Devry ACCT434 full course (all discussions+ assignments +quiz +final and midterm exam)

| June 8, 2016

Question

….ABC Journey (graded)
Read the assigned article on the ABC Journey by Taikonda. What are your thoughts on the ABC Readiness and Implementation?
Workout Room (graded)
This week we will work and discuss several of the following problems from Chapter 5: 5-29 to 5-41.

WEEK 7

Quality and Performance (graded)
Companies should focus on financial measures of quality because these are the only measures of quality that can be linked to bottom-line performance. Do you agree? Explain.

Workout Room (graded)
This week, we will work several practice problems from Chapter 19: 19-27 to 19-39; and Chapter 20: 20-26 to 20-36 inclusive.

This section lists options that can be used to view responses.

Relevant Costs (graded)
Discuss Relevant Costs. Why are historical costs irrelevant?

This section lists options that can be used to view responses.

Relevant Costs (graded)
Discuss Relevant Costs. Why are historical costs irrelevant?

This section lists options that can be used to view responses.

WEEK 5

Pricing Decision (graded)

Relevant costs for pricing decisions are the full costs of the product. Do you agree? Explain.

Workout Room (graded)

This week, we will work several practice problems from Chapter 12: 12-26 to 12-37; and Chapter 22:22-27 to 22-36 inclusive.

WEEK 6

Evaluating Managers (graded)
The discussion this week is in relation to evaluating managers based on budgets. What are your thoughts on this issue?

Workout Room (graded)
This week, we will work several practice problems from Chapter 14: 14-27 to 14-39; and Chapter 21: 21-27 to 21-38 inclusive.

This section lists options that can be used to view responses.

WEEK 7

Quality and Performance (graded)
Companies should focus on financial measures of quality because these are the only measures of quality that can be linked to bottom-line performance. Do you agree? Explain.

Workout Room (graded)
This week, we will work several practice problems from Chapter 19: 19-27 to 19-39; and Chapter 20: 20-26 to 20-36 inclusive.

This section lists options that can be used to view responses.

week1 homework

Problem 1 – Aunt Ethel’s Fancy Cookie Company manufactures and sells three flavors of cookies: macaroon, sugar, and buttercream. The batch size for the cookies is limited to 1,000 cookies based on the size of the ovens and cookie molds owned by the company. Based on budgetary projections, the information listed below is available:
Buttercream Macaroon Sugar

Projected sales in units 500,000 800,000 600,000

PER UNIT data:

Selling price $0.80 $0.75 $0.60

Direct materials $0.20 $0.15 $0.14

Direct labor $0.04 $0.02 $0.02

Hours per 1,000-unit batch:

Direct labor hours 2 1 1

Oven hours 1 1 1

Packaging hours 0.5 0.5 0.5

Total overhead costs and activity levels for the year are estimated as follows:

Activity Overhead costs Activity levels

Direct labor 2,400 hours

Oven $120,000 1,900 hours

Packaging $150,000 950 hours

Total $270,000

Question 1. Question :

Based on the information provided for Problem 1, determine the activity-cost-driver rate for packaging costs.

Question 2. Question :

Based on the information provided for Problem 1, using the ABC system, for the sugar cookie, compute the estimated overhead costs per 1,000 cookies.

Question 3. Question :

Based on the information provided for Problem 1, using the ABC system, for the sugar cookie, compute the estimated gross profit per 1,000 cookies.

Question 4. Question :

Based on the information provided for Problem 1, using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated overhead costs per 1,000 cookies.

Question 5. Question :

Based on the information provided for Problem 1, using a traditional system (with direct labor hours as the overhead allocation base) for the sugar cookie, compute the estimated operating profit per 1,000 cookies.

Question 6. Question :

Based on the information provided for Problem 1, explain the difference between the profits obtained from the traditional system and the ABC system. Which system provides a better estimate of profitability? Why?

Question 7. Question :

Problem 2 (Essay question): What is activity-based management and how can it be used to improve the profitability of a company?

Week 2 homework

Problems and Questions

Problem 1- Picture Pretty manufactures picture frames. Sales for August are expected to be 10,000 units of various sizes. Historically, the average frame requires four feet of framing, one square foot of glass, and two square feet of backing. Beginning inventory includes 1,500 feet of framing, 500 square feet of glass, and 500 square feet of backing. Current prices are $0.30 per foot of framing, $6.00 per square foot of glass, and $2.25 per square foot of backing. Ending inventory should be 150% of beginning inventory. Purchases are paid for in the month acquired.

Question 1: Determine the quantity of framing, glass, and backing that is to be purchased during August. (5 points)

Question 2: Determine the total costs of direct materials for August purchases. (5 points)

Problem 2 -Russell Company has the following projected account balances for June 30, 20X2:

Accounts payable $40,000
Sales $800,000
Accounts receivable 100,000
Capital stock 400,000
Depreciation, factory 24,000
Retained earnings ?
Inventories (5/31 & 6/30) 180,000
Cash 56,000
Direct materials used 200,000
Equipment, net 240,000
Office salaries 80,000
Buildings, net 400,000
Insurance, factory 4,000
Utilities, factory 16,000
Plant wages 140,000
Selling expenses 60,000
Bonds payable 160,000
Maintenance, factory 28,000
Question 1: Calculate the budgeted net income for June 20X2.(5 points)

Question 2: Calculate the budgeted Total Assets as of June 30, 20X2. (5 points)

Problem 3- Tylon’s Hardware uses a flexible budget to develop planning information for its warehouse operations. For 20X2, the company anticipated that it would have 96,000 sales units for 664 customer shipments. Average storage bin usage for various inventories was estimated to be 200 per day. The costs and cost drivers were determined to be as follows:

Item Fixed Variable Cost driver

Product handling $10,000 $1.25 per 100 units

Storage 3.00 per storage bin

Utilities 1,000 1.50 per 100 units

Shipping clerks 1,000 1.00 per shipment

Supplies 0.50 per shipment

During the year, the warehouse processed 90,000 units for 600 customer shipments. The workers used 225 storage bins on average each day to sort, store, and process goods for shipment. The actual costs for 20X2 were:

Item Actual costs

Product handling $10,900

Storage 465

Utilities 2,020

Shipping clerks 1,400

Supplies 340

Question 1: Determine the 20X2 static budget variances. (5 points)

Question 2: Determine the 20X2 flexible budget variances. (5 points)

Related to problem 1, determine the quantity of framing, glass, and backing that is to be purchased during August

Question 2. Question :

Related to problem 1, determine the total costs of direct materials for August purchases

Question 3. Question :

Related to problem 2, calculate the budgeted net income for June 20X2

Question 4. Question :

Related to problem 2, calculate the budgeted Total Assets as of June 30, 20X2

Question 5. Question :

Related to problem 3, determine the 20X2 static budget variances

Question 6. Question :

Related to problem 3, determine the 20X2 flexible budget variances

Problems/questions

Problem 1- Tessmer Manufacturing Company produces inventory in a highly automated assembly plant inOlathe,KS. The automated system is in its first year of operation and management is still unsure of the best way to estimate the overhead costs of operations for budgetary purposes. For the first six months of operation, the following data was collected:

Machine-hours Kilowatt-hours Total Overhead Costs

January 3,800 4,520,000 $138,000

February 3,650 4,340,000 136,800

March 3,900 4,500,000 139,200

April 3,300 4,290,000 136,800

May 3,250 4,200,000 126,000

June 3,100 4,120,000 120,000

Question 1: Use the high-low method to determine the estimating cost function with machine-hours as the cost driver. (five points)

Question 2: Use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver. (five points)

Question 3: For July, the company ran the machines for 3,000 hours and used 4,000,000 kilowatt-hours of power. The overhead costs totaled $114,000. Which cost driver was the best predictor for July? (five points)

Problem 2 -Louder Company manufactures part MNO used in several of its truck models. A total of 10,000 units are produced each year with production costs as follows:

Direct materials $ 45,000

Direct manufacturing labor 15,000

Variable support costs 35,000

Fixed support costs 25,000

Total costs $120,000

Louder Company has the option of purchasing part MNO from an outside supplier at $11.20 per unit. If MNO is outsourced, 40% of the fixed costs cannot be immediately converted to other uses.

Question 1: What amount of the MNO production costs is avoidable? (five points)

Question 2: Should the company outsource MNO? Why or why not? (five points)

Question 3: What other items should the company consider before outsourcing any of the parts it manufactures? (five points)

Question 1.1.Related to Problem #1, use the high-low method to determine the estimating cost function with machine-hours as the cost driver.(Points : 5)

Question 2.2.Related to Problem #1, use the high-low method to determine the estimating cost function with kilowatt-hours as the cost driver.(Points : 5)

Question 3.3.Related to Problem #1, for July, the company ran the machines for 3,000 hours and used 4,000,000 kilowatt-hours of power. The overhead costs totaled $114,000. Which cost driver was the best predictor for July?(Points : 5)

Question 4.4.Related to Problem #2, what amount of the MNO production costs is avoidable?(Points : 5)

Question 5.5.Related to Problem #2, should the company outsource MNO? Why or why not?(Points : 5)

Question 6.6.Related to Problem #2, what other items should the company consider before outsourcing any of the parts it manufactures?(Points : 5)

Page 1

Problem 1- Red Sauce Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer of 20X2, the joint costs of processing the tomatoes were $420,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer is as follows:

Product

Cases

Sales Value at Splitoff Point

Separable Costs

Selling Price

Catsup

100,000

$6 per case

$3.00 per case

$28 per case

Juice

150,000

8 per case

5.00 per case

25 per case

Canned

200,000

5 per case

2.50 per case

10 per case

Question:Determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product. (10 points)

Problem 2 -Zenon Chemical, Inc. processes pine rosin into three products: turpentine, paint thinner, and spot remover. During May, the joint costs of processing were $240,000. Production and sales value information for the month is as follows:

Product

Units Produced

Sales Value at Splitoff Point

Turpentine

6,000 liters

$60,000

Paint thinner

6,000 liters

50,000

Spot remover

3,000 liters

25,000

Question: Determine the amount of joint cost allocated to each product if the physical-measure method is used. (10 points)

Problem 3 -Oregon Lumber processes timber into four products. During January, the joint costs of processing were $280,000. There was no inventory at the beginning of the month. Production and sales value information for the month is as follows:

Sales Value at

Product

Board feet

Splitoff Point

Ending Inventory

2 x 4’s

6,000,000

$0.30 per board foot

500,000 bdft.

2 x 6’s

3,000,000

0.40 per board foot

250,000 bdft.

4 x 4’s

2,000,000

0.45 per board foot

100,000 bdft.

Slabs

1,000,000

0.10 per board foot

50,000 bdft.

Question:Determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary. (10 points)

Question 1.1.Related to Problem #1, determine the amount allocated to each product if the estimated net realizable value method is used, and compute the cost per case for each product.(Points : 10)

Question 2.2.Related to Problem #2, determine the amount of joint cost allocated to each product if the physical-measure method is used.(Points : 10)

Question 3.3.Related to Problem #3, determine the value of ending inventory if the sales value at splitoff method is used for product costing. Round to three decimal places when necessary.(Points : 10)

Week 5 homework

Problems/Questions

Problem 1- Nancy Company has budgeted sales of $300,000 with the following budgeted costs:

Direct materials $60,000

Direct manufacturing labor 40,000

Factory overhead

Variable 30,000

Fixed 50,000

Selling and administrative expenses

Variable 20,000

Fixed 30,000

Question 1: Compute the average markup percentage for setting prices as a percentage of the full cost of the product. (five points)

Question 2: Compute the average markup percentage for setting prices as a percentage of the variable cost of the product. (five points)

Question 3: Compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs. (five points)

Problem 2 -Better Food Company recently acquired an olive oil processing company that has an annual capacity of 2,000,000 liters and that processed and sold 1,400,000 liters last year at a market price of $4 per liter. The purpose of the acquisition was to furnish oil for the cooking division. The cooking division needs 800,000 liters of oil per year. It has been purchasing oil from suppliers at the market price. Production costs at capacity of the olive oil company, now a division, are as follows:

Direct materials per liter

$1.00

Direct processing labor

0.50

Variable processing overhead

0.24

Fixed processing overhead

0.40

Total

$2.14

Management is trying to decide what transfer price to use for sales from the newly acquired company to the cooking division. The manager of the olive oil division argues that $4, the market price, is appropriate. The manager of the cooking division argues that the cost of $2.14 should be used, or perhaps a lower price, since fixed overhead cost should be recomputed with the larger volume. Any output of the olive oil division not sold to the cooking division can be sold to outsiders for $4 per liter.

Question 1: Compute the operating income for the olive oil division using a transfer price of $4. (five points)

Question 2: Compute the operating income for the olive oil division using a transfer price of $2.14. (five points)

Question 3: What transfer price(s) do you recommend? Compute the operating income for the olive oil division using your recommendation. (five points)

Question 1.1.Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the full cost of the product.(Points : 5)

Question 2.2.Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the variable cost of the product.(Points : 5)

Question 3.3.Related to Problem 1, compute the average markup percentage for setting prices as a percentage of the variable manufacturing costs.(Points : 5)

Question 4.4.Related to Problem 2, compute the operating income for the olive oil division using a transfer price of $4.(Points : 5)

Question 5.5.Related to Problem 2, compute the operating income for the olive oil division using a transfer price of $2.14.(Points : 5)

Question 6.6.Related to Problem 2, what transfer price(s) do you recommend? Compute the operating income for the olive oil division using your recommendation. (Points : 5)

Week6 homework

Page 1

Problem 1- Handy-Man Services is a repair-service company specializing in small household jobs. Each client pays a fixed monthly service fee based on the number of rooms in the house. Records are kept on the time and material costs used for each repair. The following profitability data apply to five customers.
Customer Revenues Customer Costs

Marveline Burnett $300 $225

JJackson 200 305

Roger Jones 80 75

Paul Saas 75 110

Becky Stephan 350 220

Question 1: Compute the operating income for each of the five customers. (five points)

Question 2: What options should Handy-Man Services consider in light of the customer-profitability results? (five points)

Question 3: What problems might Handy-Man Services encounter in accurately estimating the operating costs of each customer? (five points)

Problem 2- Gavin and Alex, baseball consultants, are in need of a microcomputer network for their staff. They have received three proposals, with related facts as follows:

Proposal A

Proposal B

Proposal C

Initial investment in equipment

$90,000

$90,000

$90,000

Annual cash increase in operations:

Year 1

80,000

45,000

90,000

Year 2

10,000

45,000

0

Year 3

45,000

45,000

0

Salvage value

0

0

0

Estimated life

3 yrs

3 yrs

1 yr

The company uses straight-line depreciation for all capital assets.

Question 1: Compute the payback period, net present value, and accrual accounting rate of return with initial investment, for each proposal. Use a required rate of return of 14%. (10 points)

Question 2: Rank each proposal 1, 2, and 3 using each method separately. Which proposal is best? Why? (five points)

Question 1.1.Related to Problem 1, compute the operating income for each of the five customers.(Points : 5)

Question 2.2.Related to Problem 1, what options should Handy-Man Services consider in light of the customer-profitability results?(Points : 5)

Question 3.3.Related to Problem 1, what problems might Handy-Man Services encounter in accurately estimating the operating costs of each customer?(Points : 5)

Question 4.4.Related to Problem 2, compute the payback period, net present value, and accrual accounting rate of return with initial investment, for each proposal. Use a required rate of return of 14%.(Points : 10)

Question 5.5.Related to Problem 2, rank each proposal 1, 2, and 3 using each method separately. Which proposal is best? Why?(Points : 5)

aCCT434 WEEK 7 HOMEWORK ES
Page 1

Problem 1- The Door Company manufactures doors. Classify each of the following quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs. (13 points)
a. Retesting of reworked products

b. Downtime due to quality problems

c. Analysis of the cause of defects in production

d. Depreciation of test equipment

e. Warranty repairs

f. Lost sales arising from a reputation for poor quality

g. Quality circles

h. Rework direct manufacturing labor and overhead

i. Net cost of spoilage

j. Technical support provided to suppliers

k. Audits of the effectiveness of the quality system

l. Plant utilities in the inspection area

m. Reentering data because of keypunch errors

Problem 2 -For supply item ABC, Andrews Company has been ordering 125 units based on the recommendation of the salesperson who calls on the company monthly. A new purchasing agent has been hired by the company who wants to start using the economic-order-quantity method and its supporting decision elements. She has gathered the following information:

Annual demand in units

250

Days used per year

250

Lead time, in days

10

Ordering costs

$100

Annual unit carrying costs

$20

Determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs. (17 points)

Question 1.1.Related to Problem 1, classify each of the given quality costs as prevention costs, appraisal costs, internal failure costs, or external failure costs.(Points : 13)

Question 2.2.Related to Problem 2, determine the EOQ, average inventory, orders per year, average daily demand, reorder point, annual ordering costs, and annual carrying costs.(Points : 17)

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