Week 8 Seminar Question Chimco is a limited company operating in the Hat making industry in East England. Below is a cost breakdown of their activities for the year 2020. Their business has been severely impacted by the Covid-19 lockdowns as they people were confined to their houses due to Government regulations. Items Cost per Actual (£) unit Units 100,000 Selling price 35 30 Revenue 3,000,000 Variable costs: Materials 3.50 380,000 Labour 540,000 Overhead 2.50 250,000 Contribution 24 1,830,000 Fixed overheads: Warehouse rental 350,000 200,000 Insurance 150,000 150,000 Fulltime supervisor 60,000 45,000 salary Profit 1,435,000 (i) Prepare the monthly control report showing original budget, flexed budget, and variances. (ii) Using your control report prepared in (i) above, prepare a report on Chimco's performance during the year 2020. (iii) Provide recommendations to Chimco's CEO on areas of improvement.

The Iron City Company started business on January 1, 2017. Iron City manufactures a specialty honey beer, which it sells directly to state-owned distributors in Pennsylvania. Honey beer is produced and sold in six-packs, and in 2017, Iron City produced more six-packs than it was able to sell. In addition to variable and fixed manufacturing overhead, Iron City incurred direct materials costs of $880,000, direct manufacturing labor costs of $400,000, and fixed marketing and administrative costs of $295,000. For the year, Iron City sold a total of 180,000 six-packs for a sales revenue of $2,250,000. Iron City’s CFO is convinced that the firm should use an actual costing system but is debating whether to follow variable or absorption costing. The controller notes that Iron City’s operating income for the year would be $438,000 under variable costing and $461,000 under absorption costing. Moreover, the ending f inished-goods inventory would be valued at $7.15 under variable costing and…

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Cranberry has received a special order for 170 units of its product at a special price of $2,350. The product normally sells.for $2,850 and has the following manufacturing costs: Per unit Direct materials 770 Direct labor 470 Variable manufacturing overhead 570 Fixed manufacturing overhead 670 51 Unit cost $2,480 Assume that Cranberry has sufficient capacity to fill the order without harming normal production and sales. If Cranberry accepts the order, what effect will the order have on the company's short-term profit?

Capitol, Incorporated, has received a special order for 2,080 units of its product at a special price of $158. The product normally sells for $208 and has the following manufacturing costs: Cost per Unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Total unit cost $ 58 38 28 48 $ 172 Assume that Capitol has sufficient capacity to fill the order without harming normal production and sales. Required: a. If Capitol accepts the order, what effect will the order have on the company's short-term profit? b. What minimum unit price should Capitol charge to achieve a $48,000 incremental profit? c. Now, assume Capitol is currently operating at full capacity and cannot fill the order without harming normal production and sales. If Capitol accepts the order, what effect will the order have on the company's short-term profit? Complete this question by entering your answers in the tabs below. Required A Required B Required C If Capitol accepts the order,…

The following items pertain to possible provisions: a. A company uses a part manufactured in Germany in its automobile manufacturing plant. There has been a concern about the failure of this part in cars manufactured in Germany. No failures have occurred to date in Canada. The company decided to do a voluntary recall of all cars manufactured with this part. The recall is 40% complete and has cost $1,250,000 to date. b. A company self-insures for floods. That is, it pays no insurance but is liable to replace assets lost through flood damage. No losses have been incurred this year, but there have been $225,000 of losses in most other years, and the company is concerned that there might well be $450,000 of losses next year, evening out the pattern. c. A company offers a three-year guarantee over parts and labour for products sold to ensure that parts work as expected. There were no payments this year, and only 5% of products sold this year are expected to need repairs in the next year.…

TB MC Qu. 6-60 (Algo) Flare Co. manufactures textiles. Among...   Flare Co. manufactures textiles. Among Flare's 2020 manufacturing costs were the following salaries and wages:          Loom operators $ 129,000   Factory foremen   54,000   Machine mechanics   39,000     What was the amount of Flare's 2020 indirect labor? (CPA adapted)   Multiple Choice A) $93,000 B) $168,000 C) $129,000 D) $183,000

14. As a result of a downturn in the economy, Optiplex Corporation has excess productive capacity. On January 1, Year 3, Optiplex signed a special order contract to manufacture custom-design generators for a new customer. The customer requested that the generators be ready for pickup by June 15, Year 3, and guaranteed it will take possession of the generators by July 15, Year 3. Optiplex has incurred the following direct costs related to the custom-design generators: Cost to complete the design of the generators $ 3,000 Purchase price for materials and parts 80,000 Transportation cost to get materials and parts to manufacturing facility 2,000 Direct labor (10,000 labor hours at $12 per hour) 120,000 Cost to store finished product (from June 15 to June 30) 2,000 Because of the company's inexperience in manufacturing generators of this design, the cost of materials and parts included an abnormal amount of waste totaling $5,000. In addition to direct costs, Optiplex applies variable and…

Comparing the fees in 2004 versus those in 2010 and 2014 for General Electric and Fortune 100 companies, does it appear that AS 5 has reduced costs of section 404 compliance?

Voiture Company manufactures compact, energy-efficient cars. On April 1, it purchased a machine for its assembly line at a contract price of $600,000 with terms of 2/10, n/30. Voiture paid the contract price on April 8 and also incurred installation and transportation costs of $4,000, sales tax of $48,000, and testing costs of $2,000. During testing, the machine was accidentally damaged, so the company had to pay $1,000 to repair it. Required:   Determine the cost of the machine. For each item excluded from property, plant and equipment, how would the item be classified in the financial statements?