Managerial Accounting Decision Making and Performance Management 4th edition Ray Proctor - Solutions

For Gundy Company, units to be produced are 5,000 in quarter 1 and 7,000 in quarter 2. It takes 1.6 hours to make a finished unit, and the expected hourly wage rate is $15 per hour. Prepare a direct labor budget by quarters for the 6 months ending June 30, 2020.
Perine Company has 2,000 pounds of raw materials in its December 31, 2019, ending inventory. Required production for January and February of 2020 are 4,000 and 5,000 units, respectively. Two pounds of raw materials are needed for each unit, and the estimated cost per pound is $6. Management desires
Sales budget data for Paige Company are given in BE9.2. Management desires to have an ending finished goods inventory equal to 25% of the next quarter’s expected unit sales. Prepare a production budget by quarters for the first 6 months of 2020.Data from BE9.2Paige Company estimates that unit
Paige Company estimates that unit sales will be 10,000 in quarter 1, 14,000 in quarter 2, 15,000 in quarter 3, and 18,000 in quarter 4. Using a sales price of $70 per unit, prepare the sales budget by quarters for the year ending December 31, 2020.
Sheen Co. manufactures a standard cabinet for a Blu-ray player. The variable cost per unit is $16. The fixed cost per unit is $9. The desired ROI per unit is $6. Compute the markup percentage on total unit cost and the target selling price for the cabinet.
Carey Company had sales in 2019 of $1,560,000 on 60,000 units. Variable costs totaled $900,000, and fixed costs totaled $500,000. A new raw material is available that will decrease the variable costs per unit by 20% (or $3). However, to process the new raw material, fixed operating costs will
Mary Webster owns and manages a company that provides trenching services. Her clients are companies that need to lay power lines, gas lines, and fiber optic cable. Because trenching machines require considerable maintenance due to the demanding nature of the work, Mary has created a scatter plot
James Brooks estimated the variable and fixed components of his company’s utility costs using the high-low method. He is concerned that the cost equation that resulted from the high-low method might not provide an accurate representation of his company’s utility costs. What is the inherent
Empire Company is a manufacturer of smart phones. Its controller resigned in October 2020. An inexperienced assistant accountant has prepared the following income statement for the month of October 2020.Prior to October 2020, the company had been profi table every month. The company€™s
The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.Instructionsa. Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)b. Prepare an income statement through gross profi t.c. Prepare the current
Nalpo Ltd manufactures and markets a small table that attaches to ladders. The following annual budget is based on 75,000 units made and sold:Actual production figures for year 1 and year 2 were as follows:Tasks:You are required to:1. Prepare budgeted statements of profitability on the basis
Bishop & Co. manufactures vinyl pond lining for the water-garden industry. The company buys vinyl beads by the tonne and heats and rolls them into large sheets which are then cut to the required sizes. One tonne of beads produces 10,000 square metres of liner. Bishop & Co. is uncertain of
Brightwell Shades Ltd has developed a new kind of sunglasses, the Shadewell, whose strength can be manually adjusted. The variable cost of one pair is £50 but the firm is unsure what the selling price should be. During a lengthy board meeting it was decided to commission some market research
a) What is meant by ‘price elasticity of demand’?b) Create a numerical example of the ‘absorption cost suicide spiral’.c) Explain the differences between the accountant’s and the economist’s approach to pricing.d) Why is pricing really a marketing function?e) List the stages involved in
The Chinkin Corporation produces surfboards. Its sales have been 300 a month for the last few months but it is about to launch an expansion strategy aimed at increasing sales by 50% over the next four months, April to July. Sales in April are expected to be 300 boards but to increase by 50 units a
Flipside Ltd manufactures a single-size lubrication unit for use in wind turbines etc. It operates a standard absorption costing system and uses variance analysis to control its operations. The figures below refer to the year just ended.The standard selling price used in the original budget is
Elbo Ltd makes roof tiles. It has two production departments: moulding and packing. It makes two different sizes of tile, the Handi and the Jiant. The following table shows the standard costs of labour per pallet of tiles (one pallet contains 144 tiles):During October, 400 pallets of Handis, and
Fablus Limited makes a single product, the NL. It operates a standard absorption costing system. The budget for 2012 shows sales of 500,000 NLs at £0.25 giving a profit of £12,500.Actual results for 2012:Number of NLs actually made = 452,000 which were sold at £0.30
Triform Limited operates a standard absorption costing system. During last month, it made only one product, the TR2. Using the following information, you are required to calculate as many variances as possible, discuss their causes and reconcile the budgeted profit with the actual profit. Standard
Medibed manufactures hospital beds. These are complicated mobile platforms with several moving parts. It is located on the outskirts of Bromsgrove and has good connections to the motorway system. Bromsgrove is centrally situated in the UK and has a good quality workforce. Medibed has never
In common with the rest of the National Health Service, Freeshire Hospital Trust is having to cope with considerable constraints on resources. To address this, a new accountant was appointed two years ago to introduce a decentralized budgetary control system to make managers more accountable for
Chumpy Lighting Limited manufactures a wide variety of light bulbs which it sells to lighting shops and builders merchants through wholesale distributors. It also sells direct to the big UK supermarkets. It is situated in a small town a few miles from the city of Durham in the north-east of England
Parnham Clarke (UK) plc manufactures and markets ‘off-the-shelf’ material fastenings (based on zips and Velcro) mainly for the clothing industry. These are mostly sold through a network of wholesalers. The company has two main sites in the East Midlands employing about 800 people. It was taken
The following are extracts from the profit and loss accounts and balance sheets of Digby plc:Task:Comment on Digby€™s liquidity, capital structure, profitability and working capital management during the three-year period. (State any assumptions you make.) Profit and loss account (£m)
Shoes Ltd has operated in the retail sector for the past eight years. A summary of its financial statements for the year just ended is given below: Trading and profit and loss account
The Alborg Company Ltd manufactures and sells doors and window frames to the building trade. It has been expanding rapidly over the last two years, experiencing an annual growth rate of 25%. The board is looking at the draft results for 2013 together with a forecast for 2014 (see below). Although
Charlesworth plc is a distributor of tiles to the building trade. The vast majority of these tiles are purchased in Eastern Europe and South-East Asia. It has been quite successful since it was set up 10 years ago with sales growing, on average, at the rate of 10% a year. Amy Backson has recently
SACCUS is a local charity which decides to hold an outdoors fund-raising event in mid-summer. The secretary has a connection with an entertainments company which puts on musical laser light shows for the public. For charities, it charges a reduced rate of £375 all-inclusive. The venue would be
Jim Culf is the manager of the Royal Hotel, Bigtown-on-Sea. In anticipation of preparing next year€™s budget, he has analysed his recent costs and income. His findings are summarized below........................................................................................
Hughes Healthfoods makes and sells two types of diet supplement, Slim Quick (SQ) and Healthy Living (HL). It has a single production line on which the two products are made alternately in batches. Some details from next year€™s budget are shown below:The annual total fixed cost is
Jean-Paul Cie (J-P) is a world-famous haute-couture fashion house based in Paris. It also manufactures a range of perfumes, all made from secret recipes. Only one ingredient called €˜maylarnge€™, a mixing agent, is used in all their products. Maylarnge is obtained from SML
Marie and Peter Bridge run a business manufacturing and selling sets of the popular French game, boules. The boules are turned from aluminium, packaged in a neat carrying case and sold for £22 a set. The raw materials cost £8 a set and each set takes 20 minutes of turning by skilled operatives
Murray Polls Limited recently contracted to conduct an opinion poll concerning global warming and its causes. Its costing for this job is shown below:(Overheads are absorbed on the basis of questioning hours.) The client paid a deposit of £5,000 and contracted to pay the remainder within one
The Eldave Advertising Agency has been working on a campaign for Greenpoint Leisure Limited for the last four months. The campaign is for Greenpoint’s eco-friendly holidays in South America and uses both TV and Sunday-paper magazines. The adverts have almost been completed and the campaign launch
Fiesole Ltd is considering the selection of one of a pair of mutually exclusive capital investment projects. Both would involve the purchase of machinery with a life of five years. Fiesole uses the straight-line method for calculating depreciation and its cost of capital is 15% per year.Project 1
The Adaptor Company has recently invested £40,000 in a market research survey to determine the demand for its new product, the AdaptAll. The bill for this survey has not yet been paid. Adaptor is encouraged by the survey and now has to decide whether or not to go ahead. The AdaptAll cost £50,000
Medley Ltd makes dishwashers. There are three production departments: machining, assembly and finishing; and two service departments: maintenance and stores.Costs are as follows:Production statistics are:Tasks:1. Calculate an overhead absorption rate based on direct labour hours for each
Ugur Ltd makes three different types of marine compass: Type A, Type D and Type N. Each compass passes through two production departments: assembling and finishing. Ugur absorbs its overheads on the basis of direct labour hours.Production overheads for the next 12 months are expected to
Hoffman Ltd makes only two types of portable cooking stove, the Lightweight (LW) and the Megarange (MR). Last year it produced 4,500 LWs and 500 MRs. The direct materials cost £3.00 for one LW and £10.00 for one MR. The assembly workers who put the stoves together are all paid at the
Pullman Products manufactures ceramic discs for industrial use. It makes the discs in three sizes: small (S), medium (M) and large (L). Product costs are calculated using a simple absorption costing system which has only one overhead absorption rate (based on direct labour hours) for the whole

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