Reference no: EM13831780
QUESTION 1
CleverClogs is a small accounting firm that has two departments: Audit and Taxation. Selected information on these departments is as follows:
|
|
Audit
|
Taxation
|
|
Number of clients
|
43
|
99
|
|
Number of employees
|
11
|
17
|
|
Fees earned
|
$1,317,602
|
$627,936
|
If advertising expenses of $198,864 are to be allocated based on the amount of fees earned, calculate the total amount allocated to the Audit department. (Round your answer to the nearest dollar.)
QUESTION 2
CleverClogs is a small accounting firm that has two departments: Audit and Taxation. Selected information on these departments is as follows:
|
|
Audit
|
Taxation
|
|
Number of clients
|
41
|
108
|
|
Number of employees
|
14
|
16
|
|
Fees earned
|
$1,446,218
|
$691,060
|
If advertising expenses of $195,767 are to be allocated based on the amount of fees earned, calculate the total amount allocated to the Taxation department. (Round your answer to the nearest dollar.)
QUESTION 3
Superego Ltd manufactures extra large widgets for use as a component in one of its most popular products. Last year, 10,000 widgets are produced, with the following total costs:
|
|
$
|
|
Direct materials
|
36,293
|
|
Direct labour ($15 per hour)
|
18,810
|
|
Variable manufacturing overhead
|
29,604
|
|
Fixed manufacturing overhead
|
26,525
|
Superego is considering outsourcing production of these widgets and has identified a supplier who can provide the widgets at a cost of $11.16 per unit. If production is outsourced, equipment lease costs amounting to 30% of the fixed manufacturing overhead will no longer need to be incurred.
Calculate the effect on Superego Ltd's profit if the company outsources production of the extra large widgets. (Show a decrease in profit as a negative number, and an increase in profit as a positive number; round your answer to the nearest dollar.)
QUESTION 4
Ego Ltd manufactures miniature widgets and has been approached by a major customer, requesting a special price on a once-off special order of 1,000 widgets.
Unit costs for the product are as follows:
|
Variable costs
|
$
|
|
Direct materials
|
44
|
|
Direct labour
|
16
|
|
Manufacturing overhead
|
34
|
|
Selling & administration
|
10
|
|
|
|
|
Fixed costs
|
|
|
Manufacturing overhead
|
47
|
|
Selling & administration
|
14
|
The company usually has a 40% mark-up on the miniature widget product line, and currently has excess capacity.
Calculate the minimum price (per unit) that Ego Ltd should accept for this special order.
QUESTION 5
A company manufactures two products, but in recent months the profits for Product Y have been decreasing. A revised monthly budget for the two products is as follows:
|
|
Product X ($)
|
Product Y ($)
|
|
Sales
|
9,972
|
7,194
|
|
Direct materials
|
2,480
|
1,982
|
|
Direct labour
|
1,936
|
1,227
|
|
Manufacturing overheads
|
1,358
|
4,781
|
The following information is also available:
- If Product Y is discontinued, sales of Product X are expected to increase by 30%;
- Included in manufacturing overheads is $150 for rental of equipment that is specifically used to produce Product Y;
- All other manufacturing overheads represent costs that will be incurred regardless of whether Product Y is manufactured;
- If Product Y is discontinued, one casual employee (at a cost of $200 per month) will no longer be required. The other employees currently working on Product Y would be diverted to work on Product X, so no additional workers would be needed to meet the increased production of Product X.
Calculate the effect on monthly profit if Product Y is discontinued. (Show a decrease in profit as a negative figure, and an increase in profit as a positive figure; round your answer to the nearest dollar.)
QUESTION 6
Ego Ltd manufactures miniature widgets and has been approached by a major customer, requesting a special price of $200 per unit on a once-off special order of 1,000 widgets.
Unit costs for the product are as follows:
|
Variable costs
|
$
|
|
Direct materials
|
43
|
|
Direct labour
|
19
|
|
Manufacturing overhead
|
31
|
|
Selling & administration
|
15
|
|
|
|
|
Fixed costs
|
|
|
Manufacturing overhead
|
48
|
|
Selling & administration
|
16
|
The company usually has a 40% mark-up on the miniature widget product line, and currently has excess capacity.
Calculate the change in Ego Ltd's operating profit if the special order is accepted. (Show a decrease in profit as a negative number, and an increase in profit as a positive number
QUESTION 7
Simpson Ltd manufactures three types of high quality headphones: the Experience, Insight and Divine. The company has recently implemented an activity-based costing system, which it uses to allocate indirect costs. Details on five activities are as follows:
|
Activity
|
Cost
|
Activity driver
|
|
Materials handling
|
230,089
|
Number of parts
|
|
Materials assembly
|
2,464,922
|
Number of parts
|
|
Equipment setup
|
847,912
|
Number of setups
|
|
Product finishing
|
175,806
|
Labour hours
|
|
Packaging
|
171,504
|
Number of orders shipped
|
The following information relates to the three models of headphones:
|
|
Experience
|
Insight
|
Divine
|
|
Units produced
|
10,331
|
4,940
|
1,899
|
|
Orders shipped
|
996
|
452
|
208
|
|
Number of parts used
|
117,662
|
80,589
|
44,129
|
|
Setup required
|
24,745
|
16,976
|
13,367
|
|
Labour hours used
|
22,645
|
9,353
|
3,052
|
Calculate the total dollar amount of indirect costs allocated to the Experience product line. (Round your answer to the nearest dollar.)
QUESTION 8
Superego Ltd manufactures extra large widgets for use as a component in one of its most popular products. Last year, 10,000 widgets are produced, with the following total costs:
|
|
$
|
|
Direct materials
|
41,731
|
|
Direct labour ($15 per hour)
|
14,990
|
|
Variable manufacturing overhead
|
26,094
|
|
Fixed manufacturing overhead
|
19,450
|
Superego is considering outsourcing production of these widgets and has identified a supplier who can provide the widgets at a cost of $11.48 per unit. If production is outsourced, equipment lease costs that amount to 30% of the fixed manufacturing overhead will no longer need to be incurred.
Calculate the total amount of manufacturing costs for Superego Ltd that are relevant to this decision. (Round your answer to the nearest dollar.)
QUESTION 9
Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Townsville plant is as follows:
|
|
Blox ($)
|
Shapez ($)
|
|
Direct material per unit
|
11
|
23
|
|
Direct labour per unit
|
20
|
31
|
|
Manufacturing overhead per unit
|
9
|
10
|
|
Selling & Admin. expenses per unit
|
16
|
26
|
The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $97,391 and are driven by the number of Supervision hours; Quality inspection costs totaled $128,368 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Townsville plant produced and sold 52,050 Blox and 28,224 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the total dollar amount of manufacturing overheads that would have been allocated to the Bloxproduct line, if activity-based costing had been used in the last quarter. (Round your answer to the nearest dollar.)
QUESTION 10
GoFetch Ltd is considering discontinuing one of its frisbee models from its line of product offerings, due to poor financial performance. Details from the last quarter for this product are as follows:
|
|
$
|
|
Sales (50,000 units)
|
279,469
|
|
Direct materials
|
150,999
|
|
Direct labour ($16 per hour)
|
63,858
|
|
Overheads
|
98,888
|
60% of the overheads are variable costs, and the remaining 40% relate to specialised frisbee manufacturing equipment that has no alternative use and no resale value.
Calculate the change in operating profit for the company if this model is discontinued. (Show a decrease in profit as a negative figure, and an increase in profit as a positive figure; round your answer to the nearest dollar.)
QUESTION 11
Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Hobart plant is as follows:
|
|
Blox ($)
|
Shapez ($)
|
|
Direct material per unit
|
9
|
17
|
|
Direct labour per unit
|
22
|
37
|
|
Manufacturing overhead per unit
|
9
|
13
|
|
Selling & Admin. expenses per unit
|
21
|
32
|
The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $102,380 and are driven by the number of Supervision hours; Quality inspection costs totaled $124,800 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Hobart plant produced and sold 55,721 Blox and 44,701 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the manufacturing cost per Blox unit, if activity-based costing had been used in the last quarter. (Round your answer to two decimal places.)
QUESTION 12
Simpson Ltd manufactures three types of high quality headphones: the Experience, Insight and Divine. The company has recently implemented an activity-based costing system, which it uses to allocate indirect costs. Details on five activities are as follows:
|
Activity
|
Cost
|
Activity driver
|
|
Materials handling
|
208,434
|
Number of parts
|
|
Materials assembly
|
2,471,830
|
Number of parts
|
|
Equipment setup
|
846,013
|
Number of setups
|
|
Product finishing
|
178,600
|
Labour hours
|
|
Packaging
|
165,186
|
Number of orders shipped
|
The following information relates to the three models of headphones:
|
|
Experience
|
Insight
|
Divine
|
|
Units produced
|
9,442
|
5,060
|
1,928
|
|
Orders shipped
|
1,065
|
481
|
202
|
|
Number of parts used
|
99,707
|
62,223
|
50,649
|
|
Setup required
|
17,110
|
14,152
|
13,945
|
|
Labour hours used
|
15,259
|
10,882
|
4,501
|
Calculate the indirect costs allocated to a single unit of the Experience model. (Round your answer to two decimal places.)
QUESTION 13
Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Melbourne plant is as follows:
|
|
Blox ($)
|
Shapez ($)
|
|
Direct material per unit
|
9
|
22
|
|
Direct labour per unit
|
21
|
33
|
|
Manufacturing overhead per unit
|
9
|
12
|
|
Selling & Admin. expenses per unit
|
18
|
33
|
The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $107,951 and are driven by the number of Supervision hours; Quality inspection costs totaled $131,615 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Melbourne plant produced and sold 52,836 Blox and 43,099 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the activity-cost driver rate for the Supervisions activity. (Round your answer to two decimal places.)
QUESTION 14
Emu Manufacturing produces two popular toys - Blox and Shapez, at its factories around Australia. Information on the two products at the Perth plant is as follows:
|
|
Blox ($)
|
Shapez ($)
|
|
Direct material per unit
|
10
|
23
|
|
Direct labour per unit
|
19
|
32
|
|
Manufacturing overhead per unit
|
7
|
10
|
|
Selling & Admin. expenses per unit
|
17
|
31
|
The company is investigating the use of an Activity-based costing system and has identified two principal activities associated with manufacturing overheads: Supervision and Quality Inspections. In the last quarter, Supervision costs amounted to $105,481 and are driven by the number of Supervision hours; Quality inspection costs totaled $115,173 and are driven by the number of inspections.
Each Blox requires 45 minutes of supervision time and a single quality inspection. Each Shapez requires one hour of supervision time, and every second Shapez goes through a quality inspection.
The Perth plant produced and sold 69,574 Blox and 44,275 Shapez in the last quarter, at a selling price of $65 for Blox and $135 for Shapez.
Calculate the total dollar amount of Supervisions cost that would have been allocated to the Shapez product line, if activity-based costing had been used in the last quarter. (Round your answer to the nearest dollar.)