Week 3 Assignment
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Feb 20, 2024
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Uploaded by MasterSummerLoris33
Ronni Harker
January 28, 2024
ACC-202
3-2 Assignment: Costing Methods
Company Overview:
The company that I have selected for this assignment is Walmart. Walmart is one of the largest retailers in the world. Walmart offers its customers access to in person shopping as well as
online ordering and other features including grocery delivery. Walmart has collaborated with multiple manufacturers over the years. Partnerships are essential for Walmart to continue selling their vast variety of products. Walmart has over 10,200 stores and employes nearly 2.1 million people globally. This company thrives on its motto of “Every Day Low Prices”. Low prices have always been an integral part of Walmart’s ongoing business strategy. As of December of 2023, Walmart’s revenue stood at a staggering $611 billion dollars.
Costing Methods:
Costing methods in an approach or style adopted by an organization to collect cost data in
a more appropriate manner. Job costing is the approach to style in which was adopted by an organization to collect cost data where cost units are able to be identified separately and assigned
cost on an individual basis. Walmart collects information from its stores, sales, and purchases through a centralized accounting information software that is connected and used in each and every store. Walmart uses the costing methods “Last in First Out” (LIFO) and “First in First Out”
(FIFO). LIFO is a costing method used to calculate weight cost on US Products and FIFO is used
for international Products. Factory Overhead:
Walmart’s largest overhead cost is their direct labor. In the United States alone Walmart employs 1.6 million. Walmart uses the activity-based costing (ABC) to recognize a total cost view of the company. By using the ABC System this gives Walmart the ability to reduce overhead costs and cost determinants since Walmart’s overhead costs are not spread evenly throughout all of its departments and products. Using this method allows Walmart to accomplish higher profit margins. Recommendations:
Automation is the cost saving method that would benefit Walmart. An example of a company that uses automation effectively that most of the world is familiar with is Amazon. If Walmart were to being using automation they would benefit mostly in its distribution centers by increasing productivity and lowering labor costs.
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Related Questions
Problem Set 1The Carisole Company is involved in the manufacturing and sale of its unique sandal.Carisole's interplay of costs and production capacity prompts an analysis that will guide it innavigating the balance between revenue generation and cost management. As you analyseCarisole's scenario, critical financial data emerges laying the foundation for strategicdecision-making.The Carisole Company produces its sandal that sells for $70 per pair. Operating income for2023 is as follows:Sales revenue ($70 per pair) $350,000Variable cost ($30 per pair) 150,000Contribution margin 200,000Fixed cost 100,000Operating income $100,000Carisole Company would like to increase its profitability over the next year by at least 25%.To do so, the company is considering the following options: 1. Replace a portion of its variable labour with an automated machining process. Thiswould result in a 20% decrease in variable cost per unit but a 15% increase in fixed costs.Sales would remain the same. 2. Spend…
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Problems 5.1-5.3 relate to Goods and Services Selection
the life cycle, identify a reasonable operations strategy for
each:
... 5.1
ing products, and given the position in its life cycle, identify the
issues likely to confront the operations manager and his or her
possible actions. Product Alpha has annual sales of 1,000 units
and a contribution of $2,500; it is in the introductory stage.
Prepare a product-by-value analysis for the follow-
COMPANY
CONTRIBUTION
(%: TOTAL ANNUAL
CONTRIBUTION
PRODUCT
CONTRIBUTION
(% OF SELLING
PRICE)
DIVIDED BY TOTAL
ANNUAL SALES)
POSITION IN
LIFE CYCLE
Product Bravo has annual sales of 1,500 units and a contribu-
PRODUCT
tion of $3,0003; it is in the growth stage. Product Charlie has
annual sales of 3,500 units and a contribution of $1,750; it is in
the decline stage.
Smart watch
30
40
Introduction
Tablet
30
50
Growth
Hand
calculator
• 5.2
Given the contribution made on each of the
50
10
Decline
three products in the following table and their position in
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QUESTION #1
Health-Tex produces an impressive line of safety masks. The company has established the
following selling and distribution support activity-cost pools and corresponding activity drivers:
Activity
Marketing
Customer service
Order execution
Warehousing
Cost
$30,000
10,000
5,000
5,000
Cost driver
$500,000 of sales
5,000 customer
100 orders
50 product lines
Required:
1. Determine the activity-cost-driver rate for each of the four selling and distribution activities.
2. If you were the accountant, how would you select the cost drivers for activity-based costing?
3. Explain how activity-based costing systems may provide more accurate product costs than
traditional cost systems.
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Question content area top Part 1 Red Rose Manufacturers Inc. is approached by a potential customer to fulfill a onetimeonly special order for a product similar to one offered to domestic customers. The company has excess capacity. The following per unit data apply for sales to regular customers:
Variable costs:
Direct materials
$120
Direct labor
100
Manufacturing support
115
Marketing costs
85
Fixed costs:
Manufacturing support
155
Marketing costs
55
Total costs
630
Markup (40%)
252
Targeted selling price
$882
What is the full cost of the product per unit?
A. $420 B. $252 C. $882 D. $630
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View Policies
Current Attempt in Progress
E-Flix rents DVDS that are mailed out to customers upon demand. E-Flix has identified three activities involved in getting the videos to its
customers. Information on those activities for the month of July follows:
Estimated
Expected Use of
Cost Drivers
Cost Pools
Cost Drivers
Overhead Cost
Order taking costs
Number of orders
$20,592
187,200 orders
Technology support
Number of minutes
$11,700
234,000 minutes
Picking and shipping
Number of DVDS
$39,624
330,200 DVDS
costs
During July, the Tucker family placed 17 orders consisting of 21 DVDs. Tucker required 7 minutes of tech support. Customers pay $9.00 per
month to rent unlimited DVDS. Using ABC, how much overhead is applied to the Tucker family account for order taking costs?
O $4.74
O $2.52
O $1.871
O $6.45
Submit Answer
Save for Later
Attempts: 0 of 1 used
2:27 PM
10/13/20
e
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Your Question:
Question 1 – Case Study
Alpha Homes is a private limited company involved in specialist home improvements, with two (2) main products. These are: Garage Conversions (GC) and Extension to Properties (EX). Alpha Homes currently implements the full-costing absorption method in providing price quotes to customers. The company seeks to remain competitive and has an existing policy to price all jobs at budgeted total costs plus 50%.
You are the new management accountant, and currently reviewing the cost records, for materials, labour and overheads.
Table 1 indicates the expected costs of jobs in both product areas:
Cost subheads
Garage Conversion (GC)
Extension to property (EX)
Prices quotes (£)
Units
10,000
25,000
Construction Materials (£)
3,500
8,000
Labour
5,500
6,500
Fixed overheads (£)
1,000
2,000
Variable overheads (£)
1,000
4,000
Table 2 below indicates the expected annual overhead cost for the overall business.
overhead category (cost Pools)…
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Question Content Area
needing anwser to #2B
Mastery Problem: Cost-Volume-Profit Analysis
Question Content Area
Cost Behavior
Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow.
UnitsProduced
TotalLumberCost
TotalUtilitiesCost
Total MachineDepreciationCost
7,000 shelves
$84,000
$9,550
$140,000
14,000 shelves
168,000
17,600
140,000
28,000 shelves
336,000
33,700
140,000
35,000 shelves
420,000
41,750
140,000
1. Determine whether the costs in the table are variable, fixed, mixed, or none of these.
Lumber
Utilities
Depreciation
2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total…
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Please help me with all answers thanku
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PLS HELP ASAP @@
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Question 18
View Policies
Current Attempt in Progress
E-Flix rents DVDS that are mailed out to customers upon demand. E-Flix has identified three activities involved in getting the videos to its
customers. Information on those activities for the month of July follows:
Estimated
Expected Use of
Cost Drivers
Cost Pools
Cost Drivers
Overhead Cost
Order taking costs
Number of orders
$20,592
187,200 orders
Technology support
Number of minutes
$11,700
234,000 minutes
Picking and shipping
Number of DVDS
$39,624
330,200 DVDS
costs
During July, the Tucker family placed 17 orders consisting of 21 DVDS. Tucker required 7 minutes of tech support. Customers pay $9.00 per
month to rent unlimited DVDS. Using ABC, how much overhead is applied to the Tucker family account for technology support?
O Some other answer
O $1.87
O $0.05
o$0.35
2:28 P
)
10/13/23
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Alicia WongAlicia Wong, Corporate Supply Manager, Thain Foods Limited, wanted to prepare a proposal to manufacture mustardin-house. Mustard, an important ingredient in many of thecompany’s products, was currently purchased from an outside supplier. She hoped a comprehensive proposal could beprepared in one-month’s time for the CEO’s approval.
GENERAL COMPANY BACKGROUNDThain Foods Limited (TFL) had been in business for morethan 30 years. Its products included a wide range of syrups,fudges, cone dips, sauces, mayonnaise, and salad dressings. Its customers were major food chains, hotels, andrestaurants in North America and Europe.TFL believed in continuous improvement to itsoperations. Over the last two years, it invested more than$2 million in plant facilities, the bulk of it new, state-ofthe-art process equipment and process control. All production and process control functions were computerized formaximum efficiency.TFL…
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Question Content Area
Make-or-Buy, Traditional and ABC Analysis
Brees, Inc., a manufacturer of golf carts, has just received an offer from a supplier to provide 2,600 units of a component used in its main product. The component is a track assembly that is currently produced internally. The supplier has offered to sell the track assembly for $72 per unit. Brees is currently using a traditional, unit-based costing system that assigns overhead to jobs on the basis of direct labor hours. The estimated traditional full cost of producing the track assembly is as follows:
Direct materials
$45.00
Direct labor
18.00
Variable overhead
4.00
Fixed overhead
40.00
Prior to making a decision, the company’s CEO commissioned a special study to see whether there would be any decrease in the fixed overhead costs. The results of the study revealed the following:
3 setups—$1,150 each (The setups would be avoided, and total spending could be reduced by $1,150 per setup.)
One half-time inspector…
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Case 2
Ethics and a Cost-Volume-Profit Application
Danna Lumus, the marketing manager for a division that produces a variety of paper products, is considering the divisional manager's request for a sales forecast for a new line of paper napkins. The divisional manager has been gathering data so that he can choose between two different production processes. The first process would have a variable cost of $10 per case produced and total fixed cost of $100,000. The second process would have a variable cost of $6 per case and total fixed cost of $200,000. The selling price would be $30 per case. Danna had just completed a marketing analysis that projects annual sales of 30,000 cases.
Danna is reluctant to report the 30,000 forecast to the divisional manager. She knows that the first process would be labor intensive, whereas the second would be largely automated with little labor and no requirement for an additional production supervisor. If the first process is chosen, Jerry Johnson, a…
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help please answer in text form with proper working and explanation for each and every part and steps with concept and introduction no ai no copy paste remember answer must be in proper format with all working
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