Assignment: Managerial Accounting

1. What are the 3 major categories on a BalanceSheet?

2. You are auditing the commissions earned from your sales department and you are given the following data. Sales salaries and commissions are $60,000 when 240,000 units are sold and $80,000 when 400,000 units are sold.
A) Using the high-low method, what is the variable portion of sales salaries and commissions?

B) What is the fixed portion of sales salaries and commissions?

3. Cost Volume Profit Analysis or Break Even Analysis

You are given the financial information below:

Tom's Treasures
Income Statement
For Year Ended 12/31/16
Sales (85,000 units) $5,500,000
Variable Expenses $2,475,000
Contribution Margin $3,025,000
Fixed Expenses $1,700,000
Net Operating Income $1,325,000

Additional Formulas Needed:

1. Sales - Variable expenses = Contribution Margin
2. B/E Units = Fixed Costs / CM per unit
3. B/E $ = B/E Units x Sales price per unit
4. B/E $ = Fixed Costs / CM ratio
5. Safety Margin = Budgeted sales - Breakeven sales
6. Sales - Total Variable Cost- Total Fixed Cost = Profit (Income)
7. Sales - Variable Cost = CM; CM - Fixed Costs = Profit (Income)
8. Sales (units) = (Fixed Costs+ target net profit) / CM/unit

Calculate the following:

A) Compute the Income Statement on a per unit basis and as a percent of sales and provide that information in two columns to the right of the total dollar information provided.

B) Calculate the sales price per unit and the variable expenses per unit

C) Compute the company's contribution margin ratio.

D) Compute the company's break-even point in units.

E) Compute the company's break-even point in dollars.

E) Calculate the company's margin of safety in dollars.

F) Assume that next year, management wants to earn a profit of $2,000,000. How many units must be sold to reach this target profit?

4. You have been given the expense accounts listed below.Which of them should be included as part of Manufacturing overhead when determining Cost of Goods Sold? Place an "OH" next to the ones you feel are manufacturing overhead and "Not OH" for those you feel are not manufacturing overhead..

a. Administrative Assistant salary for the VP of Manufacturing.
b. Janitorial staff salary
c. Sales representative automobile repair expense
d. Rent on the manufacturing facility
e. Factory supervisor salary
f. Utility expense to heat the factory
g. Utility expense to heat the administrative office building (separate building from factory)

5. Job XLS300 at ABC Company required $15,500 of direct materials and 210 direct labor hours at $42 per hour. Estimated total overhead for the year at ABC Company was $960,000 and 32,000 direct labor hours. What would be the cost for job XLS300? Show your work.

6. XYZ Company had actual manufacturing overhead costs of $2,310,000 and a predetermined overhead rate of $14.00 per machine hour. XYZ Company worked 185,000 machine hours during the year.

a. Did they overapply or underapply Overhead?
b. By how much for the year?