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You have been asked to price out a project for an outside customer. The project will run for eight months. Direct labor is $100,000 for each month and the overhead rate is fixed at 100 percent per month. Termination liability on the direct labor and overhead rate is 80 percent of the following month's expenses. Material expenses are as follows: Material A: Cost is $100,000 payable 30 days net. Material is needed at the end of the fifth month. Lead time is four months with termination liability expenses as follows: 30 days: 25% 60 days: 75% 90 days: 100% Material B: Cost is $200,000, payable on delivery. Material is needed at the end of the seventh month. Lead time is three months with termination liability as follows: 30 days: 50% 60 days: 100% Complete the table below, neglecting profits. Month 1 3 4 5 6. 7 8 Direct labor Overhead Material Monthly cash flow Cumulative cash flow Monthly termination liability: labor Cumulative termination liability: labor Monthly termination liability: material Cumulative termination liability: material Total project termination liability 2. You have been asked to price out a project for an outside customer. The project will run for eight months. Direct labor is $100,000 for each month and the overhead rate is fixed at 100 percent per month. Termination liability on the direct labor and overhead rate is 80 percent of the following month's expenses. Material expenses are as follows: Material A: Cost is $100,000 payable 30 days net. Material is needed at the end of the fifth month. Lead time is four months with termination liability expenses as follows: 30 days: 25% 60 days: 75% 90 days: 100% Material B: Cost is $200,000, payable on delivery. Material is needed at the end of the seventh month. Lead time is three months with termination liability as follows: 30 days: 50% 60 days: 100% Complete the table below, neglecting profits. Month 1 3 4 5 6. 7 8 Direct labor Overhead Material Monthly cash flow Cumulative cash flow Monthly termination liability: labor Cumulative termination liability: labor Monthly termination liability: material Cumulative termination liability: material Total project termination liability 2.
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Related Book For
Financial and Managerial Accounting
ISBN: 978-1285078571
12th edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac
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