ACCT-346 Course Project - Bravo Baking Company

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Instructions

ACCT 346
Student Name
Bravo Baking Company began operations in May of 2010 with the production and sales of speciality breads.
The company has experienced a good market demand for its high protein, low carbohydrate product called "Hi-Lo"
Hi-Lo's success has required that Bravo continue to make only this one product, however, Bravo's customers,
the local retailers, have been asking for more specialty breads from the company. The decision to expand will be made
in the coming weeks.
Weekly Assignments: Complete the assigned Tab each week.
In each worksheet there are several Green colored cells. These cells must be filled in with your response.
Due Points Available Points Earned
Tab1) Product vs. Period Costs Week 1 10 0.00
Tab 2) Cost of Goods Manufactured Schedule Week 2 30 0.00
Tab 3) Break Even Analysis Week 3 40 0.00
Tab 4) Incremental Analysis Week 5 40 0.00
Tab 5) Capital Budgeting Week 6 40 0.00
Tab 6) Variance Analysis Week 7 40 20.00
200 20.00 Total

Tab 1 ProductPeriod

ACCT 346
Student Name
For Tables A : From the list below, identify if the cost item is a "Product Cost" or "Period Cost" by typing "Product" or "Period" in the appropriate box. 10 points For Table B: From the list below, identify if the cost item is a "Direct Cost" or "Indirect Cost" by typing "Direct" or "Indirect" in the appropriate box.
Table A Enter either "Product" or "Period" Table B Enter either "Direct" or "Indirect"
Flour used in baking bread 0 Flour used in baking bread 0
Factory Supervisor Salaries 0 Factory Supervisor Salaries 0
Bakers wages 0 Bakers wages 0
Rent for Executive Offices 0 Factory Insurance 0
Sales Commissions 0 Rent for Factory 0
Utilities used in the factory 0 Utilities used in the factory 0
Advertising costs 0 Cleaning Bake Ovens 0
Delivery truck costs 0 Insurance on Factory 0
Paper wrappers for bread 0 Paper wrappers for bread 0
Depreciation on bake ovens 0 Depreciation on bake ovens 0
Eggs, salt, water used for baking 0 Eggs used for baking 0
Interest on bank loan 0 Small amounts of salt used 0
Factory Insurance 0 Factory Insurance 0
0 Points 0.00 0

Tab 2 COGM&COGS

ACCT 346
Student Name
Use the information provided below to prepare the Cost of Good Manufactured Schedule:Bravo had the following costs as of Dec 31, 2010. Enter the correct values in the Green shaded cells. (TCO 2) 30 points
Table C Cost of Goods Manufactured Schedule 0
Materials used in baking bread Beginning Work In Process 0
Factory Supervisor Salaries 20,000 Materials
Bakers wages $32,000 Beginning Inventory Materials 0
Rent for Executive Offices 36,000 Plus: Purchases 0
Sales Commissions 10000 Materials Available 0
Utilities used in the factory 5000 Less: Ending Inventory Materials 0
Advertising costs 12000 Materials Used 0
Delivery truck costs 25000 Direct Labor 0
Depreciation on bake ovens 500 Overhead
Interest on bank loan 250 Factory Rent 0
Beginning Inventory Materials 10,000 Depreciation on bake ovens 0
Beginning Work in Process 8000 Utilities used in Factory 0
Ending Inventory Materials 4000 Other Overhead costs 0
Inventory Purchases 26000 Total Overhead 0
Ending Work in Process 2500 Total Manufacturing Costs 0
Other Overhead costs 1200 Total Work in Process 0
Beginning Finished Goods Inventory 7500 Less: Ending Work in Process 0
Ending Finished Goods Inventory 6000 Cost of Goods Manufactured 0
Rent for Factory 7500
Complete only the Green cells. Values in Red are from the schedule above.
Cost of Goods Sold Schedule
Beginning Finished Goods Inventory 0
Beginning Work In Process $0 Try Again
Materials
Beginning Inventory Materials $0 Try Again
Plus: Purchases $0 Try Again
Materials Available $0 Try Again
Less: Ending Inventory Materials $0 Try Again
Materials Used $0 Try Again
Direct Labor $0 Try Again
Overhead
Factory Rent $0 Try Again
Depreciation on bake ovens $0 Try Again
Utilities used in Factory $0 Try Again
Other Overhead costs $0 Try Again
Total Overhead $0 Try Again
Total Manufacturing Costs $0 Try Again
Total Work in Process $0 Try Again
Less: Ending Work in Process $0 Try Again
Cost of Goods Manufactured $0 Try Again
Goods Available for Sale 0
Less: Ending Finished Goods Inventory 0
Cost of Goods Sold Schedule 0
Points 0.00 0

Tab 3 CVP

ACCT 346
Student Name
Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs. (TCO 4) 40 Points
Units produced 14,000
Part I Enter your solution in the green cells for each of the following:
Table A Variable Fixed Using the costs from Table A compute
Materials used in baking bread 2.29 A) Breakeven units (rounded to 2 decimal places) 0.00
Factory Supervisor Salaries 0.12 B) Break-even sales dollars 0.00
Bakers wages 2.29 C) Contribution Margin 0.00
Rent for Executive Offices 3,000 D) Contribution Margin Ratio (%) 0.00
Sales Commissions 3500
Utilities used in the factory 0.50 Part II Complete the following requirements
Advertising costs 1000 A) If Bravo requires a profit of $5,000 how many units must it sell? 0.00
Delivery truck depreciation 400 B) What is the total revenue from A above? 0.00
Depreciation on bake ovens 0.07 C) If Bravo actually sells 8,000 units
Interest on bank loan 500 1) What is the margin of safety in Dollars? 0.00
2) What is the margin of safety percentage? 0.00
Total Costs $5.26 $8,400.00
Price Charged per unit $7.89
Total Correct
Points 0 0.00
Hint: use spreadsheet formulas to compute your answers

Tab 4 Incremental Analysis

ACCT 346
Student Name
Bravo Baking Co has expanded its product line to include several other specialty breads. The operating results for the last quarter are provided below. (TCO 7) 40 Points
Product Hi-Lo Whole Grain Fruit & Nuts Total
Revenues $67,575 $31,800 $15,900 $115,275
Variable product costs $27,030 $12,720 $6,360 $46,110
Variable Selling & Administrative costs $13,515 $6,360 $3,180 $23,055
Contribution Margin $27,030 $12,720 $6,360 $46,110
Fixed Product Costs $5,000 $5,000 $5,000 $15,000
Fixed Selling and Administrative Costs $5,700 $2,850 $2,850 $11,400
Allocated Common Costs $5,000 $2,500 $2,500 $10,000
Net Income $11,330 $2,370 -$3,990 $9,710
Required: Bravo wants to know the effect on Net Income if it decides to discontinue the Fruit & Nuts product.
If Bravo eliminates Fruit & Nuts 50% of fixed costs can be avoided.
Prepare and incremental analysis showing the Net Income Effect of eliminating the Fruit & Nuts product.
What woud you advise Bravo to do?
Using the Table below, compute the Net Income for Bravo Baking after eliminating the Fruit & Nuts product.
Product Hi-Lo Whole Grain Fruit & Nuts Total
Revenues 0
Variable product costs 0
Variable Selling & Administrative costs 0
Contribution Margin 0
Fixed Product Costs 0
Fixed Selling and Administrative Costs 0
Allocated Common Costs 0
Net Income 0
Points 0 0

Tab 5 Capital Budgeting

ACCT 346
Student Name
Bravo Baking Co is considering replacing an older freezer with a larger unit to freeze some of its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell an more bread each year. From these additional sales
the after tax cash flow is expected to be $4,000. In addition to more sales, the new freezer will save $1,200 in electricity each year. TCO 9
However, the new freezer will cost an additional $2,000 each year for maintenance. The cost of the new unit is $25,000 and it is 40 Points
expected to last 10 years. The salvage value at the end of its life is $6,000. The old unit is fully depreciated and can be disposed at cost.
Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should Bravo purchase the freezer?
Use the format below to complete the NPV computations:
(Note: Use PV Tables on pages 342 and 343. Also, be sure to show costs as negative values)
Cash Flow PV Factors PV Amounts
Cost of new refrigeration unit 0
After tax cash flow 0
Annual electricity savings 0
Additional annual maintenance costs 0
Amount collected from disposal of unit 0
Net present value 0
Points 0 0

Tab 6 Variance Analysis

ACCT 346 TCO 10
Student Name 40 Points
Bravo Baking uses standard costing to analyze its performance. The data below is provided for your use in determining Bravo's variances.
Standard Cost per unit Cost /Unit Amount/Unit Standard Cost
Material Cost (Ingredients) (.5 lbs) 2.29 .5 lbs $4.58
Direct Labor( .25 hrs * $9/hr) 2.25 .25 hrs $9.00
Overhead 0.57
Total 5.11
During the month, Bravo sold 9,000 loaves of bread and used 4,650 pounds of ingredients. Also during the month, Bravo
purchased 5,000 pounds of ingredients at a cost of $22,500. Employees worked a total of 2200 hours and actual labor costs were $19,998
Required:
Part a. Compute the material price and quantity variance.
Material Price Variance =
= ( - ) *
= 0.00 Fav/Unf > Fav
Try Again Correct 0 1
Material Quantity Variance =
= ( - ) *
= $0.00 Fav/Unf Unf
Try Again Correct 0 1
Labor Rate Variance =
= ( - ) *
= Fav/Unf > Unf
Correct 0 1
Labor Efficiency Variance =
= ( - ) *
= Fav/Unf fav
Correct Points 20 0 1
4