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Hi Jawaad, that response was extremely quick and efficient. Thanks again !! There is another couple of assignments i need help with. These are due on Saturday at 3pm. I will add bonus since these are two assignments.

Use the following to answer questions 1 – 4 The following activities occur at Z, Inc., a company that manufactures a variety of products. Classify each of the activities as either a unit-level, batch-level, product-level, or organization sustaining activity.

1. Materials are moved from the receiving dock to the assembly area.

A) unit level
B) batch level
C) product level
D) organization sustaining

2. Diversity training is provided to all employees in the company.

A) unit level
B) batch level
C) product level
D) organization sustaining

3. Direct labor workers assemble various products

A) unit level
B) batch level
C) product level
D) organization sustaining

4. A product is designed by a cross functional team

A) unit level
B) batch level
C) product level
D) organization sustaining

Use the following to answer questions 5 – 7

L Company operates a fleet of armored cars that make scheduled pickups and deliveries in the local area. L has three activity cost pools, (Travel, Pickup & Delivery, and Other). The other cost pool is made up of idle capacity and organization sustaining cost.

Overhead costs
Driver and guard wages	$410,000
Vehicle expenses	$250,000
Total	$660,000

Activity Cost Pools	Travel	Pickup & Delivery	Other	Total
Driver and guard wages	35%	45%	20%	100%
Vehicle expenses	30%	40%	30%	100%

5. $_____________How much cost was assigned to the Travel cost pool in the first stage allocation?

6. $_____________How much cost was assigned to the Pick-up & Delivery cost pool in the first stage allocation?

7. $_____________How much of the $660,000 overhead cost will not be assigned in the second stage allocation?

Use the following to answer questions 8 – 10

GRO, is a small gardening service that uses ABC to estimate costs for pricing and other purposes. The company uses three activity cost pools (Caring for lawn, Travel to jobs, Other):

Activity cost pool	Activity measure
Caring for lawn	Square feet of lawn
Travel to jobs	Miles
Other	N/A

The company has carried out the first stage allocations of costs and has summarized its annual costs and activities as follows:

Activity cost pool	Estimated Cost	Expected Activity
Caring for lawn	$80,600	20,000	SF
Travel to jobs	$6,000	12,000	miles
Other	$11,000	n/a

8. $_______________What is the activity rate for the Caring for Lawn cost pool?

9. $_______________What is the activity rate for the Travel to jobs cost pool?

10.

10. $_______________How much overhead cost should be assigned for a 80 mile trip?

Use the following to answer questions 11 – 13

FC Corp is a diversified manufacturer of industrial goods. The company’s ABC system contains the following six activity cost pools and activity rates:

Activity cost pool	Activity rate
Labor related	$6.00	per DLH
Machine related	$18.00	per MH
Machine set-ups	$135.00	per set-up
Production orders	$55.00	per order
Shipments	$8.00	per shipment
Product sustaining	$1,500.00	per product

Activity for the cost object SK08 follows:

Number of units produced per year	1,000	units
Direct labor hours	2,400	DLH
Machine hours	3,100	MH
Machine set-ups	21	set-ups
Production orders	88	orders
Shipments	88	shipments
Product sustaining	1	product

11.

11. $_______________How much overhead cost was assigned to SK08 from the Labor Related cost pool?

12.

12. $______________How much overhead cost was assigned to SK08 from the Machine Related cost pool?

13.

13. $______________How much overhead cost in total was assigned to SK08?

Use the following to answer questions 14 – 20

FLY makes paragliders for sale through specialty sporting goods stores. The company makes specialized gliders and standard gliders. The ABC system shows:

Activity cost pool	Activity rate
Manufacturing volume	$13	per DLH
Machine set-up	$160	per set-up
Custom design processing	$590	per custom design
Customer service	$700	per customer

Management would like to see the profitability of the Standard Model. Activity for the Standard Model was:

Sales price	$825	per glider
Number of units sold per year	100	units
Direct labor hours per glider	8	DLH per unit
Machine set-ups	12	set-ups
Custom design	0	custom design
Direct material per glider	$225	per glider
Direct labor rate	$53.00	per hour

14.

14. $_____________How much overhead cost in total was assigned to the Standard Model?

15.

15. $_____________What was the total cost for the 100 Standard Model glider?

16.

16. $_____________What was the sales revenue from the sale of the 100 gliders?

17.

17. $_____________What was the product profitability margin (product margin) on the sale of the 100 gliders?

18.

18. $_____________Assume the company used traditional costing (job order costing, using a predetermined overhead rate of $45 per DLH); how much overhead cost would be assigned to the 100 standard gliders?

19.

19. $_____________Assuming the company used traditional costing what would the product margin be on the sale of the 100 gliders?

20.

20. Does using a unit level activity measure (DLH) instead of using a combination of unit, batch, product level activity measures over cost or under cost the standard glider?

A) Over cost
B) Under cost

Use the following to answer questions 21 – 27

SE Floors installs oak and other hardwood floors in homes and businesses. The company uses an activity-based costing system for its overhead costs. The company has provided the following data concerning its annual overhead costs and its activity based costing system:

	Overhead costs:
	Production overhead...........	$600,000
	Office expense......................	$300,000
	Total........................................	$900,000

Distribution of resource consumption:
	Installing	Job
Activity Cost Pools	Floors	Support	Other	Total
Production overhead...................	75%	20%	5%	100%
Office expense..............................	0%	75%	25%	100%

The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs.

The amount of activity for the year is as follows:

	Activity Cost Pool	Annual Activity
	Installing floors..............	1,250,000 SF
	Job support....................	1,000 jobs
	Other..............................	Not applicable

21.

21. $____ How much cost, in total, would be allocated in the first stage allocation to the Installing Floors activity cost pool?

22.

22. $____ How much cost, in total, would be allocated in the first stage allocation to the Job Support activity cost pool?

23.

23. $____ How much cost, in total, would be allocated in the first stage allocation to the Other activity cost pool?

24.

24. $___ What is the activity rate for the Installing Floors activity cost pool?

25.

25. $ What is the activity rate for the Job Support activity cost pool?

26.

26. $____ How much of the cost assigned to the Other activity cost pool will be allocated during the second stage allocation?

27.

27. $____ What is the overhead cost, according to the ABC system, of a job that involves installing 5,000 square feet.

Use the following to answer questions 1 – 3

Budgeted sales are provided below. From past experience, the company has learned that 40% of a month’s sales are collected in the month of sale, and 60% are collected in the month following sale.

	September	October	November	December
Budget sales	$315,000	$425,000	$480,000	$575,000

1. $____________________How much cash is expected to be collected in the month of November?

2. $____________________How much cash is expected to be collected in the month of December?

3. $____________________What are the budgeted accounts receivable on December 31st?

Use the following to answer questions 4 – 6

SR has budgeted sales of its popular toy for the next four months as follows:

	September	October	November	December
Budget sales in units	17,000	18,000	20,000	19,000

Management requires that end of month inventory level to be 10% of the following month’s sales. The ending inventory for August was 1,700 units.

4. _____________ UNITS How many units are budgeted to be produced in the month of October?

5. _____________ UNITS How many units are budgeted for ending inventory for the month of September?

6. _____________ UNITS How many units are budgeted for beginning inventory for the month of November?

Use the following to answer questions 7 – 9

5 yards of material are needed to make a sailboard sail. The sail material costs $25.00 per yard. It is necessary for the company to carry ending inventory balances equal to 15% of the following month’s production needs. The company started this period with the appropriate amount of beginning inventory.

	September	October	November	December
Budget sailboard production	10,000	12,000	13,000	11,000

7. ___________ YARDS How many yards of sail material are required for production (production needs) in October?

8. ___________ YARDS How many yards of sail material are to be purchased in October?

9. $_______________ What is the budgeted cost for purchases for sail material in October?

Use the following to answer question 10

The production department has submitted the following forecast of units to be produced by quarter for the upcoming year:

	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Units to be produced	10,000	12,000	11,000	14,000

Each unit requires 6 direct labor hours, and direct laborers are paid $28.00 per hour.

10.

10. $_______________ Assume the labor force is adjusted each quarter to match the number of hours required for production. What is the budgeted cash disbursement for labor in the third quarter?

Use the following to answer questions 11 – 12

The direct labor budget for the upcoming fiscal year contains the following details concerning budgeted direct labor hours:

	1^st Quarter	2^nd Quarter	3^rd Quarter	4^th Quarter
Budgeted DLH	10,000	12,500	13,000	11,000

The company’s variable manufacturing overhead rate is $6.00 per direct-labor hour and the company’s fixed manufacturing overhead is $120,000 per quarter. The only non-cash item included in FMOH is depreciation which is $19,000 per quarter.

11.

11. $_______________What is the budgeted manufacturing overhead for the second quarter?

12.

12. $_______________What is the cash disbursement for manufacturing overhead for the second quarter?

Use the following to answer questions 13 – 20

You have been asked to prepare a December cash budget for a distributor of exercise equipment. The following information is available about the company’s operations:

The cash balance on December 1^st is $12,000.

Actual sales for October, November and expected sales for December are as follows:

	October	November	December
Cash sales	$220,000	$315,000	$325,000
Credit Sales	$365,000	$460,000	$510,000

Credit Sales (sales on account) are collected as follows: 0% in the month of sale; 75% in the month following the sale and 25% collected in the second month following sale.

Purchases of inventory will total $425,000 for December. 70% of a month’s inventory purchases are paid for in the month of purchase and the rest is paid in the following month. The ending accounts payable for November’s inventory purchases totaled $134,000, all of which will be paid in December.

Selling and administrative expenses are budgeted at $275,000 for December. Of this amount, $11,000 is for depreciation.

The company is paying dividends of $58,000 in December.

The company maintains a minimum cash balance of $5,000. An open line of credit is available from the company’s bank, just in case they have a cash flow shortage.

13.

13. $______________ What are the expected cash collections in December?

14.

14. $______________ What are the expected ending Accounts Receivable at the end of December?

15.

15. $______________ What is the budgeted cash disbursement for the purchase of merchandise in December?

16.

16. $_______________ What is the ending Accounts Payable balance (December 31st)?

17.

17. $______________ What is the budgeted cash disbursement for Selling and Administrative expenses for December?

18.

18. $________________ What is the total budgeted cash disbursement for the month of December?

19.

19. $________________ What is the budgeted ending cash balance (December 31st) before any potential financing?

20.

20. $________________ If the company wants to maintain a minimum cash balance of $5,000, how much should they borrow?

Use the following to answer questions 21 – 30

KB manufactures a specialty product. Following are the data necessary to prepare KB’s February budgets.

	January	February	March	April
Budget sales in units:	7,000	8,000	10,000	9,000

Sales per unit: $80

All sales are on credit.

Sales collection: 25% in month of sale; 75% in month following sale

Finished goods ending inventory requirement: budgeted at 10% of the following month’s sales.

Material: 6 yards of fabric per unit.

Raw material ending inventory requirement: budgeted at 5% of the following month’s production needs.

Cost per yard of fabric: $10.00 per yard.

All purchases are made on credit.

Payment of Accounts Payable: 65% in month of purchase and 35% in month following purchase.

(Prepare as much of the budget as possible for each month (January - April) starting with the Sales budget and ending with the direct material purchases budget).

21.

21. $____ What are the budgeted collections for the month of February?

22.

22. $____ What is the budgeted Accounts Receivable at the end of February?

23.

23. ____units What is the budgeted beginning inventory, in units, for the month of February?

24.

24. ____units What is the budgeted ending inventory, in units, for the month of February?

25.

25. ____units What is the budgeted production for the month of February?

26.

26. ____yards How many yards of material are needed (production needs) to satisfy February’s production?

27.

27. ____yards How many yards of material are budgeted to be purchased in February?

28.

28. $___ The budgeted material purchases for the month of February is:

29.

29. $____ How much cash in total will be disbursed in February for the purchase of material?

30.

30. $____ What is February’s ending accounts payable for the purchase of material?

Submitted: 8 years ago.Category: Multiple Problems

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Business Tutor: F. Naz, B.Com replied 8 years ago

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Jawaad Ahmed :

okay

Jawaad Ahmed :

Click here for assignment 1

Jawaad Ahmed :

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Customer:

Hey Jawaad thank you for the answers on Assignment one. According to the hw software a couple of them were wrong. That was #3,14,15, and 17. Let me know when you have assignment two ready.

Jawaad Ahmed :

It wil take around another 24 hours, thanks.

Jawaad Ahmed :

Click here for solution

Jawaad Ahmed :

Click here for working

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Business Tutor: F. Naz, B.Com replied 8 years ago

Have you got both assignments, thanks.

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