Can you help me with question 2 please. I have no idea where to


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Can you help me with question 2 please. I have no idea where to start with this question 5 pages Managerial_Accounting_Project_question_semester_2016.docx NORTHERN CARIBBEAN UNIVERSITY COLLEGE OF BUSINESS & MANAGEMENT DEPARTMENT OF BUSINESS ADMINISTRATION ACCT104: Managerial Accounting Lecturer: Mrs Yvonne Billings, MBA Spring 2016 WORKSHEET This worksheet is comprised of five (5) questions. Required: Complete ALL questions. Due Date: Wednesday, April 20, 2016. Question 1 Campbell Company is a metal and wood cutting manufacturer, selling products to the home construction market. Consider the following data for the year December 31, 2013: 1|Page $ 2|Page Sandpaper 2,000 Materials – Handling Costs 70,000 Lubricants and Coolants 5,000 Miscellaneous Indirect Manufacturing labour 40,000 Direct Manufacturing Labour 300,000 Direct Materials, January 1 2013 40,000 Finished Goods, January 1 2013 100,000 Finished Goods, December 31 2013 150,000 Work-in-Progress, January 1 2013 10,000 Work-in-Progress, December 31 2013 14,000 Plant-leasing Costs 54,000 Depreciation – Plant Equipment 36,000 Property Taxes on Plant Equipment 4,000 Fire Insurance on Plant Equipment 3,000 Direct Materials Purchased 460,000 Direct Materials, December 31 2013 50,000 Revenue 1,360,000 Marketing Promotions 60,000 Marketing Salaries 100,000 Shipping Costs 70,000 Customer-Service Costs 100,000 Required: 1. Prepare a schedule of cost of goods manufactured and an income statement for December 31, 2013. For all manufacturing costs, indicate by V or F whether each is basically a variable cost or fixed cost. For example: Direct labour (V). 2. Suppose Campbell produced 750,000 units. What is the production cost per unit? 3. Suppose that both the direct materials and plant-leasing costs are tied to the production of 900,000 units. What is the unit cost for the direct materials assigned to each unit produced? What is the unit cost of the plant-leasing cost? 3|Page Question 2 Pearce Information Processing Company provides word processing services for its clients. Pearce uses state-of-the-art equipment and employs five data entry clerks who each average 160 hours of work a month. The following table sets out information developed by the budget officer. Client Billings (Sales) Selling and Administrative Expenses Operating Supplies Purchases Processing Overhead Actual – 2010 Forecast – 2011 November December January February March $ $ $ $ $ 25,000 35,000 25,000 20,000 40,000 12,000 13,000 12,000 11,000 12,500 2,500 3,200 3,500 3,500 2,500 2,500 2,500 2,500 4,000 3,500 The company has a bank loan of $12,000 at a 12 per cent annual interest rate. Interest is paid monthly, and $2,000 of the principle of the loan is due February 28, 2011. No capital expenditures are anticipated for the first quarter of the coming year. Income taxes of $4,550 for calendar 2010 are due and payable on March 15, 2011. The company’s five employees earn $8.50an hour, and all payroll-related labour benefit costs are included in processing overhead. For the items included in the table, assume the following conditions: Client Billings Operating Supplies Selling and Administrative Expenses and Processing Overhead 60% are cash sales collected during the month of sale 30% are collected in the first month following the sale 10% are collected in the second month following the sale Paid for in the month purchased Paid in the month following the cost’s incurrence The cash balance on December 31, 2010 is expected to be $13,840. Required: Prepare a monthly cash budget for Pearce Information Processing Company for the three-month period ending March 31, 2011. 4|Page Question 3 Vale Manufacturing started business on 1 April 2003, and incurred the following costs during its first three years. Year ending 31 March Direct materials Direct labour Variable overheads Fixed costs 2004 $ 60,000 48,000 24,000 40,000 2005 $ 49,900 44,000 30,000 40,600 2006 $ 52,200 45,000 40,000 41,3

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