Cost accounting ProjectProject Introduction:In this project, you will be required to attempt a number of problems. The concepts, including cost-volume-profit (CVP) analysis, decision making, job costing with focus on service industry, and budgeting, and flexible budget variances will be applied in separate problems.Course Objectives Tested:1. Analyze how cost accounting supports management.2. Make decisions using cost-volume-profit (CVP) analysis.3. Evaluate methods to accurately determine job costs.4. Evaluate the advantages of a budget in managing operations and developing a strategic plan.5. Compute price variances and efficiency variances for direct-cost categories.6. Analyze variable and fixed overhead cost variances.PROJECT SUBMISSION PLANDescription/Requirements of ProjectEvaluation CriteriaAssessment Preparation Checklist:To prepare for this project, you should:Read through this weeks online lesson, which will help you review the important concepts covered in Weeks 16.Read the following chapters from your textbook, Cost Accounting:o Chapter 1, pp. 219o Chapter 2, pp. 2651o Chapter 3, pp. 6286o Chapter 4, pp. 98126o Chapter 5, pp. 138164o Chapter 6, pp. 182211o Chapter 7, pp. 226249o Chapter 8, pp. 262289Did you show step-by-step calculations for each problem requirement assigned?Did you provide detailed professional analysis with numbers as required?BU315Project2Description/Requirements of ProjectEvaluation CriteriaTitle: Cost AccountingMixed BagProblem 1:AquaPure produces two models of water filters.Model 1 attaches to the faucet and cleans all water that passes through the faucet. This model is sold for $80 and has variable costs of $20.Model 2 is a pitcher-cum-filter that only purifies water meant for drinking. This model is sold for $90 and has variable costs of $25.AuqaPure sells two faucet models for every three pitchers sold. Fixed costs equal $945,000.Task:1. What is the breakeven point in unit sales and dollars for each type of filter at the current sales mix?2. AquaPure is considering buying new production equipment. The new equipment will increase fixed cost by $181,400 per year and will decrease the variable cost of the faucet and the pitcher units by $5 and $9 respectively. Assuming the same sales mix, how many of each type of filter does AquaPure need to sell to break even?3. Assuming the same sales mix, at what total sales level would AquaPure be indifferent between using the old equipment and buying the new production equipment? If total sales are expected to be 30,000 units, should AquaPure buy the new production equipment?Problem 2:Books n Books Inc. schedules book signings for science fiction authors and creates e-books and books on CD to sell at each signing. The company uses a normal-costing system with two direct cost pools, labor and materials, and one indirect cost pool, general overhead. General overhead is allocated to each signing based on 80% of labor cost. Actual overhead equaled allocated overhead in March 2010. Actual overhead in April was $1,980. All costs incurred during the planning stage for a signing and during the signing are gathered in a balance sheet account called Signings inBU315Project3Description/Requirements of ProjectEvaluation CriteriaProgress (SIP). When a signing is completed, the costs are transferred to an income statement account called Cost of Completed Signings (CCS). Following is cost information for April 2010:From Beginning SIPIncurred in AprilAuthorMaterialsLaborMaterialsLaborN. Asher$425$750$90$225T. Bucknell71057515075S. Brown200550320450S. King650400D.Sherman150200The following information relates to April 2010:As of April 1, there were three signings in progress, N. Asher, T. Bucknell, and S. Brown. Signings for S. King and D. Sherman were started during April. The signings for T. Bucknell and S. Kingwere completed during April.Tasks:1. Calculate SIP at the end of April.2. Calculate CCS for April.3. Calculate under/overallocated overhead at the end of April.4. Calculate the ending balances in SIP and CCS if the under/overallocated overhead amount is as follows:a. Written off to CCSb. Prorated based on the ending balances (before proration) in SIP and CCSc. Prorated based on the overhead allocated in April in the ending balances of SIP and CCS (before proration)5. Which of the methods in requirement 4 would you choose, and why?BU315Project4Description/Requirements of ProjectEvaluation CriteriaProblem 3:ComfyFootware Inc. manufactures a popular undyed cloth sandal in one style, but two variationsRegular and Deluxe. The Regular sandals have cloth soles and the Deluxe sandals have cloth covered wooden soles. ComfyFootware is preparing its budget for June 2012, and it has estimated sales based on past experience.Other information for the month of June is as follows:Input PricesDirect materialsCloth$3.50 per yardWood$5.00 per board footDirect manufacturing labor$10 per direct manufacturing labor-hourInput Quantities per Unit of Output (per pair of sandals)RegularDeluxeDirect materialsCloth1.3 yards1.5 yardsWood02 b.f.Direct manufacturing labor-hours (DMLH)5 hours7 hoursSetup-hours per batch2 hours3 hoursInventory Information, Direct MaterialsClothWoodBeginning inventory610 yards800 b.f.Target ending inventory386 yards295 b.f.Cost of beginning inventory$2,146$4,040ComfyFootware accounts for direct materials using a FIFO cost flow assumption.BU315Project5Description/Requirements of ProjectEvaluation CriteriaSales and Inventory Information, Finished GoodsRegularDeluxeExpected sales in units (pairs of sandals)2,0003,000Selling price$80$130Target ending inventory in units400600Beginning inventory in units250650Beginning inventory in dollars$15,500$61,750ComfyFootware uses a FIFO cost flow assumption for finished goods inventory.All the sandals are made in batches of 50 pairs of sandals. ComfyFootware incurs manufacturing overhead costs, marketing and general administration, and shipping costs. Besides materials and labor, manufacturing costs include setup, processing, and inspection costs. ComfyFootware ships 40 pairs of sandals per shipment. ComfyFootware uses activity-based costing and has classified all overhead costs for the month of June as shown in the following chart:Cost typeDenominator ActivityRateManufacturing:SetupSetup-hours$12 per setup-hourProcessingDirect manufacturing labor-hours$1.20 per DMLHInspectionNumber of pairs of sandals$0.90 per pairNonmanufacturing:Marketing and general administrationSales revenue8%ShippingNumber of shipments$10 per shipmentTasks:1. Prepare each of the following for June:a. Revenues budgetb. Production budget in unitsBU315Project6Description/Requirements of ProjectEvaluation Criteriac. Direct material usage budget and direct material purchases budget in both units and dollars; round to dollarsd. Direct manufacturing labor cost budgete. Manufacturing overhead cost budgets for processing and setup activitiesf. Budgeted unit cost of ending finished goods inventory and ending inventories budgetg. Cost of goods sold budgeth. Marketing and general administration costs budget2. ComfyFootwares balance sheet for May 31 is as follows. Use it and the following information to prepare a cash budget for ComfyFootware for June. Round to dollars.o All sales are on account; 60% are collected in the month of the sale, 38% are collected the following month, and 2% are never collected and written off as bad debts.o All purchases of materials are on account. ComfyFootware pays for 80% of purchases in the month of purchase and 20% in the following month.o All other costs are paid in the month incurred, including the declaration and payment of a $10,000 cash dividend in June.o ComfyFootware is making m!
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