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Managerial/Cost Accounting problems

Exe 8-11) Second -Stage Allocation to an Order
Durban Metal Products, Ltd., of the Republic of South Africa makes specialty metal parts used in applications ranging from the cutting edges of bulldozer blades to replacement parts for Land Rovers. The company uses an activity-based costing system for internal decision-making purposes.
The company has four activity cost pools as listed below:

Activity Cost Pool Activity Measure Activity Rate
Order size........................Number of direct labor-hours.....................R16.85 per -direct labor-hour
Customer orders..................Number of customer orders.......................R320.00 -per customer order
Product testing.....................Number of testing hours..........................R89.00 per testing hr
Selling.............................Number of sales calls...........................R1, 090.00 per sales call

Note: The currency in South Africa is the Rand, denoted here by R.
The managing director of the company would like information concerning the cost of a recently completed order for heavy-duty trailer axles. The order required 200 direct labor-hours, 4 hours of product testing, and 2 sales calls.
Required:
Prepare a report showing the overhead cost of the order for heavy-duty trailer axles. What is the total overhead cost assigned to the order?

Exe 9-1 Schedule of Expected Cash Collections
Silver Company makes a product that is very popular as a Mother's Day gift. Thus, peak sales occur in May of each year. These peak sales are shown in the company's sales budget for the second quarter given below (all sales are on account):

April May June Total
Budgeted sales..................... $300.000...500,000... 200,000.. 1,000,000

From past experience, the company has learned that 20% of a month's sales are collected in the month of sale, another 70% are collected in the month following sale, and the remaining 10% are collected in the second month following sale. Bad debts are negligible and can be ignored. February sales totaled $230, 000, and March sales totaled $260, 000.
Required:
1. Prepare a schedule of expected cash collections from sales, by month and in total, for the second quarter. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.
2. Assume that the company will prepare a budgeted balance sheet as of June 30. Compute the accounts receivable as of that date.

Exe 9-2 Production Budget
Down Under Products, Ltd., of Australia have budgeted sales of its popular boomerang for the next our months as follows:

Sales in Units
APRIL.....................50,000
May............................75, 000
June...........................90,000
July.........................80, 000
The company is now in the process of preparing a production budget for the second quarter. Past experience has shown that end-of month inventory levels must equal 10% of the following month's sales. The inventory at the end of March was 5,000 units.

Required:
Prepare a production budget for the second quarter, in your budget, show the number of units to be produced each month and for the quarter in total.

Attachments

Solution Summary

Excel file contains solution of activity base costing problem, Schedule of Expected Cash Collections , and Production Budget.

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