Cost Accounting -For Sophia Anderson Only

Module 3

Critical Thinking: (60 points) Choose one of the following two assignments to complete this week. Do not do both assignments. Identify your assignment choice in the title of your submission. When you are ready to submit, click the Module 3 Critical Thinking header on the Assignments page to upload the document.

Note that while there are two options for the Critical Thinking assignment, there is only one rubric. Review the rubric to confirm you are meeting the assignment requirements.

Assignment Choice #1: Production Cost Accounting –Weighted Average Method Maple, Inc. manufactures syrup that goes through three processing stages prior to completion. Information on work in the first department, blending, is given below for August:

Production Data:

Pounds in process, August 1; materials 100% complete; conversion 70% complete

3,000

Pounds started into production during August 85,000

Pounds completed and transferred out ?

Pounds in process, August 31; materials 80% complete; conversion 30% complete

6,000

Cost Data:

Work in process inventory, August 1: Materials cost

$900

Conversion cost $5,900

Cost added during May: Materials cost

$151,000

Conversion cost $161,700

The company uses the weighted-average method.

Instructions: Submit an Excel document, with each tab labeled by item number, which demonstrates the following:

1. Compute the equivalent units of production. 2. Compute the costs per equivalent unit for the month. 3. Determine the cost of ending work in process inventory and of the units transferred out to the

next department. 4. Prepare a cost reconciliation schedule for the month.

Provide your answers in a clearly organized Excel spreadsheet. Check spelling and formatting for readability. Document your sources. Where applicable, written comments must be in accordance with the APA Requirements. Be sure to review the Module 3 Critical Thinking grading rubric, which may be accessed through the Course Information page.

Assignment Choice #2: Production Cost Accounting Maple, Inc., manufactures syrup that goes through three processing stages prior to completion. Information on work in the first department, blending, is given below for August:

Production Data:

Pounds in process, August 1; materials 100% complete; conversion 70% complete

3,000

Pounds started into production during August 85,000

Pounds completed and transferred out ?

Pounds in process, August 31; materials 80% complete; conversion 30% complete

6,000

Cost Data:

Work in process inventory, August 1: Materials cost

$900

Conversion cost $5,900

Cost added during May: Materials cost

$151,000

Conversion cost $161,700

The company uses the weighted-average method. However, since FDA regulations are changing, management is considering converting to a job costing system of accounting so that costs may be traced by batch rather than process. Management is concerned about the advantages and disadvantages of doing so.

Instructions:

1. Compute the equivalent units of production. 2. Compute the costs per equivalent unit for the month. 3. Discuss with management the advantages and disadvantages of implementing a job costing

system versus a process costing system.

Provide your answers in a clearly organized PowerPoint presentation of 4-5 slides. Check spelling and formatting for readability. Document your sources. Where applicable, written comments must be in accordance with the APA Requirements. Be sure to review the Module 3 Critical Thinking grading rubric, which may be accessed through the Course Information page.

Portfolio Milestone (worth 25 points of the Portfolio Project)

Option #1: Review the requirements for the Portfolio Project. You will be required to select a product and demonstrate your knowledge of cost analysis for that product. Submit your selected product to your instructor in a 1-page Word document with your rationalization for selection. This submission is worth 25 points of your Portfolio Project, which is due in Module 8.

Option #2: Review the requirements for the Portfolio Project. You will be required to select a product and demonstrate your knowledge of cost analysis for that product. Submit your selected product to your instructor in a 1-page Word document with your rationalization for selection. This submission is worth 25 points of your Portfolio Project, which is due in Module 8.

Module 4

Critical Thinking: (60 points) Choose one of the following two assignments to complete this week. Do not do both assignments. Identify your assignment choice in the title of your submission. When you are ready to submit, click the Module 4 Critical Thinking header on the Assignments page to upload the document.

Note that while there are two options for the Critical Thinking assignment, there is only one rubric. Review the rubric to confirm you are meeting the assignment requirements.

Assignment Choice #1: Cost of Operation Exercise Toy Box, Inc., is contemplating expanding sales of their children’s toys. The have an opportunity to stock and sell the X toy that has been a big hit with children everywhere. They must order the X toys from the manufacturer in a minimum order of 100 at a cost of $12 each. They could resell the X toy in their store for $22 each.

Due to anticipated demand, Toy Box, Inc., will need to hire an additional part-time cashier at $600 a month, which will be classified as a fixed-cost attributable to the X toy. In addition, they have offered a $1 sales commission per toy to their floor sales representative. Finally, they will include a package of trading cards with every purchase of an X toy, which will cost them an additional $2 each.

Instructions:

In a well-written paper, answer the questions and perform the calculations described below:

1. To make the project worthwhile, Toy Box, Inc., would require a $5,000 profit per month. What level of sales, in units and in dollars, would be required to reach this target profit? Show all computations completely, in a table inserted into your document.

2. Assume that the venture is undertaken and an order is placed for 100 X toys. What would be Toy Box’s break-even point in units and in sales dollars? Show computations completely in an inserted table, and explain the reasoning behind your answer. You can ignore the fixed cost of $600 for this part.

Your paper must be written in Word and should meet the following requirements:

 2-3 pages in length, with all calculations in tables inserted in the document.

 Written and formatted according to the APA Requirements.

 Include at least 2-3 outside sources.

Assignment Choice #2: CVP Relationships Robin Simmons is ready to complete a cost-volume-profit analysis for 2016 for the Stellar Packaging Products manufacturing plant to determine if the break-even point is achieved, given the expected decline in volume. Specific costs for production of 500,000 units include the following:

Stellar Packaging Products Variable Costs

Total Fixed Costs

Total

Raw materials $ 400,000

Direct manufacturing labor $ 200,000

Indirect manufacturing labor $ 105,000

Factory Insurance & Utilities $ 63,000

Depreciation -- Machinery and factory $ 38,500

Repairs and maintenance -- factory $ 28,000

Selling, marketing and distribution expenses $ 40,000 $ 80,000

General and administrative expenses $ 120,000

There is no beginning or ending inventories. The total sales for 500,000 units produced are $2,000,000.

Instructions: Answer the following questions given the fact pattern above, showing all calculations.

1. What is the contribution margin per unit for each chocolate bar produced, given the fact pattern above?

2. What is the Stellar Packaging’s U.S. division break-even point in units and dollars, given the fact pattern above?

3. What is the Stellar Packaging’s U.S. division margin of safety and degree of operating leverage, given the fact pattern above?

4. Write a brief explanation (approximately two paragraphs) that Simmons might deliver to management to inform them of the analytical outcome, given the projected revenue and cost. Does the company have to implement a cost-reduction strategy in order to break even?

Your paper should meet the following requirements:

 2-3 pages in length

 Formatted according to the APA Requirements.

 Include at least 2-3 outside sources.