Reference no: EM131162167
For this assignment, please complete and submit Task 1 and Task 2 as described below.
Task 1: Performance Reports
At the end of last year, Cyril Fedako, chief financial officer (CFO) for Fedako Products, received a report comparing budgeted and actual production costs for the company's plant in Forest Lake, Minnesota:
Manufacturing Costs Forest Lake Plant Budget versus Actual
|
|
Budget
|
Actual
|
Difference (Actual Minus Budget)
|
Materials
|
$3,200,000
|
$3,500,000
|
$300,000
|
Direct Labor
|
$2,300,000
|
$2,500,000
|
$200,000
|
Supervisory salaries
|
$475,000
|
$500,000
|
$25,000
|
Utilities
|
$125,000
|
$135,000
|
$10,000
|
Machine maintenance
|
$350,000
|
$380,000
|
$30,000
|
Depreciation of building
|
$90,000
|
$90,000
|
$5,000
|
Depreciation of equipment
|
$250,000
|
$ 255,000
|
$5,000
|
Janitorial
|
$220,000
|
$235,000
|
$15,000
|
Total
|
$7,010,000
|
$7,595,000
|
$585,000
|
His first thought was that costs must be out of control since actual costs exceed the budget by $585,000. However, he quickly recalled that the budget was set assuming a production level of 60,000 units. The Forest Lake plant actually produced 65,000 units in the last year.
a. Given that production was greater than planned, should Cyril expect that all actual costs will be greater than budgeted? Which costs would you expect to increase, and which costs would you expect to remain relatively constant? Substantiate your response with appropriate references from the textbook.
b. Cyril is extremely busy-the company has six other plants. Therefore, he cannot spend time investigating every departure from the budget. With this in mind, which cost(s) should Cyril concentrate on in his investigation of budget differences? Substantiate your response with appropriate references from the textbook.
Task 2: Job-Order Costing: Inventory Accounts and Cost of Goods Sold
Smith Die Company manufactures cutting dies for the shoe industry. Each set of dies is custom designed to a customer's templates. During the first week of May, six orders were received from customers. They were assigned job numbers 1005 to 1010. The following transactions occurred during the first week of May.
Smith Die purchased steel on account from Eastern City Steel costing $5,000. The company received and paid for supplies (indirect materials) from Mallard Supply costing $2,300. Material requisitions indicated that materials were issued to the factory floor as follows:
Job No.
|
Direct Materials
|
Indirect Materials
|
1005
|
$600
|
|
1006
|
$800
|
|
1007
|
$1,500
|
|
1008
|
$600
|
|
1009
|
$400
|
|
1010
|
$300
|
|
Total
|
$4,200
|
$800
|
The labor time ticket summary reflected the following costs for the week:
Job No.
|
Direct Labor
|
Indirect Labor
|
1005
|
$1,500
|
|
1006
|
$1,900
|
|
1007
|
$3,200
|
|
1008
|
$1,300
|
|
1009
|
$800
|
|
1010
|
$600
|
|
Total
|
$9,300
|
$6,400
|
Overhead was applied to all jobs in process at 180 percent of direct labor cost. Jobs 1005, 1006, 1007, and 1008 were completed and transferred to finished goods. Jobs 1009 and 1010 were still in process at the end of the week. Jobs 1005, 1006, 1007, and 1008 were shipped to customers and billed at 150 percent of total job cost.
a. Calculate the total cost of each job.
b. Prepare journal entries to record the above information.
Source: Jiambalvo, J. (2010). Managerial accounting (5th ed.). Hoboken, NJ: Wiley.
Submission Requirements:
• Answer each problem in detail with a conclusion and results.
• Submit your answer in a Microsoft Excel file, showing step-by-step solutions for all calculations.
How does wolterstorff find joy after his loss
: How does Wolterstorff find joy after his loss? What is the meaning and significance of death in light of the Christian narrative? How does the hope of the resurrection play a role in comforting Wolterstorff?
|
What is rawlss difference principle
: Should consensual sadomasochistic activity between adults be illegal - What is Rawls's difference principle? Are his arguments for the difference principle convincing?
|
Owner of nationally renowned photography business
: Janice Cullen, owner of a nationally renowned photography business, files a registration statement and prospectus with the SEC. Five days after she files the registration statement, she has a meeting with her top 10 clients (primarily business owners..
|
Describe additional strategies for assisting patients
: Using the Internet, the Walden Library, or other trustworthy sources, identify a resource that you could introduce to patients to help them evaluate the credibility of health information found online. What are some strategies you could employ to i..
|
Which costs would you expect to remain relatively constant
: Given that production was greater than planned, should Cyril expect that all actual costs will be greater than budgeted? Which costs would you expect to increase, and which costs would you expect to remain relatively constant?
|
Determine the volume necessary at each location
: Determine the volume necessary at each location to realize $ 2,000,000 in profits, and which location is the most likely candidate.
|
Prices rise when a government prints too much money
: One of the economic principles says: "Prices rise when a government prints too much money". Explain and justify in details how this principle works. Suppose in a bank the amount of reserves $80 and the reserve ratio R= 20%. Find the increase in the ..
|
Develop new marketing opportunities to expand the brand
: Develop new marketing opportunities to expand the brand - The business is the oldest family owned chocolate maker in Australia and looking to increase awareness interstate and also around the world.
|
Filtered probabilities to identify phrases of business cycle
: Clearly explain the difference between one-step ahead, filtered, and smoothed regime probabilities. Is it correct to state that we should always use smoothed instead of filtered probabilities to identify phrases of business cycle? Why or Why not?
|