Variable Manufacturing Unit Cost 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Decimal Places Increase Lamp Kit 16 6% $16.96 (4.01} Labor 3.00% $2.06 (4.02) Variable Overhead 2 5% $2. 10 (4.03) Projected Variable Manufacturing Cost Per Unit 10 255,000 $21.12 14.04) Total Variable Cost Per Unit 20x1 Cost Projected Percent 20x2 Cost Rounded to 2 Increase Decimal Places Variable Selling 3.09 (4.05) Variable Administrative 2.06 (4.06) Projected Variable Manufacturing Unit Cost (4.04) Projected Total Variable Cost Per Unit 26.27 14.07)Projected Income Statement For the Period Ending December 31, 20x1 Sales 25,000 lamps @ $45.00 $ 1, 125,000.00 Cost of Goods Sold a $30.00 750,000.00 Gross Profit $ 375,000.00 Selling Expenses: Fixed $23,000.00 Variable (Commission per unit) @ $3.00 75,000.00 $ 98,000.00 Administrative Expenses: Fixed $42,000.00 Variable @ $2.00 50,000.00 92.000.00 Total Selling and Administrative Expenses: 190,000.00 Net Profit $ 185,000.00Current Assets Cash $ 34,710.00 Accounts Receivable 67,500.00 Inventory Raw Material Lamp Kits 500 @ $16.00 8,000.00 Work in Process 0 Finished Goods 3000 @ $30.00 90,000.00 Total Current Assets $ 200,210.00 Fixed Assets Equipment $ 20,000.00 Accumulated Depreciation 6,800.00 Total Fixed Assets 13,200.00 Total Assets $ 213,410.00 Current Liabilities Accounts Payable $ 54,000.00 Total Liabilities 54,000.00 Stockholder's Equity Common Stock $ 12,000.00 Retained Earnings 147,410.00 Total Stockholder's Equity 159,410.00 Total Liabilities and Stockholder's Equity $ 213,410.00The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Lamp Kit: $16.0000000 per lamp Direct Labor: 2.0000000 per lamp (4 lamps/hr.) Variable Overhead: 2.0000000 per lamp Fixed Overhead: 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $30.0000000 per lamp Expected increases for 20x2 When calculating projected increases round to TWO ($0.00) decimal places. 6 1. Material Costs are expected to increase by 6.00% 2. Labor Costs are expected to increase by 3.00%. 3. Variable Overhead is expected to increase by 5.00%. 4. Fixed Overhead is expected to increase to $255,000. 5. Fixed Administrative expenses are expected to increase to $56,000. 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 3.00%.46 47 1. Material Costs are expected to increase by 6.00% . 48 55 2. Labor Costs are expected to increase by 3.00%. 56 57 3. Variable Overhead is expected to increase by 5.00%. 58 59 4. Fixed Overhead is expected to increase to $255,000. 66 67 5. Fixed Administrative expenses are expected to increase to $56,000. 68 69 6. Variable selling expenses (measured on a per lamp basis) are expected to increase 70 by 3.00%. 77 78 7. Fixed selling expenses are expected to be $31,000 in 20x2. 79 80 8. Variable administrative expenses (measured a per lamp basis) are expected to 81 increase by 3.00%. 004 5 Schedule of Fixed Costs 20x1 Cost Projected 20x2 Cost Percent Increase 4 Fixed Overhead 255,000.00 (4.08) 5 (normal capacity of lamps @ _) 6 Fixed Selling 31,000.00 (4.09) 7 Fixed Administrative 56,000.00 (4.10} 6 Projected Total Fixed Costs 342,000.00 (4.11} 8 9 827 Month of January 28 29 Selected information for January is presented below. Note that the applied overhead rate was 30 50% of direct labor costs in the molding department. 35 36 37 Molding Department 38 9 Goods in-process as of January 1 were 3,400 figurines at a cost of $11,817.25. Of this amount, $5,236.00 was from 14 raw materials added, $4,387.50 for labor and $2, 193.75 for overhead. These 3,400 figurines were assumed to be 15 10.00% complete as to labor and overhead. 16 17 During January, 22,500 units were started, $33,614.00 of materials and $77,617.50 of labor costs were incurred. 18 53 The 3,500 figurines that were in-process at the end of January were assumed to be 70.00% complete to 64 labor and overhead. 56 All figurines in January passed inspection. 57 62 53January CO MOLDING 10 Physical Flow of Units 11 12 Work-in-Process - Beginning 13 Units Started this Period 19 Units to Account for 20 21 Total transferred out [12.01} 22 Work-in-Process - Ending (12.02) 23 Total Accounted for 29 30 31 32 Equivalent Units Material (Round to two places, (12.03) 33 39 40 Equivalent Units Conversion (Round to two places, (12.04) 41 42 43 49 Total cost of Material (Round to two places, ##.# #.HI] (12.05) 50 5141 42 43 49 Total cost of Material (Round to two places, ## #!!# #!) {12.05) 50 51 52 Total cost of Conversion (Round to two places, HIT.HIM. fir (12.06) 53 Total cost to account for (Round to two places, #. . fir (12.07) 59 60 61 62 Cost per equivalent unit of Material (Round to two places, #HH."# (12.08} 63 69 70 Cost per equivalent unit of Conversion (Round to two places, #HHH.##) (12.09) 71 72 73 79 80 81 82 Cost of the ending inventory, material and convesion (Round to two places, bill . HI (12.10) 83 8939 0 91 92 13 00 Cost of the units transferred, material and convesion (Round to two places, $HIT HIM. IT (12.11 } 01 02 03 04 0523 24 To keep records of the actual cost of a special order job, a Job Order Cost System has been developed. 25 Overhead is applied at the rate of 50% of the direct labor cost. 26 33 34 35 Job Order Costing Section 36 37 On January 1, 20x2, Division S began Job 2407 for the Client, THE BIG CHILDREN STORE. The 14 job called for 4,000 customized lamps. The following set of transactions occurred from 45 January 5 until the job was completed: 16 47 5-Jan Purchased 4,100 Lamp Kits @ $16.35 per kit. 18 9-Jan 4,225 sets of Lamp Kits were requisitioned. 55 17-Jan Payroll of 570 Direct Labor Hours @ $9.70 per hour. 56 30-Jan Payroll of 620 Direct Labor Hours @ $9.95 per hour. 57 30-Jan 3,990 lamps were completed and shipped. All materials requisitioned were 58 used or scrapped, and are a cost of normal processing. 59 66 Month End Overhead Information 67 Actual Variable Manufacturing Overhead $ 1,451.80 68 Actual Fixed Manufacturing Overhead $ 39,623.45 69 70 77Round to two places, Cost of Direct Material Incurred in Manufacturing Job 2407 (13.01} Cost of Direct Labor Incurred in Manufacturing Job 2407 (13.02) Cost of Manufacturing Overhead Applied to Job 2407 (13.03) Cost of manufacturing one lamp (13.04)