The Unit 5 Assignment includes the following textbook problems:
Exercise 14-40 – found on page 601 in your textbook
Problem 15-53 – found on pages 663-664 in your textbook
Submit your assignment using a single Excel workbook. Place each exercise / problem on a separate tab “sheet”. Rename each tab to reflect the exercise or problem number. Always include your computations, and clearly mark your final answer. Failure to do so may result in a reduced score.
You must properly format Excel for the Journal Entries.
The Kaplan math Center provides extensive help to you when you need additional training in the use of Excel spreadsheets. Most of the Assignments require you to use Excel; you are strongly encouraged to gain additional Excel expertise by taking advantage of the great video & document training tutorials and live tutoring resources available through the Kaplan Math Center.
After you have completed the assignment, upload your Excel spreadsheet to the Unit 5 Assignment Dropbox before Tuesday, 11:59 p.m. (ET) of Unit 5. Name your Assignment using this format: LastName_FirstName_Unit#_AssignmentName. For example, the Unit 5 Assignment would be named:
Assignments submitted late will be subject to the Late Policy described in your Syllabus.
The Unit 5 Assignment Rubric has been provided in Doc Sharing. The rubrics are an integral part of all assignment instructions. Please review the rubric document for a complete understanding of how your assignments will be assessed. Doing so will help you successfully complete your assignments.
Remember to “Rename” your Excel spreadsheet tabs. Failure to do so may result in a reduced score
(14-40) Journal Entries in a Standard Cost System Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated:
Direct labor: 2 hours at $25.00 per hour $50.00
Direct materials: 2 gallons at $10.00 per gallon $20.00
During December of 2013, Boron produced a total of 2,500 gallons of output and incurred the following direct manufacturing costs:
Direct labor: 4,900 hours worked @ an average wage rate of $19.50 per hour
Purchased: 6,000 gallons @ $10.45 per gallon
Used in production: 5,100 gallons
Boron records price variances for materials at the time of purchase.
**Required Give journal entries for the following events and transactions:
1. Purchase, on credit, of direct materials.
2. Direct materials issued to production.
3. Direct labor cost of units completed this period.
4. Direct manufacturing cost (direct labor plus direct materials) of units completed and transferred to Finished Goods Inventory.
5. Sale, for $150 per gallon, of 2,000 gallons of output. ( Hint: You will need two journal entries here.)
(15-53) Two-Variance Analysis: Service Company Example International Finance Incorporated issues letters of credit to importers for overseas purchases. The company charges a nonrefundable application fee of $3,000 and, on approval, an additional service fee of 2% of the amount of credit requested. The firm’s budget for the year just completed included fixed expenses for office salaries and wages of $500,000, leasing office space and equipment of $50,000, and utilities and other operating expenses of $10,000. In addition, the budget also included variable expenses for supplies and other variable overhead costs of $1,000,000. The company estimated these variable over-
head costs to be $2,000 for each letter of credit approved and issued. The company approves, on average, 80% of the applications it receives. During the year, the company received 600 requests and approved 75% of them. The total variable overhead was 10% higher than the standard amount applied; the total fixed expenses were 5% lower than the amount budgeted. In addition to these expenses, the company paid a $270,000 insurance premium for the letters of credit issued. The insurance premium is 1% of the amount of credits issued in U.S. dollars. The actual amount of credit issued often differs from the amount requested due to fluctuations in exchange rates and variations in the amount shipped from the amount ordered by importers. The strength of the dollar during the year decreased the insurance premium by 10%.
1. Calculate the (a) variable, and (b) fixed overhead rates for the year.
2. Prepare an analysis of the overhead variances for the year just completed. (a) What is the total controllable (i.e., flexible-budget) variance for the period? (b) What is the overhead volume variance for the period? ( Hint: These two should sum to $88,000U.)
Required to have the answers in an excel file, with each problem on their own sheet and all work must be showed..
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