Compute allocated production support cost

Assignment Help Managerial Accounting
Reference no: EM1378282

Question 1:

Martinez Plastics Company makes just two product lines, plastic casings for pens and plastic casings for cell phones.

Based on new information, management has adjusted the percentages that apply to the first stage of the ABC system as shown below.

Requirement

1. Prepare a schedule that shows the gross margin for both products.

Begin by allocating the indirect resources to the cost pods. First identify the formula labels, then compute the activity cost.

                                                          Total indirect cost      x     Percent of indirect resource used =

Plant and machinery                                  189,000                 x                          90%                   =

Engineering costs                                        40,000                x                        30 %                     =

Processing activity cost

Next, identify the formula labels, then compute the allocated production support cost.

                                                          Total indirect cost      x     Percent of indirect resource used =

Plant and machinery                                  189,000                 x                       10 %                     =

Engineering costs                                        40,000                x                        70 %                    =

Production support cost

Prepare a schedule that shows the gross margin for both products. (Use parentheses or a minus sign for a d Financial Reports for Martinez Plastics Company Activity Based Cost Allocation System

1350_Compute allocated production support cost.png

Question 2:

Allendale Prep School, a private high school, is preparing a planned income statement for the coming academic year ending August 31, 2013. Tuition revenues for the past two years ending August 31 were as follows: 2012, $830,000; and 2011, 5870,000. Total expenses for 2012 were $820,000 and in 2011 were $837,600. No tuition rate changes occurred in 2011 or 2012, nor are any expected to occur in 2013. Tuition revenue is expected to be S820,000 for 2013.

Requirement

1. What net income should be planned for 2013, assuming that the implied cost behavior remains unchanged?

Let's begin by determining the variable expense percentage.

510_Compute allocated production support cost1.png

Question 3:

Requirement
1. Indicate by letter which graph best fits each of the situations described. The graphs may be used more than once. Next to each number-letter pair, identify a likely cost driver for that cost

1354_Compute allocated production support cost2.png

Situations
1. Cost of machining labor that tends to decrease as workers gain experience
2. Price of an increasingly scarce raw material as the quantity used increases
3. Guaranteed annual wage plan, whereby workers get paid for 40 hours of work per week even at zero or low levels of production that require working only a few hours weekly
4. Water bill, which entails a flat fee for the first 10,000 gallons used and then an increasing unit cost for every additional 10,000 gallons used
5. Availability of quantity discounts, where the cost per unit falls as each price break is reached
6. Depreciation of office equipment
7. Cost of sheet steel for a manufacturer of farm implements
8. Salaries of supervisors, where one supervisor is added for every 12 phone solicitors
9. Natural gas bill consisting of a fixed component, plus a constant variable cost per thousand cubic feet after a specified number of cubic feet are used

402_Compute allocated production support cost4.png

The vertical axes of the graphs represent total dollars of costs incurred, and the horizontal axes represent levels of cost driver activity during a particular time period.

Reference no: EM1378282

Questions Cloud

Approaches for determining machine schedules : Assume that the two optional approaches for determining machine schedules are available. One is an optimizing method that can run once a week on the computer.
Draw a bill of materials structure for the chair : Suppose you are employed by a corporation that makes a type of simple chair. MRP is to be the method of inventory planning for the chair.
Benefits and drawback of recruiting method : Discuss some internal and external ways that I could recruit for a teaching position and what will be the benefits and drawback of each recruiting method?
Difference between a team and a work group : Discuss the difference between a team and a work group. A team is a group of people whose success is dependent on the performance of each member.
Compute allocated production support cost : Prepare a schedule that shows the gross margin for both products and identify the formula labels, then compute the allocated production support cost.
Example of operations management : What would the firm require to investigate the opportunity. If the information is not readily available, explain what the organization should do in order to obtain the data.
Provide examples of limitations or empowerment : Do workplace titles and roles define us as individuals provide examples of limitations or empowerment by role definition shown in the texts.
Analyzing financial and operational implications : The Atlantic Coast Shipping Corporation has a warehouse terminal. The capacity of terminal docks are 3-trucks. As trucks enter the terminal, the driver receives a number, and when one of the 3-dock spaces become available,
Criterion deficiency and criterion contamination : Discuss the special challenges in Criterion Deficiency and Criterion Contamination and what would be the impacts on employees and workers if the challenge were not addressed.

Reviews

Write a Review

Managerial Accounting Questions & Answers

  Manage budgets and financial plans

Explain the budgeting process and its importance to a business, identifying the components of different budgets, forecast estimates for inclusion in the budgets.

  Prepare a retained earnings statement

Prepare a retained earnings statement for the year and Prepare a stockholders' equity section of given case.

  Prepare a master budget for the three-month period

Prepare a master budget for the three-month period.

  Construct the companys direct labor budget

Construct the company's direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced.

  Evaluate the predetermined overhead rate

Evaluate the Predetermined Overhead Rate

  Determine the company''s bid

Determine the company's bid if activity-based costing is used and the bid is based upon full manufacturing cost plus 30 percent.

  Compute the pool rates for the different activities

Complete the schedule to compute the pool rates for the different activities.

  Prepare Company financial statements

Prepare Company financial statements

  Prepare an analysis of terracycles

This individual assignment is based on the TerraCycle Inc.

  Discuss the ethical issues

Discuss the ethical issues

  Political resources in emerging markets

Calculate the GDP in Income Approach  and Expenditure Approach

  Management accounting - ehsan electronics company

A new plant accountant suggested that the company may be able to assign support costs to products more accurately by using an activity based costing system that relies on a separate rate for each manufacturing activity that causes support costs.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd