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P4-4 P4-5 P4-10 Week 4 Assignment - P 4-4 Listed below are the budgeted factory overhead costs for 2011 for Muncie Manufacturing, Inc.., at the projected level of 2,000 units:

P4-4 P4-5  P4-10 Week 4 Assignment

P 4-4 Listed below are the budgeted factory overhead costs for 2011 for Muncie Manufacturing, Inc.., at the projected level of 2,000 units:

EXPENSES:
indirect materials...............................................$ 10,000
Indirect labor...................................................... 20,000
Power................................................................ 15,000
Straight-line depreciation..................................... 30,000
Factory property Tax........................................... 28,000
Factory Insurance............................................... 12,000

Total....................................................................$115,000 

Required: 
Prepare flexible budgets for factory overhead at the 1,000, 2,000, and 4,000 unit levels. (Hint: You must first decide which of the listed costs should be considered variable and which should be fixed.)


P4-5 Cake Products Inc, is divided into five departments, mixing, blending, finishing, factory office and building maintenance. The first three departments are engaged in production work. Factory Office and Building Maintenance are service departments. During the month of June, the following factory overhead was incurred for the various departments:              

mixing                         $21,000                       factory office $9,000
Blending          $18,000                       building maintenance $6,400
finishing          $25,000  

The bases for distributing service department expenses to the other departments follow:

Building maintenance - on the basis of floor space occupied by the other departments as follows: mixing 10,000 sqft, blending $4,500 sqft, finishing 10,500 sqft and factory office 7,000 sq ft. 

Factory office - on the basis of number of employees as follows : mixing 30, blending 20 and finishing 50 Prepare schedules showing the distribution of the service departments expenses for the following: 

1. The direct distribution method                  
2. The sequential distribution method in the order of number of other departments served.

P4-10 Con-Aggie Manufacturing Company is studying the results of applying factory overhead to production. The following data have been used: estimated factory overhead: $60,000; estimated materials costs, $50,000; estimated direct labor costs $60,000; estimated direct labor hours 10,000; estimated machine hours 20,000; work in process at the beginning of the month, none.

 The actual factory overhead incurred for the month of November was $75,000, and the production statistics on November 30 are as follows: 

Job
Materials Cost
Direct Labor Costs
Direct Labor Hours
Machine Hours
Date Jobs Completed
101                 
5,000              
6,000              
1000               
3,000             
10-Nov
102                 
7,000              
12,000
2,000
3,200
14-Nov
103     
8,000
13,500
2,500              
4,000              
20-Nov
104     
9,000              
15,600
2,600
3,400              
Inprocess
105                 
10,000            
29,000
4,500              
6,500              
26-Nov
106                 
11,000            
2,400
400                 
1,500              
In process
Total               
50,000            
78,500
13,000
21,600



Required: 
1. Compute the predetermined rate, based on the following: a. direct labor cost, b. direct labor hours, c. machine hours.                                                                                     

2. Using each of the methods, compute the estimated total cost of each job at the end of the month.                                                                                
3. Determine the under- or overapplied factory overhead, in total, at the end of the month under each of the methods.

4. Which method would you recommend, and why? 

TUTORIAL PREVIEW
Problem 4-4


Units


1,000
2,000
4,000
Expenses




Variable:



Indirect materials
            5,000
          10,000
          20,000
Indirect labor
          10,000
          20,000
          40,000
Power
            7,500
          15,000
          30,000


 File name: Week-4-Assignment.xls File type: XLS PRICE: $12

The comparative statements of Lucille Company are presented here.

P13‑2A The comparative statements of Lucille Company are presented here.

LUCILLE COMPANY
Income Statements
For the Years Ended December 31

2012
2011
Net sales
$1,890,540
$1,750,500
Cost of goods sold
1,058,540
1,006,000
Gross profit
832,000
744,500
Selling and administrative expenses
500,000
479,000
Income from operations
332,000
265,500
Other expenses and losses Interest expense
22,000
20,000
Income before income taxes
310,000
245,500
Income tax expense
92,000
73,000
Net income
$ 218,000
$ 172,500
Compute ratios from balance sheets and income statements. (SO 6), AP

LUCILLE COMPANY
Balance Sheets
December 31
Assets
2012
2011
Current assets



Cash
$ 60,100
$ 64,200

Short-term investments
74,000
50,000

Accounts receivable
117,800
102,800

Inventory
126,000
115,500


Total current assets
377,900
332,500
Plant assets (net)
649,000
520,300
Total assets
$1,026,900
$852,800
Liabilities and Stockholders’ Equity


Current liabilities



Accounts payable
$ 160,000
$145,400

Income taxes payable
43,500
42,000


Total current liabilities
203,500
187,400
Bonds payable
220,000
200,000


Total liabilities
423,500
387,400
Stockholders’ equity



Common stock ($5 par)
290,000
300,000

Retained earnings
313,400
165,400


Total stockholders’ equity
603,400
465,400
Total liabilities and stockholders’ equity
$1,026,900
$852,800






All sales were on account. Net cash provided by operating activities for 2012 was $220,000. Capital expenditures were $136,000, and cash dividends were $70,000.

Instructions
Compute the following ratios for 2012.
1. Earnings per share.
2. Return on common stockholders’ equity.
3. Return on assets.
4. Current ratio.
5. Receivables turnover.
6. Average collection period.
7. Inventory turnover.
8. Days in inventory.
9. Times interest earned.
10. Asset turnover.
11. Debt to total assets.
12. Current cash debt coverage.
13. Cash debt coverage.
14. Free cash flow.

TUTORIAL PREVIEW

(a)        Earnings per share = Net Income/ Average no. of common shares
No. of shares in
2011 = $300,000/ $5 = 60,000 shares
2012 = $290,000/ $5 = 58,000 shares
Average no. of shares = (60,000 + 58,000)/ 2


File name: P13-2A-Lucille.doc File type: DOC PRICE: $10

Condensed balance sheet and income statement data for Sievert Corporation are presented here and on the next page

P2‑6A Condensed balance sheet and income statement data for Sievert Corporation are presented here and on the next page.

SIEVERT CORPORATION
Balance Sheets
December 31
Assets
2012
2011
Cash
$ 28,000
$ 20,000
Receivables (net)
70,000
62,000
Other current assets
90,000
73,000
Long-term investments
62,000
60,000
Plant and equipment (net)
510,000
470,000
Total assets
$760,000
$685,000
Liabilities and Stockholders’ Equity


Current liabilities
$ 75,000
$ 70,000
Long-term debt
80,000
90,000
Common stock
330,000
300,000
Retained earnings
275,000
225,000
Total liabilities and stockholders’ equity
$760,000
$685,000


SIEVERT CORPORATION
Income StatementsFor the Years Ended December 31

2012
2011
Sales
$750,000
$680,000
Cost of goods sold
440,000
400,000
Operating expenses (including income taxes)
240,000
220,000
Net income
$ 70,000
$ 60,000


Additional information:
Cash from operating activities
$82,000
$56,000
Cash used for capital expenditures
$45,000
$38,000
Dividends paid
$20,000
$15,000
Average number of shares outstanding
33,000
30,000


Compute and interpret liquidity, solvency, and profitability ratios.
(SO 2, 4, 5), AP
Instructions
Compute these values and ratios for 2011 and 2012.
1. Earnings per share.
2. Working capital.
3. Current ratio.
4. Debt to total assets ratio.
5. Free cash flow.
6. Based on the ratios calculated, discuss briefly the improvement or lack thereof in financial position and operating results from 2011 to 2012 of Sievert Corporation.

TUTORIAL PREVIEW

Formula
2011
2012
(a)
Earnings per share= Net Income/ No. of common shares

$60,000/ 30,000 shares
   = $2.00
$70,000/ 30,000 shares
    = $2.33


File name: P2-6A-Condensed.doc File type: DOC  PRICE: $7