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Managerial Accounting graduate level course questions




Question;Exercise 5;LIFT Elevator Company manufactures small hydroelectric elevators. One;of the direct materials used is heavy-duty carpeting for the floor of the;elevator. The direct materials quantity standard for May was 6;square yards per elevator. During May, the purchasing agent;purchased this carpeting at $20 per square yard, the standard price for the;period was $22. Fifty elevators were completed and sold during the month;the Production Department used an average of 6.5 square yards of carpet per;elevator. Calculate the company?s direct materials price and;quantity variances for carpeting for May.;Exercise 6;Creative Productions manufactured and sold 800 products at $10,000 each;during the past year. At the beginning of the year, production had;been set at 1,000 products, and direct materials standard had been set at 10;pounds of direct materials at $12 per pound for each product produced. During;the year, the company purchased and used 7,900 pounds of direct materials with;a cost of $12.02 per pound. Calculate the company?s direct materials;price and quantity variances for the year.;Problem 1- Computing and Using Standard Costs;Modular houses are Homes, Inc.?s specialty. The company?s;best-selling model is a three-bedroom, 1,400-square-foot house with an;impressive front entrance. Last year, the standard costs for the six;basic direct materials used in manufacturing the entrance were as follows: wood;framing materials, $2,140, deluxe front door, $480, door hardware, $260;exterior siding, $710, electrical materials, $580, and interior finishing;materials, $1,520. Three types of direct labor are used to build the;entrance: carpenter, 30 hours at $36 per hour, door specialist, 4 hours at $24;per hour, and electrician, 8 hours at $50 per hour. Last year, the;company used an overhead rate of 40 percent of total direct materials cost.;This;year, the cost of wood framing materials is expected to increase by 20 percent;and a deluxe front door will cost $496. The cost of the door;hardware will increase by 10 percent, and the cost of the electrical materials;will increase by 20 percent. Exterior siding cost should decrease by;$15 per unit. The cost of interior material finishing materials is;expected to remain the same. The carpenter?s wages will increase by;$1 per hour, and the door specialist?s wages should remain the same. The;electrician?s wages will increase by $0.50 per hour. Finally, the;overhead rate will decrease by 30 percent of total direct materials cost.;REQUIRED;1. Compute the;total standard cost of direct materials per entrance for last year.;2. Using your answer to;requirement 1, compute the total standard unit cost per entrance;for last year.;3. Compute the total;standard unit cost per entrance for this year. (Round to the nearest dollar.);Exercise 9;Web Services, a small;company owned by Simon Orozco, provides web page service to small;businesses. His services include the preparation of basic pages and;custom pages. The following summary of information will be used to make;several short-run decisions for Web Services;Basic;Pages Custom;Pages;Service;revenue per;page $200 $750;Variable;costs per;page 77 600;Contribution;margin per;page $123 $150;Total annual fixed;costs are $78,000.;One of Web Services?;two graphic designers, Taylor Campbell, is planning to take maternity leave in;July and August. As a result, there will only be one designer;available to perform the work, and design labor hours will be a resource;constraint. Orozco plans to help the other designer complete the;projected 160 orders for basic pages and 30 orders for custom pages for those 2;months. However, he wants to know which type of page Web Services;should advertise and market. Although custom pages have a higher;contribution margin per service, each customer page requires 12.5 design hours;whereas basic pages require only 1 hour per page. On which page type;should his company focus? Explain your answer.;Problem 4;Common Chemical Company?s management is evaluating its product mix in an;attempt to maximize profits. For the past two years, Common has;produced four products, and all have large markets in which to expand market;share. Common?s controller has gathered data from current operations;and wants you to analyze them for him. Sales and operating data are;as follows;Product A1;Product B7;Product C5;Product D9;Variable production costs;$71,000;$91,000;$91,920;$91,920;Variable selling costs;$10,200;$5,400;$12,480;$12,480;Fixed production costs;$20,400;$21,600;$29,120;$29,120;Fixed administrative costs;$3,400;$5,400;$6,240;$6,240;Total sales;$122,000;$136,000;$156,400;$156,400;Units produced and sold;85,000;45,000;26,000;14,000;Machine hours used*;17,000;18,000;20,800;16,800;*Common?s scare resource, machine hours, is being used to full capacity.;REQUIRED;1. Compute the machine;hours needed to product one unit of each product.;2. Determine the;contribution margin per machine hour for each product.;3. Which product line(s);should be targeted for market share expansion?


Paper#37523 | Written in 18-Jul-2015

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