# I have this project due for Cost Accounting. I have already

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I have this project due for Cost Accounting. I have already completed some of it, but I cant seem to figure out the rest. One problem: On req f on problem 4-51 switch the columns f and g(so 2000 stoves should be where the 1600 stoves are) to get correct answer. I have already answered one section of this problem for a guideline This is in excel spreadsheet and will show if you have the correct answer. Might not show correct answer on regression analysis due to rounding errors. Spring 2011 Project.xls Student Name: Jacob Cothran Class: McGraw-Hill/Irwin Problem 04-51A DAVIS KITCHEN SUPPLY Requirement a. Sales price Quantity Before Price After Price Reduction Reduction \$370 \$325 6,000 7,000 Revenue Variable manufacturing costs Variable marketing costs Contribution margin Fixed manufacturing costs Fixed marketing costs Operating income \$2,220,000 900,000 150,000 1,170,000 360,000 420,000 \$390,000 Correct! \$2,275,000 1,050,000 175,000 1,050,000 360,000 420,000 \$270,000 Correct! Impact \$55,000 150,000 25,000 (120,000) \$(120,000) Increase Increase Increase Decrease No Change No Change Decrease Correct! Requirement b. Without Government Contract: Revenue Variable manufacturing costs Variable marketing costs Contribution margin Fixed manufacturing costs Fixed marketing costs Operating income \$2,960,000 1,200,000 200,000 1,560,000 360,000 420,000 \$780,000 Correct! With Government Contract: Revenue Variable manufacturing costs Variable marketing costs Contribution margin Regular \$2,590,000 1,050,000 175,000 1,365,000 Government Total Impact Correct! Fixed manufacturing costs * Fixed marketing costs Operating income 480,000 560,000 \$325,000 * Fixed manufacturing costs could be allocated several ways. For this solution, assume that the allocation is based on the estimated production in March of 8,000 units, which would result in an allocation to the government of 1/8 of the fixed manufacturing costs. Also assume that fixed marketing costs are not allocated Requirement c. Compute minimum price: Variable manufacturing costs Shipping costs per unit Marketing costs per unit Minimum price Requirement d. Enter the minimum acceptable selling price – no computations necessary Requirement e. Computation of price that is equivalent to in-house cost of production: Avoidable costs: Variable manufacturing cost saved per unit Variable marketing cost saved per unit Fixed manufacturing cost saved per unit In-house cost savings per unit \$50,000 300,000 108,000 \$458,000 Try again! Requirement f. Computation of maximum price for outside contractor: 6000 regular Stoves Produced In-house Revenue Variable manufacturing costs Variable marketing costs Contribution margin Fixed manufacturing costs Fixed marketing costs Operating income 4000 regular Stoves Produced In-house \$2,220,000 900,000 150,000 1,170,000 360,000 420,000 \$390,000 \$1,480,000 600,000 100,000 \$780,000 Correct! 1600 Modified Stoves \$430,000 250,000 50,000 \$130,000 Try again! Correct! 2,000 regular Stoves by Produced by Contractor Total \$720,000 440,000 80,000 \$200,000 Correct! \$4,850,000 2,190,000 380,000 2,280,000 360,000 420,000 \$1,500,000 Try again! Avoidable costs: Variable manufacturing cost saved per unit Variable marketing cost saved per unit Fixed manufacturing cost saved per unit In-house cost savings per unit Try again! Given Data P04-51: DAVIS KITCHEN SUPPLY Units manufactured Regular selling price per unit Unit manufacturing costs Variable materials Variable labor variable overhead Fixed overhead Total unit manufacturing costs Unit marketing costs Variable Fixed overhead Total unit marketing costs Total unit costs 6,000 \$370 \$50 75 25 60 \$210 25 70 95 \$305 Requirement a. information: Increase in volume (in units) New price after reduction Change in monthly sales Change in monthly costs Change in monthly income 7,000 \$325.00 ? ? ? Requirement b. information: Government contract (in units) March production (in units) Regular orders lost because of