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Cost Accounting Fall 2014 - Excel Project 1 ? Cost Allocation

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Question;Cost Accounting Fall 2014Excel Project 1 ? Cost Allocation30 Points Due Date in SyllabusPurpose:The purpose of this assignment is to provide an introduction to the vertical lookup function (=vlookup). The assignment will also require you to apply OH to products based on various cost driversAbout vlookup (from Excel help):Searches for a value in the first column of a table array and returns a value in the same row from another column in the table array.The V in VLOOKUP stands for vertical. Use VLOOKUP instead of HLOOKUP when your comparison values are located in a column to the left of the data that you want to find.VLOOKUP(lookup_value,table_array,col_index_num,range_lookup) Lookup_value The value to search in the first column of the table array (array: Used to build single formulas that produce multiple results or that operate on a group of arguments that are arranged in rows and columns. An array range shares a common formula, an array constant is a group of constants used as an argument.). Lookup_value can be a value or a reference. If lookup_value issmaller than the smallest value in the first column of table_array, VLOOKUP returns the #N/A error value.Table_array Two or more columns of data. Use a reference to a range or a range name. The values in the first column of table_array are the values searched by lookup_value. These values can be text, numbers, or logical values.Uppercase and lowercase text are equivalent.Col_index_num The column number in table_array from which the matching value must be returned. A col_index_num of 1 returns the value in the first column in table_array, a col_index_num of 2 returns the value in the second column in table_array, and so on. If col_index_num is:Less than 1, VLOOKUP returns the #VALUE! error value.Greater than the number of columns in table_array, VLOOKUP returns the #REF! error value.Range_lookup A logical value that specifies whether you want VLOOKUP to find an exact match or an approximate match:If TRUE or omitted, an exact or approximate match is returned. If an exact match is not found, the next largest value that is less than lookup_value is returned.The values in the first column of table_array must be placed in ascending sort order, otherwise, VLOOKUP may not give the correct value. You can put the values in ascending order by choosing the Sort command from the Data menu and selecting Ascending. For more information, see Default sort orders.If FALSE, VLOOKUP will only find an exact match. In this case, the values in the first column of table_array do not need to be sorted. If there are two or more values in the first column of table_array that match the lookup_value, the first value found is used. If an exact match is not found, the error value #N/A is returned.RemarksWhen searching text values in the first column of table_array, ensure that the data in the first column of table_array does not have leading spaces, trailing spaces, inconsistent use of straight (' or ") and curly (? or ?) quotation marks, or nonprinting characters. In these cases, VLOOKUP may give an incorrect or unexpected value. For more information on functions that you can use to clean text data, see Text and Data functions.When searching number or date values, ensure that the data in the first column of table_array is not stored as text values. In this case, VLOOKUP may give an incorrect or unexpected value. For more information, see Convert numbers stored as text to numbers.If range_lookup is FALSE and lookup_value is text, then you can use the wildcard characters, question mark (?) and asterisk (*), in lookup_value. A question mark matches any single character, an asterisk matches any sequence of characters. If you want to find an actual question mark or asterisk, type a tilde (~) preceding the character.Example: (From: Edmonds, T. P., Tsay, B. and Olds, P. R. (2008).Fundamental Managerial Accounting Concepts. pp. 290-291 (ATC 6-7) McGrawHill Irwin.)In order to determine the effect of different cost drivers on the overhead allocated and the resulting cost per unit this problem used the vlookup function.There are four possible cost drivers (Unit, Setup, Machine Hour, and Labor Hour). The overall overhead cost that needs to be allocated between the three products is $500,000. This spreadsheet was created so that by just changing the number in cell B15 (1 = unit, 2 = setup, 3 = machine hour, and 4 = labor hour) the amount of the allocation base (cell E15) is updated to so that a particular cost driver can be analyzed. In this example units are being used as the cost driver. The spreadsheet then calculates the overhead allocated per unit and applies that overhead to each product.Cell C15 is = VLOOKUP (B15, B4:K7,2). This function operates by using the one (1) in cell B15 to look up a value in the table (the table is cells B4:K7). The function then matches the 1 and returns the value in the second (2) column, which is unit.Cell E15 is = VLOOKUP(B15, B4:K7,10). In this case, the function returns the value in the 10th column (must count all columns even empty ones). Cell E20 is =VLOOKUP(B15, B4:K7, 4)*$G$15. In this case, the function returns the value in the 4th column and then multiplies it by the value in cell G15.Assignment:17th Logan Inc produces four types (Special, Stylish, Basic, Industrial) of widgets. Data has been collected related to direct materials and direct labor for the four widgets. 17th Logan Inc has also collected information on five possible cost drivers (units, setups, machine hours, labor hours, total direct costs {also known as prime cost}). All this information is listed below. Construct a spreadsheet thatwill allocate overhead and calculate unit cost for each of these alternative drivers. Use the VLOOKUP function when constructing the spreadsheet so that you can determine the effect of different cost drivers on the overhead allocated and the resulting cost per unit.WidgetDirectMaterialDirectLaborUnits# ofSetupsMachineHoursLaborHoursSpecialStylish$61,000$64,000$48,000$60,75015,00023,0005254,0008,000450675Basic$150,000$80,00045,000209,000800Industrial$152,000$100,00056,000106,5001000Total overhead cost to be allocated: $968,000After constructing your spreadsheet answer the following questions?1. What is the cost per unit of each widget when machine hours are used as the cost driver for overhead allocation?2. How much overhead is allocated to the Special widget when direct costs are used as the cost driver for overhead allocation?3. What is the total cost of the Basic widget when direct labor hours are used as the cost driver for overhead allocation?4. What is the cost per unit of the Stylish widget when the number of setups is used as the cost driver for overhead allocation?5. Which cost driver would you recommend that Mikey?s Paws and Things use to allocate their overhead? Why?

 

Paper#40489 | Written in 18-Jul-2015

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