Assignment 2: LASA 1: Executive Report

Assignment2-LASA1ExecutiveReport.docx

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PART 1: In this section of the report, your job is to explain cost accounting and what skills you can bring to the company. The CFO feels you should include an overview of what cost management is and some of its applications. Be sure to discuss the opportunities available in the cost accounting and how it relates to corporate strategy. This section of your report should be approximately two pages in length.

PART 2: In this section of the report, you are asked to classify the product costs for the production of toka balls. Classify each cost as:

· fixed or variable

· direct or indirect

Complete the table and include it in your report. The management team will require justification for each cost (i.e. why you classified the costs as you did).

Product Cost	Variable	Fixed	Direct	Indirect
Electricity
Real Estate Taxes
Wood for toka sticks
Leather to tie wood together
Manufacturing Labor
Water
Lubricants for Machinery
Equipment depreciation

Use Microsoft Excel to calculate your answers for Parts 3 and 4 and cut and paste the calculations from Excel into your report to show your work. PART 3: The third section of the report should contain your computations for the month of July based on the information given below. The following information is available for a GFI division that produces electronic scoreboards. These are special order products that use a job order cost accounting system. The management team wants to see your calculations in your responses.

	June 30	July 31
Inventories
Raw materials	62,000	75,000
Goods in process	85,000	95,000
Finished goods	103,000	58,000

Activities and information for July
Raw materials purchases by cash		510,000
Factory payroll by cash		745,000
Factory overhead
Indirect materials		24,000
Indirect labor		132,000
Other overhead costs		220,000
Sales in cash		3,500,000
Predetermined overhead rate based on direct labor cost		52%

Compute the following amounts for the month of July.

1. Cost of direct materials used.

2. Cost of direct labor used

3. Cost of goods manufactured.

4. Cost of goods sold. (Do not consider any underapplied or overapplied overhead.)

5. Gross profit.

6. Overapplied or underapplied overhead.

PART 4: In the last section of the report, the management team would like to know the profits they can expect from the two models of pitching machines they currently manufacture. The softball pitching machine and the hardball machine make up the entire product line. To help determine the profit of each individual product, the CFO wants overheads to be allocated back to the products. Total inspection costs are $40,000.

The estimated production budget is as follows.

Softball pitching machine
Units	20 units
Direct labor hours per unit	200 hours per unit
Number of inspections	5 per unit

Hardball pitching machine
Units	20 units
Direct labor hours per unit	200 hours per unit
Number of inspections	15 per unit

1. Under a costing system that uses direct labor hours as a driver for the allocation, how much of the inspection costs would be allocated to softball machine?

2. Repeat the same question for hardball machine.

3. Using ABC and the number of inspections as a driver for allocation, recalculate the allocation for the softball machine.

4. Repeat the activity mentioned in question 3 for hardball machine.

You know that your report will be shared with senior level managers and eventually to the board of directors. However, you are uncertain whether or not you will be allowed to present your work at a later time or in a different manner. Therefore it is important that your report is well written, professional, includes an introduction and a conclusion, and follows APA standards.

PART 1:

In this section of the report, your job is to explain cost accounting

and what skills you can bring to the company. The CFO feels you should

include an overview of what cost management is and some of its applications.

Be sure to discuss the opportunities a

vailable in the cost accounting and how

it relates to corporate strategy. This section of your report should be

approximately two pages in length.

PART 2:

In this section of the report, you are asked to classify the product

costs for the production of toka

balls. Classify each cost as:

fixed or variable

direct or indirect

Complete the table and include it in your report. The management team will

require justification for each cost (i.e. why you classified the costs as you

did).

Product Cost

Variable

Fixed

Direct

Indirect

Electricity

Real Estate Taxes

Wood for toka sticks

Leather to tie wood together

Manufacturing Labor

Water

Lubricants for Machinery

Equipment depreciation

Use Microsoft Excel to calculate your answers for Parts 3 and 4 and cut

and paste the calculations from Excel into your report to show your

work.

PART 3:

The third section of the report should contain your computations

for the month of July based on the information given below. The following

information is available for a GFI division that produces electronic

scoreboards. These are special order products th

at use a job order cost

PART 1: In this section of the report, your job is to explain cost accounting