Seminar assignments - Questions for chapters 2, 3, 6-12 PDF

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questions for chapters 2, 3, 6-12...

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Chapter 2 Homework Assignments

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Cherokee Inc. is a merchandiser that provided the following information:

Number of units sold Selling price per unit Variable selling expense per unit Variable administrative expense per unit Total fixed selling expense Total fixed administrative expense Beginning merchandise inventory Ending merchandise inventory Merchandise purchases

$ $ $ $ $ $ $ $

11,000 15.00 2.00 1.50 20,000 14,000 9,000 26,000 89,000

Required: 1. Prepare a traditional income statement.

CHEROKEE, INC. Traditional Income Statement $

Sales

165,000

Cost of goods sold

72,000

Gross margin

93,000

Selling and administrative expenses: Selling expenses

42,000

Administrative expenses

30,500

72,500 Net operating income

2. Prepare a contribution format income statement.

$

20,500

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CHEROKEE, INC. Contribution Format Income Statement Sales

$

165,000

Variable expenses: Cost of goods sold

$

72,000

Administrative expenses

16,500

Selling expenses

22,000

110,500 Contribution margin

54,500

Fixed expenses: Administrative expenses

14,000

Selling expenses

20,000

34,000 Net operating income

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$

20,500

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Chapter 2 Homework Assignments

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The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel's business is highly seasonal, with peaks occurring during the ski season and in the summer.

Month January February March April May June July August September October November December

OccupancyDays 3,350 3,610 1,680 1,230 4,380 1,690 4,130 4,250 1,950 2,140 1,480 2,710

Electrical Costs $ 9,241 $ 9,666 $ 5,208 $ 3,813 $ 10,428 $ 5,239 $ 10,058 $ 10,125 $ 6,045 $ 6,634 $ 4,588 $ 7,829

Required: 1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. (Do not round your intermediate calculations. Round your Variable cost answer to 2 decimal places and Fixed cost element answer to nearest whole dollar amount)

Occupancy

Electrical

Days

Costs

High activity level

4,380 $

Low activity level

1,230

3,813

Change

3,150 $

6,615

Variable cost

$

Fixed cost element

$

10,428

2.10 per occupancy-day 1,230

2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month? (You may select more than one answer. Single click the box with the question mark to produce a check mark for a correct answer and double click the box with the question mark to empty the box for a wrong answer.) Seasonal factors like winter or summer. Systematic factors like guests, switching off fans and lights. Number of days present in a month. Income taxes paid on hotel income.

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Chapter 2 Homework Assignments

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The Dorilane Company specializes in producing a set of wood patio furniture consisting of a table and four chairs. The set enjoys great popularity, and the company has ample orders to keep production going at its full capacity of 2,000 sets per year. Annual cost data at full capacity follow:

Direct labor Advertising Factory supervision Property taxes, factory building Sales commissions Insurance, factory Depreciation, administrative office equipment Lease cost, factory equipment Indirect materials, factory Depreciation, factory building Administrative office supplies (billing) Administrative office salaries Direct materials used (wood, bolts, etc.) Utilities, factory

$ 118,000 $ 50,000 $ 40,000 $ 3,500 $ 80,000 $ 2,500 $ 4,000 $ 12,000 $ 6,000 $ 10,000 $ 3,000 $ 60,000 $ 94,000 $ 20,000

Required: 1. Enter the dollar amount of each cost item under the appropriate headings. Note that each cost item is classified in two ways: first, as variable or fixed with respect to the number of units produced and sold; and second, as a selling and administrative cost or a product cost. (If the item is a product cost, it should also be classified as either direct or indirect.) (If your answer is zero, leave the cell blank.) Period (Selling or Administrative)

Cost Behavior Cost Item Direct labor

Variable $

Fixed

Direct $

50,000

Factory supervision

40,000

80,000

118,000 40,000

2,500

Depreciation, administrative office equipment

4,000

Indirect materials, factory

3,500 80,000

Insurance, factory Lease cost, factory equipment

2,500 4,000

12,000

12,000

10,000

10,000

6,000

Depreciation, factory building Administrative office supplies (billing)

6,000

3,000

Administrative office salaries

3,000 60,000

Direct materials used (wood, bolts, etc.)

94,000

Utilities, factory

20,000 $

321,000 $

2. Compute the average product cost of one patio set.

Indirect

50,000

3,500

Sales commissions

Total costs

Cost

118,000

Advertising Property taxes, factory building

Product Cost

60,000 94,000 20,000

182,000 $

197,000 $

212,000 $

94,000

Chapter 2 Homework Assignments

Average product cost

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$

153 per set

3. Assume that production drops to only 1,000 sets annually. Would you expect the average product cost per set to increase, decrease, or remain unchanged? Increase Decrease Remain unchanged

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Worksheet

Learning Objective: 02-01 Understand cost classifications used for assigning costs to cost objects: direct costs and indirect costs.

Learning Objective: 02-03 Understand cost classifications used to prepare financial statements: product costs and period costs.

Difficulty: 2 Medium

Learning Objective: 02-02 Identify and give examples of each of the three basic manufacturing cost categories.

Learning Objective: 02-04 Understand cost classifications used to predict cost behavior: variable costs, fixed costs, and mixed costs.

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Chapter 3 Homework Assignments

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Last month when Holiday Creations, Inc., sold 39,000 units, total sales were $303,000, total variable expenses were $254,520, and fixed expenses were $39,200. Required: 1. What is the company’s contribution margin (CM) ratio?

Contribution margin ratio

16 %

2. Estimate the change in the company’s net operating income if it were to increase its total sales by $1,200.

Estimated change in net operating income

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$

192

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Chapter 3 Homework Assignments

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Miller Company’s most recent contribution format income statement is shown below:

Sales (37,000 units) Variable expenses

Total $222,000 111,000

Per Unit $6.00 3.00

Contribution margin

111,000

$3.00

Fixed expenses

46,000

Net operating income

$ 65,000

Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 18%.

Miller Company Contribution Income Statement Total Sales

$

261,960 $

Per Unit 6.00

Variable expenses

130,980

3.00

Contribution margin

130,980 $

3.00

Fixed expenses Net operating income

46,000 $

84,980

2. The selling price decreases by $1.30 per unit, and the number of units sold increases by 17%.

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Miller Company Contribution Income Statement Total $

Sales Variable expenses

Per Unit

203,463 $

4.70

129,870

3.00 1.70

73,593 $

Contribution margin Fixed expenses

46,000

Net operating income

$

27,593

3. The selling price increases by $1.30 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 7%.

Miller Company Contribution Income Statement Total $

Per Unit

251,193 $

7.30

Variable expenses

103,230

3.00

Contribution margin

147,963 $

4.30

Sales

Fixed expenses

52,000 $

Net operating income

95,963

4. The selling price increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 11%.

Miller Company Contribution Income Statement Total Sales

$

237,096 $

Per Unit 7.20

Variable expenses

105,376

3.20

Contribution margin

131,720 $

4.00

Fixed expenses

46,000

Net operating income

85,720

rev: 06_08_2016_QC_CS-53206

$

Chapter 3 Homework Assignments

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Difficulty: 1 Easy

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Learning Objective: 03-04 Show the effects on net operating income of changes in variable costs, fixed costs, selling price, and volume.

Learning Objective: 03-01 Explain how changes in activity affect contribution margin and net operating income.

Chapter 3 Homework Assignments

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Mauro Products distributes a single product, a woven basket whose selling price is $15 and whose variable expense is $13.35 per unit. The company’s monthly fixed expense is $2,970. Required: 1. Solve for the company’s break-even point in unit sales using the equation method. (Do not round your intermediate calculations.)

Break-even point in unit sales

1,800 basket

2. Solve for the company’s break-even point in dollar sales using the equation method and the CM ratio. (Do not round intermediate calculations. Round "CM ratio percent" to nearest whole percent.)

CM ratio Break-even point in dollar sales $

11 % 27,000

3. Solve for the company’s break-even point in unit sales using the formula method. (Do not round your intermediate calculations.)

Break-even point in unit sales

1,800 baskets

4. Solve for the company’s break-even point in dollar sales using the formula method and the CM ratio. (Do not round intermediate calculations. Round "CM ratio percent" to nearest whole percent.)

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CM ratio

11

Break-even point in dollar sales $

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Chapter 3 Homework Assignments

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2. Using the formula method, determine for the unit sales that are required to earn a target profit of $9,300. (Round your answer to the nearest whole number.)

Unit sales

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Chapter 6 Homework Assignment

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SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service, and Other. The activity measures are miles for the Travel cost pool, number of pickups and deliveries for the Pickup and Delivery cost pool, and number of customers for the Customer Service cost pool. The Other cost pool has no activity measure because it is an organizationsustaining activity. The following costs will be assigned using the activity-based costing system:

Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses

$

Total cost

$

1,040,000 470,000 350,000 380,000 240,000 540,000 3,020,000

The distribution of resource consumption across the activity cost pools is as follows:

Travel 50 % 70 % 60 % 0 % 0 % 0 %

Driver and guard wages Vehicle operating expense Vehicle depreciation Customer representative salaries and expenses Office expenses Administrative expenses

Pickup and Delivery 35 % 5 % 15 % 0 % 20 % 5 %

Customer Service 10 % 0 % 0 % 90 % 30 % 60 %

Other 5 % 25 % 25 % 10 % 50 % 35 %

Totals 100 % 100 % 100 % 100 % 100 % 100 %

Required: Complete the first stage allocations of costs to activity cost pools.

Travel Driver and guard wages

$

520,000 $

Pickup and

Customer

Delivery

Service

364,000 $

Other

104,000 $

52,000 $

Totals 1,040,000

Vehicle operating expense

329,000

23,500

0

117,500

470,000

Vehicle depreciation

210,000

52,500

0

87,500

350,000

Customer representative salaries and expenses

0

0

342,000

38,000

380,000

Office expenses

0

48,000

72,000

120,000

240,000

Administrative expenses Total cost

rev: 07_04_2014_QC_51095

0 $

1,059,000 $

27,000 515,000 $

324,000

189,000

842,000 $

604,000 $

540,000 3,020,000

Chapter 6 Homework Assignment

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Chapter 6 Homework Assignment

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Klumper Corporation is a diversified manufacturer of industrial goods. The company’s activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Supporting direct labor Machine processing Machine setups Production orders Shipments Product sustaining

Activity Rates $ 7.00 per direct labor-hour $ 3.00 per machine-hour $ 40.00 per setup $ 150.00 per order $ 120.00 per shipment 750.00

per product

Activity data have been supplied for the following two products:

Number of units produced per year Direct labor-hours Machine-hours Machine setups Production orders Shipments Product sustaining

Total Expected Activity K425 M67 200 2,000 925 40 2,200 30 13 1 13 1 26 1 1 1

Required: Determine the total overhead cost that would be assigned to each of the products listed above in the activity-based costing system.

Chapter 6 Homework Assignment

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Noreen: Managerial Accounting ACCT2112.51 Summer 2016

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Assignment: Chapter 5 Homework Assignments

Attempt 1 (of 1)

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Denton Company manufactures and sells a single product. Cost data for the product are given below:

Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead Variable selling and administrative Total variable cost per unit Fixed costs per month: Fixed manufacturing overhead Fixed selling and administrative Total fixed cost per month

$

$

5 11 3 1 20

$ 90,000 175,000 $ 265,000

The product sells for $54 per unit. Production and sales data for July and August, the first two months of operations, are as follows:

July August

Units Produced $ 18,000 18,000

Units Sold $ 14,000 22,000

The company’s Accounting Department has prepared absorption costing income statements for July and August as presented below: July $ 756,000 336,000 $ 420,000 189,000 $ 231,000

Sales Cost of goods sold Gross margin Selling and administrative expenses Net operating income

August $1,188,000 528,000 $ 660,000 197,000 $ 463,000

Required: 1. Determine the unit product cost under absorption costing and variable costing.

a.

Absorption costing

Unit Product Cost 24 $

b.

Variable costi...