Buckhorn, Matuseski, Bella Lugosi, McMullen, Topple, Maroon Corporation __correct w/ Solutions !!!

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1.  Buckhorn Corporation bases its predetermined overhead rate on the estimated machine hours for the upcoming year. Data for the upcoming year appear below.

 

Estimated Machine hours: 85,000

Estimated variable manufacturing overhead: 5.55 per machine hour

Estimated total fixed manufacturing overhead: 951,888

Compute the company’s predetermined overhead rate

 

2.  Matuseki Corporation is preparing its cash budget for October. The budgeted beginning cash balance is 17,000. Budgeted cash receipts totals 187,000 and budgeted cash disbursements totals 177,000. The desired ending cash balance is 40,000. The company can borrow up to 120,000 at any time from the local bank, with interest not due until the following month.

 

Prepare the company’s cash budget for October in good form

 

3. Bella Lugosi holdings, INC has collected the following operating information below for its current month’s activity. Using the information, prepare a flexible budget analysis to determine how well BLH performed in terms of cost control.

 

                                               Actual cost incurred                     Static Budget

Activity level (in units)                   5,250                                        5,178

Variable cost:      

Indirect material                             24,182                                     23,476

Utilities                                              22,356                                     22,674

Fixed Cost:        

Administration                                63,450                                        65,500

Rent                                                  65,317                                      63,904

 

4. McMullen Co.  manufactures automatic door openers. The company uses 15,000 electronic hinges per year as a component in the assembly of the openers. You have been engaged by the McMullen to assist with an evaluation of whether the company should continue producing the hinges or purchase them from an outside vendor.

The accounting Department provided the following detail regarding the annual cost to produce electronic hinges.

 

Direct material:   54,000

Direct labor:   60,000

Variable manufacturing overhead:   36,000

Fixed manufacturing overhead:   90,000

Total cost:      240,000

 

The procurement department provided the following supplier pricing:

 

Supplier A price per hinge: 11.00

Supplier B price per hinge: 10.75

Supplier C price per hinge: 10.50

 

The supplier pricing was obtained in response to a formal request for proposal (RFP). Procurement has determined these suppliers meet McMullens technical specifications and quality requirements.  If McMullen stops producing the part internally, 10% of the manufacturing overhead would be eliminated.

 

Prepare a make or buy analysis showing the annual advantage or disadvantage of accepting an outside supplier’s offer

 

5. Topple company produces a singe product. Operating data for the company and its absorption costing income statement for the last year is presented below:

 

Units in beginning Inventory: 0

Units produced:    9,000

Units sold:          7,000

Sales:              100,000

Less cost of goods sold

Beginning inventory: 0

Add cost of goods manufactured: 54,000

Goods available for sale: 54,000

Less ending inventory: 12,000

Cost of goods sold:       42,000

Gross margin: 58,000

Less selling and admin expenses: 28,000

Net operating income: 30,000

 

Variable manufacturing cost are 4$ per unit. Fixed factory overhead totals 18,000 for the year. This overhead was applied at a rate of 2$ per unit. Variable selling and administrative expenses were 1$ per until sold.

 

Prepare a new income statement for the year using variable costing. Comment on the differences between the absorption costing and the variable costing income statements.

 

6. The following data (in thousands of dollars) have been taken from the accounting records of the Maroon Corporation for the just-completed year:

 

Sales: 1,150

Raw Material inventory, beginning: 15

Raw material inventory ending: 40

Purchased of raw material: 150

Direct labor: 250

Manufacturing overhead: 300

Admin expenses: 500

Selling expenses: 300

Work in process inventory, beginning: 100

Work in process inventory, ending: 150

Finished goods Inventory, beginning: 80

Finished goods inventory, ending: 120

 

Use the above data to prepare (in thousands of dollars) a schedule of cost of goods manufactured and schedule of cost of goods sold for the year.  In addition, what is the impact on the financial statements if the ending finished goods inventory is overstated or understated?

    • 10 years ago
    Buckhorn, Matuseski, Bella Lugosi, McMullen, Topple, Maroon Corporation __correct w/ Solutions !!!
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