Ba510 Week 8 Final

609 WordsApr 11, 20163 Pages
BA510 Week 8 FINAL Click Link Below To Buy: http://hwaid.com/shop/ba510-comprehensive-problem-1/ Problem 1 Only the incremental costs and benefits are relevant. In particular, only the variable manufacturing overhead and the cost of the special tool are relevant overhead costs in this situation. The other manufacturing overhead costs are fixed and are not affected by the decision. Per Unit Total for 10 Bracelets Incremental revenue $349.95 $3,499.50 Incremental costs: Variable costs: Direct materials $143.00 1,430.00 Direct labor 86.00 860.00 Variable manufacturing overhead 7.00 70.00 Special filigree 6.00 60.00 Total variable cost $242.00 2,420.00 Fixed costs: Purchase of special…show more content…
Total budgeted manufacturing overhead for the year (a) $175,700 Total budgeted direct labor-hours for the year (b) 20,400 Manufacturing overhead rate for the year (a) ÷ (b) $ 8.61 Problem 5 1. The activity variances are shown below: Air Meals Activity Variances For the Month Ended December 31 Planning Budget Flexible Budget Activity Variances Meals 20,000 21,000 Revenue ($3.80q) $76,000 $79,800 $3,800 F Expenses: Raw materials ($2.30q) 46,000 48,300 2,300 U Wages and salaries ($6,400 + $0.25q) 11,400 11,650 250 U Utilities ($2,100 + $0.05q) 3,100 3,150 50 U Facility rent ($3,800) 3,800 3,800 0 Insurance ($2,600) 2,600 2,600 0 Miscellaneous ($700 + $0.10q) 2,700 2,800 100 U Total expense 69,600 72,300 2,700 U Net operating income $ 6,400 $ 7,500 $1,100 F 2. Management should note that the level of activity was above what had been planned for the month. This led to an expected increase in profits of $1,100. However, the individual items on the report should not receive much management attention. The favorable variance for revenue and the unfavorable variances for expenses are entirely caused by the increase in activity. Problem 6 Average operating assets £2,200,000 Net operating income £400,000 Minimum required return: 16% × £2,200,000 352,000 Residual

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