This document contains 6 practice problems for a Managerial Accounting II exam. Problem 1 involves preparing a sales budget for Rose Company. Problem 2 requires calculating variances for Mickey Corporation's actual and budgeted performance. Problem 3 deals with calculating variances for Andrew Corporation's overhead costs. Problem 4 requires preparing an income statement and analyzing a potential internal transfer between two divisions. Problem 5 is about calculating total cost of ownership and a supplier performance index for two suppliers. Problem 6 involves classifying various quality costs for Mathew Corporation.
This document contains 6 practice problems for a Managerial Accounting II exam. Problem 1 involves preparing a sales budget for Rose Company. Problem 2 requires calculating variances for Mickey Corporation's actual and budgeted performance. Problem 3 deals with calculating variances for Andrew Corporation's overhead costs. Problem 4 requires preparing an income statement and analyzing a potential internal transfer between two divisions. Problem 5 is about calculating total cost of ownership and a supplier performance index for two suppliers. Problem 6 involves classifying various quality costs for Mathew Corporation.
This document contains 6 practice problems for a Managerial Accounting II exam. Problem 1 involves preparing a sales budget for Rose Company. Problem 2 requires calculating variances for Mickey Corporation's actual and budgeted performance. Problem 3 deals with calculating variances for Andrew Corporation's overhead costs. Problem 4 requires preparing an income statement and analyzing a potential internal transfer between two divisions. Problem 5 is about calculating total cost of ownership and a supplier performance index for two suppliers. Problem 6 involves classifying various quality costs for Mathew Corporation.
Problem 1: Rose Company, a retailer, is preparing budgets for the year ending December 20x1. Budget sales are 100,000 units in the year, with 40% in 1st quarter, 20% in 2nd quarter, 30% in 3rd quarter and 10% in 4th quarter. All sales are on account with 40% collected in the quarter of sale and 60% collected in the following quarter for both year 20x0 and 20x1. Sales in the 4th quarter of 20x0 are 12,000 units. The unit selling price is estimated to be $20 for both year 20x0 and 20x1. Account payable at the end of the year 20x0 was $300,000. Required: Let’s prepare the sales budget. Problem 2: Mickey Corporation has the budgeted information each year as follows: - Unit sales 2,000 units - Selling price/unit $250 - Variable cost/unit $100 - Fixed cost/unit 120 Actual information for the year 20x1 has given as follows: - Unit sales 2,200 units - Selling price/unit 240 - Variable cost/unit 95 - Fixed cost/unit 110 Requried: 1) Prepare performance report combining activity variances and revenue and spending variances – contribution costing as the following sample: Revenue & Actual Flexible Activity Planning spending results budget variance budget variances Revenue Variable costs Contribution margin Fixed costs Operating income 2) Give a reason for revenue variance and a reason for spending variance. Problem 3: Andrew Corporation has the standard product cost card for a single product as follows: $/unit Direct material cost 2.8 kgs at $15 per kg 42 Direct labor cost 5 direct labor-hours at $2 per direct labor-hour 10 Variable production overhead 2 machine-hours at $1.5 per machine-hour 3 Fixed production overehead 2 machine-hours at $6 per machine-hour 12 Total standard cost per unit 67 In 20x0, the corporation produced 8,000 units and spent $115,000 on fixed production overhead with 39,000 actual direct labor-hours and 18,000 actual machine-hours worked. Its management accounting department determined the volume variance with $4,200 (Unfavorable). Required: 1. Determine the budget variance (of fixed production overhead) for the year. 2. Determine the denominator activity level used in setting the predetermine overhead rate for the year. Problem 4: Mathew Company has 2 divisions. Division X produced chips for laptops that can be sold to Division Y or to outside customers. The management acounting department collected information last year below: Division A - Capacity of chips produced 10,000 units - Number of chips sold to outside customer 7,000 units - Selling price/chip $100 - Variable cost/chip $40 - Total segment fixed cost $100,000 Division B - Number of labtops sold 4,000 units - Selling price/latop $500 - Variable cost of chip/laptop (chips bought by outside suppliers) $90 - Additional variable cost/laptop $60 - Total segment fixed cost $500,000 Total common fixed costs $220,000 Required: 1. Prepare a segmented contribution format income statement by Division and Total company. 2. Next year, Division B suggests to buy 4,000 chips from Division A. If managers are free to negotiate and make decisions on their own, will a transfer take place? If so, within what range will the transfer price fall? Explain. Problem 5: Henry Corporation manufactures and sells cars directly to customers, as well as to retail stores. To produce its cars, the company purchases chips from 2 suppliers - Jayson Co. and Tony Co., in order to less risky than relying on a single supplier that might sometimes experience delivery or quality problems. Most orders are placed with Jayson Co., as it charges only $50 per chip , whereas Tony charges $60 per chip. In the past year, Henry Corporation purchased a total of 2,000 units from Jayson Co. and 1,000 units from Tony Co. The accountant and the purchasing manager have just completed an analysis of the costs of dealing with each supplier during the year. Activity Total costs Activity driver Number of activities Jayson Tony - Rework product due to $54,000 Number of units reworked 200 40 poor-quality material - Downtime due to poor- $64,000 Number of downtime hours 80 20 quality material - Place purchase order $150,000 Number of orders 400 600 - Receiving an order $220,000 Number of deliveries 500 500 - Inspect material $30,000 Number of inspects 180 20 - Supplier audit $260,000 (Jayson) $40,000 (Tony) - Salary of Supplier $80,000 % time spent 70% 30% relationship manager - R&D $60,000 (Jayson) Required: Determine the total cost of ownership per unit and the supplier performance index for each of the two suppliers. Problem 6: Mathew Corporation has the information of quality cost for the year 20x0 as follows: Cost of quality $ % Quality engineering 70,000 Lost contribution margin from current and future sales 1,200,000 Laboratory testing 60,000 Downtime 100,000 Quality improvement plans 40,000 Servicing customer complaints 50,000 Finished goods inspection 80,000 Rework 400,000 Required: Preprare a cost of quality report (including classify the above quality costs as prevention, appraisal, internal failure and external failure.