Professional Documents
Culture Documents
ManAcc Quiz 3 - Final
ManAcc Quiz 3 - Final
Answers
Manchester Technology, Inc. manufactures several different types of printed circuit boards; however, two of the boards account for the majori
standard in the industry for several years. The market for this type of board is competitive and price-sensitive. Manchester plans to sell 79,000
personal computer circuit board, is a recent addition to Manchester’s product line. Because the PC board incorporates the latest technology, i
per unit.
Manchester’s management group is meeting to discuss how to spend the sales and promotion dollars for 20x1. The sales manager believes t
promotional efforts in this area. In response to this suggestion, the production manager said, “Why don’t you go after a bigger market for the P
larger than the contribution from a TV board. I know we get a premium price for the PC board. Selling it should help overall profitability.”
The cost-accounting system shows that the following costs apply to the PC and TV boards.
PC Board TV Board
Direct Material (USD) 226 146
Direct Labour (in hours) 4 1
Machine Time (in hours) 1 1
Variable manufacturing overhead is applied on the basis of direct-labor hours. For 20x1, variable overhead is budgeted at $2,450,000, and dir
$26 and $34, respectively. The company applies a material-handling charge at 10 percent of material cost. This material-handling charge is n
budgeted at $25,209,000.
Andrew Fulton, Manchester’s controller, believes that before the management group proceeds with the discussion about allocating sales and
basis of the activities involved in their production. Fulton has prepared the following schedule to help the management group understand this
“Using this information,” Fulton explained, “we can calculate an activity-based cost for each TV board and each PC board and then compare i
methods is the cost of direct material. The cost drivers will replace the direct labor, machine time, and overhead costs in the old standard cost
Ans:
PC Boards TV Boards
Expected Sales in units 47,000 72,000
Price per Unit 835 450
Hourly rate for Labour 42
Hourly rate for Machines 34
Budgeted Variable Ohs 2,345,000
Estimated Direct Labour Hours 286,000
Material Handling Charge 10%
Total Direct material costs 21,134,000
Required 1
Identify at least four general advantages associate with activity-based costing. Select "X" if the item is a general advantage.
Required 2
On the basis of Manchester’s unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute t
covering fixed costs and profit in 20x1. (Round your intermediate calculations to 2 decimal places.)
PC Board TV Board
Sales 39,245,000 32,400,000
Less:
Direct Material 10,622,000 10,512,000
Direct Labour 7,896,000 3,024,000
Machining Costs 1,598,000 2,448,000
Variable Ohs 1,541,600 590,400 8.2
Material Handlin 1,062,200 1,051,200
Total Contri Mar 16,525,200 14,774,400
Required 3
Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit
(Round your intermediate calculations to 2 decimal places.)
Ans:
PC Board TV Board
Sales 39,245,000 32,400,000
Less:
Direct Material 10,622,000 10,512,000
Procurement 454,020 332,640
Production Scheduling 170,610 261,360
Packaging and Shipping 341,220 522,720
Machine Setup 366,600 468,000
Hazardous Waste Disposal 79,665 20,340.00
Quality Control 523,110 534,240
General Supplies 54,990 84,240
Machine Insertion 1,313,650 1,497,600
Manual Insertion 6,782,100 399,600
Wave Soldering 107,160 164,160
Total Contri Margin 18,429,875.00 17,603,100.00
the boards account for the majority of the company’s sales. The first of these boards, a television circuit board, has been a
e. Manchester plans to sell 79,000 of the TV boards in 20x1 at a price of $450 per unit. The second high-volume product, a
corporates the latest technology, it can be sold at a premium price. The 20x1 plans include the sale of 54,000 PC boards at $785
0x1. The sales manager believes that the market share for the TV board could be expanded by concentrating Manchester’s
u go after a bigger market for the PC board? The cost sheets that I get show that the contribution from a PC board is significantly
uld help overall profitability.”
s budgeted at $2,450,000, and direct-labor hours are estimated at 322,875. The hourly rates for machine time and direct labor are
This material-handling charge is not included in variable manufacturing overhead. Total 20x1 expenditures for direct material are
ussion about allocating sales and promotional dollars to individual products, it might be worthwhile to look at these products on the
anagement group understand this concept.
ach PC board and then compare it to the standard cost we have been using. The only cost that remains the same for both cost
ead costs in the old standard cost figures.”
Cost/Unit of Cost
Driver
0.14
3.63
7.26
1.3
5.65
3.71
1.17
0.65
5.55
2.28
eral advantage.
Manchester Technology, Inc. manufactures several different types of printed circuit boards; however, two of the boards account for the majori
standard in the industry for several years. The market for this type of board is competitive and price-sensitive. Manchester plans to sell 79,000
personal computer circuit board, is a recent addition to Manchester’s product line. Because the PC board incorporates the latest technology, i
per unit.
Manchester’s management group is meeting to discuss how to spend the sales and promotion dollars for 20x1. The sales manager believes t
promotional efforts in this area. In response to this suggestion, the production manager said, “Why don’t you go after a bigger market for the P
larger than the contribution from a TV board. I know we get a premium price for the PC board. Selling it should help overall profitability.”
The cost-accounting system shows that the following costs apply to the PC and TV boards.
PC Board TV Board
Direct Material (USD) 227 147
Direct Labour (in hours) 3 1.5
Machine Time (in hours) 1.5 1.5
Variable manufacturing overhead is applied on the basis of direct-labor hours. For 20x1, variable overhead is budgeted at $2,450,000, and dir
$26 and $34, respectively. The company applies a material-handling charge at 10 percent of material cost. This material-handling charge is n
budgeted at $25,209,000.
Andrew Fulton, Manchester’s controller, believes that before the management group proceeds with the discussion about allocating sales and
basis of the activities involved in their production. Fulton has prepared the following schedule to help the management group understand this
“Using this information,” Fulton explained, “we can calculate an activity-based cost for each TV board and each PC board and then compare i
methods is the cost of direct material. The cost drivers will replace the direct labor, machine time, and overhead costs in the old standard cost
Ans:
PC Boards TV Boards
Expected Sales in units 48,000 73,000
Price per Unit 860 470
Hourly rate for Labour 44
Hourly rate for Machines 36
Budgeted Variable Ohs 2,360,000
Estimated Direct Labour Hours 266,175
Material Handling Charge 10%
Total Direct material costs 21,627,000
Required 1
Identify at least four general advantages associate with activity-based costing. Select "X" if the item is a general advantage.
Required 2
On the basis of Manchester’s unit cost data given in the problem, calculate the total amount that each of the two product lines will contribute t
covering fixed costs and profit in 20x1. (Round your intermediate calculations to 2 decimal places.)
PC Board TV Board
Sales 41,280,000 34,310,000
Less:
Direct Material 10,896,000 10,731,000
Direct Labour 6,336,000 4,818,000
Machining Costs 2,592,000 3,942,000
Variable Ohs 1,277,280 971,265 8.87
Material Handlin 1,089,600 1,073,100
Total Contri Mar 19,089,120 12,774,635
Required 3
Using activity-based costing, calculate the total amount that each of the two product lines will contribute toward covering fixed costs and profit
(Round your intermediate calculations to 2 decimal places.)
Ans:
PC Board TV Board
Sales 41,280,000 34,310,000
Less:
Direct Material 10,896,000 10,731,000
Procurement 477,120 347,480
Production Scheduling 181,440 275,940
Packaging and Shipping 362,880 551,880
Machine Setup 436,320 442,380
Hazardous Waste Disposal 86,784 19,797.60
Quality Control 520,320 593,490
General Supplies 59,040 89,790
Machine Insertion 1,330,560 1,517,670
Manual Insertion 6,868,800 386,900
Wave Soldering 114,720 174,470
Total Contri Margin 19,946,016.00 19,179,202.40
the boards account for the majority of the company’s sales. The first of these boards, a television circuit board, has been a
e. Manchester plans to sell 79,000 of the TV boards in 20x1 at a price of $450 per unit. The second high-volume product, a
corporates the latest technology, it can be sold at a premium price. The 20x1 plans include the sale of 54,000 PC boards at $785
0x1. The sales manager believes that the market share for the TV board could be expanded by concentrating Manchester’s
u go after a bigger market for the PC board? The cost sheets that I get show that the contribution from a PC board is significantly
uld help overall profitability.”
s budgeted at $2,450,000, and direct-labor hours are estimated at 322,875. The hourly rates for machine time and direct labor are
This material-handling charge is not included in variable manufacturing overhead. Total 20x1 expenditures for direct material are
ussion about allocating sales and promotional dollars to individual products, it might be worthwhile to look at these products on the
anagement group understand this concept.
ach PC board and then compare it to the standard cost we have been using. The only cost that remains the same for both cost
ead costs in the old standard cost figures.”
Cost/Unit of Cost
Driver
0.14
3.78
7.56
3.03
4.52
2.71
1.23
0.63
5.3
2.39
eral advantage.
Cost-driver data for two of Fresno’s customers for the most recent year are:
The following additional information has been compiled for Fresno Fiber Optics for two of its customers, Trace Telecom and
Prepare a customer profitability analysis for Trace Telecom and Caltex Computer.
Ans:
Trace Caltex
Particulars
Telecom Computers
stomers, Trace Telecom and Caltex Computer, for the most recent year:
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, whic
costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is ide
The following information pertains to the three product lines for next year:
Ans:
Units of Cost/unit of
Activity Cost Cost Driver
Cost-Driver cost driver
Material handling 228,500 No. of parts 393,700 0.58
Material insertion 2,482,000 No. of parts 393,700 6.30
Automated machinery 843,500 Machine Hours 175,000 4.82
Finishing 177,000 Labour Hours 171,900 1.03
Packaging 177,000 Orders Shipped 1,910 92.67
3,908,000
Deluxe. The company, which uses activity-based
and related cost driver is identified below.
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which u
costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identifie
The following information pertains to the three product lines for next year:
Under Barnett’s activity-based costing system, what is the per-unit overhead cost of Economy? (Do not round your intermediate
round your final answer to 2 decimal places.)
Bouquet
Delivery Others
production
Wages and Salaries 50% 40% 10%
Other Overheads 60% 30% 10%
The cost of wages and salaries and other overhead that would be charged to each delivery is closest to:
Ans:
Wages 200,000 Other Overheads 20,000
Activity Total Cost Cost Driver Units of Cost driver Pool Rate
Bouquet production 112,000 Bouquets 29,000 3.86
Delivery 86,000 Deliveries 4,000 21.50
to:
Anton’s Fresh Fish and Produce is a wholesale distributor that operates in central Florida. An analysis of two of the company's
reveals the data that follows the requirements for this problem for a recent 12-month period.
Anton’s uses activity-based costing to determine the cost of servicing its customers. The company had total delivery costs durin
with cost of $768,000 for the administrative processing of 88,500 invoices.
Compute the pool rates for deliveries and invoice processing.(Round your answer to 2 decimal places.)
Ans:
Activity Cost-Driver Total Cost Pool Rates
Delivery No. of deliveries 13,500 565,000 41.85
Admin proceNo. of invoices 84,500 776,000 9.18
Compute the operating income that Anton’s earned from these two customers.(Round your intermediate calculations to 2 decim
Ans:
Particulars Seaside Spa Sigma
Sales Revenue 691,000.00 281,000.00
COGS 587,350.00 238,850.00
Delivery Cost 5,105.70 6,110.10
Admin Processing 1,606.50 1,753.38
Operating Income 96,937.80 34,286.52
Compute the total of customer-related costs (deliveries and invoice processing) for each customer as a percentage of gross ma
Ans:
Particulars Seaside Spa Sigma
Gross Margins 103,650.00 42,150.00
Total Customer Costs 6,712.20 7,863.48
Percentage of gross margin 6.5000 18.7000
alysis of two of the company's customers, Seaside Spa and Sigma Assisted Living,
ny had total delivery costs during the year of $573,000 and 9,500 deliveries, along
mediate calculations to 2 decimal places and final answers to the nearest dollar.)