1. Morris Minor Corporation manufactures two products each of which require machine processing and labor operations. There is extensive demand for both products, but Morris Minor could devote all of its capacity to manufacturing either product. Relevant financial information is as follows:
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Product A-12
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Product A-14
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Unit selling price
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$220
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$80
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Unit variable cost
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$90
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$40
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|
Machine hours per unit
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1.4
|
.4
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|
Labor hours per unit
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6
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2
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In 2014 the company will have a maximum capacity of 160,000 machine hours and 120,000 labor hours. Fixed costs in 2014 will be $1,000,000.
Compute the most profitable combination of products to be produced in 2014.
Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.
2. It has been suggested that it is not possible to determine the point at which financial accounting and managerial accounting diverge. What does that mean?
Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.
3. Tree Top Company manufactures a single product and uses a process costing system. On the first day of April, there were 5,000 units in process that were 100% complete as to direct materials and 50% complete as to direct labor and manufacturing overhead. During the month of April, the company began production of 100,000 units, and at the end of April, the Work-in-Process inventory consisted of 2,000 units that were 100% complete as to direct materials and 80% complete as to direct labor and manufacturing overhead. The company's cost information is as follows:
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Beginning Work-in-Process
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Costs Added In April
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Direct materials
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$3,000
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$65,250
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Direct labor
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$125
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$6,151
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Manufacturing overhead
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$175
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$7,147
|
Calculate the cost of units manufactured during April and the cost of Work-in-Progress at the end of April.
Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.
4. Outdoor Furniture Company has inventory balances at the end of August as follows:
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Materials inventory
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$21,360
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Work-in-Process inventory
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15,112
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|
Finished goods inventory
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17,120
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Job order cost cards for jobs in process at the company as of the end of September were as follows:
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Job Number
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Direct Materials
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Direct Labor
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Mfg Overhead
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|
48A
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$1,596
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$1,290
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$1,677
|
|
48B
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$1,492
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$1,380
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$1,794
|
|
48C
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$1,984
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$1,760
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$2,288
|
|
48D
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$1,608
|
$1,540
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$2,002
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Materials purchased and received in September:
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September 4
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$33,120
|
|
September 16
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$28,600
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|
September 22
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$31,920
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Direct labor costs for September:
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September 15 payroll
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$23,680
|
|
September 29 payroll
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$25,960
|
Predetermined overhead rate:
130% of direct labor costs
Direct material transferred to production during September:
|
September 15 payroll
|
$23,680
|
|
September 29 payroll
|
$25,960
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Finished goods with a 75% markup over cost were sold during September for $230,000.
a. Compute the cost of units completed during the month.
b. What was the total cost of units sold during the month?
c. What are ending inventory balances?
Your response should be at least 200 words in length.
5. Financial information for a recent year for Apples, Inc. is:
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Sales
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$40,000,000
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|
Less:
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|
|
|
Cost of goods sold
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25,000,000
|
|
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Selling and administrative expenses
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5,000,000
|
|
|
Interest expense
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1,000,000
|
|
|
Income before taxes
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9,000,000
|
|
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Less: income taxes
|
3,150,000
|
|
|
Net income
|
|
5,850,000
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Total assets were $104,000,000 and the non-interest-bearing current liabilities were $2,000,000. The company has a required rate of return on invested capital of 10%.
Calculate the company's return on investment.
Your response should be at least 200 words in length. For problems, be sure to answer all questions and provide all requested information.