Managerial Accounting Assignment -
Jake Corporation makes a product that is very popular in the summer. Thus sales peak in June each year leading to higher production levels in April and May as shown below:
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|
APRIL
|
MAY
|
JUNE
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TOTAL
|
|
Direct Materials Budget
|
60,000
|
70,000
|
40,000
|
170,000
|
Each unit needs two springs. The springs can be difficult to get at times, so the company has determined that it must have 20% of the required springs at the start of each period. The Company had 24,000 springs in inventory at the beginning of April. Jake has determined it needs 18,000 springs at the end of June.
1) How many gages are needed to be purchased to meet the production schedule for the quarter?
a) 170,000 c) 340,000
b) 334,000 d) 364,000
2) If the Springs cost $1.50 each and Jake pays for half of the springs in the month they were purchased and half in the following month, how much did they pay for the springs during the months of April and June. Accounts Payable at the beginning of April was $80,000 all of which was paid in April. EXTRA CREDIT: What is Accounts Payable at the end of June?
Use the following information to complete Questions 3 and 4.
Buffett Enterprises produces a product called Slugger. The direct materials and direct labor standards for one bottle of Slugger are given below
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Standard Quantity of hours
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Standard Price Rate
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Standard Cost
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|
Direct Materials
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7.2 ounces
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$2.50 per ounce
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$18.00
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|
Direct Labor
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0.4 hours
|
$10.00 per hour
|
$4.00
|
During the recent month, the following activity was recorded:
- Twenty thousand ounces (20,000) of material were purchased at a cost of $2.40 per ounce.
- All of the material was used to produce 2,500 bottles of Slugger.
- Nine hundred hours (900) of direct labor time were recorded at a total labor cost of $10,800
3) What are the Material Quantity and Price Variances for the Month?
4) What is the Material Spending Variance for the month?
Use the following information to complete questions 5 and 6.
Catalyst Corporation makes high-end hard sided luggage for equipment. Data concerning three of the company's most popular models appear below.
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Camera Case
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Gun Case
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Golf Case
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|
Selling price per unit
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$110
|
$150
|
$87.50
|
|
Variable cost per unit
|
$30
|
$60
|
$27.50
|
|
Plastic injection molding machine processing time required to produce one unit
|
4 minutes
|
5 minutes
|
2 minutes
|
|
Pounds of plastic pellets per unit
|
5 pounds
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6 pounds
|
5 pounds
|
5) The total time available on the plastic injection-molding machine is the constraint in the production process. In what order would be the most profitable use of this constraint (from most profitable to least profitable)?
a. Camera, Gun, Golf c. Gun, Golf, Camera
b. Golf, Camera, Gun d. Gun, Camera, Golf
6) A severe shortage of plastic pellets has required the company to cut back its production so much that the plastic injection molding machine is no longer the bottleneck. Instead, the constraint is the total available pounds of pellets. In what order would be the most profitable use of this constraint (from most profitable to least profitable)?
a. Camera, Gun, Golf c. Gun, Golf, Camera
b. Golf, Camera, Gun d. Gun, Camera, Golf
Data for Pritchard Woodworks are shown below:
|
|
Per Unit
|
% of Sales
|
|
Selling Price
|
$800
|
100%
|
|
Variable Expenses
|
$480
|
60%
|
|
Contribution Margin
|
$320
|
40%
|
Fixed Expenses are $600,000 per month and the company is selling 5,000 units per month.
7) The marketing manager believes that a $75,000 increase in the monthly advertising budget would increase monthly sales by 250 units (a 5% increase in sales). Should the advertising budget be increased? Yes or no? SHOW YOUR WORK
8) Engelhard Enterprises manufactures an protein based powder that passes through two departments. Data for December for the first department follow:
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|
Pound
|
Material
|
Labor
|
Overhead
|
|
Work in Process, October 1
|
80,000
|
$75,000
|
$30,000
|
$48,000
|
|
Gallons started in process
|
780,000
|
|
|
|
|
Gallons transferred out
|
760,000
|
|
|
|
|
Work in Process, October 31
|
100,000
|
|
|
|
|
Cost added during October
|
|
$1,155,000
|
$370,000
|
$420,000
|
The beginning work in process inventory was 80% complete with respect to materials and 75% complete with respect to labor and overhead. The ending work in process inventory was 60% complete with respect to materials and 20% complete with respect to labor and overhead.
Utilizing the weighted-average method of accounting for units and costs:
- Compute the Equivalent units for October's activity for the first department.
- Determine the costs per equivalent unity for October
- Compute the Cost of Goods Transferred
- Compute Ending Inventory Valuation for October 31.
Platinum, Inc. makes a product that is very popular at Easter time. Thus peak sales occur in April each year, as shown in the company's sales budget for the fourth quarter given below:
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|
April
|
May
|
June
|
Total
|
|
Budgeted sales (all account)
|
$875,000
|
$425,000
|
$300,000
|
$1,600,000
|
From past experience the company has learned that 40% of a month's sales are collected in the month of sale, another 40% in the month following sale, and the remaining 20% are collected in the second month following sale. Bad debts are negligible and can be ignored. January Sales totaled $200,000, and February sales totaled $500,000.
9) What are the cash collections for the quarter?
10) What is the Accounts Receivable Balance at the end of June?