Exam 4 (Chaps 13-17)-1.pdf

Problem 4 (10 points)Hampshire Industries has two geographic segments that they operate – Eastern and Western.  The following information pertains provides segmented sales and cost data that have been provided to you by the newly hired accountant.    Total Eastern Western Sales $1,000,000 $800,000 $200,000 Variable Costs $450,000 $350,000 $100,000 Fixed Costs $151,250     Of the fixed costs, $50,000 would be eliminated if we eliminated the Western segment and $75,000 would be eliminated if we eliminated the Eastern segment. Required: a. Compute the contribution margin for the Eastern segment. (1 points) b. Compute the segment margin for the Eastern segment. (1 points) c. Compute the contribution margin for the Western segment. (1 points) d. Compute the segment margin for the Western segment. (1 points) e. If Hampshire decided to eliminate the Western segment, how would the overall company income be affected?  (1 point) f. What is the break-even in sales dollars for Hampshire? (1 point) g. If total sales increase by 20%, compute the new operating income that would result. (1 point) h. For your calculation in g, list 3 assumptions that you used in your calculation. (3 points)

Use the following information to answer questions 20 & 21.Lehner Corporation has provided the following data from its activity-based costing accounting system: Distribution of Resource Consumption across Activity Cost Pools:Activity Cost Pools The “Other” activity cost pool consists of the costs of idle capacity and organization-sustaining costs that are not assigned to products.How much indirect factory wages and factory equipment depreciation cost would be assigned to the Customer Orders activity cost pool?

Matt Company uses activity-based costing. The company has two products: A and B. The annual production and sales of Product A is 8,000 units and of Product B is 6,000 units. There are three activity cost pools, with total cost and total activity as follows: The activity-based costing cost per unit of Product A is closest to:

Spendlove Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product S78N a year, requiring a total of 1,120 machine-hours, 40 orders, and 30 inspection-hours per year. The product’s direct materials cost is $49.81 per unit and its direct labor cost is $12.34 per unit. The product sells for $129.90 per unit.According to the activity-based costing system, the product margin for product S78N is:

Exam 2 (Chaps 5 – 8)-1.pdf

The manufacturing overhead was:

The manufacturing overhead applied was:

Problem 2 (9 points) A partial listing of costs incurred at Starr Corporation during June appears below: Required:(a) What is the total amount of product cost listed above? Show your work.(b) What is the total amount of period cost listed above? Show your work.

Problem 4 (12 points)Kurth Corporation uses a job-order cost system to trace costs to its custom made jewelry products that are specially tailored to meet specific customer needs.  Kurth has little trouble tracing direct materials costs and direct labor costs to the jobs it undertakes.  However, manufacturing overhead has posed a bit more of a challenge due to its indirect nature.  Kurth is considering two different activities upon which to base its predetermined overhead rate.  The following information is computer output from two least squares regression analyses that were run using past data from the company.    Direct Labor Hours (DLH) Machine Hours (MH) Estimated fixed overhead $50,000 $70,000 Estimated variable overhead per unit of production $7 per DLH $5 per MH R-squared from least squares regression O.88 0.57 For 2013, Kurth had expected direct labor hours equal to 10,000 hours and expected machine hours equal to 20,000.  Kurth had actual direct labor hours for 2013 of 12,000 and actual machine hours of 18,000.  Actual manufacturing overhead costs for 2013 were $148,500. Required:     a.  Compute the predetermined overhead rate using DLH as the activity base. b. How much is the under-applied or over-applied manufacturing overhead before allocation to cost of goods sold using your answer from part a? c. Compute the predetermined overhead rate using MH as the activity base.  d. How much is the under-applied or over-applied manufacturing overhead before allocation to COGS using your answer from part c? e.  After all under- or over-applied manufacturing overhead is allocated to cost of goods sold at the end of the period, which allocation base (DLH or MH) will give you a higher cost of goods sold for the period? Please circle one of the following:           i.      DLH          ii.      MH         iii.      Both will have the same cost of goods sold  f.  Which allocation base (DLH or MH) would you decide to use at the beginning of 2013?  Why?