Assignment Detail:- ACCT2002 Financial Reporting - Southern Cross University
PORTFOLIO
Question OneHome Office Inc is a large stationery retail store specializing in office supplies- Anthony Vella, the assistant manager, is in the process of budgeting monthly supplies expense for 2022- He assumes that in some way supplies expense is related to sales, either in units or in dollars- He has collected these data for sales and supplies expenses for January 2020 through to December 2021, and has estimated sales for 2022- These are shown on the next page-
Required:A- Develop the regression that Anthony should use based on the data, and evaluate the reliability and precision of the regression you have chosen-
B- Using the regression that you have chosen, predict the monthly expenses for 2022-
Date
Supplies Expense
Sales -Units-
Sales -Dollars-
January-20
2,310
212
$ 19,990
February-20
2,573
284
$ 21,900
March-20
2,487
246
$ 18,940
April-20
2,484
278
$ 21,340
May-20
3,384
498
$ 32,100
June-20
2,945
424
$ 28,500
July-20
2,758
312
$ 22,650
August-20
3,394
485
$ 24,350
September-20
2,199
188
$ 18,930
October-20
2,763
276
$ 22,320
November-20
3,245
489
$ 30,040
December-20
4,576
692
$ 32,090
January-21
2,103
104
$ 21,950
February-21
2,056
167
$ 20,450
March-21
3,874
298
$ 23,010
April-21
2,784
398
$ 23,450
May-21
2,345
187
$ 18,150
June-21
2,912
334
$ 20,940
July-21
2,093
264
$ 19,340
August-21
2,873
333
$ 20,540
September-21
2,254
143
$ 19,770
October-21
2,384
245
$ 18,570
November-21
2,476
232
$ 21,890
December-21
3,364
560
$ 30,303
January-22
180
$ 18,500
February-22
230
$ 20,000
March-22
190
$ 19,000
April-22
450
$ 24,000
May-22
350
$ 21,250
June-22
350
$ 23,000
July-22
450
$ 25,000
August-22
560
$ 30,000
September-22
300
$ 24,500
October-22
300
$ 25,000
November-22
450
$ 32,000
December-22
600
$ 33,500
Question Two
SecretLab, Inc-, produces two types of gaming chairs: Overwatch and Cyberpunk- Their biggest seller is the Overwatch, but they have been concerned about the recent decline in their market share for the Overwatch-
SecretLab utilises a simple costing system- The company's simple costing system has two direct cost categories -material and labour- and one indirect cost pool- The simple costing system allocates indirect costs on the basis of machine-hours- Information related to SecretLab's production for the most recent year follows:
Overwatch
Cyberpunk
Units sold
3,200
1,800
Selling price
$ 125
$ 200
Direct material cost per unit
$ 30
$ 45
Direct manufacturing labour cost per hour
$ 16
$ 16
Direct manufacturing labour hours per unit
1-50
2-25
Production runs
40
85
Material moves
72
168
Machine setups
45
155
Machine-hours
5,500
4,500
Number of inspections
250
150
The owners have heard of other companies in the industry that are now using activity based costing and are curious how ABC would affect their product costing decisions- After analysing the indirect cost pool for SecretLab, the owners identify six activities as generating indirect costs: production scheduling, material handling, machine setup, assembly, inspection and marketing- SecretLab collected the following data related to the indirect cost activities-
Activity
Activity cost
Activity Cost Driver
Production scheduling
$95,000
Production runs
Material handling
$45,000
Material moves
Machine setup
$25,000
Machine setups
Assembly
$60,000
Machine hours
Inspection
$8,000
Number of inspections
Marketing costs were determined to be 3% of the sales revenue for each type of chair-
Required:A- Calculate the cost of an Overwatch and a Cyberpunk chair under the existing simple costing system -per unit cost--
B- Calculate the cost of an Overwatch and a Cyberpunk chair under an Activity Based Costing system -per unit cost--
C- Compare the costs of the chairs in requirements A and B- Why do the two systems differ in the cost of an Overwatch and a Cyberpunk chair????
D- How can SecretLab use the new cost information from the ABC system to address the declining market share for Overwatch chairs????
Question Three
Nudie Company started operation in 2020- The company manufactures mineral salt for swimming pools that it sells online by the box, at $50 per box- Nudie uses an actual costing system, which means that the actual costs of direct materials, direct labour, and manufacturing overhead are entered into the work-in-process inventory- The actual application rate for manufacturing overhead is computed each year; actual manufacturing overhead is divided by actual production -in units- to compute the application rate-Information for Nudie's first two years of operation is as follows:
2020
2021
Sales -in units- ---------------------------------------------------------------------
2,500
2,500
Production -in units- -----------------------------------------------------------
3,000
2,000
Production costs:
Variable manufacturing costs --------------------------------------
$21,000
$14,000
Fixed manufacturing overhead -----------------------------------
42,000
42,000
Selling and administrative costs:
Variable ----------------------------------------------------------------------------
25,000
25,000
Fixed ---------------------------------------------------------------------------------
20,000
20,000
Nudie Company had no beginning or ending work-in-process inventories for either year-
Required:A- Prepare operating income statements for both years based on absorption costing-
B- Prepare operating income statements for both years based on variable costing-
C- Prepare a numerical reconciliation of the difference in income reported under the two costing methods used in requirements A and B-
Question Four
Hyper Sports Inc- is a manufacturer of sports uniforms- Among the uniforms they produce are jerseys for the girls netball teams of Rockingham and Mandurah- The company uses fabric to create the jerseys and sews on a logo patch purchased from a licensed store-Details of the teams are as follows:
- Rockingham, with teal jerseys and the Rockingham logo- Mandurah, with red jerseys and the Mandurah logo
The budgeted direct cost inputs for each product in 2022 are as follows:
Rockingham
Mandurah
Teal fabric
2 metres
0
Red fabric
0
2-5 metres
Rockingham logo patches
1
0
Mandurah logo patches
0
1
Direct manufacturing labour
3 hours
4 hours
Data pertaining to the direct materials for April 2022 are as follows:
Actual Beginning Direct Materials Inventory, April 1, 2022
Rockingham
Mandurah
Teal fabric
18 metres
0
Red fabric
0
7 metres
Rockingham logo patches
45
0
Mandurah logo patches
0
60
Target Ending Direct Materials Inventory, April 30, 2022
Rockingham
Mandurah
Teal fabric
16 metres
0
Red fabric
0
16 metres
Rockingham logo patches
25
0
Mandurah logo patches
0
25
Unit cost data for direct cost inputs pertaining to March 2022 and April 2022 are as follows:
March -Actual-
April -Budgeted-
Teal fabric -per metre-
$ 9
$ 10
Red fabric -per metre-
12
11
Rockingham logo -per patch-
7
7
Mandurah logo -per patch-
6
8
Manufacturing labour cost per hour
26
27
Manufacturing overhead -both variable and fixed- is allocated to each jersey based on budgeted direct manufacturing labour hours per jersey- The budgeted variable manufacturing overhead rate for April 2022 is $16 per direct manufacturing labour hour- The budgeted fixed manufacturing overhead for April 2022 is $14,640- Both variable and fixed manufacturing overhead costs are allocated to each unit of finished goods-
Data relating to the finished goods inventory for April 2022 are as follows:
Rockingham
Mandurah
Beginning inventory, in units
12
17
Beginning inventory, in dollars -cost-
$ 2,244
$ 4,284
Target ending inventory, in units
22
27
Budgeted sales for April 2022 are 130 units of Rockingham jerseys and 190 units of Mandurah jerseys- The budgeted selling prices per unit in April 2022 are $229 for the Rockingham jerseys and $296 for the Mandurah jerseys- Assume the following in your answer:• Work-in-process inventories are negligible and ignored-• Direct materials inventory and finished goods inventory are costed using the FIFO method-• Unit cost of direct materials purchased and finished goods are constant in April 2022-
Required:Prepare the following budgets and computations for April 2022:a- Revenues budgetb- Production budget in unitsc- Direct materials usage budget -in units and dollars-d- Direct materials purchases budgete- Direct manufacturing labour costs budgetf- Manufacturing overhead costs budget-g- Fixed manufacturing overhead rate for April 2022-h- Ending inventories budget -direct materials and finished goods- -in dollars-i- Cost of goods sold budget
Attachment:- Portfolio Requirements-rar
Most Recent Questions