-process Less = Cost of Goods Manufactured Part 4 - Determine the cost of producing a helmet Part 5 - Identify the type of cost accounting system that Concrete Helmet Company is probably using at this time. Explain. 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 Part 10 (a through d) (a) (c) Sales budget Direct Materials Budget Total Sales Total kilograms needed for production Total materials required Armstrong Helmet Company Production Budget For the month ended December 31, 2013 Total cost of direct materials purchases Total Required units (d) Direct Labor Budget Required production units Total required direct labor hours Total direct labor cost Part 10 ) (e) Selling & Administrative Budget Variable Expenses: Fixed Expenses: Total Fixed Expenses: Total Selling & Administrative Expenses: Part 10 (F-9) Cash Budget Budgeted Income Statement Beginning cash balance Add: Receipts Gross Profit Total available cash Less: Disbursements Income Tax Expense Net Income Total Disbursements Excess (deficiency) of available cash over disbursements Financing (if any): Ending cash balance