The solution to Accounting Problems
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I am not the greatest in accouting so any assistance would be great. Thanks!
Note- Label the answers so i can see which one match the question to make it easier to see it.
12-29 Fixed- and Variable-Cost Pools
The city of Cedarcrest signed a lease for a photocopy machine at $2,000 per month and $.02 per copy. Operating costs for toner, paper, operator salary, and so on are all variable at $.03 per copy. Departments had projected a need for 50,000 copies a month. The Public Works Department predicted its usage at 18,000 copies a month. It made 21,000 copies in August.
1. Suppose one predetermined rate per copy was used to allocate all photocopy costs. What rate would be used and how much cost would be allocated to the Public Works Department in August?
2. Suppose fixed- and variable-cost pools were allocated separately. Specify how each pool should be allocated. Compute the cost allocated to the Public Works Department in August.
3. Which method, the one in number 1 or the one in number 2, do you prefer? Explain.
12-37 By-products Costing Allsap Apple Company buys apples from local orchards and presses them to produce apple juice. The pulp that remains after pressing is sold to farmers as livestock food. This livestock food is accounted for as a by-product. During the 20X7 fiscal year, the company paid $800,000 to purchase 8 million pounds of apples. After processing, 1 million pounds of pulp remained. Allsap spent $30,000 to package and ship the pulp, which was sold for $50,000.
1. How much of the joint cost of the apples is allocated to the pulp?
2. Compute the total inventory cost (and therefore the cost of goods sold) for the pulp.
3. Assume that $130,000 was spent to press the apples and $150,000 was spent to filter, pasteurize, and pack the apple juice. Compute the total inventory cost of the apple juice produced.
13-41 Underapplied and Overapplied Overhead- see attachment
14-25 Analysis of Job-Cost Data- see attachment
9-32 Key Performance Indicators
Research on performance management suggests that organizations can compete most effectively by identifying and monitoring those elements that are most closely linked to organizational success. A key performance indicator can be thought of as a measure that drives organizational success. For each of the following companies or organizations, identify two possible key performances indicators.
1. Northwest Airlines
3. Hewlett Packard
4. New York Department of Motor Vehicles
9-35 Common Measures on a Balanced Scorecard
Listed below are common performance measures appearing on balanced scorecards. Indicate whether the listed measure is primarily associated with the financial, customer, internal process, or learningand growth perspective. (Note that some measures might reasonably be associated with more than one perspective.)
? Return on sales
? Retention of target customers
? Net cash flow
? Training hours
? Employee turnover rate
? Materials handling cost per unit
? Market share
? Product-development cycle time
? Revenue growth in segments
? Occupational injuries and illness
? Days sales in inventory
? Average cost per invoice
10-29 Simple ROI and Economic Profit Calculations- See attachment
10-34 Variable Costs as a Transfer Price
A chair's variable cost is $50 and its market value as a piece of unfinished furniture is $63 at a transfer point from the Assembly Division to the Finishing Division. The Finishing Division's variable cost of sanding and finishing the chair is $28, and the selling price of the finished chair is $85.
1. Prepare a tabulation of the contribution margin per unit for the Finishing Division's performance and overall company performance under the two alternatives of (a) selling to outsiders at the transfer point and (b) sanding and finishing the chair and then selling to outsiders.
2. As Finishing Division manager, which alternative would you choose? Explain.
The solution explains various accounting problems relating to fixed and variable costs, by-products costing, analysis of job-cost data.
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