Fleet Bhd operates a chain of high street retail outletsselling clothing and household items. In 1995, this company washeading for a financial lossand was deemed to have lost strategic direction. prepare an incremental cost analysis
At the end of the year,under or over applied overhead is closed to the income summary?is this correct? If not indicate the customary summary statement for this amount?
Aries Corporation manufactures eighteenth-century, classical-style furniture. It uses a job costing system that applies factory overhead on the basis of direct labor-hours. Budgeted factory overhead for the year 2019 was P1,235,475 and management budgeted 86,700 direct labor-hours. These transactions were recorded during August:
A. Purchased 5,000 square feet of oak on account at P25 per square foot.
B. Purchased 50 gallons of glue on account at P36 per gallon (indirect materials)
C. Requisitioned 3,500 square feet of oak and 30.5 gallons of glue for production.
D. Incurred and paid payroll costs P187,900. Of this amount, P46,000 were indirect labor costs; direct labor personnel earned P22 per hour on average.
E. Paid factory utility bill, P15,230 in cash
F. August’s insurance cost for the manufacturing property and equipment was P3,500. The premium had been paid in March
G. Incurred P8,200 depreciation on manufacturing equipment for August
H. Recorded P2,400 depreciation on an administrative asset.
I. Paid advertising expenses in cash, P5,500
J. Incurred and paid other factory overhead costs, P13,500
K. Incurred miscellaneous selling and administrative expenses P13,250
L. Applied factory overhead to production on the basis of direct labor-hours
M. Completed goods costing P146,000 manufactured during the month
N. Made sales on account in August, P132,000. The cost of goods sold wasP112,000.
1. Compute the firm’s predetermined factory overhead rate for the year.
2. Prepare journal entries to record the August events
3. Calculate the amount of overapplied or underapplied overhead
4. Prepare a schedule of cost of goods manufactured and sold
5. Prepare income statement for August.
Everyday Bottles began business on August 1, 2023 and has selected a July 31, 2024 fiscal year-end. They plan to sell plastic drink bottles for runner, cyclists and other recreational activities, to sports stores across Canada. They have negotiated with two suppliers of drink bottles and will start by selling three types of bottles to customers. The company has two salaried employees who are to be paid 24 times a year on the 2nd and 4th Friday of every month and both will contribute to a medical plan (each pay $11.00). For project information purposes, all revenues and expenses must be allocated (split) between two regions (projects), Ontario and the rest of Canada.
All the modules are ready to use and the following have been entered:
? All General Ledger accounts
? Two vendor accounts (Royal Plastics and PVC Plastics)
? Two employees (Wendy Toste and Dustin Chad)
? Three inventory items (running, cycling and recreational)
? Two projects (Ontario and Rest of Canada)
Customers will need to be set up when sales are made. The company will not print cheques, invoices or statements. The Shipped by field will not be used.
Bottles 4 All is EHT (Employee Health Tax) exempt.
A single product company estimated its sales for the next year quarter wise as under:
Quarter Sales units
1 30000
2 37500
3 41250
4 45000
The opening stock of finished goods is 10000 units and the company expects to maintain the closing stock of finished goods at 16250 units at the end of the year. The production pattern in each quarter is based on 80% sales of the current quarter and 20% of the sales of the next quarter.
The opening stock of raw material in the beginning of the year is 10000 kg and the closing stock of the raw material is required to be maintained at 5000 kg. Each units of finished output requires 2 kg of raw material.
The company proposes to purchase the entire annual requirement of raw material in the first three quarters in the proportion and the prices given below:
Quarter | Purchase of raw material % to total annual requirement in quantity | Price per kg in Rs. |
1 | 30% | 2 |
2 | 50% | 3 |
3 | 20% | 4 |
The value of the opening stock of raw material in the beginning of the year is Rs.20000.
Required: Present the following for the next year, quarter wise:
· Production budget in units
· Raw material usage budget in quantity
· Raw material purchase budget in quantity and value
Reingold Company produces wireless phones. One model is the mini-phone –a basic model that is very small and slim. The mini-phone fits into a shirt pocket. Another model the inet-phone, has a larger display and is Internet-ready. For the coming year, Reingold expects to sell 200,000 mini-phones and 600,000 inet-phones. A segmented income statement for the two products is asfollows:Mini-phoneNet-phoneTotalGH¢’000GH¢’000GH¢’000Sales 5,00036,00041,000Less variable costs2,40030,00032,400Contribution2,6006,0008,600Less direct fixed costs1,2009602,160Segment profit1,4005,0406,440Less common fixed costs 1,280Operating income5,160Required:
Calculate the:
i.sales mix, in units, for the company
ii.sales mix, in revenue, for the company
iii.contribution per mix
iv.weighted average contribution per mix
v.weighted average contribution to sales ratio per mix
vi.number of mini-phones and net-phones that the company must sell to break even
vii.revenue that must be generated each by the two brands of phones to break even
viii.number of mini-phones and net-phones that the company must sell to earn a before-tax profit of GH¢ 20,000
ix.number of mini-phones and net-phones that the company must sell to earn an after-tax profit of GH¢ 20,000 (assume tax rate of 20%)x.revenue that must be generated each by the two brands of phones to earn a before-tax profit of GH¢ 30,000
xi.revenue that must be generated each by the two brands of phones to earn a before-tax profit of GH¢ 30,000 (assume tax rate of 20%
Bid calculations. The Shepard Company is to submit a bid on the production of 10,000 ceramic salad bowls. It is estimated that the cost of materials will be $7,500 and direct labor, $10,100 Factory overhead is applied at $5 per direct labor hour in the Molding Department and at 120% of the direct labor cost in the Finishing Department. It is estimated that 800 direct labor hours will be required in Molding and that direct labor cost in Finishing will be $4,300. The company wishes a bid price consisting of a markup of 40% of its total production costs.Required:1) Estimated cost to produce.(2) Estimated prime cost.(3) Estimated conversion cost.(4) Bid price.
Candy Garment Co., produces a particularly casual fashion collections. Average variable unit costs are as follows (per unit cloth): Cotton Fabric with standard 1.5 metres @ Rp. 20,000 = Rp. 30,000 Accesories with standard 5 bottons @ Rp. 500 = Rp. 2,500 Labor 3 hours @ Rp. 30,000 = Rp. 100,000 Supplies 3 items @ Rp. 5,000 = Rp. 15,000 Box, packing material @ Rp. 3,000 = Rp. 3,000 Selling Commission = Rp. 30,000 Fixed overhead cost (including depreciation of office and factory building, depreciation machine of office and building, supervisor’s salary, etc) = Rp. 12,000,000 Fixed selling and administrative costs are = Rp. 8,000,000 Average Candy Garment Co., sell their product Rp. 350,000 each on average. Last year Candy Garment Co., sold 380 unit. Required: 1. What is the contribution margin per unit cloth? What is the contribution margin ratio? 2. How many clothes must be sold to break even? What is the break-even sales revenue? 3. What was Candy Garment’s operating income last year? What was the margin of safety? 4. Suppose that Candyland, Inc., raises the price to Rp. 500,000 per cloth but anticipates a sales drop to 180 clothes. What will the operating income ? What new break-even point in units be with the new price? 5. Should Candy Garment raise the price? Explain.
EXTRACT FROM BUDGET SPEECH 2015-2016 BY THE HONOURABLE MINISTER OF FINANCE
“before coming to the objectives of the Budget and to our policies for attaining those objectives, I wish first to explain the rationale behind the change in the budgeting approach - from a Programme Based Budgeting to Performance Based Budgeting. There was a consensus that the Programme Based Budgeting was bulky and too complicated for legislative purposes and for the public. It made the appropriation process tedious and very often opaque. We are shifting to a more transparent, and simpler to understand Budgeting process”
Required:
Give your views on this extract of the budget speech 2015-2016 from the Honourable Minister of Finance. You should explain the rationale behind the change fromProgramme Based Budgeting to Performance Based Budgeting and state whether you agree with this change.
If you agree, you must state how this will benefit our country in terms of simplifying its budgeting process (take any example that you think might be appropriate)