QUESTION 1: CleverClogs is a small accounting firm that has two departments: Audit and Taxation.
Selected information on these departments is as follows:
Audit Taxation Number of clients 43 99 Number of employees 11 17 Fees earned $1,317,602 $627,936 If advertising expenses of $198,864 are to be allocated based on the amount of fees earned,
Calculate the total amount allocated to the Audit department. (Round your answer to the nearest dollar.)
QUESTION 2: CleverClogs is a small accounting firm that has two departments: Audit and Taxation.
Selected information on these departments is as follows: Audit Taxation Number of clients 41 108 Number of employees 14 16 Fees earned $1,446,218 $691,060 If advertising expenses of $195,767 are to be allocated based on the amount of fees earned,
calculate the total amount allocated to the Taxation department. (Round your answer to the nearest dollar.)
QUESTION 3: Superego Ltd manufactures extra large widgets for use as a component in one of its most popular products.
Last year, 10,000 widgets are produced, with the following total costs: $
Direct materials 36,293
Direct labour ($15 per hour) 18,810
Variable manufacturing overhead 29,604
Fixed manufacturing overhead 26,525
Superego is considering outsourcing production of these widgets and has identified a supplier who can provide the widgets at a cost of $11.16 per unit.
If production is outsourced, equipment lease costs amounting to 30% of the fixed manufacturing overhead will no longer need to be incurred.
Calculate the effect on Superego Ltd's profit if the company outsources production of the extra large widgets. (Show a decrease in profit as a negative number, and an increase in profit as a positive number; round your answer to the nearest dollar.)
QUESTION 4: Ego Ltd manufactures miniature widgets and has been approached by a major customer, requesting a special price on a once-off special order of 1,000 widgets.
Unit costs for the product are as follows:
Variable costs $ Direct materials 44 Direct labour 16 Manufacturing overhead 34 Selling & administration 10 Fixed costs Manufacturing overhead 47 Selling & administration 14
The company usually has a 40% mark-up on the miniature widget product line, and currently has excess capacity.
Calculate the minimum price (per unit) that Ego Ltd should accept for this special order.
QUESTION 5: Ego Ltd manufactures miniature widgets and has been approached by a major customer, requesting a special price of $200 per unit on a once-off special order of 1,000 widgets.
Unit costs for the product are as follows: Variable costs $ Direct materials 43 Direct labour 19 Manufacturing overhead 31 Selling & administration 15 Fixed costs Manufacturing overhead 48 Selling & administration 16 The company usually has a 40% mark-up on the miniature widget product line, and currently has excess capacity.
Calculate the change in Ego Ltd's operating profit if the special order is accepted.
(Show a decrease in profit as a negative number, and an increase in profit as a positive number.)
QUESTION 6: Superego Ltd manufactures extra large widgets for use as a component in one of its most popular products.
Last year, 10,000 widgets are produced, with the following total costs: $
Direct materials 41,731
Direct labour ($15 per hour) 14,990
Variable manufacturing overhead 26,094
Fixed manufacturing overhead 19,450
Superego is considering outsourcing production of these widgets and has identified a supplier who can provide the widgets at a cost of $11.48 per unit.
If production is outsourced, equipment lease costs that amount to 30% of the fixed manufacturing overhead will no longer need to be incurred. Calculate the total amount of manufacturing costs for Superego Ltd that are relevant to this decision. (Round your answer to the nearest dollar.)
QUESTION 7: Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Townsville plant is as follows: Blox ($) Shapez ($) Direct material per unit 11 23 Direct labour per unit 20 31 Manufacturing overhead per unit 9 10 Selling & Admin. expenses per unit 16 26 The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $97,391 and are driven by the number of Supervision hours; Quality inspection costs totaled $128,368 and are driven by the number of inspections. Each Blox requires 45 minutes of supervision time and a single quality inspection.
Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection. The Townsville plant produced and sold 52,050 Blox and 28,224 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the total dollar amount of manufacturing overheads that would have been allocated to the Blox product line, if activity-based costing had been used in the last quarter. (Round your answer to the nearest dollar.)
QUESTION 8: GoFetch Ltd is considering discontinuing one of its frisbee models from its line of product offerings, due to poor financial performance.
Details from the last quarter for this product are as follows: $ Sales (50,000 units) 279,469 Direct materials 150,999 Direct labour ($16 per hour) 63,858 Overheads 98,888 60% of the overheads are variable costs, and the remaining 40% relate to specialised frisbee manufacturing equipment that has no alternative use and no resale value.
Calculate the change in operating profit for the company if this model is discontinued. (Show a decrease in profit as a negative figure, and an increase in profit as a positive figure; round your answer to the nearest dollar.)
QUESTION 9: Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Hobart plant is as follows: Blox ($) Shapez ($) Direct material per unit 9 17 Direct labour per unit 22 37 Manufacturing overhead per unit 9 13 Selling & Admin. expenses per unit 21 32 The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $102,380 and are driven by the number of Supervision hours; Quality inspection costs totaled $124,800 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Hobart plant produced and sold 55,721 Blox and 44,701 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez. Calculate the manufacturing cost per Blox unit, if activity-based costing had been used in the last quarter. (Round your answer to two decimal places.)
QUESTION 10: Simpson Ltd manufactures three types of high quality headphones: the Experience, Insight and Divine. The company has recently implemented an activity-based costing system, which it uses to allocate indirect costs.
Details on five activities are as follows: Activity Cost
Activity driver Materials handling 208,434
Number of parts Materials assembly 2,471,830
Number of parts Equipment setup 846,013
Number of setups Product finishing 178,600
Labour hours Packaging 165,186
Number of orders shipped
The following information relates to the three models of headphones:
Experience Insight Divine Units produced 9,442 5,060 1,928
Orders shipped 1,065 481 202
Number of parts used 99,707 62,223 50,649
Setup required 17,110 14,152 13,945
Labour hours used 15,259 10,882 4,501
Calculate the indirect costs allocated to a single unit of the Experience model. (Round your answer to two decimal places.)
QUESTION 11: Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Melbourne plant is as follows: Blox ($) Shapez ($) Direct material per unit 9 22 Direct labour per unit 21 33 Manufacturing overhead per unit 9 12 Selling & Admin. expenses per unit 18 33 The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections.
In the last quarter, Supervision costs amounted to $107,951 and are driven by the number of Supervision hours; Quality inspection costs totaled $131,615 and are driven by the number of inspections. Each Blox requires 45 minutes of supervision time and a single quality inspection.
Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection. The Melbourne plant produced and sold 52,836 Blox and 43,099 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the activity-cost driver rate for the Supervisions activity. (Round your answer to two decimal places.)
QUESTION 12: Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Perth plant is as follows: Blox ($) Shapez ($) Direct material per unit 10 23 Direct labour per unit 19 32 Manufacturing overhead per unit 7 10 Selling & Admin. expenses per unit 17 31
The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections.
In the last quarter, Supervision costs amounted to $105,481 and are driven by the number of Supervision hours; Quality inspection costs totaled $115,173 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Perth plant produced and sold 69,574 Blox and 44,275 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the total dollar amount of Supervisions cost that would have been allocated to the Shapez product line, if activity-based costing had been used in the last quarter. (Round your answer to the nearest dollar.)