Acc212 Chapter22-24

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ACC212 Chapter 22 1. We sell peaches that sell for different amounts based on their quality. #1 sell for $1.50 per lb.; #2 sell for $1.00 per lb. and #3 sell for $0.20 per lb. We can sell 300,000 Ibs. of#1, 300,000 Ibs. of #2 and 750,000 Ibs. of #3. Our total costs of producing the peaches are $472,500. Required: a. How much of the cost should be allocated to each quality of peach? b. How much is the cost per pound of peaches? 2. Alpha company has 4 departments. A & B are support departments, 1 & 2 are selling departments. Use the following information to complete the Departmental Expenses Allocation Spreadsheet and the supporting schedules. Sales Payroll expenses Square footage # of employees…show more content…
B are allocated based on total number of employees as follows: |# employees | ||Cost | Oept. 1 |10 |.40 |$ |9,400 | Oept. 2 |15 |.60 ||14,100 | Total |25 |1.00 |$23,500 | 3 a. Return on Assets (Investment) Net Income/Average Total assets Bruce = ($205,000-189,000) / $300,000 = 5.3 Wayne = ($270,000-232,000) / $290,000 = 13.1 Residual Income Net income/target net income on assets Bruce: RI = $16,000 - (.10)($300,000) = $(14,000) Wayne: RI = $38,000 - (.10)($290,000) = $9,000 b. Wayne should get the promotion because he is generating a greater percentage return on the assets of his division and it is higher than the target specified. He appears to be earning a superior return with fewer assets. Chapter 23 1. Sale of repaired units (5,000 x $33) $165,000 Sale of defective units(5,OOO x $18) (90,000) Incremental revenue from repair $ 75,000 Cost to repair the units ($10 x 5,000) (50,000) Incremental income from repairing the $ 25.000 units 2. |A||B |C| Sales price per unit |$22.00 ||$34.00 |$46.00 | Variable costs per unit |(10.00)|| (19.00)| (25.30)| ||||| Contribution margin per unit |$ 12.00 ||$15.00 |$20.70 | Divided by machine hours/unit |.75 ||1.2 |2.3 | ||||| Contribution/machine hour |S 16.00 |S |12.50 |S 9.00 | In general, the company should produce Product A first, then B, and finally C. Specifically: a. If no market constraints exist on any of the products, produce as much A

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