5 Management Accounting Questions$49.00 + Quantity - Add to cart Category: Accounting Tags: 0, 1, 2, 3, 4, 5, 6, 7, absorption, accounting, accounting, administrative, alternatives, cost, costing, department, follows, goods, income, management, mini, month, motors, offer, outsourcing, paid, percent, prepare, production, questions, required, sales, total, variable Description Reviews (0) Description Here are 5 questions related to managerial accounting.1. TX Companyproduces avarietyof electricmotors. Management follows apricingpolicyof manufacturing cost plus 60 percent. In responseto a request from Sporting Goods, the followingpricehas beendeveloped for an order of300 Mini Motors (the smallest motor TP Companyproduces): Manufacturing Costs DirectMaterials â€¦â€¦â€¦â€¦â€¦.. $10,000 DirectLabor â€¦â€¦â€¦â€¦â€¦.. $12,000 FactoryOverhead â€¦â€¦â€¦â€¦â€¦.. $18,000 Total â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦ $40,000 Markup (60%)â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦. $24,000 Sellingpriceâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦.. $64,000 Mr Smith, the president of SportingGoods, rejected this price and offeredto purchasethe 300 Minimotors at a priceof$44,000. Thefollowing additional information is available. Â· TP Companyhas sufficient excess capacityto producethe motors. Â· Factoryoverhead is $400,000 for the currentyear. Ofthis amount, $100,000 is fixed. Ofthe $18,000 offactoryoverheadassigned to Mini Motors, only$13,500 is driven bythe special order; $3,500 is afacility-level cost. Â· Sellingand administrative expenses arebudgetedas follows: Fixedâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦$90,000peryear (facilitylevel) Variable â€¦â€¦â€¦â€¦â€¦â€¦..$20 per unit manufactured and sold Required: a. Thepresident of TP Companywants to know ifheshould allow Ms Smith to havethe MiniMotors for $44,000. Determinetheeffect onprofits of acceptingMrSmithâ€™s offer. b. Brieflyexplain why certain costs should beomitted from the analysisin requirement (a). c. Assume TP Companyisoperatingat capacityandcould sellthe 300 Mini Motors at its regular markup. 1. Determinethe opportunitycost ofacceptingMr Smithâ€™s offer. 2. Determinetheeffect on profits of acceptingMr Smithâ€™s offer. 2. Frontier Companyis preparingabudget for Januaryand Februaryof nextyear. Thebalance sheet as ofDecember 31,2011 follows: FrontCompany BalanceSheet 31–Dec–11 Assets Liabilties&Stockholders’Equity Cash $ 100,000 Accountspayable $ 125,000 AccountsReceivable $ 60,000 Operatingexpensepayable $ 10,000 Inventory $ 30,000 Miscellaneouspayable $ 20,000 EquipmentLeasehold $ 60,000 Capitalstock $ 25,000 Retainedearnings $ 70,000 Totalassets $ 250,000 Totalliabilities&equity $ 250,000 .png”>.png”>.png”>.png”>.png”>Monthlysales dataforthe currentyear and the budgeted data for thenextyear are as follows: November2011 â€¦â€¦â€¦â€¦â€¦.. $180,000 February2012 â€¦â€¦â€¦â€¦â€¦.. $250,000 December2011 â€¦â€¦â€¦â€¦â€¦.. $100,000 March2012 â€¦â€¦â€¦â€¦â€¦.. $260,000 January2012 â€¦â€¦â€¦â€¦â€¦.. $240,000 April2012 â€¦â€¦â€¦â€¦â€¦.. $280,000 For 2012, the followingareexpected: Â· Fortypercent of the salesrevenueiscollected duringthe month of sale, with the balancecollected during the followingmonth. Â· Cost of goods sold is 60 percent of sales. MerchandiseInventorysufficient for20 percent of thenext monthâ€™s sales is to bemaintained at the end of each month. All purchasesforresale is paid in the month followingthe month of purchase. Â· Operatingexpenses for each month are estimatedat 10percent of sales revenue. All operatingexpenses arepaid for duringthe followingmonth. Â· Income taxes are estimated are40percent of income beforetaxes. Incometaxes are paid 15 days after the end of thequarter. Therewereno taxpayable on December31. Themiscellaneous payables as at December31, 2011 are to be paid duringJanuary 2012. Required: a. Prepare a contribution margin statement for thequarterendingMarch 31,2012. Do not preparemonthlystatements. b. Prepare abudgetedbalancesheetas at March 31,2012. (Hint: Preparepurchases and cash budgets.) 3. =”msonormal”>=”msonormal”>IT producesavarietyof computer accessories. To improvefinancial incentives, the Production Department and the Sales Department arebothtreated as profitcenters, with all goods produced in theProduction Department beingâ€œsoldâ€to theSales department at 150 percent of variable cost. The costsof theAdministrativeDepartment are allocated equallyto the Production and Salesdepartments. Thefollowingperformancereportsarefor the Production and Sales Departments fortheyear 2010: ComputerIT ProductionDepartmentPerformanceReport .png”>.png”>Forthe year2010 UnitSales Actual 10,000 Budget 8,000 Variance Salesrevenue Lessvariablemanufacturingcosts DirectMaterials $ 241,500 (69,000) $ 147,000 (35,000) DirectLabor (32,000) (21,000) ManufacturingOverhead (60,000) (42,000) Total (161,000) (98,000) Contribution Margin Less:FixedCosts Manufacturingoverhead 80,500 (24,000) 49,000 (25,000) Administrative (15,000) (10,000) Total (39,000) (35,000) Manufacturingprofit 41,500 14,000 27,500 F ComputerIT SalesDepartmentPerformanceReport .png”>For theyear2010 UnitSales Actual 10,000 Budget 8,000 Variance Salesrevenue Lessvariablecosts Costofgoodssold $ 310,000 (241,500) $ 217,000 (147,000) Sellinganddistribution (50,000) (35,000) Total (291,500) (182,000) ContributionMargin Less:FixedCosts Sellinganddistribution 18,500 (8,000) 35,000 (8,000) Administrative (15,000) (10,000) Total (23,000) (18,000) Sellingprofit/ (loss) (4,500) 17,000 (21,500)U Management congratulated the Production department supervisorforanother outstanding performanceand offeredhimaraise. Themanager oftheSales department, on the other hand, was called to a special meetingof theboardof directorsand told that unless she provided an adequateexplanation ofher departmentâ€™s performance, shewould be terminated. .png”>Required: Extremelyconcernedabout herfuture with theorganization, the manager ofthe Sales .png”>department hasaskedyou (1)To evaluate the 2010 performancereports for each department and (2)To assist in preparingrevised 2010 performancereports for each department and the companyas awhole. 4. GCompanybuysavarietyof fruits from growers and then processes the fruitinto a product line offresh fruit, juices and fruitflavorings. Themost recentyearâ€™s sales revenue was $4,200,000. Variable costswere60 percent of sales and fixed coststotalled $1,300,000. Garden Companyis evaluatingtwo alternatives designed toenhanceprofitability. Â· Onestaff member has proposed that Garden Companypurchasemoreautomated processingequipment. This strategywould increasefixed costsby$300,000 but decreasevariablecoststo 54 percent of sales. Â· Another staffmemberhas suggested that GardenCompanyrelymoreon outsourcing for fruitprocessing. This would reducefixed costsby$300,000 but increasevariable coststo 65 percent of sales. Required: Please assist Garden Companymanagement byansweringthe followingquestions: a. What is the current break-even pointin sales dollars? b. Assumingan income taxrate of34 percent, what dollar sales volumeis current required to obtain anafter-taxprofitof $500,000. c. In theabsenceof incometaxes, at what sales volume will both alternatives (automation and outsourcing) providethe same profit? d. Brieflydescribeonestrength and oneweakness of both the automation and the outsourcing alternatives. 5. OTCompanymanufacturesorangejam. Becauseof bad weather,its orange cropwas small. The followingdatahave beengatheredforthe summer quarter of2012. Beginninginventory(cases)â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦0 Casesproducedâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦10,000 Casessoldâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦ 9,400 Salespricepercaseâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦. $60 Directmaterialspercaseâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦. $8 Directlaborpercaseâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦$9 Variable manufacturingoverheadpercaseâ€¦â€¦â€¦â€¦â€¦. $3 Totalfixed manufacturingoverheadâ€¦â€¦â€¦â€¦â€¦â€¦â€¦â€¦$400,000 Variablesellingandadministrativecostpercaseâ€¦â€¦â€¦$2 Fixedsellingandadministrativecostpercaseâ€¦â€¦â€¦â€¦ $48,000 Required: a. Prepare an incomestatement for thequarter using absorption costing. b. Prepare an incomestatement for the quarter usingvariable costing. c. What is the value of endinginventoryunder absorption costing? d. What is the value of endinginventoryunder variable costing? e. Explain the differenceinendinginventoryunder absorption costingand variable costing. =”msonormal”>=”msonormal”>=”msonormal”>=”msonormal”> Reviews There are no reviews yet. Be the first to review “5 Management Accounting Questions” Cancel replyYour email address will not be published. Required fields are marked *Your rating Rate… Perfect Good Average Not that bad Very poor Your review *Name * Email * Related products Accounting acc 560!!!!!!!!!!!!!!!!!!!!!!!!!!!1 $1.00 Add to cart Accounting Allowance method: $23.00 Add to cart Accounting acc 560!!!!!!!!!!!!!!!!!!!!!!!!! $1.00 Add to cart
There are no reviews yet.