SNHU acct 207 Milestone 3
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a_acc207_student_workbook.xlsxPart I - Product vs Period Cost
| Milestone One, Part I | |||||||||
| Product Costs | N/B | ||||||||
| Materials- cedar | products costs | ||||||||
| Materials-plastic | products costs are those costs that go into the determination of costs of goods manufactured during | ||||||||
| Factory worker labor | the manufacturing process as either direct materials or labor and as manufacturing overheads rather factory | ||||||||
| Materials -indirect | overheads | .These costs form part of the cost of the ultimate product produced. They majroly fall into three categories | |||||||
| Factory depreciation | direct materials | ||||||||
| Factory utilities | direct labor | ||||||||
| Factory maintenance and repairs | factory overheads | ||||||||
| Period Costs | periods costs | ||||||||
| Shipping($2.25/each) | |||||||||
| Sales commission ($2.00/unit sold) | Are costs that do not go into the determination of the cost of good manufactured during the manufacturing process | ||||||||
| Office rent | They are expensed in the period in which they are incurred and as such do not form part of the product costs. | ||||||||
| Advertising | these costs fall into the following categories | ||||||||
| Liability Insurance | selling and administrative costs | ||||||||
| Office depreciation | |||||||||
| Office salaries |
Part I - Costs
| Milestone One, Part II | |||||||||||||
| Use Table I on the MDE Manufacturing Budget to complete your calculations. | |||||||||||||
| 50,000 | Totals | Totals | |||||||||||
| Units | Budget | Actual | |||||||||||
| Sales Price per Unit | $ 21 | 24 | |||||||||||
| Variable Costs | |||||||||||||
| Materials - Cedar | 225,000 | 248,160 | |||||||||||
| Materials - Plastic | 37,500 | 37,741 | |||||||||||
| Factory Worker Labor | 300,000 | 332,760 | |||||||||||
| Materials - Indirect | 3,000 | 2,585 | |||||||||||
| Shipping ($2.25/ea) | 112,500 | 105,750 | |||||||||||
| Sales Commissions ($2/unit sold) | 100,000 | 94,000 | |||||||||||
| Variable Cost per Unit | 16 | 17 | |||||||||||
| Contribution Margin | 5 | 4 | |||||||||||
| Fixed Costs | |||||||||||||
| Factory Depreciation | 78,000 | 78,000 | |||||||||||
| Factory Utilities | 12,000 | 12,000 | |||||||||||
| Factory Maintenance and Repairs | 5,000 | 4,500 | |||||||||||
| Office Rent | 12,000 | 12,000 | |||||||||||
| Advertising | 20,000 | 20,000 | |||||||||||
| Liability Insurance | 5,000 | 5,000 | |||||||||||
| Office Depreciation | 1,000 | 1,000 | |||||||||||
| Office Salaries | 48,000 | 48,000 | |||||||||||
| Total Fixed Costs | 181,000 | 180,500 | |||||||||||
| Using Budgeted Amounts | |||||||||||||
| Breakeven Point - | Fixed Costs | 181,000 | Breakeven Point - | 36,200 | |||||||||
| Contribution Margin | 5.00 | ||||||||||||
| Using Actual Amounts | Total Actual fixed costs | 180,500 | Units at Current Sales Price | 45125 | |||||||||
| + 10,000 profit | contribution margin | 4.00 | |||||||||||
| Using actual amounts | Actual fixed costs+profit | 190,500 | 47625.00 | New Contribution Margin | 4.05 | ||||||||
| + 10,000 profit | contribution margin | 4 | Current Variable Costs | 17.47 | |||||||||
| New Sales Price | 21.52 |
Part II - Budget Model
| Milestone Two, Part I | |||||||||
| Use Tables I through IV on the MDE Manufacturing Budget to complete your calculations. | |||||||||
| Refer to Exhibit 7-2 on page 253 of the text | |||||||||
| Budget Model | From Flexible Budget Calculations Sheet | ||||||||
| Actual | Flexible Budget Variance | Favorable/ Unfavorable | Flexible Budget | Sales Volume Variance | Favorable/ Unfavorable | Static Budget | |||
| Units Sold | 47,000 | 47,000 | 50,000 | ||||||
| Revenues | $991,700 | $4,700 | Favorable | $987,000 | ($63,000) | Unfavorable | $1,050,000 | ||
| Variable Costs | |||||||||
| DM-Plastic | $37,741.00 | $2,491.00 | Favorable | $35,250.00 | ($2,250.00) | Unfavorable | $37,500.00 | ||
| DM-Cedar | $248,160.00 | $36,660.00 | Favorable | $211,500.00 | ($13,500.00) | Unfavorable | $225,000.00 | ||
| Direct Manuf. Labor | $332,760.00 | ($50,760.00) | Unfavorable | $554,600.00 | $254,600.00 | Favorable | $300,000.00 | ||
| Variable Manuf. Overhead | $2,585.00 | $235.00 | Favorable | $11,750.00 | $8,750.00 | Favorable | $3,000.00 | ||
| Total Variable Costs | $621,246.00 | ($191,854.00) | Unfavorable | $813,100.00 | $247,600.00 | Favorable | $565,500.00 | ||
| Fixed Manuf. Overhead | $95,000.00 | ($500.00) | Unfavorable | $95,000.00 | $ - | $95,000.00 | |||
| Total Costs | $716,246.00 | ($192,354.00) | Unfavorable | $908,100.00 | $247,600.00 | Favorable | $660,500.00 | ||
| Gross Margin | $275,454.00 | $197,054.00 | Favorable | $78,900.00 | ($310,600.00) | Unfavorable | $389,500.00 | ||
Part II - Variance Analysis
| Milestone Two, Part II | |||||||
| Use the variance supporting calculation tab to complete your calculations. | |||||||
| Price Variance | Efficiency Variance | ||||||
| Direct Materials - Cedar | -22,560 | (14,100) | |||||
| Direct Materials - Plastic | 1034 | (3,525) | |||||
| Direct Labor | 5,640 | (56,400) | |||||
| Spending Variance | Efficiency Variance | ||||||
| Variable Manufacturing Overhead | (235.00) | 470 |
Flexible Budget Calculations
| Budgeted Unit | Actual Volume | Flexible Budget | |||
| Amounts | Amount | ||||
| Revenues | $ 21.00 | 47,000 | $987,000 | ||
| Variable Costs | |||||
| DM-Plastic | $0.75 | 47,000 | 35,250 | ||
| DM-Cedar | $4.50 | 47,000 | 211,500 | ||
| Direct Manuf. Labor | 6.00 | 47,000 | 282,000 | ||
| Variable Manuf. Overhead | 0.06 | 47,000 | 2,820 | ||
| Total Variable Manufacturing Costs | 531,570 | ||||
| Fixed Manufacturing Overhead | 95,000 | ||||
| Total Manufacturing Costs | 626,570 | ||||
| Gross Margin | $360,430 | ||||
Variance Supporting Calculation
| Use Tables III and IV on the MDE Manufacturing Budget to complete your calculations. | |||||||||||||
| Development of Price and Efficiency Variances - Calculations | |||||||||||||
| Actual Feet per Unit | Actual Units | Actual Feet Used | Actual Cost | Actual Cost per Unit | |||||||||
| DM-Plastic | 1 | 47,000 | 51,700 | 37,741 | $ 0.80 | ||||||||
| DM-Cedar | 3 | 47,000 | 150,400 | 248,160 | $ 5.28 | ||||||||
| Actual Labor Cost per Hour | Actual Labor Costs | Actual Labor Hours | Actual Units | Actual Labor Hours per Unit | |||||||||
| Direct Manuf. Labor | $ 11.80 | $ 332,760 | 28,200 | 47,000 | 0.60 | ||||||||
| Actual Costs Incurred (Actual Input Qty. × Actual Price) | Actual Input Qty. × Budgeted Price | Flexible Budget (Budgeted Input Qty. Allowed for Actual Output × Budgeted Price) | |||||||||||
| Actual Units | Actual Feet per Unit | Actual Price per Ounce | Actual Units | Actual Feet per Unit | Budgeted Cost per Ounce | Actual Units | Budgeted Feet per Unit | Budgeted Cost per Ounce | I believe that all of the yellow highlighted cells should read "per Unit" and not "per Ounce" | ||||
| Direct Material Plastic | 47,000 | 1 | $ 0.73 | 47,000 | 1 | $ 0.75 | 47,000 | 1 | $ 0.75 | ||||
| $ 37,741 | $ 38,775 | $ 35,250 | |||||||||||
| $ 1,034 | $ (3,525) | ||||||||||||
| Price Variance | Efficiency Variance | ||||||||||||
| Direct Material Cedar | 47,000 | 3 | $ 1.65 | 47,000 | 3 | $ 1.50 | 47,000 | 3 | $ 1.50 | ||||
| $ 248,160 | $ 225,600 | $ 211,500 | |||||||||||
| $ (22,560) | $ (14,100) | ||||||||||||
| Price Variance | Efficiency Variance | ||||||||||||
| Actual Units | Actual Hours per Unit | Actual Cost per Hour | Actual Units | Actual Hours per Unit | Budgeted Cost per Hour | Actual Units | Budgeted Hours per Unit | Budgeted Cost per Hour | |||||
| Direct Manufacturing Labor | 47,000 | $ 0.60 | $ 11.80 | 47,000 | $ 0.60 | $ 12.00 | 47,000 | 0.5 | $ 12.00 | ||||
| $ 332,760 | $ 338,400 | $ 282,000 | |||||||||||
| $ 5,640 | $ (56,400) | ||||||||||||
| Price Variance | Efficiency Variance | ||||||||||||
| Actual Costs | Actual Input Qty. × Budgeted Price | Flexible Budget (Budgeted Input Qty. Allowed for Actual Output × Budgeted Price) | |||||||||||
| Actual Costs | Actual Units | Actual Feet per Unit | Budgeted Cost per Foot | Actual Units | Budgeted Feet per Unit | Budgeted Cost per Foot | |||||||
| Variable manufacturing overhead | $ 2,585 | 47,000 | 0.25 | $ 0.20 | 47,000 | 0.3 | $ 0.20 | ||||||
| $ 2,585 | $ 2,350 | $ 2,820 | |||||||||||
| $ (235) | $ 470 | ||||||||||||
| Spending Variance | Efficiency Variance | ||||||||||||
