Module Managerial Accounting (Akt) Genap 2020 PDF

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Module Managerial Accounting (Akt) Genap 2020...

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EVEN TERM 2020 / 2021

ACCO UN TIN G LAB MOD ULE UPH BUS IN ESS SCH O O L

MANAGERIAL ACCOUNTING 10th Edition

Prepared by The Accounting Lab Tim

FOREWORD Managerial Accounting is a very crucial subject. The students will be introduced into a deeper and broader level of accounting concepts, learn how to manage risks and implementing strategy through planning, budgeting and forecasting, and decision support.

This course helps students to become more actively involved by independent problem solving and understand the financial and operational sides of the business.

This module has been compiled in a way that these purposes might be achieved. It contains the key elements of each chapter, followed by specific comprehensive exercises to be solved and discussed each meeting with a lab assistant.

After accomplishing this course, we hope that students are able to apply and analyze the concepts in Managerial Accounting.

May God bless all of you and grant you wisdom throughout the journey.

“The fear of the LORD is the beginning of knowledge, but fools despise wisdom and instruction.” (Proverbs 1:7)

Sincerely, Lab Assistant Team

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Contents FOREWORD

1

INTRODUCTION

3

OUTLINE OF THE INSTRUCTION PROGRAM (SAP)

5

MODULE 1 – COST BEHAVIOUR AND FORECASTING

6

MODULE 2 – COST-VOLUME-PROFIT ANALYSIS

8

MODULE 3 – PROFIT PLANNING AND FLEXIBLE BUDGETS

11

MODULE 4 – STANDARD COSTING AND VARIANCE ANALYSIS

16

MODULE 5 – PERFORMANCE EVALUATION AND DECENTRALIZATION

19

MODULE 6 – TACTICAL DECISION MAKING AND RELEVANT ANALYSIS

20

MODULE 7 – EMERGING TOPICS IN MANAGERIAL ACCOUNTING

22

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INTRODUCTION A. Description Laboratory subject is related to the main subject (Theory), which cannot be separated. The purpose of laboratory subject is to make the student be able to understand the concept of the subject by exercising their self in problems and cases. All laboratory subject is 0 credit but the duration of the class is 100 minutes which equivalent to 2 credits. B. General Purpose Instruction After involving in this class and doing all of the materials, students are expected to be able to do identification/ explaining/ calculating/ analyzing the concept about: 1. Cost Behaviour and Forecasting 2. Cost-Volume-Profit Analysis 3. Profit Planning and Flexible Budgets 4. Standard Costing and Variance Analysis 5. Performance Evaluation and Decentralization 6. Tactical Decision Making and Relevant Analysis 7. Emerging Topics in Managerial Accounting C. Lecture Activities The students are directed to involve actively in the class learning process. 1. To facilitate the learning process, the students must read the chapter on the reference book that related to the class material. Students are also be able to read the brief theory that provide in each module 2. The questions that are provided in this module are only the materials that partially have been taught in the theory subject. 3. Students must do the questions on the module individually based on the instruction of the laboratory assistant, do quizzes that will be held, follow the laboratory mid-exam and final exam based on the given schedule D. Class Rules 1. Attendance At least attend 5 sessions from 6 sessions or equal to 85% attendance. 2. Lateness >15 Minutes regarded as absent 3. Permission Exception 1. Formal permission from university or faculty 2. Hospitalized (maximum 2 weeks) 3. Sudden pass away of core family member (with supported documents). E. Grading Composition The final grade is the sum of the student’s theory and lab score with a composition of 85% theory class and 15% lab course. Below are the components of the lab course grading:

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Mid-Test Final-Test

: 35% : 35%

Absence KAT Quiz

: 10% : 10% : 10%

F. Grading Scale Score 90 – 100 85 –89.99 80 – 84.99 75– 79.99 70–74.99 65–69.99 60– 64.99 55– 59.99 0 – 54.99

Grade A AB+ B BC+ C CF

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OUTLINE OF THE INSTRUCTION PROGRAM (SAP) Below is the instruction program for Lab. Managerial Accounting: Week

Module

1

1

2

2

3

3

4

3

5

3

6

4

Material

Type

Cost Behaviour and Forecasting Cost-Volume-Profit Analysis

Video Video

Profit Planning and Flexible Budgets

Video

Profit Planning and Flexible Budgets Profit Planning and Flexible Budgets Standard Costing and Variance Analysis

VIDEO TITLE Cost Behaviour and Forecasting – Managerial Accounting (Akt) Cost-Volume-Profit Analysis – Managerial Accounting (Akt) Profit Planning and Flexible Budgets – Managerial Accounting (Akt)

REFERENCE Chapter 3 Chapter 7 Chapter 9

Tatap Muka

Chapter 9

Tatap Muka

Chapter 9

Video

Standard Costing and Variance Analysis – Managerial Accounting (Akt)

Chapter 10

MID EXAM 4

Standard Costing and Variance Analysis

8

5

Performance Evaluation and Decentralization

9

5

10

6

11

7

12

7

7

Tatap Muka

Video

Performance Evaluation and Decentralization Tactical Decision Making and Relevant Analysis Emerging Topics in Managerial Accounting Emerging Topics in Managerial Accounting

Chapter 10 Performance Evaluation and Decentralization – Managerial Accounting (Akt)

Tatap Muka

Video

Chapter 11

Chapter 11 Tactical Decision Making and Relevant Analysis – Managerial Accounting (Akt)

Chapter 8

Tatap Muka

Chapter 13

Tatap Muka

Chapter 13

FINAL EXAM

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MODULE 1 COST BEHAVIOUR AND FORECASTING VIDEO 01. Absorption vs Variable Costing Shawn Company produced 1,300,000 teddy bears and managed to sell 75% of units produced last year. Other information for the year included: Beginning Inventory

425,000 units

Variable manufacturing overhead

$ 1,260,200

Fixed administrative expense

$ 275,500

Direct manufacturing labor

$ 1,209,000

Fixed manufacturing overhead

$ 520,000

Variable selling expense

$ 672,500

Fixed selling expense

$ 295,200

Direct materials

$ 1,820,800

Required: 1.

Calculate the cost of one unit of product under absorption costing and variable costing.

2.

Calculate the cost of ending inventory under absorption and variable costing.

3.

Suppose that the selling price for one unit is $32, what is the operating income under absorption and variable costing.

PROBLEM 01. Ending Inventory Absorption vs Variable Costing Miles Company produces soap for well-known grocery stores. In October 2020, Miles began producing the soaps. During the month of October, 45,000 were produced and 25,000 were sold at $65 each. The following costs were incurred: Direct materials

$ 540,500

Direct labor

$ 112,250

Variable Overhead

$ 157,250

Fixed Overhead

$ 360,000

A selling commission of 5 percent of sales price was paid. All administrative expenses are fixed amounted to $345,250. Required: 1. Calculate the unit cost and the cost of ending inventory using absorption costing. 2. Calculate the unit cost and the cost of ending inventory using variable costing.

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3. On the other hand, management thinks November 2020 sales will be 3 times from October 2020 sales. Prepare an income statement for November 2020 using the assumed higher level of sales. Which costing method should be used: Absorption or Variable?

PROBLEM 02. Inventory Cost and Variable Costing Sean Company produces and sells book shelf that are used for interior design. The operating costs for the past year were as follows: Variable costs per unit: Direct materials

$8

Direct labor

$6

Variable overhead

$7

Variable selling

$9

Fixed costs per year: Fixed overhead

$600,000

Selling and administrative

$100,000

During the year Sean produced 300.000 book shelf and sold 250.000 at $40 each. Sean had 20.000 book shelf in the beginning finished goods inventory, costs have not been changed from last year to this year. An actual costing system is used for product costing. Required: 1. What is the per-unit inventory cost that will be reported on Sean Balance Sheet at the end of year? How many units are in the ending inventory? What is the total cost of ending inventory? 2. What would the per unit inventory cost be under the variable costing? Does this differ from the unit cost computed in Requirement 1? Why? 3. Calculate the variable costing operating income.

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MODULE 2 COST-VOLUME-PROFIT ANALYSIS VIDEO 01. Break-even Point For each of the following independent situations, calculate the amount(s) required. Required: A. At the break-even point, Leo Company sells 160,000 units and has fixed cost of $480,000. The variable cost per unit is $15. What price does Leo charge per unit? B. Luca Industries charges a price of $120 and has fixed cost of $450,000. Next year, Luca expects to sell 20,000 units and make operating income of $150,000. What is the variable cost per unit? What is the contribution margin ratio? C. Last year, Lily Company earned operating income of $75,000 with a contribution margin ratio of 0.50. Actual revenue was $250,000. Calculate the total fixed cost. D. Louis Company has variable cost ratio of 0.5. The fixed cost is $90,000 and 22,500 units are sold at breakeven. What is the price? What is the variable cost per unit? The contribution margin per unit?

PROBLEM 01. Variable Cost, Contribution Margin, Break-Even Point Ten Corporation produces shoes in America. They sold 1,200,000 units in the year 2020. Below is given the cost data for Ten Corporation: Selling price per unit

$ 14

Direct materials cost per unit

$2

Direct labor cost per unit

$ 4.4

Variable overhead cost per unit

$ 3.2

Fixed overhead

$ 300,000

Fixed selling and administrative expenses

$ 400,000

Selling commission per unit

$ 0.9

Required: 1. Prepare income statement for Ten Corporation. 2. Compute: a. Variable cost per unit b. Variable cost ratio Managerial Accounting (Accounting) | 9th Edition | 8

c. Contribution margin per unit d. Contribution margin ratio e. Break-even point in units f. Break-even point in sales dollars 3. How many units must be sold to earn operating income of $1,400,000? 4. Compute the margin of safety in unit and then in sales dollars. 5. Compute the degree of operating leverage and the meaning of your result. Prove your answer!

PROBLEM 02. BEP Packages Nana bakes and sells authentic baked Christmas cookies. For the most recent year, Nana sold 150,000 cookies at a selling price of $2 per cookie. During this same year, Nana incurred fixed costs of $75,000 and variable costs of $0.5 per cookie. Management now is considering extending their product line to include cake slices. Management plans on selling each cake slice for $5. At this price, they estimate selling 37,500 cake slices. Moreover, the variable cost per cake slice would be $1.5 and the decision would increase Nana’s total fixed costs by $43,750 per year.

Required: 1. How many cookies does Nana need to sell each year to break even (assume Nana decide not to introduce cake slice)? Calculate the Degree of Operating Leverage and the meaning of your result. 2. Assume Nana decides to introduce cake slice. How many cookies and cake slices does Nana need to sell at the breakeven point? Prove your answer by preparing the income statement.

PROBLEM 03. Contribution Margin, BEP, DOL Mark Company manufactures and sells a specialized in CPU. The company’s contribution format income statement for the most recent year is given below:

Sales (20,000 units) Variable expenses Contribution margin Fixed expenses Net operating income

Total $1,200,000 900,000 300,000 240,000 $ 60,000

Per Unit $60 45 $15

Percent of Sales_ 100 % ? % ? %

Management is anxious to increase the company’s profit and has asked for an analysis of a number of items.

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Required: 1. Compute the company’s CM ratio and variable expense ratio. 2. Compute the company’s break-even point in both units and sales dollars. 3. Assume that sales increase by $400,000 next year. If cost behavior patterns remain unchanged, by how much will the company’s net operating income increase? Use the CM ratio to compute your answer. 4. Refer to the original data. Assume that next year management wants the company to earn a profit of at least $90,000. How many units will have to be sold to meet this target profit? 5. Refer to the original data. Compute the company’s margin of safety in both dollar and percentage form. 6. a. Compute the company’s degree of operating leverage at the present level of sales. b. Assume that through a more intense effort by the sales staff, the company’s sales increase by 8% next year. By what percentage would you expect met operating income to increase? c. Verify your answer to (b) by preparing a new contribution format income statement showing an 8% increase in sales. 7. In an effort to increase sales and profits, management is considering the use of a higherquality keyboard. The higher-quality keyboard would increase costs by $3 per unit, but management could eliminate one quality inspector who is paid a salary of $30,000 per year. The sales manager estimates that the higher-quality speaker would increase annual sales by at least 20%. a. Assuming that changes are made as described above, prepare a projected contribution format income statement for next year. Show data on a total, per unit, and percentage basis. b. Compute the company’s new break-even point in both units and dollars of sales. c. Would you recommend that the changes be made?

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MODULE 3 PROFIT PLANNING AND FLEXIBLE BUDGETS VIDEO 01. Direct Materials Budget King Company produces multi-purpose wallet. The wallet needs two 15-cm2 cloth that cost $ 1.25 each. King has prepared a production budget for the pouch by quarters for 2020 and for the first quarter of 2021, as follows: Quarter 1 Budget production (in unit)

50,000

2020 Quarter2 Quarter 3 70,000

100,000

Quarter 4

2021 Quarter 1

110,000

60,000

The inventory of the material at the end of a quarter must be equal 10% of the following quarter’s production needs. Required: Prepare materials budget for the pouch, by quarter and in total for 2020, including the dollar amount of purchases for each quarter and for the year in total, if known beginning inventory for 2020 was 10,000 units.

VIDEO 02. Direct Labor Budget Refer to Problem 1, besides materials, each wallet produced by King Company requires (on average) 0.45 direct labor hours, and the average cost of direct labor is $15 per hour. Required: Prepare a direct labor budget, showing the hours needed and the direct labor cost for each quarter in total.

VIDEO 03. Manufacturing Overhead Budget Refer to Problem 1 and 2, King Company variable manufacturing overhead rate is $3.00 per direct laborhour and the company’s fixed manufacturing overhead (cash expenses) is $60,000 for the first quarter and increase 5% every quarter. The only non-cash expense included in the fixed overhead is depreciation of $20,000 for the first quarter and increase 2% every quarter. Required: 1. Construct company’s manufacturing overhead budget for the year. 2. Compute the company’s manufacturing overhead rates (variable, fixed and total) for the year. 3. Calculate the cash disbursement for manufacturing overhead in each quarter. Managerial Accounting (Accounting) | 9th Edition | 11

PROBLEM 01. Cash Budget Manuka Corporation sells some of its product on account. It has the following accounts receivable payment experience: Percent paid in the month of sale

25%

Percent paid in the month after the sale

40%

Percent paid in the second month after the sale

35%

To encourage payment in the month of sale, Manuka gives a 3 percent cash discount. Manuka’s anticipated sales for the next few months are as follows: April

$120,000

May

300,000

June

270,000

July

390,000

August

450,000

Required: Prepare a schedule of cash receipts for July and August.

PROBLEM 02. Cash Budget Mont Inc. provided the following information relating to cash payments: a. They purchased direct materials on account in the following moths: June

$170,000

July

140,000

August

165,000

b. Blanc pays 30 percent of direct materials payable in the month of purchase and the remaining 70 percent in the following month. c. In July, direct labor cost was $69,000. August direct labor cost was $75,000. The company finds that typically 95 percent of direct labor cost is paid in cash during the month, with the remainder paid in the following month. d. August overhead amounted to $167,000, including $10,000 of depreciation. e. The company had taken out a loan of $30,000 on May 1. Interest, due with payment of principal accrued at the rate of 9 percent per year. The loan and all interest were repaid on August 31. Required: Prepare a schedule of cash payments for Mont Company for the month of August.

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PROBLEM 03. Cash Budget Moon Corporation is a furniture company. The following data was gathered from Imagine to assist in the preparation of a cash budget for the fourth quarter of 2019. a. The projected sales and the projected direct material purchases. Month

Sales (in dollars)

Purchases (in kgs)

August

57,600

5,700

September

52,500

5,250

October

55,000

6,000

November

60,000

6,100

December

62,000

6,250

b. Each month, 30% of sales are for cash and the remaining (70%) are on credit. The collection pattern for credit sales is 28% in the month of sale, 21% in the following month, and 17,5% in the second month following the sale. The comp...