Accounting homework help.
St Mary’s University
School of Graduate Studies, MBA
Group Assignment (30%)
Submission date: February 25, 202
Course: Accounting and Finance for Managers
Group Assignment 2
- The following data belong to a company for a period.
- Materials used $80,000 (60% for DM)
- Labor used 400,000(50% for DL)
- FOH cost (others) 40,000 (Heat, Light, Power)
- Prime cost
- Total FOH cost
- Conversion cost
- Production cost (mfg)
- Direct cost
- Indirect cost
- AXY Company produces two products, the ABB and the ACC. The ABB is a high-volume item totaling 50,000 units annually. The ACC is a low-volume item totaling only 10,000 units per year. Each product requires 4 hour of direct labor for completion. Therefore, total annual direct labor hours are 240,000. Expected annual manufacturing overhead costs are $1,600,000. The cost allocation base is direct labor hour. The direct materials cost per unit is $80 for the ABB and $60 for the ACC. The direct labor cost is $24 per unit for each product.
AXY Company’s expected annual overhead costs of $1,600,000 relate to two activities—machine setups, machining.
|Activity||Cost Driver||Total expected overhead cost||Total expected use of driver|
|Machine setup||Number of setup||$600,000||3000|
|Number of setup||1000||2000|
- Allocate overhead cost in traditional costing system and ABC costing system.
- Determine unit cost under traditional costing and ABC costing system and comment on it.
- A Bike manufacturer manufactures gear shifters used in one of its products.The unit product cost of this part is:
|Depreciation of special equipment||2|
|Allocated general overhead||4|
|Unit product cos||$25|
The special equipment has resale value of $20,000.The total amount of general overhead, which is allocated on the basis of direct labor hours, would be unaffected by this decision.The $25 unit product cost is based on 10,000 parts produced each year.An outside supplier has offered to provide the 10,000 parts at a cost of $20 per part.
Required:Should we accept the supplier’s offer? Why/why not?
- Data related to the expected sales of a Products for ABC Inc. for the current year is follows:
Products Unit Selling Price Unit Variable Cos
Automobile ETB 200,000 ETB 160,000
The estimated fixed costs for the current year are ETB 20,000,000.
- Determine the estimated units of sales of the product necessary to reach the break-even point for the current year.
- Assume the company targets income before tax ETB 4,000,000. Calculate total units to be sold to achieve target profit.