My Accounting Lab Homework PDF

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My accounting lab homework assignment - Module one...

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1-3 My Accounting Lab Homework Chapters 1 and 2 In this homework assignment, you will apply what you have learned in this week’s textbook reading. You have three attempts to answer each question. You must click the Check Answer button for each item to be scored. To complete this assignment, be sure to follow the applicable steps in the General Navigation Pearson MyLab video. Access this resource by going to the My Accounting Lab area under the course Table of Contents menu. Question 1 E1 – 17 Dell Computer incurs the following costs: Requirement Classify each of the cost items (a-h) into one of the business functions of the value chain.

Question 2 P1 – 29

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Consider the following series of independent situations in which a firm is about to make a strategic decision.

1-3 My Accounting Lab Homework

Requirement 2. For each decision, select what information the management accountant can provide about the source of competitive advantage for these firms. a. For Julian Phones decision to launch production and sale of a cell phone with standard features, management accountants can provide the following information: (Complete all answer boxes.)

Cost to manufacture and sell the cell phone Productivity, efficiency, and cost advantages relative to competition Prices of competitive cell phones Sensitivity of target customers to price and quality The production capacity of Julian Phones and its competitors How the market for cell phones with standard features is growing b. For Flint Computers decision to produce and sell a new home computer software package, management accountants can provide the following information: (Complete all answer boxes.)

Cost to develop, produce, and sell new software Premium price that customers would be willing to pay due to product uniqueness Price of basic software Price of closest competitive software Cash needed to develop, produce, and sell new software

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Cost of producing the "store-brand" facial cream Productivity, efficiency, and cost advantages relative to competition Prices of competitive products

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c. For Maria Cosmetics decision to provide a "store brand" facial cream that will be sold at discount retail stores, management accountants can provide the following information: (Complete all answer boxes.)

1-3 My Accounting Lab Homework Sensitivity of target customers to price and quality The production capacity of Maria Cosmetics and its competitors How the market for facial cream is growing d. For Jansen Computers decision to develop a special line of computers that can be both a tablet and a computer, management accountants can provide the following information: (Complete all answer boxes.)

Cost to produce and sell new line of tablet computers Cash available to develop, produce, and sell a new line of tablet computers Price of basic computer Price of closest competitive product Premium price that customers would be willing to pay due to product uniqueness Question 3 E2-24 Band Box Entertainment (BBE) operates a large store in Atlanta, Georgia. The store has both a movie (DVD) section and a music (CD) section. BBE reports revenues for the movie section separately from the music section. Requirement

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Classify each cost item (A-H) as follows: a. Direct or indirect (D or I) costs of the total number of DVDs sold. b. Variable or fixed (V or F) costs of how the total costs of the movie section change as the total number of DVDs sold changes. (If in doubt, select on the basis of whether the total costs will change substantially if there is a large change in the total number of DVDs sold.)

1-3 My Accounting Lab Homework

Question 4 E2 – 27 Ocean View Motors specializes in producing one specialty vehicle. It is called Surfer and is styled to easily fit multiple surfboards in its back area and top-mounted storage racks. Ocean View has the following manufacturing costs:

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(Click the icon to view the manufacturing costs.)

1-3 My Accounting Lab Homework

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Ocean View currently produces 220 vehicles per month.

1-3 My Accounting Lab Homework

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Requirement 3. What is the total manufacturing cost of each vehicle if 90 vehicles are produced each month? 215 vehicles? How do you explain the difference in the manufacturing cost per unit?

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The concept of relevant range is potentially relevant for both graphs. The question does not place restrictions on the unit variable costs. The relevant range for the total fixed costs is from 0 to 500 tires; 501 to 1000 tires; more than 1000 tires, and so on. Within these ranges, the total fixed costs do not change in total.

1-3 My Accounting Lab Homework Calculate the manufacturing cost of each vehicle (a) if 90 vehicles are produced each month and (b) if 215 vehicles are produced each month. (Round your answers to the nearest cent.)

A. 90 = (418,000 ÷ 90) = $4,644.44 + $2,200.00 = $6,844.44 B. 215 = (548,000 ÷ 215) = $2,548.837 + $2,200.00 = $4,748.84

Explain the difference in the unit-cost figures. The difference is caused by the fixed cost increment of $130,000 being spread over an increment of 125 vehicles and the fixed cost per unit is lower.

Question 5

E233 Each of the following cost items pertains to one of these companies: Best Buy (a merchandising-sector company), KitchenAid (a manufacturing-sector company), and HughesNet (a service-sector company):

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Cost of phones and computers available for sale in Best Buy 's electronics department Electricity used to provide lighting for assembly-line workers at a KitchenAid manufacturing plant Depreciation on HughesNet satellite equipment used to provide its services Electricity used to provide lighting for BestBuy's store aisles Wages for personnel responsible for quality testing of the KitchenAid products during the assembly process f. Salaries of BestBuy's marketing personnel planning local-newspaper advertising campaigns g. Perrier mineral water purchased by HughesNet for consumption by its software engineers a. b. c. d. e.

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(Click the icon to view the cost items.)

1-3 My Accounting Lab Homework

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h. Salaries of HughesNet area sales managers i. Depreciation on vehicles used to transport KitchenAid products to retail stores

1-3 My Accounting Lab Homework

Question 6

P234 The following data are for Michael Department Store. The account balances (in thousands) are for 2017. (Click the icon to view the account balances.)

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Requirements 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold. 2. Prepare the income statement for 2017.

$39,000 27,000 13,000 43,000 35,000 150,000 3,000 8,000 6,000 7,000 330,000

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Marketing, distribution, and customer-service costs Merchandise inventory, January 1, 2017 Utilities General and administrative costs Merchandise inventory, December 31, 2017 Purchases Miscellaneous costs Transportation-in Purchase returns and allowances Purchase discounts Revenues

1-3 My Accounting Lab Homework Requirement 1. Compute (a) the cost of goods purchased and (b) the cost of goods sold. (a) Calculate the cost of goods purchased by completing the schedule. (If a box is not used in the schedule, leave the box empty; do not select a label or enter a zero.)

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Michael Department Store Income Statement For the Year Ended December 31, 2017 (in thousands)

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Michael Department Store Schedule of Cost of Goods Purchased For the Year Ended December 31, 2017 (in thousands)

1-3 My Accounting Lab Homework

Question 7

P236 Choice Plastics' selected data for May 2017 are presented here (in millions): $115

Direct materials inventory 5/1/2017 Direct materials purchased

335

Direct materials used

395

Total manufacturing overhead costs

480 245

Variable manufacturing overhead costs

1,590

Total manufacturing costs incurred during May 2017

235

Work-in-process inventory 5/1/2017

1,660

Cost of goods manufactured

155

Finished goods inventory 5/1/2017

1,740

Cost of goods sold

Direct materials purchased Direct materials available for production

$115 335 450

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Direct materials inventory 5/1/2017

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Requirement 1. Calculate the cost of direct materials inventory 5/31/2017.

1-3 My Accounting Lab Homework Direct materials used Direct materials inventory 5/31/2017

(395) $55

Requirement 2. Calculate the fixed manufacturing overhead costs for May 2017. The fixed manufacturing overhead costs for May 2017 are $ 235. Requirement 3. Calculate the direct manufacturing labor costs for May 2017.

Total manufacturing costs incurred Less: Direct materials used Total manufacturing overhead costs Direct manufacturing labor costs for May

$1,590 (395) (480) $715

Requirement 4. Calculate the cost of work-in-process inventory 5/31/2017.

Work-in-process inventory 5/1/2017 Total manufacturing costs incurred Work-in-process available for production Cost of goods manufactured Work-in-process inventory 5/31/2017

$235 1,590 1,825 (1,660) $165

Requirement 5. Calculate the cost of finished goods available for sale in May 2017.

Finished goods inventory 5/1/2017 Cost of goods manufactured Finished goods available for sale in May

$155 1,660 $1,815

Requirement 6. Calculate the cost of finished goods inventory 5/31/2017.

Finished goods available for sale in May Cost of goods sold Finished goods inventory 5/31/2017

$1,815 (1,740) $75

Question 8

(Click the icon to view the account balances.)

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Consider the following account balances (in thousands) for the Peterson Company:

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P237

1-3 My Accounting Lab Homework Dat aTabl e

Beginning of End of 2017 2017 23,000 25,000 21,000 20,000 13,000 22,000 71,000 27,000 15,000 8,000 11,000 3,000

Peterson Company Direct materials inventory Work-in-process inventory Finished-goods inventory Purchases of direct materials Direct manufacturing labor Indirect manufacturing labor Plant insurance Depreciation—plant, building, and equipment Repairs and maintenance—plant Marketing, distribution, and customer-service costs General and administrative costs

90,000 29,000

Requirements 1. Prepare a schedule for the cost of goods manufactured for 2017. 2. Revenues for 2017 were $290 million. Prepare the income statement for 2017. Requirement 1. Prepare a schedule for the cost of goods manufactured for 2017. Begin by preparing the schedule of cost of goods manufactured (in thousands). Start with the direct materials and labor costs, then indirect manufacturing costs, and complete the schedule by calculating cost of goods manufactured.

Peterson Company Schedule of Cost of Goods Manufactured

Ending inventory, Dec. 31, 2017 Direct materials used Direct manufacturing labor Indirect manufacturing costs:

94,000 25,000 $69,000 27,000

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Cost of direct materials available for use

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For the Year Ended December 31, 2017 (in thousands) Direct materials: Beginning inventory, Jan. 1, 2017 $23,000 71,000 Purchases of direct materials

1-3 My Accounting Lab Homework Indirect manufacturing labor Plant insurance Depreciation—plant, building, and equipment Repairs and maintenance—plant

$15,000 8,000 11,000 3,000

Total indirect manufacturing costs Manufacturing costs incurred during 2017 Beginning work-in-process inventory, Jan. 1, 2017 Total manufacturing costs to account for Ending work-in-process inventory, Dec. 31, 2017 Cost of goods manufactured

37,000 133,000 21,000 154,000 20,000 $134,000

Requirement 2. Revenues for 2017 were $290 million. Prepare the income statement for 2017. (Use parentheses or a minus sign for operating losses.)

Peterson Company Income Statement For the Year Ended December 31, 2017 (in thousands) Revenues Cost of goods sold: Beginning finished goods, Jan. 1, 2017 $13,000 134,000 Cost of goods manufactured Cost of goods available for sale Ending finished goods, Dec. 31, 2017 Cost of goods sold Gross margin Operating costs: Marketing, distribution, and customer-service costs General and administrative costs

$290,000

147,000 22,000 125,000 165,000 90,000 29,000

Total operating costs Operating income/(loss)

119,000 $46,000

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The following items (in millions) pertain to Chan Corporation: (Click the icon to view the items.)

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Question 9

1-3 My Accounting Lab Homework Dat aTabl e For Specific Date Work-in-process inventory, Jan. 1, 2017 Direct materials inventory, Dec. 31, 2017 Finished goods inventory, Dec. 31, 2017 Accounts payable, Dec. 31, 2017 Accounts receivable, Jan. 1, 2017 Work-in-process inventory, Dec. 31, 2017 Finished goods inventory, Jan 1, 2017 Accounts receivable, Dec. 31, 2017 Accounts payable, Jan. 1, 2017 Direct materials inventory, Jan. 1, 2017

For Year 2017 $13 7

Plant utilities

$5

Indirect manufacturing labor

20

18

Depreciation—plant and equipment

26

Revenues Miscellaneous manufacturing overhead Marketing, distribution, and customer-service costs

51 6

4 354 17 98

47

Direct materials purchased

87

31

Direct manufacturing labor

39

42

Plant supplies used

8

36

Property taxes on plant

1

(Click the icon to view the partial schedule of cost of goods manufactured.)

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Partial Schedule of Cost of Goods Manufactured (in millions) Direct materials used $116 Direct manufacturing labor costs 39 55 Total indirect manufacturing overhead costs Manufacturing costs incurred during 2017 210

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Ref er ence

1-3 My Accounting Lab Homework Add: Beginning work-in-process inventory, Jan. 1, 2017 Total manufacturing costs to account for Less: Ending work-in-process inventory, Dec. 31, 2017 Cost of goods manufactured

13 223 6 $217

Chan's manufacturing costing system uses a three-part classification of direct materials, direct manufacturing labor, and manufacturing overhead costs.

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Requi r ement s 1. Calculate total prime costs and total conversion costs. 2. Calculate total inventoriable costs and period costs. 3. Design costs and R&D costs are not considered product costs for financial statement purposes. When might some of these costs be regarded as product costs? Give an example. 4. Suppose that both the direct materials used and the depreciation on plant and equipment are related to the manufacture of 1 million units of product. Determine the unit cost for the direct materials assigned to those units and the unit cost for depreciation on plant and equipment. Assume that yearly depreciation is computed on a straight-line basis. 5. Assume that the implied cost-behavior patterns in requirement 4 persist. That is, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a fixed cost. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product. Determine the effect on total costs. 6. Assume that depreciation on the equipment (but not the plant) is computed based on the number of units produced because the equipment deteriorates with units produced. The depreciation rate on equipment is $8.00 per unit. Calculate the depreciation on equipment assuming (a) 1 million units of product are produced and (b) 2 million units of product are produced.

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Read the requirements

1-3 My Accounting Lab Homework Requirement 1. Calculate total prime costs and total conversion costs. Total prime costs $155 Million = (116 + 39) Total conversion costs $94 Million = (39 + 55)

Requirement 2. Calculate total inventoriable costs and period costs. Manufacturing costs incurred during Total inventoriable costs $210 2017 Million (Marketing, distribution & customer Period costs $98 Serv. Cots.)

Requirement 4. Suppose that both the direct materials used and the depreciation on plant and equipment are related to the manufacture of 1 million units of product. Determine the unit cost for the direct materials assigned to those units and the unit cost for depreciation on plant and equipment. Assume that yearly depreciation is computed on a straight-line basis. Begin by determining the formula used to calculate the unit cost for direct materials.

Direct materials used

÷

Units

= Unit cost

Now calculate the unit cost for direct materials and the unit cost for depreciation on plant and equipment. Use the same logic that you used in determining the formula for direct materials unit cost, when you calculate the depreciation unit cost. (Enter unit cost in dollars. Round your answers to the nearest cent.)

Direct materials used unit cost Depreciation unit cost

$116.00 = (116 ÷ 1) $4.00 = (4 ÷ 1)

Direct materials used unit cost Depreciation unit cost

$116.00 (116 ÷ 1) $2.00 (4 ÷ 2)

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Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product. (Enter unit cost in dollars. Round your answers to the nearest cent.)

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Requirement 5. Assume that the implied cost-behavior patterns in requirement 4 persist. That is, direct material costs behave as a variable cost and depreciation on plant and equipment behaves as a fixed cost. Repeat the computations in requirement 4, assuming that the costs are being predicted for the manufacture of 2 million units of product. Determine the effect on total costs.

1-3 My Accounting Lab Homework

Requirement 6. Assume that depreciation on the equipment (but not the plant) is computed based on the number of units produced because the equipment deteriorates with units produced. The depreciation rate on equipment is $8.00 per unit. Calculate the depreciation on equipment assuming (a) 1 million units of product are produced and (b) 2 million units of product are produced. Begin by determining the formula used to calculate the depreciation on equipment.

Calculate the depreciation on equipment assuming: (Do not round intermediary calculations. Enter answers in millions rounded to two decimal places, $X.XX million.)

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million.

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(b) 2 million units of product are produced, the depreciation would then be $

million.

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(a) 1 million units of product are produced, the depreciation would be $ $8...