Check Figures for Selected End-Of-Chapter Assignments

Ingram/Albright/Baldwin/Hill, Accounting: Information for Decisions 3e

Check figures for selected end-of-chapter assignments

CHAPTER M1

Exercises:
1-2 / 3. Strategic planning
Problems:
P1-11 / Total cost at 500,000 units with upgrade $870,000
P1-12 / 3.d; 6.c; 9.d

CHAPTER M2

Exercises:
2-2 k. / Indirect
2-3 b. / Conversion costs
2-4 k. / Product cost
2-5 / Gross margin $525
2-6 /

Utilities for Plant, Overhead, Indirect Cost of Production

2-8 / Cost of goods sold, $40,000
2-9 /

Ending balance WIP, $1,250,000

2-10 / Target cost $375
2-11 / Item E target unit cost $84
2-12 / Total cost $100
2-13 / Required margin $48.00
Problems:
P2-3 B. / Salary and commission are non manufacturing, selling expenses.
P2-4 A. / Transfer to finished goods $229,000
P2-5 B. / WIP ending balance $60,000
P2-6 B. / Cost of services provided $59,000
P2-8 A. / WIP ending balance $15,000
P2-10 A. / Target cost $229,500
P2-13 / Ending cost of goods sold $520,000
P2-14 / 3.c; 6.d; 9.a

CHAPTER M3

Exercises:
3-2 b. / Total manufacturing cost $35,500
3-3 a. / $5 per machine hour
3-5 a. / $223 per unit
3-6 a. / Predetermined overhead rate 150% of direct labor dollars
3-7 b. / Overhead applied to production $675,000
3-9 a. / Predetermined overhead rate $35 of direct labor hour
3-10 a. / Cost of job 423 $3,550
3-11 a. / Manufacturing overhead $1,885; total cost $6,335
Problems:
P3-1 B. / Total cost (normal costing) $29,000
P3-2 A. / Total cost (actual costing) $17,400
P3-4 D. / Selling price of Job 102 $89,190
P3-5 A. / $10 per direct labor hour; $60 per machine hour
P3-6 B. / WIP inventory balance $7,750
P3-7 C. / Total $126,000
P3-8 D. / Total billing, case DR9312 $25,796.40
P3-9 B. / Job 100 OH per labor hours $857,144
P3-11 / Total cost for 2,500 units $4,930.98
P3-12 / 3.c; 6.a; 9.a

CHAPTER M4

Exercises:
4-4 / Units completed and transferred out 450
4-5 / Equivalent units of materials 59,000
4-6 b. / Equivalent units of conversion, 12,700
4-7 b. / $1.36 per equivalent unit of materials
4-8 b. / Equivalent units of materials 420,000
4-9 a. / Total equivalent units of 23,200
4-10 b. / Total conversion costs of $2,200
4-11 / Cost per equivalent unit for direct materials $1.50
Problems:
P4-1 A. / Unit cost per loaf $0.47
P4-2 B. / Total equivalent units 2,400
P4-4 A. / Cost per unit $142.73
P4-5 A. / Cost per unit $11.36
P4-6 A. / $2.50 per equivalent units materials
P4-7 D. / Value of completed units $11,600
P4-8 / Total cost per unit $17.19
P4-9 / 3.a; 6.a; 9.c

CHAPTER M5

Exercises:
5-2 / Paper: raw materials (25.0%); Labor (25.0%); Overhead (50.0%)
5-4 c. / Over-applied overhead $150,000
5-5 b. / Overhead cost per roll of vinyl striping $8.58
5-6 a. / Materials handling $120 per batch
5-9 / 2. Allocation base
5-11 a. / Product A: traditional profit margin $20;
ABC profit margin $35;
Percentage change +75%
5-12 a. / Product C –16%
5-13 a. / Whole wheat bread cost per unit $0.88
5-14 / Product 2 total cost $437.50
5-16 / Product B cost per unit $20.90
Problems:
P5-2 B. / Product A unit cost based on direct labor hours $93.50
P5-3 A. / Total cost $191,875.15
P5-4 A. / Product D total production cost per unit $604.70
P5-6 A. / Total setup cost $212,500
P5-7 B. / Cost per unit $14.31
P5-10 A. / Website maintenance cost $191,250
P5-12 A. / Service cost allocation using a single rate $22,500
P5-14 / Data unit profit $0.76; Music unit profit $0.11
P5-15 / 3.a; 6.a; 9.d

CHAPTER M6

Exercises:
6-3 / 4.a
6-4 / 5. Asset management module
6-7 / 6.b; 13.h
6-13 / 2. Purchase orders, materials
Problems:
P6-3 / Companies that produce and sell in batches use job order systems.
P6-5 / Errors in recording data; unauthorized access; destruction of hardware
P6-12 / Fields: Id number, description, cost, quantity on hand, etc.
P6-15 / 3.b; 6.d; 9.a

CHAPTER M7

Exercises:
7-5. / Profit $24,000
7-7 b. / Net loss $32,000
7-8 b. / Breakeven in dollar $300,000
7-9 a. / Breakeven in sales $627,143
7-10 b. / Breakeven point dollars $179,104
7-11 b. / Net income $36,500
7-12 / Buy: net income = $1,440,000
7-14 / Profit = $2,500
7-15 / Give away two tickets – net income $22,000
7-16 a. / Breakeven units 1,333
7-17 / Sales to cover fixed costs plus target profits = 4,000 units
7-18 / Contribution margin ratio 35%
7-20 a. / Total unit product cost $2.90
7-21 b. / Variable product cost per unit $30
7-24 a. / Cost of withdrawal using a teller $1.20
Problems:
P7-7 A. / Contribution margin $125
P7-8 B. / Breakeven point units 16,000
P7-9 C. / New breakeven: 250,00 units
P7-10 C. / Company B breakeven in units 10,000
P7-12 A. / $12,100 used for variable costs
P7-13 B. / Net income this year $40,000
P7-14 B. / Net income $0
P7-15 A. / Total costs per unit $170
P7-16 C. / Total cost $79
P7-17 A. / Total unit product cost $21
P7-18 A. / Net income $1,070,000
P7-19 C. / Net income $500
P7-22 / Breakeven with $1.20 variable cost per unit 432,000 units
P7-23 / 3.c; 6.c; 9.d

CHAPTER M8

Exercises:
8-3 b. / Cash collections 4th quarter $250,000
8-5 / Total production needs in May 345,000 units
8-6 / Required mixed vegetables in February 595,000 ounces
8-7 / Total budgeted direct labor cost in March $21,800
8-10 / Total cash disbursements for manufacturing overhead for the 2nd quarter $30,750
8-11 / Second quarter total budgeted S&A expenses $515,000
8-14 / Expected total cash collections in September $685,000
8-16 / Total budgeted manufacturing overhead for the year $394,000
Problems:
P8-1 A. / Net income $34,000
P8-3 A. / Ending cash balance for the year $40,000
P8-4 A. / Total purchasing costs for January $93,600
P8-6 A. / Excess ending inventory in February 4,420 pounds
P8-9 B. / Total cash collections in October $175,000
P8-10 A. / Total variable expenses per unit of A $151.80
P8-12 / Cost of materials for insert $35,000; Total direct labor cost $198,000
P8-13 / 3.c; 6.a; 9.d

CHAPTER M9

Exercises:
9-2 a. / Materials price variance $2,280 U
b. / Labor efficiency variance $1,725 U
9-3 c. / Labor rate variance $71,550 U
9-4 / Labor efficiency variance $2,100 F
9-5 / Materials price variance $110 U
Labor rate variance $80 F
9-7 / Materials quantity variance $200 U
9-11 a. / Edward Deming refers to external failure costs
9-13 a. / Plant 2 has more variation. The distribution is uniform.
Problems:
P9-1 A. / Total standard cost $62.75
D. / Mixing department labor efficiency variance $1,550 F
P9-6 A. / Prevention costs $85,000 Year 1
External failure costs $142,000 Year 2
P9-7 A. / Total quality loss $54,117.28
P9-12 A. / Quality loss $5,820
P9-14 D. / Total clerical support variance $860 F
P9-15 / Price variance $33,859.38
P9-16 / 3.b; 6.d; 9.a

CHAPTER M10

Exercises:
10-4 / ROI. Investment Center
Market Share. Investment Center
10-7 b. / Residual income $140,000
10-8 a. / 2006, ROI = 4.9% 2007, ROI = 5.3%
10-9 / Company 2, ROI = 28%
10-13 a. / $2 per unit savings
10-15 b. / Transfer price $10
10-19 c. / $235
Problems:
P10-2 D. / Division 1 ROI .06
P10-6 B. / Division A ROI 19.63%
P10-11 C. / Total benefit to company $620,000
P10-13 / ROI General Mills .050
P10-15 / With 10% gross margin, (over) maximum transfer price ($12,762.39)
P10-16 / 3.c; 6.c; 9.b

CHAPTER M11

Exercises:
11-3 / Change is a strategic decision signaling a major shift in the competitive model
11-6 / 2.e
11-8 / 3.b
11-9 / Production rate 7 minutes
11-10 / Cycle time is 211 minutes
11-12 b. / Operating income $173.200
11-14 b. / Throughput 480 minutes per shift
11-17 c. / 48 units for an 8-hour shift
11-18 c. / Throughput improvement from 48 units to 60 units per shift
11-21 c. / The kitchen would become the bottleneck if production exceeded 120 meals.
Problems:
P11-4 C. / Total process time 85 minutes
P11-13 C. / Value-added time = 425 minutes
P11-15 / With new $1,200,000 investment, annual profit margin = 12%
P11-16 / 3.d; 6.a; 9.a

CHAPTER M12

Exercises:
12-2 / Payback period 2 years
12-4 / ARR 25%
12-6 / $12,000 in year 3
12-8 / NPV $1,505
12-11 / IRR approximately 8%
12-12 / Cost of waterslide $36,502
12-14 / Tax savings $600
12-16 / NPV $1,734
12-18 / IRR slightly more than 10%
12-21 / NPV $448
Problems:
P12-2 B. / Project A NPV $338
P12-3 B. / Project A: $22,055
P12-5 A. / Net income $90,000
B. / ARR 22.5%
P12-6 A. / Payback 4.8 years
P12-8 A. / Net cash inflows $2,810
P12-10 A. / IRR is between 9% an 10%
P12-12 B. / NPV -$4,830
P12-14 B. / Operating loss, net of tax $140,000
P12-17 / NPV at an annual rate of 12% 13,868.50256
P12-18 / 3.d; 6.d; 9.d

CHAPTER M13

Exercises:

13-2 / a. Reciprocal service arrangement
13-4 / Assembly - producing
13-5 a. / Cost-to-charge ratio = .579
13-7 b. / Service department A. = $250,000 + .40 (Service Department B.)
13-8 / Total cost for Dept 2 = $2,527,200
13-9 b. / Service Department 1 = $860,465
13-10 b. / Service dept. 2 = $400,000 + .20(Service department 1)
13-12 / Amount billed = $2,880
13-13 / $5,325
13-15 e. / $60,200
Problems:
P13-2 C. / Total allocated cost to Industrial products = $524,000
P13-3 A. / $129,555 total cost for deposits
P13-4 A. / Laboratory total cost $387,500
P13-5 B. / Administration allocated cost $2,580
P13-6 A. / Escrow analysis total cost $422,756.34
P13-8 B. / Total bill $338
P13-9 A. / $1,195.00
P13-15 / Lower School total cost $1,569,081.63
P13-16 / 3.c; 6.d; 7.d