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1 of 3 Parts for Final Exam. Please help with the computations in a an attached excel sheet.

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Notre Dame College
MBA 540 Accounting
NAME______________________________________________________
Week 8
Final Examination Part B: Numeric
Total Points: 50
Instructions:
(a) There are total of 11 problems in this part of the final examination.
(b) Maximum possible points are shown against each problem.
(c) Solve all the problems with complete work to earn points.
(d) Submit your answers by 11:55 pm on Friday of the week.
1. (3 points) Magio Company manufactures kitchen equipment used in hospitals. They distribute their products directly to the customer and, for the year ending 2022, they reported these revenues and expenses.
    Sales revenue
    $545,000
    Cost of goods sold
    225,000
    Operating expenses
    195,000
Required:
Use the above information to construct an income statement for the year 2022.
Work and Solution:
2. (8 points) A company builds custom sailboats and ships to the dealership. They have collected this shipping cost data:
    Months
    Sailboats Shipped
    Shipping Cost
    June
    6
    $11,650
    July
    4
    9,100
    August
    3
    7,825
    Septembe
    8
    14,200
    Octobe
    2
    6,550
    Novembe
    7
    12,925
    Decembe
    5
    10,375
Required:
A. Prepare a scatter graph of the shipping data. Plot cost on the vertical axis and sailboats shipped on the horizontal axis. Is the relationship between shipping costs and unit shipped approximately linear? Draw a straight line through the scatter graph.
B. Using the high-low method, create the cost formula for a company’s shipping costs.
C. The least-squares regression method was used and the analysis resulted in this cost equation: Y = 4,000 + 1,275x. Comment on the accuracy of your high-low method estimation.
D. What would you estimate shipping costs to be if the company shipped 10 sailboats in a single month? Use the cost formula you obtained in part B. Comment on how accurately this is reflected by the scatter graph you constructed.
E. What factors other than the number of sailboats shipped do you think could affect the company shipping expense? Explain.
Work and Solution:
3. (8 points) Maple Enterprises sells a single product with a selling price of $400 and variable costs per unit of $160. The company’s monthly fixed expenses are $36,000.
Required:
(a) What is the company’s
eak-even point in units?
(b) What is the company’s
eak-even point in dollars?
(c) Construct a contribution margin income statement for the month of September when they will sell 130 units.
(d) How many units will Maple need to sell in order to reach a target profit of $48,000?
(e) What dollar sales will Maple need in order to reach a target profit of $48,000?
(f) Construct a contribution margin income statement for Maple that reflects $200,000 in sales volume.
Work and Solution:
4. (3 Points) These costs are associated with company’s production:
    Production
    110,000
    Direct materials
    $525
    Direct labo
    280
    Variable manufacturing overhead
    120
    Fixed manufacturing overhead
    $2,200,000
Required: Using the above information, what is the cost per unit under both variable and absorption costing?
Work and Solution:
5. (3 points) Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC:
    Cost Pool
    Cost Drive
    Estimated Overhead
    Wholesale
    Retail
    Ordering
    Number of orders
    $120,000
    180,000
    60,000
    Machine setups
    Number of setups
    85,000
    200,000
    140,000
    Inspection
    Number of inspections
    75,000
    60,000
    15,000
Required:
Calculate the predetermined rate for each cost pool.
Work and Solution:
6. (5 points) Cloud Shoes manufactures recovery sandals and is planning on producing 12,000 units in March and 11,500 in April. Each sandal requires 1.2 yards of material, which costs $3.00 per yard. The company’s policy is to have enough material on hand to equal 15% of next month’s production needs and to maintain a finished goods inventory equal to 20% of the next month’s production needs. What is the budgeted cost of purchases for March?
Required:
What is the budgeted cost of purchases for March?
Work and Solution:
7. (3 points) Queen Industries uses a standard costing system in the manufacturing of its single product. It requires 2 hours of labor to produce 1 unit of final product. In Fe
uary, Queen Industries produced 12,000 units. The standard cost for labor allowed for the output was $90,000, and there was an unfavorable direct labor time variance of $5,520.
Required:
(a) What was the standard cost per hour?
(b) How many actual hours were worked?
(c) If the workers were paid $3.90 per hour, what was the direct labor rate variance?
Work and Solution:
8. (5 points) The Trek bicycle Company manufactures three types of bicycles—a dirt bike, a mountain bike, and a racing bike. Due to their residential location they operate with one 8-hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are:
     
    Dirt
    Mountain
    Racing
    Hours of produce
    5
    3
    2
    Selling price
    $1,000
    $800
    $600
    Direct Material
    $400
    $200
    $100
    Direct Labo
    $200
    $150
    $100
    Variable Overhead
    $50
    $25
    $25
    Fixed Overhead
    $25
    $25
    $25
Required:
A. How many of each bicycle should be produced to maximize profits?
B. What qualitative factors would you need to consider?
9. (3 points) Jansen Crafters has the capacity to produce 50,000 oak shelves per year and is cu
ently selling 44,000 shelves for $32 each. Cutrate Furniture approached Jansen about buying 1,200 shelves for bookcases it is building and is willing to pay $26 for each shelf. No packaging will be required for the bulk order. Jansen usually packages shelves for Home Depot at a price of $1.50 per shelf. The $1.50 per-shelf cost is included in the unit variable cost of $27, with annual fixed costs of $320,000. However, the $1.50 packaging cost will not apply in this case. The fixed costs will be unaffected by the special order and the company has the capacity to accept the order.
Required:
Based on this information, calculate be the profit if Jansen accepts the special order.
Work and Solution:
10. (3 points) A company is examining a possibility of investing in a new machine. Two machines are available, Machine A and Machine B. Both machines require an investment of $450,000 and have a life of six years. The estimated cash flows that each machine is likely to generate over their lives are given below:
    Yea
    Option A
    Option B
    1
     100,000
     80,000
    2
     150,000
     90,000
    3
     150,000
     180,000
    4
     100,000
     100,000
    5
     100,000
     150,000
    6
     100,000
     150,000
Required:
(a) Calculate the payback period of Machine A and Machine B.
(b) Which machine would you select based on the payback period method? Why?
Work and Solution:
11. (6 points) Oleg Markov is the production manager of NASA Solvents. Due to limited capacity, the company can only produce one of two possible products:
· an industrial concentrated solvent with a 15% probability of making a profit of $1 million and an 85% probability of making a profit of $200,000.
· a household diluted solvent with a 100% chance of making a profit of $310,000.
Oleg will get a 20% bonus from his department. Oleg has the responsibility to choose between the two products and is more risk averse than most of the top management at NASA Solvents.
Required:
(a) Calculate the expected returns (ER) for each alternative project. (ER is the weighted average of all the possible outcomes from a project.)
(b) Which option is Oleg more likely to choose and why?
(c) Which option would the company be more likely to choose and why?
(d) What changes should the company make to Oleg’s compensation to encourage managers to take appropriate risks?
Work and Solution:
Page 1 of 1
Page 2 of 2

Page
1

of
2
Notre Dame College

MBA 540 Accounting

NAME______________________________________________________

Week
8

Final Examination Part B: Numeric

Total Points: 50
Instructions:
(a)

There are total of 1
1

problems in this part of the final examination.

(b)

Maximum possible points are shown against each
problem.

(c)

Solve all the problems with complete work to earn points.

(d)

Submit your answers by
11:55 pm o
n
Friday

of the week.
1.

(
3

points
) Magio

Company manufactures kitchen equipment used in hospitals. They distribute
their products directly to the customer and, for the
yea

ending
20
22
, they reported these
evenues and expenses.
Sales revenue

$
545
,000

Cost of goods sold

225
,000

Operating expenses

195
,000
Required
:

Use
the above

information to construct an income statement for the year
20
22
.
Work and Solution
:
2.

(
8

points
)
A

company

uilds custom
sailboat
s

and
ships

to
the dealership. They have
collected this shipping cost data:
Months

Sailboats
Shipped

Shipping
Cost

June

6

$11,650

July

4

9,100

August

3

7,825

Septembe

8

14,200

Octobe

2

6,550

Novembe

7

12,925

Decembe

5

10
,
375


Page 1 of 2

Notre Dame College
MBA 540 Accounting
NAME______________________________________________________
Week 8
Final Examination Part B: Numeric
Total Points: 50

Instructions:
(a) There are total of 11 problems in this part of the final examination.
(b) Maximum possible points are shown against each problem.
(c) Solve all the problems with complete work to earn points.
(d) Submit your answers by 11:55 pm on Friday of the week.


1. (3 points) Magio Company manufactures kitchen equipment used in hospitals. They distribute
their products directly to the customer and, for the year ending 2022, they reported these
evenues and expenses.
Sales revenue $545,000
Cost of goods sold 225,000
Operating expenses 195,000

Required:
Use the above information to construct an income statement for the year 2022.

Work and Solution:



2. (8 points) A company builds custom sailboats and ships to the dealership. They have
collected this shipping cost data:

Months Sailboats
Shipped
Shipping
Cost
June 6 $11,650
July 4 9,100
August 3 7,825
September 8 14,200
October 2 6,550
November 7 12,925
December 5 10,375
Answered 2 days After Jun 26, 2023

Solution

Khushboo answered on Jun 29 2023
7 Votes
SOLUTION.PDF

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