SADCO Consulting Firm has the following budget for 2021:Revenues$25,000,000Direct costs8,000,000Indirect costs14,000,000Net Operating Income3,000,000SADCO has a single direct cost exemplified by professional consultants, which is takenas an allocation base. A markup of 14% is used for pricing the assigned job. SADCObidding on a consulting job for Ajman University. The required professional consultationcould be categorized as follows:Professional CategoryBudgeted Rate per HourBudgeted HoursCategory A$20010 hoursCategory B15012Category C0040Category D75180Required:(A) Compute the budgeted indirect cost rate.(B) How much will SADCO bid for the job?(C) What would be the case if the markup is taken as 10% of the revenue?

Name: SADCO Consulting Firm has the following budget for 2021:Revenues$25,0
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Description: SADCO Consulting Firm has the following budget for 2021:Revenues$25,000,000Direct costs8,000,000Indirect costs14,000,000Net Operating Income3,000,000SADCO has a single direct cost exemplified by professional consultants, which is takenas an allocati

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SADCO Consulting Firm has the following budget for 2021: Revenues $25,000,000 Direct costs 8,000,000 Indirect costs 14,000,000 Net Operating Income 3,000,000 SADCO bas a single direct cost exemplified by professional con

SADCO Consulting Firm has the following budget for 2021: Revenues $25,000,000 Direct costs 8,000,000 Indirect costs 14,000,000 Net Operating Income 3,000,000 SADCO bas a single direct cost exemplified by professional con

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 9E: Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost...

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Coral Seas Jewelry Company makes and sells costume jewelry. For the coming year, Coral Seas expects sales of 15.9 million and cost of goods sold of 8.75 million. Advertising is a key part of Coral Seas business strategy, and total marketing expense for the year is budgeted at 2.8 million. Total administrative expenses are expected to be 675,000. Coral Seas has no interest expense. Income taxes are paid at the rate of 40 percent of operating income. Required: 1. Construct a budgeted income statement for Coral Seas Jewelry Company for the coming year. 2. What if Coral Seas had interest payments of 500,000 during the year? What effect would that have on operating income? On income before taxes? On net income?
Adam Corporation manufactures computer tables and has the following budgeted indirect manufacturing cost information for the next year: If Adam uses the step-down (sequential) method, beginning with the Maintenance Department, to allocate support department costs to production departments, the total overhead (rounded to the nearest dollar) for the Machining Department to allocate to its products would be: a. 407,500. b. 422,750. c. 442,053. d. 445,000.
Nozama.com Inc. sells consumer electronics over the Internet. For the next period, the budgeted cost of the sales order processing activity is 250,000 and 50,000 sales orders are estimated to be processed. a. Determine the activity rate of the sales order processing activity. b. Determine the amount of sales order processing cost associated with 30,000 sales orders.
Foy Company has a welding activity and wants to develop a flexible budget formula for the activity. The following resources are used by the activity: Four welding units, with a lease cost of 12,000 per year per unit Six welding employees each paid a salary of 50,000 per year (A total of 9,000 welding hours are supplied by the six workers.) Welding supplies: 300 per job Welding hours: Three hours used per job During the year, the activity operated at 90 percent of capacity and incurred the actual activity and resource costs, shown on page 676. Lease cost: 48,000 Salaries: 315,000 Parts and supplies: 805,000 Required: 1. Prepare a flexible budget formula for the welding activity using welding hours as the driver. 2. Prepare a performance report for the welding activity. 3. What if welders were hired through outsourcing and paid 30 per hour (the welding equipment is provided by Foy)? Repeat Requirement 1 for the outsourcing case.
Aspen Enterprises makes award pins for various events. Budget information regarding the current period is: A fraternity with which Aspen has a long relationship approached Aspen with a special order for 6,000 pins at a price of $2.75 per pin. Variable costs will be the same as the current production, and the special order will not impact the rest of the companys orders. However, Aspen is operating at capacity and will incur an additional $5,000 in fixed manufacturing overhead if the order is accepted. Based on this information, what is the differential income (loss) associated with accepting the special order?
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A company estimates its manufacturing overhead will be $840,000 for the next year. What is the predetermined overhead rate given each of the following Independent allocation bases? Budgeted direct labor hours: 90,615 Budgeted direct labor expense: $750000 Estimated machine hours: 150,000
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