Need help in Cost Accounting Paper Analysis

part_1_draft_of_costs_.xlsx

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Part I - Product vs Period Cost

Milestone One, Part I
	Product Costs
	Product cost is toatl cost of production or manufacturing
	product. It is total of variable and fixed costs.
	Period Costs
	Period costs are fixed costs and does not change with
	change in volume of production.

Part I - Costs

Milestone One, Part II
Use Table I on the MDE Manufacturing Budget to complete your calculations.
				50,000	Totals		47000	Totals
				Units	Budget		Units	Actual
	Sales Price per Unit			$ 21.00	$ 1,050,000		$ 21.10	991,700
	Variable Costs
		Materials - Cedar		4.50	225,000		5.28	248,160
		Materials - Plastic		0.75	37,500		0.80	37,741
		Factory Worker Labor		6.00	300,000		7.08	332,760
		Materials - Indirect		0.06	3,000		0.06	2,585
		Shipping ($2.25/ea)		2.25	112,500		2.25	105,750
		Sales Commissions ($2/unit sold)		2.00	100,000		2.00	94,000
	Variable Cost per Unit			15.56			17.47
	Contribution Margin			5.44			3.63
	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/ CM per unit			33,272			Breakeven Point -
	Using Actual Amounts		(FC+10000)/CM per unit			52,450			Units at Current Sales Price
	+ 10,000 profit
	Using actual amounts		FC+10000			190,500			New Contribution Margin	4.05
	+ 10,000 profit								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	37741	2,491.00	Unfavorable	35250			37500
	DM-Cedar	248160	36,660.00	Unfavorable	211,500.00			225000
	Direct Manuf. Labor	332760	50,760.00	Unfavorable	282,000.00			300000
	Variable Manuf. Overhead	2585	235.00	Favorable	2,820.00			3000
	Total Variable Costs	621246	124,926.00	Unfavorable	496320			565500
	Fixed Manuf. Overhead	94500	500.00	Favorable	95000			95000
	Total Costs	715746	124,426.00	Unfavorable	591320			660500
	Gross Margin	$275,954	$119,726	Unfavorable	$395,680			$389,500

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	-22560	-14100
	Direct Materials - Plastic	1034	-3525
	Direct Labor	5640	-56400
		Spending Variance	Efficiency Variance
	Variable Manufacturing Overhead	-235	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
	1	0.75	DM-Plastic		1.1	47,000	51,700	37,741	$ 0.73
	3	4.5	DM-Cedar		3.2	47,000	150,400	248,160	$ 1.65
					Actual Labor Cost per Hour	Actual Labor Costs	Actual Labor Hours	Actual Units	Actual Labor Hours per Unit
		0.5	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	1.1	$ 0.73	47,000	1.1	$ 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	3.2	$ 1.65	47,000	3.2	$ 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	0.6	$ 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		47000	0.25	$ 0.20	47000	$ 0.30	$ 0.20
			$ 2,585			$ 2,350			$ 2,820
				$ (235)			$ 470
				Spending Variance			Efficiency Variance