Category: Uncategorized

Activity-based budgets

Biscuit Company sells its product for $50. In addition, it has a variable cost ratio of 45 percent and total fixed costs of $6,875. What is the break-even point in sales dollars for Biscuit Company?

Discuss the features of an ideal budgetary process.

Asian Lamp Company manufactures lamps. The estimated number of lamp sales for the last three months for the current year are as follows:   Month Sales October 10,000 November 14,000 December 13,000 Finished goods inventory at the end of September was 3,000 units. Ending finished goods inventory is budgeted to equal 25 percent of the next month’s sales. Asian Lamp expects to sell the lamps for $25 each. January sales is projected at 16,000 lamps. ​ What is the expected sales revenue for December?

Aquamarine company incurred $20,000 of common fixed costs and $80,000 of common variable costs. These costs are to be allocated to its two departments: Department A and Department B. Data on capacity provided and capacity used by the two departments follows: ​ Capacity Provided Capacity Used Department in Hours in Hours A 600 550 B 400 450 Common fixed costs are allocated to Departments A and B on the basis of capacity provided, and common variable costs are allocated to Departments A and B on the basis of capacity used. The fixed and variable costs allocated to Department A are:

Describe the differences between support and producing departments. Give three examples of each.

Allocation is not necessary when using JIT manufacturing.

Beginning inventory consisted of 10,000 units (20 percent converted) and ending inventory consisted of 20,000 units (40 percent converted). In addition, 60,000 units were started during the period. How many equivalent units for conversion costs were produced using the weighted average method?

A secondary product recovered during the manufacturing of a primary product during a joint process is called a(n): __________ .

Alpha Corp. prices its products at full cost plus 25 percent. The company has two support departments and two producing departments. Budgeted costs and normal activity levels are as follows:   ​ Support Departments Producing Departments ​ S1 S2 P1 P2 Overhead costs $15,000 $27,000 $250,000 $200,000 Square feet       900     1,100       4,000       8,000 Number of employees         12         28          100            80 Direct labor hours – –       9,000     10,000 Machine hours – –     12,000      8,000 ​ S1 Department’s costs are allocated based on square feet, and S2 Department’s costs are allocated based on number of employees. ​ P1 Department uses direct labor hours to assign overhead costs to products and P2 Department uses machine hours. ​ Alpha manufactures Product X, each unit of which requires 5 direct labor hours in P1 Department and no time in P2 Department. Direct materials per unit of Product X cost $200, and direct labor is $110 per unit. ​ Determine the selling price of Product X, if the direct method of allocation is used and the company follows its usual pricing policy.