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Question;A);Given the;following costs for Bently Company, classify each cost as either variable;fixed, or mixed.;Total;Cost at;2,000;Units 3,000;Units;Cost A $12,900 $19,350;Cost B 12,300 16,650;Cost C 13,000 13,000;B);Robey Inc. manufactures two products, Extra and Basic.;Overhead costs consist of setting up machines, $200,000, machining, $450,000;and inspecting, $150,000. Additional;information on the two products is;Extra Basic Total;Direct labor hours 15,000 25,000 40,000;Machine setups 600 400 1,000;Machine hours 24,000 26,000 50,000;Inspections 800 700 1,500;Show;Computations;i);Determine the overhead applied to Extra using;traditional costing based on direct labor hours;ii);Determine the overhead applied to Extra using activity;based costing;iii);Does it appear activity based costing would be;worthwhile in this case? Why?;Hose Inc. is preparing its budget for the coming;year, 2014. The first step is to plan for the first quarter of that coming;year. Hose gathered the following information from the managers.;Sales;Unit;sales for November 2013 112,500;Unit sales for December 2013 102,083;Expected unit sales for January 2014 113,333;Expected unit sales for February 2014 112,500;Expected unit sales for March 2014 116,667;Expected unit sales for April 2014 125,000;Expected unit sales for May 2014 137,500;Unit selling price per hose $12;Hose likes to keep 10% of the next month?s;unit sales in ending inventory. All sales are on account.;85% of the Accounts Receivable are;collected in the month of sale, and;15% of the Accounts Receivable are;collected in the month after sale.;Accounts receivable on December 31, 2013;totaled $183,750.;Direct Materials;Item__ Amount;used per unit Inventory;Dec. 31,2013;Plastic 12;oz @ 6? per oz 3,883.125;lbs;Rubber 4 oz @ 5? per oz 1,294.375 lbs;Hose;likes to keep 5% of the materials needed for the next month in its ending;inventory. Payment for materials is;made within 15 days.;50% is paid in the month of purchase, and;50% is paid in the month after purchase.;Accounts Payable on December 31, 2013;totaled $120,595.;Direct Labor;Labor requires 12 minutes per unit for;completion and is paid at a rate of $10 per hour.;Manufacturing Overhead;Indirect;materials 30? per;labor hour;Utilities 45?;per labor hour;Salaries $42,000;per month;Depreciation $16,800;per month;Property taxes $2,500;per month;Janitorial $1,300;per month;Selling and Administrative;Variable selling and administrative cost;per unit is $1.62.;Advertising $15,000;a month;Salaries $72,000;a month;Depreciation $2,500;a month;Other Information;The Cash balance on December 31, 2013;totaled $100,500, but management has decided it would like to maintain a cash;balance of at least $150,000 beginning on January 1, 2014.;Dividends are paid each month at the rate;of $2.50 per share for 5,000 shares outstanding. The company has an open line;of credit with Last National Bank. The terms of the agreement requires;borrowing to be in $1,000 increments at 8% interest.;Hose;borrows on the first day of the month and repays on the last day of the month.;A $500,000 equipment purchase is planned;for February.;Required;Prepare the following for January 2014;a) Sales budget.;b) Production budget.;c) Direct materials budget.;d) Direct labor budget.;e) Manufacturing overhead budget;f) Selling and administrative budget.;g) Expected cash collections from customers.;h) Expected payments for materials purchases.;i) Cash budget.

 

Paper#40646 | Written in 18-Jul-2015

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