...BMGT 321 Chapter 6 Homework Click Link Below To Buy: http://hwaid.com/shop/bmgt-321-chapter-6-homework/ MASTER BUDGET AND RESPONSIBILITY ACCOUNTING Problem Solutions 6-16 (15 min.) Sales budget, service setting. In 2014, Rouse & Sons, a small environmental-testing firm, performed 12,200 radon tests for $290 each and 16,400 lead tests for $240 each. Because newer homes are being built with lead-free pipes, lead-testing volume is expected to decrease by 10% next year. However, awareness of radon-related health hazards is expected to result in a 6% increase in radon-test volume each year in the near future. Jim Rouse feels that if he lowers his price for lead testing to $230 per test, he will have to face only a 7% decline in lead-test sales in 2015. Required: 1. Prepare a 2015 sales budget for Rouse & Sons assuming that Rouse holds prices at 2014 levels. 2. Prepare a 2015 sales budget for Rouse & Sons assuming that Rouse lowers the price of a lead test to $230. Should Rouse lower the price of a lead test in 2015 if the company’s goal is to maximize sales revenue? 6-17 (5 min.) Sales and production budget. The McKnight Company expects sales in 2015 of 208,000 units of serving trays. McKnight’s beginning inventory for 2015 is 18,000 trays, and its target ending inventory is 27,000 trays. Compute the number of trays budgeted for production in 2015. 6-18 (5 min.) Direct materials purchases budget. Inglenook Co. produces wine. The company expects...
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...BMGT 321 Chapter 4 Homework Click Link Below To Buy: http://hwaid.com/shop/bmgt-321-chapter-4-homework/ Solutions to In-Class Problems 4-18 (20 -30 min.) Job costing, normal and actual costing. Anderson Construction assembles residential houses. It uses a job-costing system with two direct-cost categories (direct materials and direct labor) and one indirect-cost pool (assembly support). Direct labor-hours is the allocation base for assembly support costs. In December 2013, Anderson budgets 2014 assembly-support costs to be $8,000,000 and 2014 direct labor- hours to be 160,000. At the end of 2014, Anderson is comparing the costs of several jobs that were started and completed in 2014. Laguna Model Mission Model Construction period Direct material costs Feb–June 2014 $106,650 May–Oct 2014 $127,970 Direct labor costs $ 36,276 $ 41,750 Direct labor-hours 920 1,040 Direct materials and direct labor are paid for on a contract basis. The costs of each are known when direct materials are used or when direct labor-hours are worked. The 2014 actual assembly-support costs were $7,614,000, and the actual direct labor-hours were 162,000. Required: 1. Compute the (a) budgeted indirect-cost rate and (b) actual indirect-cost rate. Why do they differ? 2. What are the job costs of the Laguna Model and the Mission Model using (a) normal costing and (b) actual costing? 3. Why might Anderson Construction prefer normal costing over actual...
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...BMGT 321 Chapter 5 Homework Click Link Below To Buy: http://hwaid.com/shop/bmgt-321-chapter-5-homework/ ACTIVITY-BASED COSTING AND ACTIVITY-BASED MANAGEMENT 5-16 (20 min.) Cost hierarchy. Forrester, Inc., manufactures karaoke machines for several well-known companies. The machines differ significantly in their complexity and their manufacturing batch sizes. The following costs were incurred in 2014: a. Indirect manufacturing labor costs such as supervision that supports direct manufacturing labor, $825,000 b. Procurement costs of placing purchase orders, receiving materials, and paying suppliers related to the number of purchase orders placed, $525,000 c. Cost of indirect materials, $160,000 d. Costs incurred to set up machines each time a different product needs to be manufactured, $365,000 e. Designing processes, drawing process charts, and making engineering process changes for products, $287,500 f. Machine-related overhead costs such as depreciation, maintenance, and production engineering, $950,000 (These resources relate to the activity of running the machines.) g. Plant management, plant rent, and plant insurance, $512,000 Required: 1. Classify each of the preceding costs as output unit–level, batch-level, product-sustaining, or facility- sustaining. Explain each answer. 2. Consider two types of karaoke machines made by Forrester, Inc. One machine, designed for professional use, is complex to make and is produced in many batches. The...
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...BMGT 321 Chapter 11 Homework Click Link Below To Buy: http://hwaid.com/shop/bmgt-321-chapter-11-homework/ DECISION MAKING AND RELEVANT INFORMATION 11-16 Disposal of assets. Answer the following questions. 1. A company has an inventory of 1,250 assorted parts for a line of missiles that has been discontinued. The inventory cost is $76,000. The parts can be either (a) remachined at total additional costs of $26,500 and then sold for $33,500 or (b) sold as scrap for $2,500. Which action is more profitable? Show your calculations. 2. A truck, costing $100,500 and uninsured, is wrecked its first day in use. It can be either (a) disposed of for $18,000 cash and replaced with a similar truck costing $103,000 or (b) rebuilt for $88,500 and thus be brand-new as far as operating characteristics and looks are concerned. Which action is less costly? Show your calculations. 11-17 Relevant and irrelevant costs. Answer the following questions. 1. DeCesare Computers makes 5,200 units of a circuit board, CB76, at a cost of $280 each. Variable cost per unit is $190 and fixed cost per unit is $90. Peach Electronics offers to supply 5,200 units of CB76 for $260. If DeCesare buys from Peach it will be able to save $10 per unit in fixed costs but continue to incur the remaining $80 per unit. Should DeCesare accept Peach’s offer? Explain. 2. LN Manufacturing is deciding whether to keep or replace an old machine. It obtains the following information: LN Manufacturing...
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...BMGT 321 Chapter 13 Homework Click Link Below To Buy: http://hwaid.com/shop/bmgt-321-chapter-13-homework/ Solutions to In Class Homework Assignments 13-16 Value-added, nonvalue-added costs. The Magill Repair Shop repairs and services machine tools. A summary of its costs (by activity) for 2013 is as follows: Required: 1. Classify each cost as value-added, non-value-added, or in the gray area between. 2. For any cost classified in the gray area, assume 60% is value-added and 40% is non-value-added. How much of the total of all seven costs is value-added and how much is non-value-added? 3. Magill is considering the following changes: (a) introducing quality-improvement programs whose net effect will be to reduce rework and expediting costs by 40% and materials and labor costs for servicing machine tools by 5%; (b) working with suppliers to reduce materials-procurement and inspection costs by 20% and materials-handling costs by 30%; and (c) increasing preventive-maintenance costs by 70% to reduce breakdown-maintenance costs by 50%. Calculate the effect of programs (a), (b), and (c) on value-added costs, non-value-added costs, and total costs. Comment briefly. 3. Effect on Costs Classified as Program Value-Added Nonvalue-Added Gray Area (a) Quality improvement programs to • reduce rework costs by 40% (0.40 $90,000) • reduce expediting costs by 40% (0.40 $65,000) • reduce materials and labor costs by 5% (0.05 $1,100,000) ...
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