Accounts 18

Question One(25 tag) Based on mental faculty 7 Budgeting Retail outlets obtain snowboards from Slopes Ltd. , byout the course. However, in anticipation of late summer and early autumn purchases, outlets ramp up inventories from January through May. Outlets atomic number 18 billed when boards are ordered. Invoices are pay subject within 60 days. From past experience, Slopes accountant projects 20% of invoices are pay in the month invoiced, 50% are paid in the following month, and 30% of invoices are paid both months after the month of invoice. The average selling price per snowboard is $450.To meet demand, Slopes increases meet from December through certify, beca pulmonary tuberculosis the snowboards are produced a month prior to their projected sale. Direct materials are purchased in the month of production and are paid for during the following month (terms are payment in effective within 30 days of the invoice date). Direct manufacturing trade union movement and manufa cturing crash are paid monthly. shifting manufacturing overhead is incurred at the rate of $7 per station manufacturing labour-hour. unsettled marketing courts are impelled by the number of sales visits. However, there are no sales visits during the months studied.Slopes, also incurred fixed manufacturing overhead costs of $5,500 per month and fixed non-manufacturing overhead costs of $2,500 per month. Projected Sales January80 unitsApril100 units February120 unitsMay60 units March200 unitsJune40 units Direct Materials and Direct Manufacturing advertise Utilisation and Cost Unit per BoardPrice per UnitUnit Wood5$30Board feet Fiberglass6 5Yard Direct manufacturing labour5 25Hour The beginning interchange balance for March, 2010, is $10,000. On June 1, 2009 Slopes had a notes crunch and borrowed $30,000 on a 6% unrivalled-year note with interest payable monthly.The note is overdue June 1, 2010. Using the information provided, you will need to determine whether Slopes will b e in a condition to pay off this short-term debt on June 1, 2010. Required a. Prepare a cash budget for the months of March through May 2010. Show supporting schedules for the calculation of receivable and payables. b. Will Slopes be in a position to pay off the $30,000 one-year note that is due on June 1, 2010? If not, what actions would you recommend to Slopes management? c. figure Slopes is interested in maintaining a minimum cash balance of $10,000.Will the company be able to maintain such a balance during all three months analysed? If not, suggest a suitable cash management strategy. Marking Criteria finishing of budgeting to movement 1a 18 marks industry of budgeting to question 1b 3 marks Application of budgeting to question 1c 4 marks Question devil(25 marks) Based on module 8 CVP abbreviation Grace Inc manufactures and sells baby cots. For its 2011 budget, Grace Inc. estimated the following Selling price $600 Net income after tax $650 000 Variable cost per cot $300 Income tax rate 30% Annual fixed costs $cl 000 Unfortunately sales were not meeting expectations. Only 525 units had been sold in the first four months of the year at the established price and cost structure. The net income projection for 2011 would not be reached unless some action is taken. A management committee presented the following mutually exclusive alternatives to the CEO. (a) Reduce the selling price by $60. The sales organization forecasts that at this significantly reduced price, 4050 units can be sold during the remainder of the year. tally fixed costs and uncertain cost per unit will stay as budgeted. b) Lower variable cost per unit by $15 through the subroutine of less expensive direct materials and slightly modified manufacturing techniques. The selling price will also be reduced by $45, and sales of 3300 units are judge for the remainder of the year. (c) Reduce fixed costs by $15 000 and lower the selling price by 5%. Variable cost per unit will be unchanged. S ales of 3000 units are expected for the remainder of the year. Required (a) Determine the number of units that Grace Inc must sell (a) to break even and (b) to happen upon its income objective using the current price and cost structure. b) Determine which alternative Grace Inc should select to tap net income. Show your calculations. Marking Criteria Application of CVP to question 2a 9 marks Application and interpretation of CVP to question 2b 16 marks Question Three Based on module 8 Costing in an entity(25 marks) Alexs Fine Art Studio is a company offering art services. The owner Alex impression has been contacted by the manager of Ruthven Cars Company who complained about the price charged for some art work. On the alike day Alex was also contacted by the manager of Books Galore who was delighted with the work and the price charged.Alex uses a cost-based attempt to pricing (billing) each employment. Currently it uses a whizz direct-cost category (professional labour hours) and a single indirect-cost jackpot (general support). Indirect costs are allocated to jobs on the basis of professional labour-hours per job. Professional labour costs at Alexs Fine Art Studio are $70 an hour. Indirect costs are allocated to jobs at $105 an hour. Total indirect costs in the most recent period were $21 000. The job files show the following Professional Labour Ruthven Cars Company 104 hours Books Galore 96 hours Assume these two jobs were the just now jobs immaculate in this period. ) Required (a) Compute the costs of the Ruthven Cars Company and Books Galore jobs using Alexs existent job-cost system. (b) Alex asks his assistant to collect details on those costs in the $21 000 indirect cost puddle that can be traced to each individual job. After analysis, Alex is able to reclassify $14 000 of the $21 000 as direct costs Other Direct Costs Ruthven Cars Company Books Galore Research support labour $1600 $3400 Computer time 500 1300 Travel and allowances 600 4400Te lephone/faxes 200 1000 Photocopying 250 750 Total $3150 $10 850 compute for Alex the costs of each job using the six direct-cost pools and a single indirect cost pool. The single indirect cost pool would gestate $7000 of costs and would be allocated to each job using the professional-labour hours base. (c) Alexs Fine Art Studio has two classifications of professional staff artists and apprentices. Alex asks her assistant to examine the relative use of artists and apprentices on the recent Ruthven Cars Company and Books Galore jobs.The Ruthven Car Company job used 24 artist-hours and 80 apprentice-hours. The Books Galore job used 56 artist-hours and 40 apprentice-hours. Alex is curious as to how each job would have been costed if using separate direct cost rates for artists and apprentices and using separate indirect cost pools for artists and apprentices. For direct costs, the cost per artist hour is $100 and per apprentice hour is $50. For indirect costs, from the total indirect cost pool of $7000, $4600 is attributable to the activities of artists, and $2400 is attributable to the activities of apprentices.You are necessitate to satisfy Alexs curiosity by computation the costs for each job under this more refined costing system. (d) Complete a relation of costing under the existing system and that of the more refined system. Which is better and why? Marking Criteria Application of cost apportionment principles to question 3a 6 marks Application of cost allocation principles to question 3b 8 marks Application of cost allocation principles to question 3c 8 marks Application of cost allocation principles to question 3d 3 marks Question Four(25 marks) Based on module 10 executing managementPart A Managers should be rewarded only on the basis of their performance measures, They should be paid no salary. Do you agree? Explain. Part B Bobs Cellular Phone Company uses ROI to measure divisional performance. Annual ROI calculations for each division have tradi tionally employed the ending amount of invested outstanding along with annual operating income and net revenue. The Dupont method is generally used. The companys Phone Accessories Division had the following results for the last two years 2010 ROI = ($2,000,000/$20,000,000) ? ($20,000,000/$10,000,000) = 0. 0 2011 ROI = ($2,400,000/$25,000,000) ? ($25,000,000/$15,000,000) = 0. 16 Corporate management was disappointed in the performance of the division for 2011, since it had do an additional investment in the division that was budgeted for a 23% ROI. Required a. Discuss some factors that may have contributed to the decrease in ROI for 2011. b. Would there have been any substantial difference if average capital had been used? Marking Criteria banter and explanation regarding the extent of use of performance measures. 10 marks Discussion of performance as required in Part B a. 10 marksExplanation required in Part B b. 5 marks General Requirements 1. Given the nature of the questions there is not specified work limit. However, you are encourage to present your work in a clear and laconic manner. You should ensure that you answer the question fully while giving enough information to ensure that the patsy can ascertain your objective in your calculations to enable part marks to be given if necessary. 2. sic references for all questions at the end of the assignment not at the end of each question. 3. You can use dot points or tables to help present your answer if you wish. . Assignment extensions will be granted if unavoidable due to medical, work or personal reasons. However, extensions will not be granted for more than one week. This is because I cannot post back marked assignments and solutions until all assignments have been received. It is unfair on other students to crack the return of their marked assignments unduly. 5. You should note that the assignment is based on modules 7-10. I would recommend completing the pertinent question each week as it rela tes to each module. This approach would mean that the assignment would be completed by the due date.Therefore reasons for needing an extension should be extreme. (Sources withheld Questions for this assignment are taken from other sources. expand of this source have been withheld for assessment purposes. This material is reproduced under the provisions of the Section 200 (1) (b) of the Copyright Amendment represent 1980. ) ACC5502 Accounting for Managers Assignment Two Description Marks out of Wtg(%) Due date Based on modules 710 100 20% 2012 1. Question Criteria MarksAvailable Question One Application and understanding of module 7 25 marks Application of budgeting to 1a) 19 marks1b) 3 marks1c) 3 marks Question Two Application and understanding of module 9 25 marks Application of CVP principles to a practical situation. 2a) 10 marks2b) 15 marks Question Three Application and understanding of module 10 Use of costing principles3a) 6 marks3b) 8 marks3c) 8 marks3d) 3 marks 25 marks Question Four Application and understanding of module 11 Discussion and application of performance measurementPart A 10 marksPart B a) 10 marksPart B b) 5 marks 25 marks Total 100 marks