Question Details

[answered] 1-1 Waterways Corporation Cost of Goods Manufactured Schedu


I need help with the attached pdf with 8 questions and spreadsheet that lets us work on the problems. I need it worked on the spreadsheet that is attached with this . Thank you for any help


1-1 Waterways Corporation

 

Cost of Goods Manufactured Schedule

 

For the Month of November Beginning Work in Process (WIP), Oct. 31

 

Direct Materials

 

Beginning Raw Materials Inventory, Oct. 31

 

Raw Materials Purchases

 

Total Raw Materials Available for Use

 

Less: Ending Raw Materials Inventory, Nov. 30

 

Direct Materials Used 1

 

2

 

3 4 $ - Direct Labor

 

Manufacturing Overhead

 

Depreciation - Factory Equipment

 

Factory Supplies Used

 

Factory Utilities

 

Indirect Labor

 

Rent - Factory Equipment

 

Repairs - Factory Equipment

 

Total Factory Overhead

 

Total Manufacturing Costs

 

Total Cost of Work in Process (WIP)

 

Less: Ending Work in Process, Nov. 30

 

Cost of Goods Manufactured 5 6

 

7

 

8

 

9

 

10

 

11 12 $ - 1-2a Waterways Corporation

 

Income Statement

 

For the Month of November Sales

 

Cost of Goods Sold (COGS)

 

Beginning Finished Goods Inventory, Nov. 1

 

Cost of Goods Manufcatured (COGM)

 

Cost of Goods Available For Sale (AFS)

 

Less: Ending Finished Goods Inventory, Nov. 30

 

Cost of Goods Sold (COGS)

 

Gross Profit 1

 

2

 

3 4 - Operating Expenses

 

Selling Expenses

 

Advertising Expenses

 

Sales Commissions

 

Total Selling Expenses

 

Administrative Expenses

 

Depreciation - Office Equipment

 

Office Supplies Expense

 

Other Administrative Expenses

 

Salaries

 

Total Administrative Expenses

 

Total Operating Expenses

 

Net Income 1-2b 5

 

6 7

 

8

 

9

 

10 $ - Waterways Corporation

 

Balance Sheet (Partial)

 

For the Month of November Current Assets

 

Cash

 

Accounts Receivable

 

Inventories

 

Raw Materials Inventory

 

Work in Process (WIP) Inventory

 

Finished Goods (FG) Inventory

 

Prepaid Expenses

 

Total Current Assets 11

 

12

 

13

 

14 - 15

 

16 $ - 2-1 JOB COST SHEET

 

Job No. J57 Quantity

 

Date Requested

 

Date Completed

 

Item Special Order Parts Units

 

Dec. 2

 

Dec. 15 Manufacturing Overhead

 

Direct

 

Materials1 Date Direct

 

Labor2 Hours Rate3 2-Dec

 

3-Dec

 

8-Dec

 

9-Dec

 

14-Dec

 

15-Dec Amount

 

- Cost Summary

 

Direct Materials

 

Direct Labor

 

Manufacturing Overhead

 

Total Cost

 

Unit Cost Supplementary Information

 

Annual Overhead Analysis

 

Anticipated Overhead Costs

 

Expected Machine Hours

 

Predetermined Overhead Rate per Machine Hour 3 Raw Materials Usage

 

% Used per Job

 

2-Dec

 

8-Dec

 

14-Dec

 

Totals J57 Direct Labor Usage

 

% Used per Job

 

3-Dec

 

9-Dec

 

15-Dec J57 1 2 K52 - Total - - K52

 

Total Hours Rate per

 

Hour J57

 

K52

 

Direct Labor

 

- Totals 0 0 0 $ - $ - 1 2

 

5

 

6

 

10

 

11

 

14 15

 

16

 

17

 

18

 

19 20

 

21

 

22 24

 

27

 

30

 

33 Total 35 - 39

 

- 43

 

- 47 $ - 2-2 JOB COST SHEET

 

Job No. K52 Quantity (in Units)

 

Date Requested Dec. 2

 

Date Completed Dec. 15

 

Item Special Order Parts 1 Manufacturing Overhead

 

Date

 

2-Dec

 

3-Dec

 

8-Dec

 

9-Dec

 

14-Dec

 

15-Dec

 

Cost Summary

 

Direct Materials

 

Direct Labor

 

Manufacturing Overhead

 

Total Cost

 

Unit Cost Direct

 

Materials1

 

- Direct

 

Labor2 Hours Rate3 Amount - #DIV/0! #DIV/0! 2 - #DIV/0! #DIV/0! 3 - #DIV/0! #DIV/0! 4 - $ #DIV/0!

 

#DIV/0!

 

#DIV/0! Supplementary Information

 

Annual Overhead Analysis

 

Anticipated Overhead Costs

 

Expected Machine Hours $ - Predetermined Overhead Rate #DIV/0! per Machine Hour Raw Materials Usage

 

% Used per Job

 

2-Dec

 

8-Dec

 

14-Dec

 

Totals J57

 

0 Direct Labor Usage

 

% Used per Job

 

2-Dec

 

8-Dec

 

14-Dec

 

Totals J57

 

0

 

0

 

0

 

0

 

0 3 K52

 

0

 

- Total

 

- K52

 

0

 

0

 

0

 

0

 

0 Total

 

Hours

 

0

 

0

 

0

 

0 Rate per

 

Hour

 

$

 

$

 

$

 

- J57

 

K52

 

Direct Labor

 

$

 

- $ Total

 

- $ - 1. Why would Waterways choose machine hours as the cost driver for the overhead rather than direct labor

 

cost?

 

5 2. What would Waterways be likely to choose as the overhead cost driver for installing the irrigation system

 

and why?

 

6 3 Waterways Corporation

 

Molding Department Production Report

 

For the Month of January

 

Equivalent Units (EUs)

 

Physical

 

Units QUANTITIES

 

Units to be Accounted for

 

Beginning Work in Process, Jan. 1

 

Started into Production

 

Total Units COSTS

 

Unit Costs

 

Costs in January (Beg WIP + All Costs Added)

 

Equivalent Units (EUs)

 

Units Costs Conversion % Complete 0 Units Accounted For

 

Transferred Out

 

Percentage Completed (Should be 100%)

 

Units

 

Ending Work in Process, Jan. 31

 

Percentage Completed

 

Units

 

Total Units Materials % Complete

 

0 0 % Complete 0 0 Materials 0

 

#DIV/0! 0

 

Conversion

 

Costs 0

 

#DIV/0! Costs to be Accounted for

 

Beginning Work in Process, Jan. 1

 

Started into Production

 

Total Costs

 

COST RECONCILIATION SCHEDULE

 

Costs Accounted for

 

Transferred Out (EUs x Unit Cost per EU)

 

Ending Work in Process, Jan. 31

 

Materials (EUs x Material Unit Cost per EU)

 

Conversion (EUs x Conversion Unit Cost per EU)

 

Total Costs #DIV/0!

 

#DIV/0! 3

 

4 6

 

7 9

 

12 Total

 

$ - 14

 

#DIV/0! 15

 

16 $ - #DIV/0! #DIV/0!

 

#DIV/0! 4-1a Waterways Corporation

 

Contribution Margin Income Statement for Water Control and Timer

 

For the Year 2011

 

Ratio

 

Unit Cost Sales

 

Variable Expenses

 

Contribution Margin

 

Fixed Expenses

 

Net Income from Product $ - $ $ - #DIV/0! 2. Break-Even Point

 

In Dollars (a/b)

 

a. Fixed Expenses

 

b. Contribtuion Margin Ratio #DIV/0!

 

#DIV/0!

 

$ $ #DIV/0! #DIV/0!

 

#DIV/0! Ratio (a/b)

 

a. Margin of Safety (in Dollars)

 

b. Sales #DIV/0!

 

#DIV/0! 4. Additional Units to Increase Income

 

Desired Increase in Income (%)

 

Current Income

 

Desired Increase ($)

 

Total Projected Income

 

Fixed Expense

 

Projected Contribution Margin

 

Total Units Required (a/b) 3 5 ANALYSIS

 

1. Contribution Margin Ratio (%) 3. Margin of Safety

 

In Dollars (a - b)

 

a. Sales

 

b. Break-Even (in Dollars) 1 4 Supplementary Information

 

Total Units Sold In Units (a/b)

 

a. Fixed Expenses

 

b. Unit Contribtuion Margin - %

 

Sales

 

#DIV/0!

 

#DIV/0!

 

#DIV/0! 6 $ - $ - $ - a. Projected Contribution Margin $

 

b. Unit Contribution Margin

 

$

 

Total Units Required

 

Additional Units Required (a - b)

 

a. Total Unit Sales Required

 

b. Current Unit Sales

 

Additional Units Required #DIV/0! #DIV/0!

 

#DIV/0! 4-1b Waterways Corporation

 

Contribution Margin Income Statement for Water Control and Timer

 

Projected For the Year 2012

 

Ratio Sales

 

Variable Expenses

 

Contribution Margin

 

Fixed Expenses

 

Net Income from Product $ $ Unit Cost

 

- $

 

- $

 

- Supplementary Information

 

Current Units Sold

 

Additional Projected Units Sold

 

Total Projected Units Sold ANALYSIS

 

Projected Increase in Net Income

 

Projected Net Income

 

$

 

Current Net Income

 

Increase (Decrease) in Net Income $ %

 

Sales

 

#DIV/0!

 

#DIV/0!

 

#DIV/0! 1 - - 4-2 a. Waterways Corporation

 

Contribution Margin Income Statement for Sprinkler Units

 

For the Year 2011

 

Ratio %

 

Sales

 

#DIV/0! Unit Values

 

Sales

 

Variable Expenses

 

Manufacturing

 

Selling & Administrative

 

Total Variable Expenses

 

Contribution Margin

 

Fixed Expenses

 

Manufacturing

 

Selling & Administrative

 

Total Fixed Expenses

 

Net Income from Product $ #DIV/0!

 

#DIV/0!

 

- 2

 

3 #DIV/0!

 

#DIV/0! - #DIV/0!

 

#DIV/0!

 

4

 

5 $ - Supplementary Information

 

Units Sold

 

b. 6 Waterways Corporation

 

Contribution Margin Income Statement for Sprinkler Units

 

Projected For the Year 2012

 

With An Increase in Sales Price per Unit Ratio Unit Values

 

Sales

 

Variable Expenses

 

Contribution Margin

 

Fixed Expenses

 

Net Income from Product $

 

$

 

$ Supplementary Information

 

Increase in Units Sold

 

Current Units Sold

 

Projected Increase (%)

 

Projected Total Units Sold

 

Increase in Variable Costs

 

Current Variable Cost per Unit

 

Projected Increase

 

Projected Variable Cost per Unit

 

Increase in Sales Price per Unit 1 - $ - %

 

Sales

 

#DIV/0!

 

#DIV/0!

 

#DIV/0! 8

 

10 11

 

12

 

13 14

 

15 $ - Current Sales Price per Unit

 

Projected Increase

 

Projected Sales Price per Unit 16

 

17 $ - 4-2 c. Waterways Corporation

 

Contribution Margin Income Statement for Sprinkler Units

 

Projected For the Year 2012

 

With NO Increase in Sales Price per Unit Ratio Unit Values

 

Sales

 

Variable Expenses

 

Contribution Margin

 

Fixed Expenses

 

Net Income from Product $

 

$

 

$ Supplementary Information

 

Increase in Units Sold

 

Current Units Sold

 

Projected Increase (%)

 

Projected Total Units Sold

 

Increase in Variable Costs

 

Current Variable Cost per Unit

 

Projected Increase

 

Projected Variable Cost per Unit - $ - %

 

Sales

 

#DIV/0!

 

#DIV/0!

 

#DIV/0! 19

 

21 22

 

23

 

24 25

 

26 $ - d. Comparative Effects on Contribution Margin and Net Income

 

27 5-1

 

a. Waterways Corporation

 

Sales Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan

 

Feb Expected Unit Sales

 

Unit Selling Price

 

Total Sales $ $

 

$ - March

 

- $

 

$ Quarter Total

 

$

 

$

 

- - Waterways Corporation

 

Production Budget

 

For the First Quarter of 2012

 

First Quarter b. Jan Feb Quarter

 

(As a Whole) March Expected Unit Sales - Add: Desired Ending Finished Goods Units

 

Total Required Units

 

Less: Beginning Finished Goods Units

 

Required Production Units - - - - - - - - 1 - 2 Supplementary Information

 

Desired Ending FG Units (% of Next Months Unit Sales) 1 Beginning FG Units (% of Next Months Unit Sales) 0% 2 NOTE: Beginning FG = Ending FG from Previous Month c. Waterways Corporation

 

Direct Materials Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan Feb Quarter

 

(As a Whole) March Units to be Produced3

 

Direct Materials per Unit (Lbs)

 

Total Lbs. Needed for Production - - - - Add: Desired Lbs. Ending Direct Materials4

 

Total Materials Required - - - - Less: Beginning Lbs. Direct Materials5

 

Direct Materials Purchases - - - - Cost per Lb.6

 

Total Cost of Direct Materials Purchases - - 2 $

 

$ - $

 

$ - $

 

$ Supplementary Information

 

Units to be Produced = Required Production Units (Last line of Production Budget) 3 Desired Lbs. Ending Direct Materials (% of Next Month's Total Lbs. Needed For Production) 4 Beginning Direct Materials = Ending Direct Materials from Previous Month 5 - - $

 

$ - Cost per Lb. 6 d. Waterways Corporation

 

Direct Labor Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan Feb Units to be Produced3

 

Direct Labor Time (Hours per Unit)7

 

Total Required Direct Labor Hours

 

Direct Labor Cost per Hour

 

Total Direct Labor Cost - Supplementary Information

 

Direct Labor Time (Hours per Unit) = Minutes/60 7 - $ - Quarter

 

(As a Whole) March

 

- $

 

$ - - $

 

$ - $

 

$ - 3

 

4 April May

 

9 - 12 - 13 April

 

2 16 - 17 18 19 23

 

24 5-2

 

a. Waterways Corporation

 

Manufacturing Overhead Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan

 

Feb Variable Costs1

 

Indirect Materials

 

Indirect Labor

 

Utilities

 

Maintenance

 

Total Variable Costs $ - $ March

 

- $ Fixed Costs2

 

Salaries

 

Depreciation

 

Property Taxes

 

Insurance

 

Maintenance

 

Fixed Manufacturing Overhead

 

Total Manufacturing Overhead - $ Quarter Total

 

- - - a. Total Manufacturing Overhead

 

b. Direct Labor Hours

 

Predetermined Overhead Rate for the Quarter (a/b) - - - $ - $ - $ - $ - $ - $ - $

 

$ $ $

 

$ - - $

 

$ - - 1 $

 

$ - $ - - 2

 

3

 

4

 

5 #DIV/0! Supplementary Information

 

Variable Costs = Direct Labor Hours x (Cost per Labor Hour)

 

Indirect Materials Cost per Labor Hour

 

Indirect Labor Cost per Labor Hour

 

Utilities Cost per Labor Hour

 

Maintenance Cost per Labor Hour

 

1 6

 

7

 

8

 

9 Fixed Costs Remain the Same Each Month for the Quarter 2 5-2

 

b. a. Expected Unit Sales

 

b. Variable Expenses per Unit Waterways Corporation

 

Selling and Administrative Expense Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan

 

Feb

 

March

 

Quarter Total

 

$

 

- $

 

- $

 

- 10 Total Variable Selling & Administrative

 

Expenses per Unit (a/b)

 

Fixed Expenses

 

Advertising

 

Insurance

 

Salaries

 

Depreciation

 

Other Fixed Costs $ - $ $ 15,000 $ - $ 15,000 $

 

- - $ 15,000 $

 

- 45,000

 

- 11

 

12

 

13

 

14 Total Fixed Expenses

 

Total Selling and Administrative Expenses $

 

$ 15,000 $

 

15,000 $ 15,000 $

 

15,000 $ 15,000 $

 

15,000 $ 45,000

 

45,000 5-2

 

c. Waterways Corporation

 

Schedule of Expected Collections from Customers

 

For the First Quarter of 2012

 

First Quarter

 

Jan

 

Feb

 

March

 

Accounts Receivable, Dec. 31, 2011

 

January

 

$

 

- $

 

February

 

$

 

- $

 

March

 

$

 

Total Cash Collections

 

$

 

- $

 

- $

 

Supplementary Information

 

Total Sales

 

% Cash Collected in Month of Sale

 

% Cash Collected in Month After Sale Jan

 

$ Feb

 

- $ Quarter Total

 

$

 

$

 

$

 

$

 

$

 

- 15 March

 

- $ 16

 

17 Waterways Corporation

 

Schedule of Expected Payments for Direct Materials

 

For the First Quarter of 2012

 

First Quarter

 

Jan

 

Feb

 

March

 

Accounts Payable, Dec. 31, 2011

 

January

 

$

 

- $

 

February

 

$

 

- $

 

March

 

$

 

Total Payments

 

$

 

- $

 

- $

 

d. Supplementary Information

 

Total Cost of Direct Materials Purchases

 

% Paid in Month of Purchase

 

% Paid in Month After Purchase Jan

 

$ Feb

 

- $ Quarter Total

 

$

 

$

 

$

 

$

 

$

 

- 18 March

 

- $ 19

 

20 5-3 Waterways Corporation

 

Cash Budget

 

For the First Quarter of 2012

 

First Quarter

 

Jan Feb Beginning Cash Balance

 

Add: Receipts

 

Collections from Customers

 

Total Available Cash

 

Less: Disbursements

 

Direct Materials

 

Direct Labor March Quarter Total

 

- 1 and 2 Manufacturing Overhead3

 

Selling and Administrative

 

Equipment Purchase - - - - - - - - - - - 4 - 5 Dividends6

 

Total Disbursements

 

Excess (Deficiency) of Available Cash Over Cash

 

Disbursements

 

Financing

 

Borrowings7

 

Repayments - 8 Interest9

 

Ending Cash Balance $ - - - - - - - - - - - - - - - - - - - - - - $ - $ - $ Supplementary Information

 

Beginning Cash Balance = Ending Cash Balance from Previous Month 1 All Cash Balances 2 Jan Feb March Monthly Manufacturing Overhead is Adjusted for Depreciation

 

Monthly Manufacturing Overhead

 

Depreciation

 

Manufacturing Overhead - - - Monthly Selling and Administrative is Adjusted for Depreciation

 

Monthly Manufacturing Overhead

 

Depreciation

 

Selling and Administrative 15,000

 

15,000 15,000

 

15,000 15,000

 

15,000 3 4 Equipment Purchase (in February) 5 Monthly Dividends Paid = Outsanding Shares x Dividends per Share

 

Outstanding Shares

 

Dividends per Share 6 - Borrowings = Amount Required (in $1,000 Increments) to Maintain Desired Cash Balance

 

Desired Cash Balance

 

Available Cash (Rounded Down to Nearest $1,000)

 

Borrowing (To Nearest $1,000) - Repayments = Last Day of Following Month - 7 8 Interest = Repayment Amount x Interest Rate

 

Interest Rate (Annual)

 

Interest Rate (Monthly) = Annual Rate /12

 

Interest Repaid - 9 0%

 

0.00%

 

- 0%

 

0.00%

 

- - 3 6 7 8

 

9 10

 

11

 

12 13

 

14 6-1 Waterways Corporation

 

Manufacturing Overhead Flexible Budget

 

For the Month of March

 

Projected Production Levels (in Units)

 

Budgeted Production (in Units)

 

Variable Costs 5 Indirect Materials1 10 Indirect Labor 15 Utilities 2 3 20 Maintenance

 

Total Variable Costs

 

4 Fixed Costs

 

Salaries

 

Depreciation

 

Property Taxes

 

Insurance

 

Janitorial

 

Total Fixed Costs

 

Total Budgeted Costs 25 - - - - - - - - - - 5 $ - $ - $ - $ - $ 26

 

27

 

28

 

29

 

30 - Supplementary Information

 

Indirect Materials Cost = Projected Production (in Units) x Indirect Materials Unit Cost (Static)

 

Indirect Materials Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

Original Budgeted Production (In Units)

 

Indirect Materials Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production) 31 Indirect Labor Cost = Production (in Units) x Indirect Labor Unit Cost (Static)

 

Indirect Labor Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

Original Budgeted Production (In Units)

 

Indirect Labor Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production) 33 Utilities Cost = Production (in Units) x Utilities Unit Cost (Static)

 

Utilities Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

Original Budgeted Production (In Units)

 

Utilities Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production) 34 Maintenance Cost = Production (in Units) x Maintenance Unit Cost (Static)

 

Maintenance Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

Original Budgeted Production (In Units)

 

Maintenance Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production) 35 1 32 2 3 4 Fixed Costs = Original Budgeted Amounts (Regardless of Production Quantity) 5 6-2 Waterways Corporation

 

Manufacturing Overhead Flexible Budget Report

 

For the Month of March Budgeted

 

Costs Difference

 

(Actual Favorable (F)

 

Standard) Unfavorable (U) Actual

 

Costs Actual Production (in Units)

 

Variable Costs 2 Indirect Materials1 #DIV/0! #DIV/0! 4 Indirect Labor #DIV/0! #DIV/0! 6 #DIV/0! #DIV/0! 8 #DIV/0!

 

#DIV/0! #DIV/0!

 

#DIV/0! 10 #DIV/0! 12 Utilities 2 3 Maintenance

 

Total Variable Costs

 

4 Fixed Costs

 

Salaries

 

Depreciation

 

Property Taxes

 

Insurance

 

Janitorial

 

Total Fixed Costs

 

Total Budgeted Costs - 11 5 #DIV/0! $ - Supplementary Information

 

Indirect Materials Cost = Projected Production (in Units) x Indirect Materials Unit Cost (Static)

 

Indirect Materials Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Indirect Materials Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

1 Indirect Labor Cost = Production (in Units) x Indirect Labor Unit Cost (Static)

 

Indirect Labor Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Indirect Labor Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

2 Utilities Cost = Production (in Units) x Utilities Unit Cost (Static)

 

Utilities Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Utilities Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

3 Maintenance Cost = Production (in Units) x Maintenance Unit Cost (Static)

 

Maintenance Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

4 13

 

14

 

15

 

16

 

17 Original Budgeted Production (In Unit

 

Maintenance Unit Cost (Static) #DIV/0! (Used for ALL Projected Levels of Production) Fixed Costs = Budgeted Amounts (Regardless of Production Quantity) 5 6-3 Waterways Corporation

 

Manufacturing Overhead Responsibility Report

 

For the Month of March Budgeted

 

Costs Actual

 

Costs Difference

 

(Budgeted Favorable (F)

 

- Actual) Unfavorable (U) Actual Production (in Units)

 

Controllable Costs 2 Indirect Materials1 #DIV/0! #DIV/0! 4 Indirect Labor2 #DIV/0! #DIV/0! 6 Utilities #DIV/0! #DIV/0! 8 #DIV/0!

 

#DIV/0! $ #DIV/0!

 

#DIV/0! 10 3 Maintenance

 

Total Variable Costs

 

4 - Supplementary Information

 

Indirect Materials Cost = Projected Production (in Units) x Indirect Materials Unit Cost (Static)

 

Indirect Materials Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Indirect Materials Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

1 Indirect Labor Cost = Production (in Units) x Indirect Labor Unit Cost (Static)

 

Indirect Labor Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Indirect Labor Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

2 Utilities Cost = Production (in Units) x Utilities Unit Cost (Static)

 

Utilities Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Utilities Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

3 Maintenance Cost = Production (in Units) x Maintenance Unit Cost (Static)

 

Maintenance Unit Cost (Static) = Original Budgeted Cost / Original Budgeted Production (In Units)

 

Original Budgeted Cost

 

$

 

Original Budgeted Production (In Unit

 

Maintenance Unit Cost (Static)

 

#DIV/0! (Used for ALL Projected Levels of Production)

 

4 Fixed Costs = Budgeted Amounts (Regardless of Production Quantity) 5 11 7 Waterways Corporation

 

Budget Variance Report

 

For the Month of January a. Materials Price Variance = (AQ x AP) - (AQ x SP) F or U Actual Quantity Used (AQ)

 

Actual Price Paid per Lb. (AP)

 

Actual Quantity (AQ) 1 $ - 2 $

 

$ - 3 - Standard Price per Lb. (SP)1

 

Difference (Actual - Standard) 4 b. Materials Quantity Variance = (AQ x SP) - (SQ x SP)

 

Actual Quantity Used (AQ)

 

Standard Price per Lb. (SP)

 

Standard Quantity (SQ) #DIV/0! 1 #DIV/0! 2 5 Standard Price per Lb. (SP)1

 

Difference (Actual - Standard) #DIV/0! #DIV/0!

 

7 c. Total Materials Variance = (AQ x AP) - (SQ x SP)

 

Actual Quantity Used (AQ)

 

Actual Price Paid per Lb. (AP)

 

Standard Quantity (SQ) $ -

 


 

$ - - 2 Standard Price per Lb. (SP)

 

Difference (Actual - Standard)

 

1 #DIV/0! #DIV/0!

 

#DIV/0! 8 Supplementary Information

 

Standard Price per Lb. 1 Material 3

 

Standard

 

Lbs. per Unit

 

(Ounces/16) Price per Lb. Total Metal

 

Plastic

 

Rubber $

 

$

 

$ Totals

 

0

 

Standard Price per Lb. (Total Price / Total Lbs. per Unit 0

 

#DIV/0! Standard Quantity (SQ) = Actual Units Produced x Standard Quantity per Unit

 

Actual Units Produced - 20

 

22

 

24 2 25 Standard Quantity (Lbs.) per Unit3

 

Standard Quantity 26 - Actual Hours (AH) = Actual Unit Produced x Actual Hours per Unit

 

Actual Units Produced

 

Actual Hours per Unit (Minutes/60)

 

Actual Hours

 

- 4 h. Evaluation of Variances 27 s Corporation

 

Variance Report

 

Month of January

 

d. Labor Price Variance = (AH x AR) - (AH x SR) F or U Actual Hours (AH)4

 

Actual Labor Rate (AR)

 

Actual Hours (AH) 9 $ - 10 $

 

$ - 11 $ - - Standard Labor Rate (SR)

 

Difference (Actual - Standard) 12 e. Labor Quantity Variance = (AH x SR) - (SH x SR)

 

Actual Hours (AH)4 - Standard Labor Rate (SR)

 

Standard Hours (SH) $ - 5 Standard Labor Rate (SR)

 

Difference (Actual - Standard) 13 $ - $

 

$ - $ - $

 

$ - 14 f. Total Labor Variance = (AH x AR) - (SH x SR)

 

Actual Hours (AH)4

 

Actual Labor Rate (AR)

 

Standard Hours (SH) $ - 5 Standard Labor Rate (SR)

 

Difference (Actual - Standard) $ - 15 g. Total Overhead Variance = Actual OH - Applied OH

 

Actual Overhead6

 

Applied Overhead 16

 

7 17 $ - 18 ntary Information Standard Hours (SH) = Actual Units x Standard Hours per Unit

 

Actual Units Produced

 

Standard Hours per Unit (Minutes /60)

 

Standard Hours

 

- 5 28 Actual Overhead = Actual Variable OH + Actual Fixed OH 6 Actual Variable OH

 

Actual Fixed OH 29

 

30 Actual Overhead - Applied Overhead = Actual Units x Standard Hours per Unit 7 x Pre-determined Standard OH Rate

 

Actual Units Produced

 

Standard Hours per Unit

 

Standard OH Rate

 

$

 

- 31 32 8-1a1. Net Present Value Analysis

 

Buy New Backhoes

 

8%

 

Cash Flow Discount

 

Time

 

(Positive

 

or

 

Periods1 Negative)

 

Rate Present Value

 

NA

 

1

 

- Equipment Purchase

 

Salvage Value of Old Equipment

 

Net Cash Flow per Year

 

Salvage Value (New Backhoes)

 

Net Present Value (NPV) 2 NA 1

 

5.74664

 

0.54027 $ 1

 

2

 

4

 

6 - Supplementary Information

 

Time Periods = Years Used To Determine Present Value (i.e. Remaining Life)

 

NOTE: Current Year Events = Present Value of 1 (No Time Periods Elapse) 1 Cash Inflow From Salvage Value of Old Equipment Would Be Immediate 2 8-1a2. Net Present Value Analysis

 

Rehab Old Backhoes

 

8%

 

Cash Flow Discount

 

Time

 

(Positive or

 

Periods1 Negative)

 

Rate Present Value Overhaul Cost2

 

Net Cash Flow per Year

 

New Salvage Value (Old Backhoes)

 

Net Present Value (NPV) 0.92593

 

5.74664

 

0.54027 $ 8

 

10

 

12 - Supplementary Information

 

Time Periods = Years Used To Determine Present Value (i.e. New Remaining Life) 1 Overhaul Cost is Estimated to Create Cash Outflow 1 Year From Now 2 8-1b. Payback Method Analysis

 

New

 

Old

 

Backhoes Backhoes Cost of Capital Investment1 & 2

 

Net Cash Flow per Year

 

Cash Payback Period (in Years) 14

 

16

 

3 #DIV/0! #DIV/0! Supplementary Information

 

Cost of Capital Investment For New Backhoes (a - b)

 

a. Purchase Cost

 

b. Salvage Value of Old Backhoe

 

Cost of Capital Investment 1 Cost of Capital Investment For Old Backhoes 2 17

 

18

 

19 Investment in Major Overhaul

 

Cost of Capital Investment = Capital Investment Required 1&2 Cash Payback Period (in Years) = Cost of Capital Investment / Net Annual Cash Flow

 

NOTE: A Shorter Payback Time is Desirable 3 20 8-1c. Internal Rate of Return (IRR)1

 

1

 

Internal Rate of Return = Present Value Factor2 (Interest Rate) Closest

 

to the IRR Factor For the Time Period Covered

 

2

 

For an Ordinary (End of Month) Annuity of 1 IRR Factor = (a / b)

 

a. Cost of Capital Investment

 

b. Net Annual Cash Flows

 

IRR Factor (a/b) New

 

Old

 

Backhoes Backhoes

 

#DIV/0!

 

#DIV/0! Closest Present Value Factor (%)3

 

Internal Rate of Return

 

Required Discount Rate

 

Is This IRR > Required Rate? 22

 

24

 

26

 

28 Supplementary Information

 

Table of Discount Factors (Interest Rates)3

 

Present Value Factors

 

for an Annuity of 1 for 8 Periods 8-2. Interpretation of the Results

 

a. Which option provides the best

 

results, under each method? PVF2

 

6.73274

 

6.46321

 

6.20979

 

5.74664

 

5.53482

 

5.33493

 

5.14612

 

4.96764

 

4.48732 Discount

 

Rate

 

4%

 

5%

 

6%

 

8%

 

9%

 

10%

 

11%

 

12%

 

15% New

 

Old

 

Backhoes Backhoes

 

Check One a. Net Present Value (NPV)

 

b. Payback Time

 

c. IRR (vs. Required Rate)

 

b. Are there any intangible benefits or negatives that would influence this decision? (i.e.

 

Ease of use, comfort, and/or efficiency of an option) 29

 

30

 

31 32 c. What decision would you make and why?

 

33

 


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