Melco Management Accounting Research Discussion Paper Series
Research Paper Accounting
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Research Paper #1
Chapter 1 - Introduction to Managerial AccountingS1-1
Categorize each of the following activities as to which management responsiplanning, irecting, or controlling! Some activities may" fulll more than one!
a! anagement conucts variance analysis by comparing buget to actual!
b! anagement uses information on prouct costs to etermine sales prices:
c! anagement ecies to increase sales growth by 1%& ne't year! Planning
! (o lower prouct costs, management moves prouction to e'ico! Controll
e! anagement reviews hourly sales reports to etermine the level of sta)n
to service customers! *oth Controlling an $irecting
Chapter 2 - Building Blocks of Managerial AccountingE2_33B
Requireent 1!$ $+ +
irplane seats . /0%!%%
. 1%!%%
achine lubricant . /%!%%
2actory 3anitor wages . 1%!%%
. 01%!%%
plant utilities
. 4%!%%
5et 6ngines . 1,%%%!%%
"#"A$ . 1,/0%!%% . 0%!%% . /%!%% . /%%!%%
Requirement 2-6
Total inventoriable product costs: $2160
Total prime costs: $1950 Total period costs: $470
Total conversion costs: $900 Total manufacturing overhead
prouction supervisorsalaries
$epreciation on2or7lifts
ssembly wor7erwages
Property ta' on corp
mar7etingo)ces
Cost of 8arrantyrepairs
achine operatorshealth insurance
$epreciation on amino)ces
Cost of $esigning new
plant layout
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9anessa Pacheco
bility it fullls:
ontrolling
$irecting
ing
neee
(;6R ; P6R$
. %!%%
. 1
. 1/%!%%
. /1
. =%!%%
. 1=%!%%
. /1%!%% . >=%!%%
costs: $430
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Calculation of %irect Materials &sed
*eginning Raw aterials nventory
Plus: Purchases of irect materials
aterials available for use
+ess: 6ning Raw aterial nventory
$irect materials use
'chedule of Cost of (oods Manufactured
*eginning 8or7 in Process nventory
Plus: anufacturing costs incurre
$irect materials use ?from previous scheule@
$irect labor
anufacturing overhea
(otal manufacturing costs to account for
+ess: 6ning 8or7 in Process nventory
Cost of goos manufacture
Calculation of Cost of (oods 'old
*eginning 2inishe Aoos nventory
Plus: Cost of goos manufacture ?from previous scheule@
Cost of goos available for sale
+ess: 6ning 2inishe Aoos nventory
Cost of goos sol
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. /1,%%%
. =%,%%%
. 1,%%%
. B%,%%%
. 01,%%%
. >1,%%%
. 01,%%%
. 4=,%%%
. 04,
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E2-3)BSti7er Company ncome Statement
2or Current ear
Sales revenue ?B,
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0@
2R6CS(6$ 2E6$ CS( . %!1%
=@
(;6 96RA6 PR$FC( CS( $6CR6S6S S PR$FC(G GCR6S6SS *6GA *RH6G $8G * R6 G$ R6 FG(S 8;6G PR$FC(
(;S GCR6S6S PR$FC(9(
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*6CFS6 (;6 2E6$ CS( GCR6S6S
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E3-3)B
Preetermine manufacturing overhea rate .
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(otal irect labor
anufacturing verhea llocate:
.4 per $irect +abor ;our
(otal 3ob cost
ReI! /
Sales price per unit
.==!4=<
Aross proDt per unit
.
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(otal
. 1,!%%
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. />1!%%
. 104!%%
. 1,4B!%%
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6B->1*
Direct materials used
Indirect materials used
Direct labor
Indirect labo
Cost of goods manufactured
Cost of goods sold
Actual manufacturing overhead
Allocated manufacturing overhead
Predetermined manufacturingoverhead rate, as a % of direct
labor cost; $42,000 $ !4,!00""""""""""""
#anufacturing overhead is$!4,!00 actual $42,000 allocated& ' $ (2,!00)nderallocated
6>-B0*
1!anufacturing plants ten to be organize with self-containe pro/!aintain greater Iuantities of raw materialsL wor7 in process, an
B! Setup times are longer! (R$(G+
>! ;igh Iuality is stresse in every aspect of prouction! +6G
0! 6mphasis is place on shortening manufacturing times! (R$(
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=! anufacturing plants ten to group in line machinery together in
4! Setup times are shorter +6G
! Prouce in larger batches! (R$(G+
1%! Strive to maintain low inventory levels! +6G
11! Cycle time tens to be longer! (R$(G+1/! Nuality tens to be Oinspect-in rather than Obuil-in - (R$(
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. /4,
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iMerent parts of the factory! (R$(G+
G+
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E*-2,BGR(;
Computation of C
C(9( ((+ 6S((6$ CS(
(6R+S ;G$+GA . 1/,%%%
achine setup . B,>%%
nsertion . >4,%%%
2inishing . 4%,%%%
5*
C(9( C(F+ NFG((
(6R+S ;G$+GA1
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E*-3)B
Prevention costs:
(raining employees in (N
(raining suppliers in (N
entifying preferre suppliers who commit to on-time elivery
ppraisal costs:
Strength-testing one item from each batch of panels
voi inspection of raw materials
nternal failure costs:
voi rewor7 an spoilage
6'ternal failure costs:
voi lost proDts from lost sales ue to isappointe customer
voi warranty costs
"he should adopt the ne. progra! It .ill sa/e the 01
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S(R
st llocation Rates
B%%% PR(S . >!%%
1% S6(FPS . B>%!%%
B%%% PR(S . 10!%%
/%%% ;FRS . >%!%%
/%CS( ++C(G R(6 ; SSAG6$
. >!%% . 0%%
. B>%!%% . 04%
. 10!%% . /,>%%
. >%!%% . >,%%%
. =,04%!%%
1%CS( ++C(G R(6 ; SSAG6$
. >!%% . /,%%%
. B>%!%% . 1,B0%
. 10!%% . 4,%%%
. >%!%% . 1/,>%%
. /B,=0%!%%
6S((6$ NFG(( 2 CS(++C(G *S6
C(9( CS( ++C(GR(6
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-. />,%%%
-. BB,%%%
of perfect Iuality materials -.
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6>-/*
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Alison*s A++le Pieslo- of Ph.sical )nits and Com+utation of /uiv
)nits to account for1
eginning -or3 in +rocess, une ( 20(,000"00
5tarted in +roduction during une (,020,000"00
6otal +h.sical units to account for (,22(,000"00
)nits accounted for1
(,070,000"00
/nding -or3 in +rocess, une 80 (!(,000"00
6otal +h.sical units accounted for (,22(,000"00
6otal /uivalent )nits
lo- of Ph.sicalunits
Com+leted and transferred out during une
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lent )nits
/uivalent )nitsDirect #aterials Conversion Costs
(,070,000"00 (,070,000"00
((8,2!0"00 (8!,900"00
(,(:8,2!0"00 (,20!,900"00
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/!4(
$(6 CCFG(S G$ 6EP+G(GS $6*(
a! Raw aterials nventory ,%%
ccounts Payable
b! 8or7 in Process nventoryQssembly >,>%%
Raw aterials nventory
8or7 in Process nventoryQ2inishing /4%%
Raw aterials nventory
c! 8or7 in Process nventory - ssembly 1%B%% Cash
! anufacturing verhea 1%=%%
Property (a'es PayableQPlant
Ftilities Payable
Prepai nsuranceQPlant
ccumulate $epreciationQPlant
e! 8or7 in Process nventoryQssembly =,=%%
8ages Payable anufacturing verhea
f! 8or7 in Process nventoryQ2inishing 1%B%%
8ages Payable
anufacturing verhea
g! 8or7 in Process nventoryQ2inishing 1%/%%
8or7 in Process nventoryQssembly
h! 2inishe Aoos nventory 1
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CR6$(
,%%
>,>%%
/4%%
1%B%%
1%%
BB%%
B%%
0%%%
1%/%%
1
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e5-45b
Assign Costs
a& Com+leted and transferred out1 /uivalent units com+leted and transferred out #ulti+l. b.1 Cost +er euivalent unit
Cost assigned to units com+leted and transferred out
b& /nding -or3 in +rocess inventor.1 /uivalent units in ending
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Direct #aterials Conversion Costs 6otal
77000 77000 $ 2":= $ 2"80
$ (78,:00 $ 2(8,800 $ 8:7,(00
!(00 (700 $ 2":= $ 2"80$ (4,!70"92 $ 8,90:":7 $ (:,4:0
$ 40!,!:0
alDebit Credit
$ 8:7,(00$ 8:7,(00