Managerial Accounting: Creating Value in a Dynamic Business Environment
12th Edition
ISBN: 9781260417074
Author: HILTON, Ronald
Publisher: MCGRAW-HILL HIGHER EDUCATION
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Chapter 9, Problem 42P
FreshPak Corporation manufactures two types of cardboard boxes used in shipping canned food, fruit, and vegetables. The canned food box (type C) and the perishable food box (type P) have the following material and labor requirements.
The following production-
The following selling and administrative expenses are anticipated for the next year.
The sales
The following inventory information is available for the next year. The unit production costs for each product are expected to be the same this year and next year.
Required: Prepare a
- 1. Sales budget.
- 2. Production budget.
- 3. Direct-material budget.
- 4. Direct-labor budget.
- 5. Production-overhead budget.
- 6. Selling and administrative expense budget.
- 7.
Budgeted income statement . (Hint: To determine cost of goods sold, first compute the production cost per unit for each type of box. Include applied production overhead in the cost.)
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Madison Enterprises manufactures and sells two types of dump trucks, Standard and Economy. The
company's production process is organized into two departments, Fabrication and Assembly. For the
upcoming year, Madison estimates total direct labor hours (DLHs) of 15,660, total machine hours
(MHs) of 12,500, and total manufacturing overhead of $6,264,000. Historically, Madison applied
overhead to jobs using a plantwide rate based on DLHS. Madison's production schedule for the
upcoming, in terms of units produced, DLHs per unit, and total DLHS for the plant is as follows:
Standard
Economy
Units produced DLH per unit
180
102
70
30
Madison plans to switch to departmental rates based on MHs for the Fabrication Department and
DLHS for the Assembly Department. Here are estimated overhead data for the upcoming year:
Fabrication department
Assembly department
Total
overhead costs
$2,739,000
$3,525,000
Plantwide DLH
12,600
3,060
O $22,914 higher using departmental rates
$4,785 higher using…
Deoro Company has identified the following overhead activities, costs, and activity drivers for the coming year:Deoro produces two models of dishwashers with the following expected prime costs and activity demands:
The company’s normal activity is 8,000 direct labor hours.Required:1. Determine the unit cost for each model using direct labor hours to applyoverhead.2. Determine the unit cost for each model using the four activity drivers.3. Which method produces the more accurate cost assignment? Why?
Delph Company uses job-order costing with a plantwide predetermined overhead rate based on machine-hours. At the beginning of the year, the company estimated that 54,000 machine-hours would be required for the period’s estimated level of production. It also estimated $1,000,000 of fixed manufacturing overhead cost for the coming period and variable manufacturing overhead of $4.00 per machine-hour.
Because Delph has two manufacturing departments—Molding and Fabrication—it is considering replacing its plantwide overhead rate with departmental rates that would also be based on machine-hours. The company gathered the following information to enable calculating departmental overhead rates:
Â
Molding
Fabrication
Total
Machine-hours
23,000
31,000
54,000
Fixed manufacturing overhead cost
$ 760,000
$ 240,000
$ 1,000,000
Variable manufacturing overhead cost per machine-hour
$ 4.00
$ 1.00
Â
During the year, the company had no beginning or ending inventories and it started,…
Chapter 9 Solutions
Managerial Accounting: Creating Value in a Dynamic Business Environment
Ch. 9 - Explain how a budget facilitates communication and...Ch. 9 - Prob. 2RQCh. 9 - Prob. 3RQCh. 9 - Prob. 4RQCh. 9 - Prob. 5RQCh. 9 - What is meant by the term operational budgets?...Ch. 9 - How does activity-based budgeting explain the...Ch. 9 - Prob. 8RQCh. 9 - Give three examples of how the City of Boston...Ch. 9 - Describe the role of a budget director.
Ch. 9 - What is the purpose of a budget manual?Ch. 9 - Prob. 12RQCh. 9 - Prob. 13RQCh. 9 - Define the term budgetary slack, and briefly...Ch. 9 - How can an organization help to reduce the...Ch. 9 - Prob. 16RQCh. 9 - Discuss this comment by a small-town bank...Ch. 9 - List the steps you would go through in developing...Ch. 9 - Prob. 19RQCh. 9 - Prob. 20RQCh. 9 - Fill in the missing amounts in the following...Ch. 9 - Bodin Company budgets on an annual basis. The...Ch. 9 - Coyote Loco, Inc., a distributor of salsa, has the...Ch. 9 - Greener Grass Fertilizer Company plans to sell...Ch. 9 - The following information is from Tejas...Ch. 9 - Tanya Williams is the new accounts manager at East...Ch. 9 - Sound Investments, Inc. is a large retailer of...Ch. 9 - Handy Hardware is a retail hardware store....Ch. 9 - Prob. 30ECh. 9 - Spiffy Shades Corporation manufactures artistic...Ch. 9 - Western State University (WSU) is preparing its...Ch. 9 - Mary and Kay, Inc., a distributor of cosmetics...Ch. 9 - Prob. 34PCh. 9 - Alpha-Tech, a rapidly growing distributor of...Ch. 9 - Prob. 36PCh. 9 - Scholastic Furniture, Inc. manufactures a variety...Ch. 9 - Prob. 38PCh. 9 - Vista Electronics, Inc. manufactures two different...Ch. 9 - Prob. 40PCh. 9 - Toronto Business Associates, a division of Maple...Ch. 9 - FreshPak Corporation manufactures two types of...Ch. 9 - Healthful Foods Inc., a manufacturer of breakfast...Ch. 9 - We really need to get this new material-handling...Ch. 9 - City Racquetball Club (CRC) offers racquetball and...Ch. 9 - Patricia Eklund, controller in the division of...Ch. 9 - Jeffrey Vaughn, president of Frame-It Company, was...
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