Management Accounting Problem Sets

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

11. If 8,000 units are produced, what is the total amount of manufacturing overhead cost incurred to support this level of production? What is the total amount expressed on a per unit basis?

2. What is the total cost? How much of the total cost are labor costs? Capital costs?

14. A decision to work closely with a limited number of suppliers for the purpose of ensuring that the proper materials are available at the optimal time is an example of:

Account/Description Manufacturing overhead Cost of goods sold Actual overhead costs Incurred on account Indirect materials Indirect labor Depreciation $120,000 14,000 20,000 8,000 $162,000 Applied overhead costs Job 7640 Job 7641 Job 7642 $43,200 57,600 66,000 $166,800 $162,000 166,800 $4,800

In this table, it reflects the changes in fixed plant overhead from $420,000 to $378,000. The company still has the fixed selling and administrative expense per quarter of $118,000. The new company fixed overhead is now at $496,000 from the past $538,000 ($42,000) change from past to

The Kenton Company processes unprocessed milk to produce two products, Butter Cream and Condensed Milk. The following information was collected for the month of June:

Therefore, given the effective burden rate of 145% ($4,713,982.00/3,260,015.00) we can calculate the cost of the product in table 1:

b. Use your answer to part A to determine the total annual indirect cost assigned to:

shipments x 500$ 70 nr. shipments x 500$ 220 nr. shipments x 500$ number of units per batch total overhead cost overhead cost / unit cost per unit

b. Use your answer to part A to determine the total annual indirect cost assigned to:

ML had developed a policy of selling manual machines and renting automatic machines. Manual machines did not cost much, did not require service, and could be modified to attach different fasteners inexpensively. Automatic machines were rented on an annual basis because they would have been more expensive to sell and it provided annual income to ML. However, about 700 of the rented machines were returned each year. During the time that machines were in inventory, ML would modify the machines to attach different fasteners. This was expensive with an average cost per modification of $2000. If all 700 machines were modified during a given year this would have cost $1.4 million per year. It was also industry practice to provide preventative maintenance and

In order to make a GPSN, the department must buy materials locally in month-to-month contracts. There are 100 employees that comprise the direct labor required to build each GPSN. Factory space is required to house the manufacturing, and the basic rate of $2.50 per sq. ft. is applied across all BMCs departments to cover factory costs. 16,000 sq. ft. leads to a $40,000 charge each month. Supervisors do not fall into direct labor, because they are not actively involved in the creation of a GPSN. Their costs account for $56,000 a month and must be added to the cost of each GPSN. Finally, general overhead is spread across every operating unit within BMC. The overhead cost dedicated to this department is $640,000 per month. This brings the cost of each GPSN built in house to $425. FEE is offering to build each GPSN for $400 at a rate of 8,000 per month for 2 years. This is not the final cost for BMC, because there are some additional costs that come into play with the decision to purchase GPSNs. The decision to buy GPSNs will trigger a layoff of the 100 direct labor employees in the department. When this occurs, BMC will be required to pay $66,000 to the employee union for four years. Since the contract is for 2 years, this should be paid in full at the conclusion of the contract. This means that $132,000 must be added to the annual cost of GPSNs provided by FEE. This

Total overhead cost allocated to wood framed prints = 0.28 × 7,000 × 20 = 39,200

Company α wants to construct a cost volume relation between its factory overhead cost and number of units produced. Use the high-low method to analyze its factory overhead (FOH) costs and build a cost volume formula. The volume and the corresponding total cost information of the factory for past eight months are given below: