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Question;Mccoo Inc. bases its manufacturing overhead budget on budgeted direct labor-hours. The variable overhead rate is $1.10 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $120,320 per month, which includes depreciation of $19,730. All other fixed manufacturing overhead costs represent current cash flows. The September direct labor budget indicates that 9,400 direct labor-hours will be required in that month.Required:a. Determine the cash disbursement for manufacturing overhead for September. (Omit the "$" sign in your response.) Cash disbursement for manufacturing overhead $ b. Determine the predetermined overhead rate for September. (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Predetermined overhead rate $ Lahay Inc. bases its selling and administrative expense budget on the number of units sold. The variable selling and administrative expense is $3.80 per unit. The budgeted fixed selling and administrative expense is $30,350 per month, which includes depreciation of $3,620. The remainder of the fixed selling and administrative expense represents current cash flows. The sales budget shows 3,000 units are planned to be sold in April.Required:Calculate the selling and administrative cash disbursements budget for April. (Omit the "$" sign in your response.) Cash disbursement for selling and administrative expenses $ rev: 11_09_2012Velazques Jeep Tours operates jeep tours in the heart of the Colorado Rockies. The company bases its budgets on two measures of activity (i.e., cost drivers), namely guests and jeeps. One vehicle used in one tour on one day counts as a jeep. Each jeep has one tour guide. The company uses the following data in its budgeting: Fixed elementper month Variable elementper guest Variable elementper jeep Revenue $ 0 $ 91 $ 0 Tour guide wages $ 0 $ 0 $ 107 Vehicle expenses $ 3,700 $ 4 $ 57 Administrative expenses $ 1,800 $ 1 $ 0 ________________________________________In March, the company budgeted for 357 guests and 127 jeeps. The company's income statement showing the actual results for the month appears below:Velazques Jeep ToursIncome StatementFor the Month Ended March 31 Actual guests 354 Actual jeeps 129 Revenue $ 32,154 ________________________________________ ________________________________________ Expenses: Tour guide wages 13,553 Vehicle expenses 12,589 Administrative expenses 2,154 ________________________________________ ________________________________________ Total expense 28,296 ________________________________________ ________________________________________ Net operating income $ 3,858 ________________________________________________________________________________ ________________________________________________________________________________________________________________________Required:Complete the report showing the company's activity variances for March. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)Velazques Jeep ToursActivity VariancesFor the Month Ended March 31 Revenue $ ________________________________________ Expenses: Tour guide wages Vehicle expenses Administrative expenses ________________________________________ Total expense ________________________________________ Net operating income $ During May, Hiles Corporation budgeted for 26,000 customers, but actually served 24,000 customers. The company uses the following revenue and cost formulas in its budgeting, where q is the number of customers served:Revenue: $4.81qWages and salaries: $35,100 + $1.72qSupplies: $0.62qInsurance: $12,100Miscellaneous: $5,100 + $0.12qRequired:Complete the company's flexible budget for May based on the actual level of activity for the month. (Input all amounts as positive values. Omit the "$" sign in your response.)Hiles CorporationFlexible BudgetFor the Month Ended May 31 Actual customers served Revenue $ ________________________________________ Expenses: Wages and salaries Supplies Insurance Miscellaneous ________________________________________ Total expense ________________________________________ Net operating income $ ________________________________________________________________________________________________________________________Crovo Corporation uses customers served as its measure of activity. During December, the company budgeted for 44,000 customers, but actually served 46,000 customers. The company has provided the following data concerning the formulas used in its budgeting and its actual results for December:Data used in budgeting: Fixed elementper month Variable elementper customer Revenue $ 2.60 Wages and salaries $ 20,500 $ 0.91 Supplies $ 0 $ 0.56 Insurance $ 7,500 $ 0.00 Miscellaneous $ 3,500 $ 0.36 ________________________________________Actual results for December: Revenue $ 115,300 Wages and salaries $ 57,000 Supplies $ 23,860 Insurance $ 9,500 Miscellaneous $ 23,860 ________________________________________Required:Complete the report showing the company's revenue and spending variances for December. (Input all amounts as positive values. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.)Crovo CorporationRevenue and Spending VariancesFor the Month Ended December 31 Revenue $ ________________________________________ Expenses: Wages and salaries Supplies Insurance Miscellaneous ________________________________________ Total expense ________________________________________ Net operating income $ Silmon Corporation makes a product with the following standard costs: Inputs Standard Quantityor Hours Standard Priceor Rate Direct materials 4.6 grams $ 7.00 per gram Direct labor 0.4 hours $ 14.00 per hour Variable overhead 0.4 hours $ 2.00 per hour________________________________________In June the company produced 5,100 units using 24,710 grams of the direct material and 2,550 direct labor-hours. During the month the company purchased 25,000 grams of the direct material at a price of $6.80 per gram. The actual direct labor rate was $14.60 per hour and the actual variable overhead rate was $1.90 per hour. The materials price variance is computed when materials are purchased. Variable overhead is applied on the basis of direct labor-hours.Required:Compute the following variances for raw materials, direct labor, and variable overhead, assuming that the price variance for materials is recognized at point of purchase: (Input all amounts as positive values. Do not round intermediate calculations. Leave no cells blank - be certain to enter "0" wherever required. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Omit the "$" sign in your response.) a. Direct materials quantity variance $ b. Direct materials price variance $ c. Direct labor efficiency variance $ e. Direct labor rate variance $ d. Variable overhead efficiency variance $ f. Variable overhead rate variance $ ________________________________________Costs associated with two alternatives, code-named Q and R, being considered by Corniel Corporation are listed below: Alternative Q Alternative R Supplies costs $ 60,000 $ 54,000 Power costs $ 35,000 $ 35,000 Inspection costs $ 15,000 $ 23,000 Assembly costs $ 28,000 $ 17,000 ________________________________________Required:a. Which costs are relevant and which are not relevant in the choice between these two alternatives? Supplies costs Power costs Inspection costs Assembly costs ________________________________________b. What is the differential cost of Alternative R over Alternative Q? (Negative amount should be indicated by a minus sign. Omit the "$" signs in your response.) Differential cost $ Nutall Corporation is considering dropping product N28X. Data from the company's accounting system appear below: Sales $ 600,000 Variable expense $ 241,000 Fixed manufacturing expenses $ 232,000 Fixed selling and administrative expense $ 180,000 ________________________________________All fixed expenses of the company are fully allocated to products in the company's accounting system. Further investigation has revealed that $192,500 of the fixed manufacturing expenses and $107,500 of the fixed selling and administrative expenses are avoidable if product N28X is discontinued.Required:a. According to the company's accounting system, what is the net operating income earned by product N28X? (Input the amount as a positive value. Omit the "$" sign in your response.) $ b-1. What would be the effect on the company's overall net operating income of dropping product N28X?(Input the amount as a positive value. Omit the "$" sign in your response.) Net operating income would be by $.b-2. Should the product be dropped?NoYesMasse Corporation uses part G18 in one of its products. The company's Accounting Department reports the following costs of producing the 16,700 units of the part that are needed every year. Per Unit Direct materials $3.90 Direct labor $4.60 Variable overhead $7.60 Supervisor's salary $8.30 Depreciation of special equipment $8.90 Allocated general overhead $5.90 ________________________________________An outside supplier has offered to make the part and sell it to the company for $32.00 each. If this offer is accepted, the supervisor's salary and all of the variable costs, including direct labor, can be avoided. The special equipment used to make the part was purchased many years ago and has no salvage value or other use. The allocated general overhead represents fixed costs of the entire company. If the outside supplier's offer were accepted, only $22,700 of these allocated general overhead costs would be avoided. In addition, the space used to produce part G18 could be used to make more of one of the company's other products, generating an additional segment margin of $29,000 per year for that product.Required:a. Calculate the effect on the company's total net operating income of buying part G18 from the supplier rather than continuing to make it inside the company. (Input the amount as a positive value. Omit the "$" sign in your response.) Net operating income would be by $.b. Which alternative should the company choose?MakeBuyFoulds Company makes 6,000 units per year of a part it uses in the products it manufactures. The unit product cost of this part is computed as follows: Direct materials $ 12.10 Direct labor 19.70 Variable manufacturing overhead 1.90 Fixed manufacturing overhead 9.80 ________________________________________ ________________________________________ Unit product cost $ 43.50 An outside supplier has offered to sell the company all of these parts it needs for $41.20 a unit. If the company accepts this offer, the facilities now being used to make the part could be used to make more units of a product that is in high demand. The additional contribution margin on this other product would be $43,200 per year.If the part were purchased from the outside supplier, all of the direct labor cost of the part would be avoided. However, $6.30 of the fixed manufacturing overhead cost being applied to the part would continue even if the part were purchased from the outside supplier. This fixed manufacturing overhead cost would be applied to the company's remaining products.Required:a. How much of the unit product cost of $43.50 is relevant in the decision of whether to make or buy the part? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Relevant cost per unit $ b. What is the net total dollar advantage (disadvantage) of purchasing the part rather than making it? (Input the amount as a positive value. Omit the "$" sign in your response.) Net $ c. What is the maximum amount the company should be willing to pay an outside supplier per unit for the part if the supplier commits to supplying all 6,000 units required each year? (Round your answer to 2 decimal places. Omit the "$" sign in your response.) Maximum acceptable purchase price per unit $ Holtrop Corporation has received a request for a special order of 9,500 units of product Z74 for $47.00 each. The normal selling price of this product is $52.10 each, but the units would need to be modified slightly for the customer. The normal unit product cost of product Z74 is computed as follows: Direct materials $17.80 Direct labor 7.10 Variable manufacturing overhead 4.30 Fixed manufacturing overhead 7.20 ________________________________________ Unit product cost $36.40 ________________________________________________________________________________________________________________________Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like some modifications made to product Z74 that would increase the variable costs by $6.70 per unit and that would require a one-time investment of $46,500 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order.Required:Calculate the incremental net operating income of accepting the special order. (Omit the "$" sign in your response.) Incremental net operating income $ Janes, Inc., is considering the purchase of a machine that would cost $430,000 and would last for 5 years, at the end of which, the machine would have a salvage value of $43,000. The machine would reduce labor and other costs by $103,000 per year. Additional working capital of $5,000 would be needed immediately, all of which would be recovered at the end of 5 years. The company requires a minimum pretax return of 16% on all investment projects. (Ignore income taxes.)Click here to view Exhibit 13B-1 and Exhibit 13B-2 to determine the appropriate discount factor(s) using tables.Required:Determine the net present value of the project. (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate and final answers to the nearest dollar amount. Omit the "$" sign in your response.) Net present value $ Brewer Company is considering purchasing a machine that would cost $451,260 and have a useful life of 6 years. The machine would reduce cash operating costs by $98,100 per year. The machine would have a salvage value of $107,270 at the end of the project. (Ignore income taxes.)Required:a. Compute the payback period for the machine. (Round your answer to 2 decimal places.) Payback period years b. Compute the simple rate of return for the machine. (Round your answer to 2 decimal places. Omit the "%" sign in your response.) Simple rate of return % Austin Company is investigating four different investment opportunities. Information on the four projects under study is given below: Project Number 1 2 3 4 Investment required $ (450,000) $ (540,000) $ (390,000) $ (420,000) Present value of cash inflows at a 8% discount rate 624,720 618,300 624,720 496,800 _ Net present value $ 174,720 $ 78,300 $ 234,720 $ 76,800 ____________________________________________________________________________ Life of the project 7 years 14 years 7 years 4 years Internal rate of return 19% 10% 24% 16% ________________________________________Because the company?s required rate of return is 8%, a 8% discount rate has been used in the present value computations above. Limited funds are available for investment, so the company can?t accept all of the available projects.Required:1. Compute the project profitability index for each investment project. (Round your answers to 3 decimal places.)Project ProfitabilityIndex1 2 3 4 ________________________________________2. Rank the four projects according to preference, in terms of net present value, project profitability index and internal rate of return. Net PresentValue ProjectProfitability Index Internal Rate ofReturn First preference Second preference Third preference Fourth preference

 

Paper#41361 | Written in 18-Jul-2015

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