Springfield Manufacturing produces electronic storage devices

Springfield Manufacturing produces electronic storage devices, and uses the following three-part classification for its manufacturing costs: direct materials, direct manufacturing labor, and indirect manufacturing costs. Total indirect manufacturing costs for January were $300 million, and were allocated to each product on the basis of direct manufacturing labor costs of each line. Summary data (in millions) for January for the most popular electronic storage device, the Big Bertha, was:

 

Big Bertha

Direct materials costs $9,000,000

Direct manufacturing labor costs $3,000,000

Indirect manufacturing costs $8,500,000

Units produced 40,000

Required:

A. Compute the manufacturing cost per unit for each product produced in January.

B. Suppose production will be reduced to 30,000 units in February. Speculate as to whether the unit costs in February will most likely be higher or lower than unit costs in January; it is not necessary to calculate the exact February unit cost. Briefly explain your reasoning.

 

File name: Springfield-manu1.doc File type: application/msword Price: $4

Scenario - Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments

12-59 Allocating Costs Using Direct and Step-Down Methods

Goal: Create an Excel spreadsheet to allocate costs using the direct method and the stepdown method. Use the results to answer questions about your findings.

Scenario: Antonio Cleaning has asked you to help them determine the best method for allocating costs from their service departments to their producing departments.
Additional background information for your spreadsheet appears in Fundamental Assignment Material

12-B2. Exhibit 12-4 on page 532 illustrates the types of calculations that are used for allocating costs using the direct method and the step-down method.

Introduction to Management Accounting: Chapters 1-17, Fourteenth Edition, by Charles T. Horngren, Gary L. Sundem, William O. Stratton,

David Burgstahler, and Jeff Schatzberg. Published by Prentice Hall. Copyright © 2008 by Pearson Education, Inc.

Chapter 12: Cost Allocation 585

When you have completed your spreadsheet, answer the following questions:

1. What are the total costs for the Residential department using the direct method? What are the total costs for the Commercial department using the direct method?
2. What are the total costs for the Residential department using the step-down method?
3. What are the total costs for the Commercial department using the step-down method?
4. Which method would you recommend that Antonio Cleaning use to allocate their service departments’ costs to their producing departments? Why?

 

File name: 12-59-Allocating-Costs.xls File type: application/vnd.ms-excel Price: $8

Murdock Paints is in the process of evaluating two mutually exclusive additions to its processing capacity.

Murdock Paints is in the process of evaluating two mutually exclusive additions to its processing capacity. The firm’s financial analysts have developed pessimistic, most likely, and optimistic estimates of the annual cash inflows associated with each project. These estimates are shown in the following table. Project A Project B Initial investment (CF0) $8,000 $8,000 Outcome Annual cash inflows (CF) Pessimistic $ 200 $ 900 Most likely 1,000 1,000 Optimistic 1,800 1,100

a. Determine the range of annual cash inflows for each of the two projects.

b. Assume that the firm’ s cost of capital is 10% and that both projects have 20-year lives. Construct a table similar to this for the NPVs for each project. Include the range of NPVs for each project.

c. Do parts a and b provide consistent views of the two projects? Explain.

d. Which project do you recommend? Why?

File name: Murdock-Paints.xls File type: application/vnd.ms-excel Price: $10

Completing the Accounting Cycle – Appendix G - XACC280 Assignment

Completing the Accounting Cycle – Appendix G - XACC280 Assignment

 

• Complete P4-5B on pp. 189 of Financial Accounting.

• Use the Excel Document – P4-5B, found in the Course Materials Forum, to complete the problem; complete all six tabs. (appendix G)

File name: xacc280-app-G-Julies-maid-cleaning-service.xls File type: application/vnd.ms-excel  Price: $15

13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead Acc 561

13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead Acc 561

 

Week 5 Question 13-49:

 

13-49 Variances Study Appendix 13. Consider the following data regarding factory overhead: Variable Fixed Budget for actual hours of input $45,000 $70,000 Applied 41,000 64,800 Budget for standard hours allowed for actual output achieved ? ? Actual incurred 48,500 68,500 Using the above data, fill in the following blanks with the variance amounts. Use F for favorable or U for unfavorable for each variance.

File name: 13-49-Variances-Study-Appendix-13.doc File type: application/msword Price: $6