Acc 206 Essay

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ACC 206 Week 3 Assignment: Chapter 4 and 5 Problems

Please complete the following 7 exercises below in either Excel or a word document (but must be single document). You must show your work where appropriate (leaving the calculations within Excel cells is acceptable). Save the document, and submit it in the appropriate week using the Assignment Submission button.

Chapter 4 Exercise 7 7. Overhead application: Working backward The Towson Manufacturing Corporation applies overhead on the basis of machine hours. The following divisional information is presented for your review: |Division A |Division B | |Actual machine hours |22,500 |? | |Estimated machine hours |20,000 |? | |Overhead application
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Break-even and other CVP relationships Cedars Hospital has average revenue of $180 per patient day. Variable costs are $45 per patient day; fixed costs total $4,320,000 per year.
How many patient days does the hospital need to break even? 4,320,000/180.00=24,000
What level of revenue is needed to earn a target income of $540,000? 180+45=225*24,000=540,000
If variable costs drop to $36 per patient day, what increase in fixed costs can be tolerated without changing the break-even point as determined in part (a)? $45-$36=$9.00 increase

Chapter 5 Problem 6 6. Direct and absorption costing The information that follows pertains to Consumer Products for the year ended December 31, 20X6. Inventory, 1/1/X6 |24,000 units | |Units manufactured |80,000 | |Units sold |82,000 | |Inventory, 12/31/X6 |22,000 units | |Manufacturing costs: | |Direct materials |$3 per unit | |Direct labor |$5 per unit | |Variable factory overhead |$9 per unit | |Fixed factory overhead |$280,000 | |Selling & administrative expenses: | |Variable |$2 per unit | |Fixed |$136,000 | | The unit selling price is $26. Assume that costs have been stable in recent years.

Instructions:
Compute the number of units in the ending inventory.
Calculate the cost of a unit assuming use of:
Direct costing. 280000/9.00= 31.00 per unit
Absorption costing. Inventory
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