1 of 3 Parts for Final Exam. Please help with the computations in a an attached excel sheet.
Notre Dame College MBA 540 Accounting NAME______________________________________________________ Week 8 Final Examination Part B: Numeric Total Points: 50 Instructions: (a) There are total of 11 problems in this part of the final examination. (b) Maximum possible points are shown against each problem. (c) Solve all the problems with complete work to earn points. (d) Submit your answers by 11:55 pm on Friday of the week. 1. (3 points) Magio Company manufactures kitchen equipment used in hospitals. They distribute their products directly to the customer and, for the year ending 2022, they reported these revenues and expenses. Sales revenue $545,000 Cost of goods sold 225,000 Operating expenses 195,000 Required: Use the above information to construct an income statement for the year 2022. Work and Solution: 2. (8 points) A company builds custom sailboats and ships to the dealership. They have collected this shipping cost data: Months Sailboats Shipped Shipping Cost June 6 $11,650 July 4 9,100 August 3 7,825 September 8 14,200 October 2 6,550 November 7 12,925 December 5 10,375 Required: A. Prepare a scatter graph of the shipping data. Plot cost on the vertical axis and sailboats shipped on the horizontal axis. Is the relationship between shipping costs and unit shipped approximately linear? Draw a straight line through the scatter graph. B. Using the high-low method, create the cost formula for a company’s shipping costs. C. The least-squares regression method was used and the analysis resulted in this cost equation: Y = 4,000 + 1,275x. Comment on the accuracy of your high-low method estimation. D. What would you estimate shipping costs to be if the company shipped 10 sailboats in a single month? Use the cost formula you obtained in part B. Comment on how accurately this is reflected by the scatter graph you constructed. E. What factors other than the number of sailboats shipped do you think could affect the company shipping expense? Explain. Work and Solution: 3. (8 points) Maple Enterprises sells a single product with a selling price of $400 and variable costs per unit of $160. The company’s monthly fixed expenses are $36,000. Required: (a) What is the company’s break-even point in units? (b) What is the company’s break-even point in dollars? (c) Construct a contribution margin income statement for the month of September when they will sell 130 units. (d) How many units will Maple need to sell in order to reach a target profit of $48,000? (e) What dollar sales will Maple need in order to reach a target profit of $48,000? (f) Construct a contribution margin income statement for Maple that reflects $200,000 in sales volume. Work and Solution: 4. (3 Points) These costs are associated with company’s production: Production 110,000 Direct materials $525 Direct labor 280 Variable manufacturing overhead 120 Fixed manufacturing overhead $2,200,000 Required: Using the above information, what is the cost per unit under both variable and absorption costing? Work and Solution: 5. (3 points) Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: Cost Pool Cost Driver Estimated Overhead Wholesale Retail Ordering Number of orders $120,000 180,000 60,000 Machine setups Number of setups 85,000 200,000 140,000 Inspection Number of inspections 75,000 60,000 15,000 Required: Calculate the predetermined rate for each cost pool. Work and Solution: 6. (5 points) Cloud Shoes manufactures recovery sandals and is planning on producing 12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which costs $3.00 per yard. The company’s policy is to have enough material on hand to equal 15% of next month’s production needs and to maintain a finished goods inventory equal to 20% of the next month’s production needs. What is the budgeted cost of purchases for March? Required: What is the budgeted cost of purchases for March? Work and Solution: 7. (3 points) Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In February, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $90,000, and there was an unfavorable direct labor time variance of $5,520. Required: (a) What was the standard cost per hour? (b) How many actual hours were worked? (c) If the workers were paid $3.90 per hour, what was the direct labor rate variance? Work and Solution: 8. (5 points) The Trek bicycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Due to their residential location they operate with one 8-hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are: Dirt Mountain Racing Hours of produce 5 3 2 Selling price $1,000 $800 $600 Direct Material $400 $200 $100 Direct Labor $200 $150 $100 Variable Overhead $50 $25 $25 Fixed Overhead $25 $25 $25 Required: A. How many of each bicycle should be produced to maximize profits? B. What qualitative factors would you need to consider? 9. (3 points) Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is currently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order. Required: Based on this information, calculate be the profit if Jansen accepts the special order. Work and Solution: 10. (3 points) A company is examining a possibility of investing in a new machine. Two machines are available, Machine A and Machine B. Both machines require an investment of $450,000 and have a life of six years. The estimated cash flows that each machine is likely to generate over their lives are given below: Year Option A Option B 1 100,000 80,000 2 150,000 90,000 3 150,000 180,000 4 100,000 100,000 5 100,000 150,000 6 100,000 150,000 Required: (a) Calculate the payback period of Machine A and Machine B. (b) Which machine would you select based on the payback period method? Why? Work and Solution: 11. (6 points) Oleg Markov is the production manager of NASA Solvents. Due to limited capacity, the company can only produce one of two possible products: · an industrial concentrated solvent with a 15% probability of making a profit of $1 million and an 85% probability of making a profit of $200,000. · a household diluted solvent with a 100% chance of making a profit of $310,000. Oleg will get a 20% bonus from his department. Oleg has the responsibility to choose between the two products and is more risk averse than most of the top management at NASA Solvents. Required: (a) Calculate the expected returns (ER) for each alternative project. (ER is the weighted average of all the possible outcomes from a project.) (b) Which option is Oleg more likely to choose and why? (c) Which option would the company be more likely to choose and why? (d) What changes should the company make to Oleg’s compensation to encourage managers to take appropriate risks? Work and Solution: Page 1 of 1 Page 2 of 2 Page 1 of 2 Notre Dame College MBA 540 Accounting NAME______________________________________________________ Week 8 Final Examination Part B: Numeric Total Points: 50 Instructions: (a) There are total of 1 1 problems in this part of the final examination. (b) Maximum possible points are shown against each problem. (c) Solve all the problems with complete work to earn points. (d) Submit your answers by 11:55 pm o n Friday of the week. 1. ( 3 points ) Magio Company manufactures kitchen equipment used in hospitals. They distribute their products directly to the customer and, for the year ending 20 22 , they reported these revenues and expenses. Sales revenue $ 545 ,000 Cost of goods sold 225 ,000 Operating expenses 195 ,000 Required : Use the above information to construct an income statement for the year 20 22 . Work and Solution : 2. ( 8 points ) A company builds custom sailboat s and ships to the dealership. They have collected this shipping cost data: Months Sailboats Shipped Shipping Cost June 6 $11,650 July 4 9,100 August 3 7,825 September 8 14,200 October 2 6,550 November 7 12,925 December 5 10 , 375 Page 1 of 2 Notre Dame College MBA 540 Accounting NAME______________________________________________________ Week 8 Final Examination Part B: Numeric Total Points: 50 Instructions: (a) There are total of 11 problems in this part of the final examination. (b) Maximum possible points are shown against each problem. (c) Solve all the problems with complete work to earn points. (d) Submit your answers by 11:55 pm on Friday of the week. 1. (3 points) Magio Company manufactures kitchen equipment used in hospitals. They distribute their products directly to the customer and, for the year ending 2022, they reported these revenues and expenses. Sales revenue $545,000 Cost of goods sold 225,000 Operating expenses 195,000 Required: Use the above information to construct an income statement for the year 2022. Work and Solution: 2. (8 points) A company builds custom sailboats and ships to the dealership. They have collected this shipping cost data: Months Sailboats Shipped Shipping Cost June 6 $11,650 July 4 9,100 August 3 7,825 September 8 14,200 October 2 6,550 November 7 12,925 December 5 10,375