Problem 1:
Napa Valley Wine Industries of Pacific Coast California in the U.S. creates a unique component to aid in the fermenting of wine in casks in the noted Napa Valley region. The components are sold for $4180 a barrel. Export duties are significant when sold outside the Continental U.S., adding $450 to each barrel exported. The component is sold in various parts of the world where wine making is viewed favorably by the local governments and they hope to compete against the traditional European producers.
The company uses the weighted-average method in its process costing system. The first stage in the production process is carried out in the Fermenting Department, which removes the foreign matter and blends them in the proper proportions in large vats. The POR based on MH is $16.42/MH. The Blending Department adds 80% direct materials at the start of the process. 20% are added at the end of the process. Subsequent to this processing, the product proceeds to a split-off off point and some of the component is processed into raw material for the health care industry.
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Barrels in Fermenting Dept.
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Percent Complete
Direct Labor
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Percent Complete
Mfg. Overhead
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Percent Complete
Direct Material
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Work in process 6/1/16
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20,000
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30%
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50%
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78%
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Work in process 6/30/16
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10,000
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60%
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30%
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85%
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Started into process in May
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386,000
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--
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--
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--
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Started into process in June
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440,000
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--
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--
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--
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The total costs to be accounted for during the month are $537,000. The total value of the ending WIP is $1,205, 200. The WIP costs were 4.93% higher than forecasted due to large internal failure costs with spoiled raw material products.
Prepare the complete schedule of the flow of units and equivalent units in the Mashing Department for June.
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Quantities
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Physical
Units
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Equivalent Units
Materials
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Equivalent Units
Direct Labor
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Equivalent Units
Mfg. Overhead
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| Units accounted for |
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WIP, 6/1/16
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Started in Production
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Total Units
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| Units accounted for |
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Finished
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WIP, 6/30/16
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Total Units
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Problem 2:
The Boulder Technology Center has its most recent contribution margin income statement shown on the worksheet. In each of the following scenarios, calculate the values indicated. (CALCULATE ALL CHANGES FROM THE BEGINNING SCENARO OF NUMBERS)
A) The breakeven point in dollars and units.
B) The sales volume decreases by 10% and the price increase by $4.00 per unit.
C) The selling price decreases $2.00 per unit, fixed expenses increase by $300,000, and the sales volume increases by 80%.
D) The selling price increases by 35%, variable expense increases by $21.50 per unit, fixed expenses decrease to $385,000, and the sales volume decreases by 15%.
E) The selling price increases by $7.00 per unit, variable cost increases by 14% per unit, fixed expenses increase by $363,940, and sales volume increases by 4.2%
Calculate the Degree of Operating Leverage for all five scenarios.
Problem 3
Complete the table in the Excel template for Dakota Agricultural Products Industries. The company sells three products: Nitrogen, Premium Seeds, and Fertilizer. Total product sales are $9,200,000. Calculate the sales for each product and the variable cost for each product. Finally, calculate the C/M for each product and the total. Determine the net income or (loss) for the overall company. Indicate the percent of total (two decimal places XX.XX%) for each product for the sales, variable costs and contribution margin.
Calculate the overall sales dollars necessary to break-even. Suggest using the C/M ratio (%) formula.
Problem 4:
The Pittsburgh Biotech Development, Inc. has been instrumental in the revival of economic activity in the Steel City. The company based in suburban Braddock develops, produces and markets two types of Biogen products: AD-882 and SP-664. The below data were gathered on activities last year.
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Financial & Operational Information
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AD-882
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SP-664
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Sales in units
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2,450
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4,800
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Selling price per unit
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$200
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$600
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Variable production costs per unit
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$40
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$116
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Traceable fixed production costs
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$284,500
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$118,500
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Variable selling expenses per unit
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$8
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$35
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Traceable fixed selling expenses
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$27,900
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$48,300
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Allocated division administrative expenses
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$17,900
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$230,500
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Prepare a segmented income statement in the contribution format for last year.
Problem 5:
You have been presented with four independent scenarios, i.e. they are not related in any manner. Complete the missing information in the scenarios.
Problem 6:
Golden Adult Beverages of Golden, CO utilizes the weighted-average method in its process costing system. The following data concern the operations of the company's first processing department for a recent month.
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Work in process, beginning:
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Units in process
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19,290
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Stage of completion with respect to materials
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72%
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Stage of completion with respect to conversion
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47%
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Costs in the beginning inventory:
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Materials cost
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$167,042
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Conversion cost
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$986,574
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Units activity during the month:
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Units started into production during the month
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1,738,710
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Units completed and transferred out
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1,747,000
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Costs added to production during the month:
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Materials cost
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$2,380,464
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Conversion cost
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$4,626,706
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Work in process, ending:
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Units in process
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11,000
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Stage of completion with respect to materials
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90%
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Stage of completion with respect to conversion
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65%
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Attachment:- excel template.xls