Accounting assignments

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Accounting assignments

Accounting assignments

walmart and target for my assignment 2

.walmart.com/annual-reports”>http://stock.walmart.com/annual-reports

http://investors.target.com/phoenix.zhtml?c=65828&p=irol-reportsannual

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Accounting assignments

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Assignment 1

Assignment
3: Management Accounting Case: West Island Products

Due Week
8, Day 7 (100 points)

The
specific course learning outcomes associated with this assignment are:

•
Apply key techniques and concepts in
measuring the cost of producing goods and services.

•
Apply management accounting concepts to
identify and process relevant financial information for decision-making
purposes.

•
Use technology and
information resources to research issues in financial management.

•
Write clearly and concisely
about financial management using proper writing mechanics.

Assignment:

West Island Products (WIP) is a
divisionalized furniture manufacturer. The divisions are autonomous segments
with each division responsible for its own sales, cost of operations, and
equipment acquisition. Divisional performance is evaluated annually based on
ROI. Each division serves a different market in the furniture industry. Because
the markets and products of the divisions are so different, there have never
been any transfers between divisions.

The Commercial Division of WIP, manufacturers
furniture for the restaurant industry. The Commercial Division plans to
introduce a new line of counter chair units featuring a cushioned seat. Roberta
Katz, the Commercial Division manager, has discussed the manufacturing of the
cushioned seats with Nathan Danielson of the Office Division. They both believe
a cushioned seat currently made by the Office Division for use on its deluxe
office stool could be modified for use on the new counter chair. Consequently, Katz
asked Danielson for a price for 100- unit lots of the cushioned seats. The
following conversation took place about the price to be charged for the
cushioned seats.

Danielson: “Roberta,
we can make the necessary modifications to the cushioned seat easily. The raw
materials used in the new counter chair seat are slightly different and should
cost about 10 percent more than those used in our deluxe office stool. However,
the labor time should be the same because the seat fabrication process is the
same. I would price the cushioned seat at our regular rate: full cost plus a 30
percent mark-up. According to my calculations, that would be $2,053 per lot of
100 seats.”

Katz: “That’s higher than I
expected, Nathan. I was thinking that a good price would be your variable
manufacturing cost. After all, your fixed costs will be incurred regardless of
this job. In addition, I have received a quote from one of the Commercial
Division’s regular suppliers to provide us with the counter seats at $1,900 per
lot of 100 seats.”

Danielson: “Roberta, I am at
full capacity. By making the cushioned seats for you, I have to cut my
production of deluxe office stools. The labor time freed by not having to
fabricate the frame and assemble the deluxe stool can be shifted to the production
of the economy stool. I’d like to sell the cushioned seats to you at my
variable cost, but I have excess demand for both products. I don’t mind
changing my product mix to the economy model and producing the cushioned seats
for you as long as I don’t change my division’s overall profitability. Here are
my standard costs for the two stools and a schedule of my manufacturing
overhead.” (See Exhibits 1 and 2.)

Katz: “I
guess I see your point, Nathan, but I don’t want to price myself out of the
market. In addition to pricing, I am also concerned about delivery. We’ll need
the counter seats within two weeks of placing our order or we risk losing some
important potential customers. Our outside supplier claims that they can meet
our timing needs.”

Danielson: “Oh – oh. That
lead-time is a bit short considering the production re -scheduling we need to
do. I can’t promise you a lead-time shorter than four weeks at the moment.”

Katz: “There’s
quite a few issues that need to be addressed here, Nathan. As we have no
previous experience in transferring goods between our divisions, I think we
should speak with the controller at corporate headquarters before we can agree
on a transfer price.”

Exhibit 1 – Office
Division Standard Costs and Prices

Deluxe

Economy

Direct materials:

Office
Stool

Office Stool

Framing
………………………………………………………………………

$
7.35

……….

$
6.50

Cushioned
seat ……………………………………………………………

6.40

—

Molded
seat (purchased) ……………………………………………….

— ……….

6.00

Direct Labor:

Frame
fabrication (0.5 hrs. @ $7.50/hr.) ………………………….

3.75

……….

3.75

Cushion
fabrication (0.5 hrs. @ $7.50/hr.) ……………………….

3.75

……….

—

Assembly
(0.5 hrs. @ $7.50/hr.) ……………………………………..

3.75

……….

3.75

Manufacturing
overhead ($10.00/DLH) …………………………………

15.00

……….

10.00

…………………………………………………………….Totalstandardcost

$ 40.00

……….

$ 30.00

…………………………………..Sellingprice(including30%mark-up)

$
52.00

……….

$
39.00

Exhibit 2 – Office
Division Manufacturing Overhead Budget

Overhead Item

Description

Amount

Supplies
……………………………….

Variable
…………………………………………………………..

$ 370,000

Indirect
labor …………………………

Variable
…………………………………………………………..

375,000

Supervision
…………………………..

Fixed
……………………………………………………………….

150,000

Power …………………………………..

Variable
…………………………………………………………..

180,000

Heat and light
………………………..

Fixed ……………………………………………………………….

120,000

Property tax &
insurance ………..

Fixed
……………………………………………………………….

130,000

Depreciation ………………………….

Fixed
……………………………………………………………….

1,100,000

Employee benefits
…………………

Variable
…………………………………………………………..

575,000

………………………………………………….Totaloverhead

$ 3,000,000

……………………Capacityindirectlaborhours(DLH)

300,000

Overhead rate per direct labor hour
…………………….

$
10.00

©2014 Strayer University. All Rights
Reserved. This document contains Strayer University Confidential and
Proprietary information and may not be copied, further distributed, or
otherwise disclosed in whole or in part, without the expressed written
permission of Strayer University.

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JWMI
530 Course Guide – Spring 2014 Page 21 of
33

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Required:

Your
goal is to examine this situation and recommend a course of action for Roberta
Katz and Nathan Danielson.

1. Re-examine
Nathan Danielson’s calculation of a transfer (selling) price for the cushioned
seats to the Commercial Division. Based on the information provided,
determine/confirm the transfer price that would meet Danielson’s objective
regarding the profitability of the Office Division.

2.
Discuss the pros and cons of each option
(i.e., in-sourcing and out-sourcing). Include in your analysis what you believe
the corporate controller is likely to recommend and why.

3. How
would you suggest that the company handles such transfer disputes in the future
(i.e., what policies would you suggest putting in place)? Make sure your
recommendation includes financial policies around setting a transfer price
range. Support your suggestion by examining the advantages and disadvantages of
its adoption.

Grading:

Grades
for this assignment will be based on answer quality, logic/organization of the
paper, and language and writing skills, using the following rubric:

Assignment Points

Percentage

Grade

90

– 100

90% – 100%

A

80
– 89

80%
– 89%

B

70
– 79

70%
– 79%

C

0

– 69

0%
– 69%

F

Assignment 2

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accounting assignments

$22.00

Description

The
short answer questions below required detailed answers. Read each question to
understand the requirements. Notice that the questions may require computations
and multiple-part answers, and they should include reference to where the
answer was located.

1.(TCO 10) Not all pricing methods apply to
the market place. In manufacturing it is common practice to determine
the cost of a product as it moves through it transformation to a finished
product. (1) Explain how a transfer price could be used to make other
financial decisions (10 points) and (2) provide an example of the
application of transfer price data (10 points). (Points : 20)

2.(TCO 11) Terry LeMay is unclear as to the
difference between the income statement of a merchandising company and a
manufacturing company. (1) Describe and provide an example of an
income statement of a merchandising company and (2) compare to an example
of an income statement of a manufacturing company (10 points). (Points :
20)

3.(TCO 3) Internal Control Procedures are
required to safeguard company assets and to ensure ethical operation of the
business. (1) Explain how proper approvals can satisfy the purpose of
internal control (10 points) and (2) provide an example of how this control
could be implemented (10 points). (Points : 20)

4.(TCO 7) To promote better management control
of business centers financial responsibilities are assigned to managers.
There are three basic types of responsibility centers. (1) Explain
how a investment center operates (10 points) and (2) provide an example of
its application in business. (10 points). (Points : 20)

.

5.(TCO 1) To evaluate the financial operation
and health of a business ratio analysis is used. (1) Provide the formula
for Current Ratio and explain how it is computed (10 points) and (2)
provide an example of how this ratio can be used in decision making in
business (10 points). (Points : 20)

Part 2

The
essay questions below required detailed answers. Read each question to
understand the requirements. Notice that the questions may require computations
and multiple-part answers, and they should include reference to where the
answer was located.

1.(TCO 8) Planning for capital
investments is an important function of management. You are
responsible for considering purchasing new equipment for $450,000. It
is expected that the equipment will produce net annual cash flows of
$55,000 over its 10-year useful life. Annual depreciation will be
$45,000. Compute the cash payback period. (1) Explain the pros
and cons of using this method to evaluate a capital expenditure (10 points)
and (2) show all computations required to arrive at the correct
solution. (15 points). (Points : 25)

Answer:

2.(TCO 6) To adequately plan for the success
of the business a budget must be developed. (1) Indicate the benefits
of budgeting (10 points) and (2) state the essentials of effective
budgeting (15 points). Include textbook page references to identify
where the correct answer was located. (Points : 25)
Answer:

3.(TCO 4) Financial statement analysis is used
by investors, creditors and managers of business to evaluate the operation
and health of the business. This information is in part the basis for
decision making. (1) Identify ratios use to evaluate the ability to
pay current and long-term liabilities (10 points) and (2) provide an
example of how the results of this analysis could be used to make business
decisions. (15 points). (Points : 25)

4.(TCO 2) There are three different forms of
business; sole-proprietor, partnership and corporation. (1) Explain
why a corporation’s taxation may not be considered a positive (10 points)
and (2) as a stockholder explain why a stockholder would want to own common
stock. (15 points). (Points : 25)

5.(TCO 5) Allgood Inc. has fixed costs of
$480,000. It has a unit selling price of $6, unit variable cost of
$4.50, and a target net income of $1,500,000. Compute the required
sales in units to achieve its target net income. (1) Explain how the
analysis is to be performed (10 points) and (2) Show all computations
required to arrive at the correct answer. (20 points). (Points : 30)

6.(TCO 9) Warsaw Products has a factory
machine with a book value of $90,000 and a remaining useful life of 4
years. A new machine is available at a cost of $250,000. This
machine will have a 4-year useful life with no salvage value. The new
machine will lower annual variable manufacturing costs from $600,000 to
$500,000. Prepare an analysis showing whether the old machine should
be replaced or retained. (1) Explain how the analysis is to be
performed (10 points) and (2) Show all computations required to arrive at
the correct answer. (20 points). (Points : 30)

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