HOMEWORK #A
INSTRUCTIONS
A) Prepare the REQUIRED REPORTS below using the Production Information on the last page.
B) Please SHOW ALL WORK used to Determine your Answers (T-Accounts, Calculations, and Computations)
C) Prepare all of your work using a computerized spreadsheet such as Microsoft Excel.
a) Please see me if you are having problems using a Computerized Spreadsheet Program.
b) Each Report should be shown inthe Portrait Format All on 1 Page > 70%.
D) Please SHOW Amounts as Follows:
a) Round AllTotal Amounts to the nearest Dollar
b) Round All Per Unit Amounts and Percentsto the 2nd Decimal.
c) Show Negative Amounts In Parenthesis (5,000) not -5000
E) Your Grade Will be based on the Following;
a) 5 Bonus points will be awarded if you turn in your Project Early,One class Early
1) Submit aHard Paper Copy and an Email Copy to Me before the Project is Officially Due
b) Accounting Formats and Methodology as we have studied in the Book and Class.
c) Organized, Logical, Neat and Easy to Follow, Completeness and Accuracy.
d) Make Sure to Reference all of your answers to the Page Where Work is shown
F) You may Do This Assignment in a Group of Three, Two or By Yourself(your choice).
a) You Should Turn in Only One Report for the Entire Group.
b) Each Group must prepare their Own Reports and Spreadsheets!!
c) Do not copy or give your reports or FILES to another group otherwise a score of ZERO will be given to all parties involved.
G) Do Not WAIT until the Last Day to start this project or you will not have enough time. This project will also help you to understand the Cost Accounting Process in Preparation for the Exam on Chapters 1-4.
H) FYI, where to Find Accounting Methods;
a) This project is Focused Mainly on Chapters 2&3, use the Instructor Notes and the Information from the Book that we have used to Compute Cost of Good Manufactured(COGM) and Cost of Good Sold(COGS).
REQUIRED REPORTS
Please Prepare the Following Reports and Pages in this Order;
i) Cover Page- See Details Below
ii) Table of Contents-See Details Below
iii) Answer Summary Page - See Details Below
iv) Income Statement Page -See Details Below
v) T-Accountsand/or Calculations Pages -See Details Below
I) Cover Page
i) Include Student Name(s), Course Name(Acctg21,T+Th), Assignment Description (H#A), and Current Date
ii) No Bulky Binders or Plastic Covers Please, Just Pages of Paper (8.5 x 11)
iii) Pictures on Cover or TOC are optional but are encouraged and look great.
II) Table of Contents
i) Show the Name of Each Report and the page they start and end on.
III) Answer Summary Page, Use the Template on the Course Website.
i) Use the EXAMPLE Posted on the Course Website in Portrait Style and Fit All onto One Page
ii) Show Your Answers with a Reference to where the work is shown;
A) 1A = RM Tires = $5,000 from Page-4T-AccountsOR
B) 1B = RM Frames = $10,000 from p.5 Calculations
iii) You Must Show How you Computed your Answers either in the T-Accounts, or on the Calculations page, or the COGM Schedule or Somewhere Make sure you Show all of the Detailed Calculations.
iv) If you use T-Accounts, make sure you have the Following; 4 RM Accounts,1 MOH Acct, 2 WIP Accts, 2 FG Accts, and 1Account Each for COGS, Sales Revenues, and SGA.
IV) Income Statement
i) Rows Description (7) = One Each for Sales Revenues, COGS, Gross Profit, SGA, Net Income, GP %, &NI%
ii) Column Headings (3) = One Eachfor Mountain Bikes, BMX Bikes, Company Total
A) Allocate All SGA Costs Evenly to each Bike 50/50, 50% to Each Product MB and BMX
V) T-Accounts and/or Calculations Pages
i) Use this Page(s) to show how you computed your Answers that are on the "Answer Summary Page"
ii) For Each Answer on your Answer Summary Page there should be a Calculation shown somewhere on your T-Accounts Page or your Calculations Page. Make sure to Reference to your work as Follows;
A) $500,000 - $495,000 = $5,000Tires 1A($5,000 the Answer to 1A on Answer Summary Page)
B) Make sure to Reference each Calculation that supports EVERY Answer on the AnswerSummary Page.
Answer Each of the Following Questions and Show the Answer on your "Answer Summary Page."
1. Compute the Dollar Balance in each of The Raw Materials Accounts at month end?
a. Tires= Example = $5,000
b. Frames=
c. Handle Bars=
d. Miscellaneous Materials=
2. Manufacturing Over-Head, MOH:
a. Compute the Predetermined Manufacturing Overhead Rate?=
b. Compute the Actual Manufacturing Overhead Costs for the Month?=
c. Compute the Manufacturing Overhead Costs Applied to Mtn Bikes for the Month?=
d. Compute the Manufacturing Overhead Costs Applied to BMX Bikes for the Month?=
e. Compute the Manufacturing Overhead Account Balance, (Over or Under Applied) =
f. Compute the Error Percent for the MOH Balance =
g. Is the Amount Reasonable based on 5% Error Limit ?=
h. What should this Business do to their MOH Rate? =
3. Mountain Bikes, Compute Each of the Following for the Mountain Bikes, MB:
a. Total Manufacturing Costs added into Production during the month TMC=
b. Total Work-in-Process Costs for the month, WIP =
c. Total Equivalent Units of Production, TEU=
d. Cost Per Equivalent Unit, CPEU=
e. Total Cost of Goods Manufactured for the month, COGM=
f. Ending Dollar Balance in the WIP Account, End WIP=
4. BMX Bikes, Compute Each of the Following for the BMX Bikes, BMX:
a. Total Manufacturing Costs added into Production during the month TMC=
b. Total Work-in-Process Costs for the month, WIP =
c. Total Equivalent Units of Production, TEU=
d. Cost Per Equivalent Unit, CPEU=
e. Total Cost of Goods Manufactured for the month, COGM=
f. Ending Dollar Balance in the WIP Account, End WIP=
5. Mountain Bikes, Compute Each of the Following for the Mountain Bikes, MB:
a. Total Cost of Goods Sold for the Month, COGS=
b. Ending Dollar Balance in the Finished Goods Account, FG=
c. Sales Price per Unit, SP=
d. Total Sales Revenues, SR=
e. Gross Profit, GP=
f. Net Income, NI=
Allocate the SGA Costs 50/50, 50% to Each Bike
6. BMX Bikes, Compute Each of the Following for the BMX Bikes, BMX:
a. Total Cost of Goods Sold for the Month, COGS=
b. Ending Dollar Balance in the Finished Goods Account, FG=
c. Sales Price per Unit, SP=
d. Total Sales Revenues, SR=
e. Gross Profit, GP=
f. Net Income, NI=
Allocate the SGA Costs 50/50, 50% to Each Bike
7. TOTAL, Compute Each of the Following in TOTAL for ALL Bikes, TOTAL:
a. Total Sales Revenues, SR=
b. Gross Profit, GP=
c. Net Income, NI=
8. Compute the Each of the Following;
a. Gross Profit Percent for Mountain Bikes, (GP/Sales) =GP%MB =
b. Net Income Percentfor Mountain Bikes, (NI/Sales) =NI%MB =
c. Gross Profit Percent for BMX Bikes, (GP/Sasles) =GP%BMX =
d. Net Income Percent for Mountain Bikes, (NI/Sales) =NI%BMX=
e. Which Product is Best for this Business and Why?
PRODUCTION Information for the JW-CORP 2 Top Products forJanuary 2017.
I. The Manufacturing Overhead Rate for the Upcoming Year is Based on Direct Labor Dollars.
a. Estimated Manufacturing Overhead for the Year is $4,500,000
b. Estimated Direct Labor Costs for the Year is $3,000,000
c. Overhead is Applied to All Jobs and Products based on Direct Labor Costs as they are incurred
II. Raw Materials Purchased During the Month were as Follows;
a. Tires Purchased for $199,000
b. Frames Purchased for $155,000
c. Handle Bars purchased for $99,000
d. Miscellaneous items such as chains, bolts, grease, and others were purchased for $88,000
III. Raw Materials were used into Production as follows;
a. Tires for Mountain Bikes = $92,000
b. Tires for BMX Bikes = $78,000
c. FRAMES forMtn Bikes =$74,000
d. FRAMES for BMX Bikes =$58,000
e. Handle Bars for Mtn Bikes =$44,000
f. Handle Bars for BMX Bikes = $38,000
g. Miscellaneous items used Indirectly Cost $55,000
IV. Payroll Costs for the Month was as follows;
a. Direct Labor on the Mountain Bikes was $125,000
b. Direct Labor on the BMX Bikes was $80,000
c. Indirect Labor was $21,000
d. Selling and Administration Salaries were $97,000
V. Other Costs for the Month were as Follows;
a. RENT was $100,000 as Follows;
i. Factory portion was 75%
ii. Admin portion was 25%
b. Insurance Costs for the Month were $40,000 as follows;
i. Factory portion was 75%
ii. Admin portion was 25%
c. Utility Costs for the Month were $70,000 as follows;
i. Factory portion was 80%
ii. Admin portion was 20%
d. Telephone Costs for the Month were $20,000 as follows;
i. Factory portion was 25%
ii. Admin portion was 75%
e. Depreciation Expenses on Property and Equipment was $90,000 as follows;
i. Factory Depreciation portion was 90%
ii. Admin Depreciation portion was 10%
VI. Production Data(By Unit) is Given Below for the Month;
a. There were NO Beg WIP Units.
b. Mountain Bikes(Units)Details are Shown Below;
i. 5,000 Mountain Bikes were Fully Completed during the Month.
ii. 1,000 Mountain Bikes partially completed (End WIP Units) (50% complete for DM, DL, MOH)
iii. 4,500 Mountain Bikes were Sold to Wal-Mart with a 40% Markup over Cost.
c. BMX Bikes (Units) Details are Shown Below;
i. 2,000 BMX Bikes were Fully Completed during the Month.
ii. 800 BMX Bikes partially completed (End WIP Units) (25% complete for DM, DL, MOH)
iii. 1,500 BMX Bikes were Sold to Target with a 60% Markup over Cost.