Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 16, Problem 4R
Open MFG2 and click the Chart sheet tab. The management of Twisp is convinced that the quality of its products is highly dependent on their relative labor costs. Experience has shown that direct labor should account for at least 45% of the total product cost. According to the pie chart that appears on the screen, Twisp did not achieve this goal in 2011. How much should Twisp have spent on direct labor to reach its 45% goal?
To find out, try different values for direct labor (cell C8), clicking the Chart sheet tab after each attempt. When you find a direct labor level that increases the direct labor percentage to 45%, enter the answer in the space provided:
In 2011, direct labor needed to be $________________.
Open MFG3 and click the Chart sheet tab. Did Twisp achieve its 45% goal in 2012? If not, answer the following:
In 2012, direct labor needed to be $________________.
When the assignment is complete, close the files without saving them again.
Worksheet. The MFG2 worksheet presents the companyʼs manufacturing activities for 2011. The company also had the following selling and general activities in 2011: sales of $13,503,000, selling expenses of $2,400,000, and general expenses of $1,200,000. Modify the worksheet to include this information in the Data Section and change the Answer Section so that it is in the form of an income statement. Preview the printout to make sure that the worksheet will print neatly on one page, and then print the worksheet. Save the completed file as MFGT.
Hint: Expand the Data Section to include these additional input items alphabetically. Insert a row for sales under the heading in the Answer Section. Add the rest of the income statement information to the bottom of the schedule. You will need to enter formulas for gross profit, all the expenses, and net income. You will also need to change the statement name.
Chart. Using the MFG2 file, prepare a single 3-D bar chart to show the dollar amount of materials, labor, and overhead incurred by Twisp in 2011 and 2012. Complete the Chart Data Table and use it as a basis for preparing the chart. Enter all appropriate titles, legends, and formats. Enter your name somewhere on the chart. Save the file again as MFG2. Print the chart.
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Gigabyte, Inc. manufactures three products for the computer industry:
Gismos (product G): annual sales, 8,000 units Thingamajigs (product T): annual sales, 15,000 units Whatchamacallits (product W): annual sales, 4,000 units
The company uses a traditional, volume-based product-costing system with manufacturing over-head applied on the basis of direct-labor dollars. The product costs have been computed as follows:
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Manufacturing overhead* ......140.00 105.00 70.00
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Manufacturing overhead budget:
Machine…
Choose the letter of answer:
Hilby, Inc., uses the high-low method to analyze cost behavior. The company observed that at 12,000 machine hours of activity, total maintenance costs averaged P7.00 per hour. When activity jumped to 15,000 machine hours, which was still within the relevant range, the average cost per machine hour totaled P6.40. On the basis of this information, the variable cost per machine hour was:
a. P4.00.b. P6.40.c. P6.70.d. P7.00.
Limos Mfg. has been manufacturing furniture sets and is considering whether tomake or outsource its own seat cushions needed for its chairs. The expected priceof the cushions is P50 per unit.If it continue to produce the company would incur the following unit cost: Directmaterials P13, Direct Labor P15, Variable overhead 5, Fixed overhead (based onthe average production requirement of 10,000 units) P20 for a total of P53.Let us assume that materials and labor costs are expected to increase by 20% nextperiod. Factory overhead costs will remain the same, except that 40% of the fixedoverhead will be eliminated in case the company decides to buy the seat cushionsfrom other suppliers. Moreover, the facilities presently being used in the manufactureof seat cushions can be utilized to manufacture another part of the main product incase such facilities become vacant when the company decides to stop producing theseat cushions. The alternative use of resources would result into cost savings…
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