Accounting Systems: Answers

The most suitable costing method Yeltin should adopt is the practical capacity in order to remove the factor of uncertain budgeted sales figure. For this approach and the practical capacity of 65000-22000 units, then the revised overhead costs come out to be $30. With the inclusion of material and labor costs, the cost of the cartridge stand at $52 and the additional royalty expense of $10 raises the overall per unit cost to $62. The selling price of the cartridge is fixed at $150. With this selling price, the gross margin is equal to $88. The gross margin percentage is equal to 59%. In comparison to the budgeted volume, the gross margin has increased by 14%. See below

1. For financial accounting purposes, what is the total amount of product costs incurred to make 10,000 units?

SMW is a wholesaler of specialty micro-brewed beers. SMW purchases bottles and kegs of beer from small microbreweries in the New England area and sells them to local liquor retailers in Boston. SMW’s slogan is “Always in-stock, next day delivery.” Ted Stern, SMW’s owner and CEO, hopes to expand sales to outside of the Boston metro area within one year.

In, 8 hours a day, the company can produce 60 * 8 * (1/0.5) = 960 shirts, which is the current production capacity. But it needs to produce only 800 shirts.

The process requires Peyton Approved to discover how much inventory is sold and what the cost of goods will result in. The process requires the business to review three forms of merchandise inventory to determine which summary benefits the business’s operational behavior. One will discover when assuming that first inventory purchased by the store is the first to be sold, it is determined that the FIFO method displays the best financial outcome for the business. During the process of updating journal entries, one must enter the information proved appropriately into the T-accounts to add the balance under each record. Once the T-accounts for transactions and adjusted transactions are balanced, the next step is to enter the information provided on the balance sheet. The balance sheet will list Peyton Approved assets, liabilities and stockholders equity after added during the T-account process (Nobles, 2014). Once the balance sheet is completed the income statement, statement of retained earnings, and closing entries can be filled with the information proved. This will give the business a full review from journal entry to closing entries of the business for the six month accounting

Second, the manufacturing order costs for non-stocked items was calculated by dividing total manufacturing order costs for non-stocked items by the number of orders for non-stocked products. Non-stocked products have additional costs associated with processing orders that went above and beyond the costs associated with a stocked product. The third step involved determining what the S"A allocation factor would be for calculating the S"A volume related costs. This allocation factor would then be applied to manufacturing COGS. The fourth and final step involved the calculation of the operating profit based on backing out volume related costs from sales revenues followed by deducting S"A and manufacturing order costs from the resulting gross margin to arrive at a operating profit.

Compute the estimated inventory at May 31, assuming that the gross profit is 25% of cost

In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

They first need to know what the cost is to make an item. They also need to know the selling price of the item. From these two pieces of data, they can then calculate the profit generated from each individual item (profit = selling price – cost of item). The third piece of data they need is the price if they item becomes liquidated. Thus, they can calculate the loss of an individual item if it becomes liquidated. Using these calculations, they can use the methods mentioned in Question #1 to make a decision of how many units of a particular item to stock.

was 7,920 units. The company has provided the following data concerning the formulas to be used in its

Production in factories is carried out in batches, where each batch is an integer number of drums set by you. The cost to produce one batch equals $1500 plus the number of drums in the batch times $1000. For example, the cost to produce a batch of 10 drums is $1500 + (10)$1000 = $11,500.

Feedback: Management accounting is the preparation and use of accounting information systems to achieve the organization's objectives by supporting decision makers inside the enterprise. LO 4

Non-stocked products have additional costs associated with processing orders that went above and beyond the costs associated with a stocked product. The third step involved determining what the S&A allocation factor would be for calculating the S&A volume related costs. This allocation factor would then be applied to manufacturing COGS. The fourth and final step involved the calculation of the operating profit based on backing out volume related costs from sales revenues followed by deducting S&A and manufacturing order costs from the resulting gross margin to arrive at a operating profit.

Answer B: The total units to be sold per year with each process are Process A: 43,038 units;

The BumbleBee program produces a daily activity report with a listing of all sales transactions. At the end of the month, the local manager uses BumbleBee to transmit an accounts receivable summary to the Personal Trainer headquarters in Chicago, where member statements are prepared and mailed. Members mail their payments to the Personal Trainer headquarters, where the payment is applied to the member account.