Puget Sound Computer User newspaper

Noreen, E., Brewer, P., & Garrison, R. (2016). Managerial accounting for managers. 4th ed.). McGraw-Hill  ISBN:  9781308886718

Chapter 2 exercises 2, 3, 4, 5, 10

Chapter 3 exercises 1, 4, 5, 7, 8, 13, and case 33

 

EXERCISE 2–2 Classifying Manufacturing Costs [LO 2–2]

The PC Works assembles custom computers from components supplied by various manufacturers. The company is very small and its assembly shop and retail sales store are housed in a single facility in a Redmond, Washington, industrial park. Listed below are some of the costs that are incurred at the company.

Required:

For each cost, indicate whether it would most likely be classified as direct labor, direct materials, manufacturing overhead, selling, or an administrative cost.

1. The cost of a hard drive installed in a computer.

2. The cost of advertising in the Puget Sound Computer User newspaper.

3. The wages of employees who assemble computers from components.

4. Sales commissions paid to the company’s salespeople.

5. The wages of the assembly shop’s supervisor.

6. The wages of the company’s accountant.

7. Depreciation on equipment used to test assembled computers before release to customers.

8. Rent on the facility in the industrial park.

EXERCISE 2–3 Classification of Costs as Product or Period Cost [LO 2–3]

Suppose that you have been given a summer job as an intern at Issac Aircams, a company that manufactures sophisticated spy cameras for remote-controlled military reconnaissance aircraft. The company, which is privately owned, has approached a bank for a loan to help it finance its growth. The bank requires financial statements before approving such a loan. You have been asked to help prepare the financial statements and were given the following list of costs:

1. Depreciation on salespersons’ cars.

2. Rent on equipment used in the factory.

3. Lubricants used for machine maintenance.

4. Salaries of personnel who work in the finished goods warehouse.

5. Soap and paper towels used by factory workers at the end of a shift.

6. Factory supervisors’ salaries.

7. Heat, water, and power consumed in the factory.

8. Materials used for boxing products for shipment overseas. (Units are not normally boxed.)

9. Advertising costs.

10. Workers’ compensation insurance for factory employees.

11. Depreciation on chairs and tables in the factory lunchroom.

12. The wages of the receptionist in the administrative offices.

13. Cost of leasing the corporate jet used by the company’s executives.

14. The cost of renting rooms at a Florida resort for the annual sales conference.

15. The cost of packaging the company’s product.

Page 51

Required:

Classify the above costs as either product costs or period costs for the purpose of preparing the financial statements for the bank.

EXERCISE 2–4 Fixed and Variable Cost Behavior [LO 2–4]

Espresso Express operates a number of espresso coffee stands in busy suburban malls. The fixed weekly expense of a coffee stand is $1,200 and the variable cost per cup of coffee served is $0.22.

 

Required:

1. Fill in the following table with your estimates of total costs and cost per cup of coffee at the indicated levels of activity for a coffee stand. Round off the cost of a cup of coffee to the nearest tenth of a cent.

  Cups of Coffee Served in a Week
  2,000 2,100 2,200
Fixed cost. . . . . . . . . . . . . . . . . . . . . . . . . . ? ? ?
Variable cost. . . . . . . . . . . . . . . . . . . . . . . . ? ? ?
Total cost . . . . . . . . . . . . . . . . . . . . . . . . . . ? ? ?
Average cost per cup of coffee served . . . . . . ? ? ?

2. Does the average cost per cup of coffee served increase, decrease, or remain the same as the number of cups of coffee served in a week increases? Explain.

EXERCISE 2–5 High-Low Method [LO 2–5]

The Cheyenne Hotel in Big Sky, Montana, has accumulated records of the total electrical costs of the hotel and the number of occupancy-days over the last year. An occupancy-day represents a room rented out for one day. The hotel’s business is highly seasonal, with peaks occurring during the ski season and in the summer.

 

Month Occupancy-Days Electrical   Costs
January. . . . . . . . . . . . . .  1,736 $4,127
February. . . . . . . . . . . . .  1,904 $4,207
March. . . . . . . . . . . . . . .  2,356 $5,083
April. . . . . . . . . . . . . . . .   960 $2,857
May . . . . . . . . . . . . . . . .   360 $1,871
June. . . . . . . . . . . . . . . .   744 $2,696
July . . . . . . . . . . . . . . . .  2,108 $4,670
August . . . . . . . . . . . . . .  2,406 $5,148
September  . . . . . . . . . . .    840 $2,691
October. . . . . . . . . . . . . .    124 $1,588
November . . . . . . . . . . . .    720 $2,454
December . . . . . . . . . . . .  1,364 $3,529

 

Required:

1. Using the high-low method, estimate the fixed cost of electricity per month and the variable cost of electricity per occupancy-day. Round off the fixed cost to the nearest whole dollar and the variable cost to the nearest whole cent.

2. What other factors other than occupancy-days are likely to affect the variation in electrical costs from month to month?

EXERCISE 2–10 Cost Behavior; Contribution Format Income Statement [LO 2–4, LO 2–6]

Harris Company manufactures and sells a single product. A partially completed schedule of the company’s total and per unit costs over the relevant range of 30,000 to 50,000 units produced and sold annually is given below:

  Units Produced and Sold
  30,000 40,000 50,000
Total costs:      
 Variable costs. . . . . . . . . . . . $180,000 ? ?
 Fixed costs. . . . . . . . . . . . . . 300,000     ?     ?
Total costs. . . . . . . . . . . . . . . $480,000     ?     ?
Cost per unit:      
 Variable cost. . . . . . . . . . . . . ? ? ?
 Fixed cost. . . . . . . . . . . . . . .     ?     ?     ?
Total cost per unit. . . . . . . . . .     ?     ?     ?

Required:

1. Complete the schedule of the company’s total and unit costs above.

2. Assume that the company produces and sells 45,000 units during the year at a selling price of $16 per unit. Prepare a contribution format income statement for the year.

EXERCISE 3–1 Preparing a Contribution Format Income Statement [LO3–1]

Whirly Corporation’s most recent income statement is shown below:

    Total Per Unit
Sales (10,000 units). . . . . . . . . . . . . . . . . . . . . . . $350,000  $35.00
Variable expenses. . . . . . . . . . . . . . . . . . . . . . . . .  200,000    20.00
Contribution margin. . . . . . . . . . . . . . . . . . . . . . .  150,000  $15.00
Fixed expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . .  135,000  
Net operating income. . . . . . . . . . . . . . . . . . . . . $ 15,000  

Required:

Prepare a new contribution format income statement under each of the following conditions (consider each case independently):

1. The sales volume increases by 100 units.

2. The sales volume decreases by 100 units.

3. The sales volume is 9,000 units.

EXERCISE 3–4 Computing and Using the CM Ratio [LO3–3]

Last month when Holiday Creations, Inc., sold 50,000 units, total sales were $200,000, total variable expenses were $120,000, and fixed expenses were $65,000.

 

Required:

1. What is the company’s contribution margin (CM) ratio?

2. Estimate the change in the company’s net operating income if it were to increase its total sales by $1,000.

EXERCISE 3–5 Changes in Variable Costs, Fixed Costs, Selling Price, and Volume [LO3–4]

Data for Hermann Corporation are shown below:

  Per Unit Percent of Sales
Selling price. . . . . . . . . . . . . . . . . . . . $90 100%
Variable expenses. . . . . . . . . . . . . . . .   63  70%
Contribution margin . . . . . . . . . . . . . . $27  30%

Fixed expenses are $30,000 per month and the company is selling 2,000 units per month.

Required:

Page 102

1. The marketing manager argues that a $5,000 increase in the monthly advertising budget would increase monthly sales by $9,000. Should the advertising budget be increased?

2. Refer to the original data. Management is considering using higher-quality components that would increase the variable expense by $2 per unit. The marketing manager believes that the higher-quality product would increase sales by 10% per month. Should the higher-quality components be used?

EXERCISE 3–7 Compute the Level of Sales Required to Attain a Target Profit [LO3–6]

Lin Corporation has a single product whose selling price is $120 and whose variable expense is $80 per unit. The company’s monthly fixed expense is $50,000.

 

Required:

1. Using the equation method, solve for the unit sales that are required to earn a target profit of $10,000.

2. Using the formula method, solve for the unit sales that are required to earn a target profit of $15,000.

EXERCISE 3–8 Compute the Margin of Safety [LO3–7]

Molander Corporation is a distributor of a sun umbrella used at resort hotels. Data concerning the next month’s budget appear below:


Get Professional Assignment Help Cheaply

Buy Custom Essay

Are you busy and do not have time to handle your assignment? Are you scared that your paper will not make the grade? Do you have responsibilities that may hinder you from turning in your assignment on time? Are you tired and can barely handle your assignment? Are your grades inconsistent?

Whichever your reason is, it is valid! You can get professional academic help from our service at affordable rates. We have a team of professional academic writers who can handle all your assignments.

Why Choose Our Academic Writing Service?

  • Plagiarism free papers
  • Timely delivery
  • Any deadline
  • Skilled, Experienced Native English Writers
  • Subject-relevant academic writer
  • Adherence to paper instructions
  • Ability to tackle bulk assignments
  • Reasonable prices
  • 24/7 Customer Support
  • Get superb grades consistently
 

Online Academic Help With Different Subjects

Literature

Students barely have time to read. We got you! Have your literature essay or book review written without having the hassle of reading the book. You can get your literature paper custom-written for you by our literature specialists.

Finance

Do you struggle with finance? No need to torture yourself if finance is not your cup of tea. You can order your finance paper from our academic writing service and get 100% original work from competent finance experts.

Computer science

Computer science is a tough subject. Fortunately, our computer science experts are up to the match. No need to stress and have sleepless nights. Our academic writers will tackle all your computer science assignments and deliver them on time. Let us handle all your python, java, ruby, JavaScript, php , C+ assignments!

Psychology

While psychology may be an interesting subject, you may lack sufficient time to handle your assignments. Don’t despair; by using our academic writing service, you can be assured of perfect grades. Moreover, your grades will be consistent.

Engineering

Engineering is quite a demanding subject. Students face a lot of pressure and barely have enough time to do what they love to do. Our academic writing service got you covered! Our engineering specialists follow the paper instructions and ensure timely delivery of the paper.

Nursing

In the nursing course, you may have difficulties with literature reviews, annotated bibliographies, critical essays, and other assignments. Our nursing assignment writers will offer you professional nursing paper help at low prices.

Sociology

Truth be told, sociology papers can be quite exhausting. Our academic writing service relieves you of fatigue, pressure, and stress. You can relax and have peace of mind as our academic writers handle your sociology assignment.

Business

We take pride in having some of the best business writers in the industry. Our business writers have a lot of experience in the field. They are reliable, and you can be assured of a high-grade paper. They are able to handle business papers of any subject, length, deadline, and difficulty!

Statistics

We boast of having some of the most experienced statistics experts in the industry. Our statistics experts have diverse skills, expertise, and knowledge to handle any kind of assignment. They have access to all kinds of software to get your assignment done.

Law

Writing a law essay may prove to be an insurmountable obstacle, especially when you need to know the peculiarities of the legislative framework. Take advantage of our top-notch law specialists and get superb grades and 100% satisfaction.

What discipline/subjects do you deal in?

We have highlighted some of the most popular subjects we handle above. Those are just a tip of the iceberg. We deal in all academic disciplines since our writers are as diverse. They have been drawn from across all disciplines, and orders are assigned to those writers believed to be the best in the field. In a nutshell, there is no task we cannot handle; all you need to do is place your order with us. As long as your instructions are clear, just trust we shall deliver irrespective of the discipline.

Are your writers competent enough to handle my paper?

Our essay writers are graduates with bachelor's, masters, Ph.D., and doctorate degrees in various subjects. The minimum requirement to be an essay writer with our essay writing service is to have a college degree. All our academic writers have a minimum of two years of academic writing. We have a stringent recruitment process to ensure that we get only the most competent essay writers in the industry. We also ensure that the writers are handsomely compensated for their value. The majority of our writers are native English speakers. As such, the fluency of language and grammar is impeccable.

What if I don’t like the paper?

There is a very low likelihood that you won’t like the paper.

Reasons being:

  • When assigning your order, we match the paper’s discipline with the writer’s field/specialization. Since all our writers are graduates, we match the paper’s subject with the field the writer studied. For instance, if it’s a nursing paper, only a nursing graduate and writer will handle it. Furthermore, all our writers have academic writing experience and top-notch research skills.
  • We have a quality assurance that reviews the paper before it gets to you. As such, we ensure that you get a paper that meets the required standard and will most definitely make the grade.

In the event that you don’t like your paper:

  • The writer will revise the paper up to your pleasing. You have unlimited revisions. You simply need to highlight what specifically you don’t like about the paper, and the writer will make the amendments. The paper will be revised until you are satisfied. Revisions are free of charge
  • We will have a different writer write the paper from scratch.
  • Last resort, if the above does not work, we will refund your money.

Will the professor find out I didn’t write the paper myself?

Not at all. All papers are written from scratch. There is no way your tutor or instructor will realize that you did not write the paper yourself. In fact, we recommend using our assignment help services for consistent results.

What if the paper is plagiarized?

We check all papers for plagiarism before we submit them. We use powerful plagiarism checking software such as SafeAssign, LopesWrite, and Turnitin. We also upload the plagiarism report so that you can review it. We understand that plagiarism is academic suicide. We would not take the risk of submitting plagiarized work and jeopardize your academic journey. Furthermore, we do not sell or use prewritten papers, and each paper is written from scratch.

When will I get my paper?

You determine when you get the paper by setting the deadline when placing the order. All papers are delivered within the deadline. We are well aware that we operate in a time-sensitive industry. As such, we have laid out strategies to ensure that the client receives the paper on time and they never miss the deadline. We understand that papers that are submitted late have some points deducted. We do not want you to miss any points due to late submission. We work on beating deadlines by huge margins in order to ensure that you have ample time to review the paper before you submit it.

Will anyone find out that I used your services?

We have a privacy and confidentiality policy that guides our work. We NEVER share any customer information with third parties. Noone will ever know that you used our assignment help services. It’s only between you and us. We are bound by our policies to protect the customer’s identity and information. All your information, such as your names, phone number, email, order information, and so on, are protected. We have robust security systems that ensure that your data is protected. Hacking our systems is close to impossible, and it has never happened.

How our Assignment  Help Service Works

1.      Place an order

You fill all the paper instructions in the order form. Make sure you include all the helpful materials so that our academic writers can deliver the perfect paper. It will also help to eliminate unnecessary revisions.

2.      Pay for the order

Proceed to pay for the paper so that it can be assigned to one of our expert academic writers. The paper subject is matched with the writer’s area of specialization.

3.      Track the progress

You communicate with the writer and know about the progress of the paper. The client can ask the writer for drafts of the paper. The client can upload extra material and include additional instructions from the lecturer. Receive a paper.

4.      Download the paper

The paper is sent to your email and uploaded to your personal account. You also get a plagiarism report attached to your paper.

smile and order essaysmile and order essay PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET A PERFECT SCORE!!!

order custom essay paper