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Question: The Excel worksheet form that appears below

The Excel worksheet form that appears below is to be used to recreate portions of Review Problem 1 relating to Dexter Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.
The Excel worksheet form that appears below is to be used to recreate portions of Review Problem 1 relating to Dexter Corporation. Download the workbook containing this form from Connect, where  you will also receive instructions about how to use this worksheet form.


You should proceed to the requirements below only after completing your worksheet. The
LIFO inventory flow assumption is used throughout this problem.
Required:
1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isn’t, check cell C41. The formula in this cell should be =IF(C26

You should proceed to the requirements below only after completing your worksheet. The LIFO inventory flow assumption is used throughout this problem. Required: 1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isn’t, check cell C41. The formula in this cell should be =IF(C26Operating Income under both absorption costing and variable costing should be $(34,000) for Year 2. That is, the loss in Year 2 is $34,000 under both methods. If you do not get these answers, find the errors in your worksheet and correct them. Why is the absorption costing net operating income now equal to the variable costing net operating income in Year 2? 2. Enter the following data from a different company into your worksheet:
The Excel worksheet form that appears below is to be used to recreate portions of Review Problem 1 relating to Dexter Corporation. Download the workbook containing this form from Connect, where  you will also receive instructions about how to use this worksheet form.


You should proceed to the requirements below only after completing your worksheet. The
LIFO inventory flow assumption is used throughout this problem.
Required:
1. Check your worksheet by changing the units sold in the Data to 6,000 for Year 2. The cost of goods sold under absorption costing for Year 2 should now be $240,000. If it isn’t, check cell C41. The formula in this cell should be =IF(C26

Is the net operating income under variable costing different in Year 1 and Year 2? Why or why not? Explain the relation between the net operating income under absorption costing and variable costing in Year 1. Explain the relation between the net operating income under absorption costing and variable costing in Year 2. 3. At the end of Year 1, the company’s board of directors set a target for Year 2 of net operating income of $500,000 under absorption costing. If this target is met, a hefty bonus would be paid to the CEO of the company. Keeping everything else the same from part (2) above, change the units produced in Year 2 to 50,000 units. Would this change result in a bonus being paid to the CEO? Do you think this change would be in the best interests of the company? What is likely to happen in Year 3 to the absorption costing net operating income if sales remain constant at 12,000 units per year?





Transcribed Image Text:

1 Chapter Applying Excel 3 Data 4 Seling prce per unit 5 Marufacturing costs 6 Variable per unit produced Drect materials Direct laber 9 Varable marutacturing oerhead Fined mantactuing avertead per year 11 Seling and adninistrative esperaes 12 Varable per unt seld 13 Fined per year $11 53 5120,000 54 S70,000 15 18 Unita in begiming inertory 17 Unts preduced during the yew 13 Unts sold during the year Year 1 Year 2 10.000 B,000 6.000 8.000 20 Enter a formue into each of the cels marked wth a ? beloe 21 Rerviem Problem 1: Contresting Variable and Abserption Costing 23 Compute he Ending kreentory 24 25 Unts in begining inentory 26 Units produced duing the year 27 Unts sold drng the year 28 Unts in endng inventary Year 1 Year 2 23 30 Compute he Absorption Cosring Unit Product Cost 31 22 Direct materials 33 Direct labor 34 Variable manufacturing ovehead 35 Paed manutacturing evertead Year 1 Yaar 2 35 Absorption cesting unt product cost 37 38 Construct the Abopon Costing ncome Statement 39 40 Sales 41 Cost of geeds seld 42 Gros margin 43 Seling and admnistrative epernes 44 Net aperating inceme Year 1 Year 2 46 Compute he Varlable Costing Uinit Product Cost Year 1 Yaar 2 41 Direct materials 49 Drect lebor s0 Variable manufacturing ovetead 51 Varisble costing uit product cont 52 33 Conatruct the Variable Coating ncome Statement 54 55 Sales 56 Variable pens 57 Varable cost ef goods sold 53 Variable seling and adinitatie exper 59 Contrbution magin Fied enpenses 41 Fiaed manuactuning averhead 62 Fied selng and adminstitive epenses 43 Net apeting income Year 1 Year 2 64 .Chanter form edn Oeoterom Chapter Data Selling price per unit. $75 Manufacturing costs: Variable per unit produced:. Direct materials $12 Direct labor..... Variable manufacturing overhead Fixed manufacturing overhead per year... Selling and administrative expenses: Variable per unit sold . $5 $7 $150,000 $1 $60,000 Fixed per year .... Year 1 Year 2 Units in beginning inventory Units produced during the year Units sold during the year .... 15,000 10,000 12,000 12,000 %24



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> Refer to the data for Lavage Rapide in Exercise 9–10. Also assume that the company’s actual operating results for August are as follows: Lavage Rapide Income Statement For the Month Ended August 31 Actual cars washed……………………………………………………………………..8,800 Rev

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> Refer to the data for The Terminator Inc. in Exercise 9–6. A management intern has suggested that the budgeted revenues and costs should be adjusted for the actual level of activity in April before they are compared to the actual revenu

> Flight Café prepares in-flight meals for airlines in its kitchen located next to a local airport. The company’s planning budget for July appears below: Flight Café Planning Budget For the Month Ended July 31 Budgeted meals (q) ..........................

> Wolfpack Company is a merchandising company that is preparing a budget for the month of July. It has provided the following information: Wolfpack Company Balance Sheet June 30 Assets Cash..................................................................

> Wheeling Company is a merchandiser that provided a balance sheet as of September 30 as shown below: Wheeling Company Balance Sheet September 30 Assets Cash.......................................................................................$ 59,000 Ac

> Hartwell Company manufactures one product, it does not maintain any beginning or ending inventories, and its uses a standard cost system. Its predetermined overhead rate includes $1,760,000 of fixed manufacturing overhead in the numerator and 44,000 dire

> The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year: In addition, 6,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the be

> Refer to the data for Beech Corporation in Exercise 2. The company is considering making the following changes to the assumptions underlying its master budget: 1. Each month’s credit sales are collected 45% in the month of sale and 55% in the month follo

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> SecuriCorp operates a fleet of armored cars that make scheduled pickups and deliveries in the Los Angeles area. The company is implementing an activity-based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service,

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> Refer to the data in Exercise 8. Assume that Minneapolis’ sales by major market are: The company would like to initiate an intensive advertising campaign in one of the two market segments during the next month. The campaign would cost

> Raner, Harris & Chan is a consulting firm that specializes in information systems for medical and dental clinics. The firm has two offices—one in Chicago and one in Minneapolis. The firm classifies the direct costs of consulting job

> Athens Company is conducting a time-driven activity-based costing study in its Engineering Department. To aid the study, the company provided the following data regarding its Engineering Department and the customers served by the department: Required:

> Refer to the data in Exercise 6 for Chuck Wagon Grills. Assume in this exercise that the company uses absorption costing. Data from Exercise 6: Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Dir

> Sierra Company incurs the following costs to produce and sell its only product. Variable costs per unit: Direct materials ................................................................$9 Direct labor ...................................................

> Crossfire Company segments its business into two regions—East and West. The company prepared a contribution format segmented income statement as shown below: Required: 1. Compute the companywide break-even point in dollar sales. 2. Co

> Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable costs per unit: Manufacturing: Direct materials…………………………. .............................$25 Direct labo

> Parker Products, Inc. is a manufacturer whose absorption costing income statement reported sales of $123 million and a net operating loss of $18 million. According to a CVP analysis prepared for management, the company’s break-even point is $115 million

> Shannon Company segments its income statement into its North and South Divisions. The company’s overall sales, contribution margin ratio, and net operating income are $500,000, 46%, and $10,000, respectively. The North Division’s contribution margin and

> Piedmont Company segments its business into two regions—North and South. The company prepared the contribution format segmented income statement as shown below: Required: 1. Compute the companywide break-even point in dollar sales. 2.

> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A

> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A

> Matheson Electronics has just developed a new electronic device it believes will have broad market appeal. The company has performed marketing and cost studies that revealed the following information: a. New equipment would have to be acquired to produce

> Bracey Company manufactures and sells one product. The following information pertains to the company’s first year of operations: Variable cost per unit: Direct materials ..................................................................$19 Fixed costs p

> Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system: The company’s manufacturing overhead cost is applied to production on the basis of direct labor hours. A

> Tom Emory and Jim Morris strolled back to their plant from the administrative offices of Ferguson & Son Manufacturing Company. Tom is manager of the machine shop in the company’s factory; Jim is manager of the equipment maintenance department. The men ha

> O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials ...................................................

> O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials ...................................................

> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t

> The Excel worksheet form that appears below is to be used to recreate Example E and Exhibit 13–8. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form. Y

> The Excel worksheet form that appears below is to be used to recreate the example in the text related to Santa Maria Wool Cooperative. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this

> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to the Magnetic Imaging Division of Medical Diagnostics, Inc.Download the workbook containing this form from Connect, where you will also receive instruct

> The Excel worksheet form that appears below is to be used to recreate the main example in the text pertaining to Colonial Pewter Company. Download the workbook containing this form from Connect, where you will also receive instructions about how to use t

> The Excel worksheet form that appears below is to be used to recreate the Review Problem relating to Harrald’s Fish House. Download the workbook containing this form from Connect, where you will also receive instructions about how to us

> Ogilvy Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable cost per unit: Direct materials ............................................................$16 Fixe

> The Excel worksheet form that appears below is to be used to recreate the Review Problem related to Mynor Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet form.

> The Excel worksheet form that appears below is to be used to recreate the Review Problem pertaining to Ferris Corporation. Download the workbook containing this form from Connect, where you will also receive instructions about how to use this worksheet f

> Refer to the financial statements for Rusco Company in Problem 14–13. Because the Cash account decreased so dramatically during this year, the company’s executive committee is anxious to see how the income statement wo

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> Refer to the data for Pavolik Company in Exercise 14–4. Data given in Exercise 14–4: The following changes took place last year in Pavolik Company’s balance sheet accounts: Long-term investments th

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> Refer to the data for Carmono Company in Exercise 14–6. Data.given.in.Exercise.14-6: Comparative.financial.statement.data.for.Carmono.Company.follow: For this year the company reported net income as follows: Sales…

> Kelly Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations: Variable cost per unit: Direct materials .....................................................................$1

> Refer to the data for Pavolik Company in Exercise 14–4. Data given in Exercise 14–4: The following changes took place last year in Pavolik Company’s balance sheet accounts: Long-term investments tha

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> Lander Company has an opportunity to pursue a capital budgeting project with a five-year time horizon. After careful study, Lander estimated the following costs and revenues for the project: Cost of equipment needed ……………………………………………….. $250,000 Working

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> Gaston Company is considering a capital budgeting project that would require a $2,000,000 investment in equipment with a useful life of five years and no salvage value. The company’s tax rate is 30% and its after-tax cost of capital is

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> Messina Company wants to use absorption cost-plus pricing to establish the selling price for a new product. The company plans to invest $650,000 in operating assets that provide the capacity to make 30,000 units. Its required return on investment (ROI) i

> National Restaurant Supply, Inc., sells restaurant equipment and supplies throughout most of the United States. Management is considering adding a machine that makes sorbet to its line of ice cream making machines. Management will negotiate the purchase

> Currington Company wants to use absorption cost-plus pricing to set the selling price on a newly remodeled product. The company plans to invest $150,000 in operating assets to produce and sell 12,000 units. Its required return on investment (ROI) in its

> Weller Industries is a decentralized organization with six divisions. The company’s Electrical Division produces a variety of electrical items, including an X52 electrical fitting. The Electrical Division (which is operating at capacity) sells this fitti

> Alpha and Beta are divisions within the same company. The managers of both divisions are evaluated based on their own division’s return on investment (ROI). Assume the following information relative to the two divisions: Managers are f

> Stavos Company’s Screen Division manufactures a standard screen for high-definition televisions (HDTVs). The cost per screen is: Variable cost per screen………â€&brvba

> Norwall Company’s budgeted variable manufacturing overhead cost is $3.00 per machine-hour and its budgeted fixed manufacturing overhead is $300,000 per month. The following information is available for a recent month: a. The denominator activity of 60,00

> Hrubec Products, Inc., operates a Pulp Division that manufactures wood pulp for use in the production of various paper goods. Revenue and costs associated with a ton of pulp follow: Hrubec Products has just acquired a small company that manufactures pap

> In each of the cases below, assume Division X has a product that can be sold either to outside customers or to Division Y of the same company for use in its production process. The managers of the divisions are evaluated based on their divisional profits

> Division A manufactures electronic circuit boards. The boards can be sold either to Division B of the same company or to outside customers. Last year, the following activity occurred in Division A: Selling price per circuit board …………………………………………………..$1

> What does a manufacturing cycle efficiency (MCE) of less than 1 mean? How would you interpret an MCE of 0.40?

> Why is it a good idea to create a “Budgeting Assumptions” tab when creating a master budget in Microsoft Excel?

> What are the two stages of allocation in activity-based costing?

> If the units produced equals the units sold, which method would you expect to show the higher net operating income, variable costing or absorption costing? Why?

> Why aren’t transactions involving accounts payable considered to be financing activities?

> Should a company allocate its common fixed costs to business segments when computing the break-even point for those segments? Why?

> What general guidelines can you provide for interpreting the statement of cash flows?

> Sunk costs are easy to spot—they’re the fixed costs associated with a decision.” Do you agree? Explain.

> Stahl Company is conducting a time-driven activity-based costing study in its Shipping Department. To aid the study, the company provided the following data regarding its Shipping Department and the customers served by the department: Required: 1. Usin

> Refer to the data in Exercises 7A–1 and 7A–2. Now assume that Saratoga Company would like to answer the following “what if” question using its time-driven activity-based costing syst

> Sako Company’s Audio Division produces a speaker that is used by manufacturers of various audio products. Sales and cost data on the speaker follow: Selling price per unit on the intermediate market ……………………………….$60 Variable costs per unit……………………………………

> Refer to the data in Exercise 7A–1. In addition, assume that Saratoga Company provided the following activity data for all jobs produced during the year: Data given in Exercise 7A–1: Saratoga Company manufactures job

> Saratoga Company manufactures jobs to customer specifications. The company is conducting a time-driven activity-based costing study in its Purchasing Department to better understand how Purchasing Department labor costs are consumed by individual jobs. T

> Markus Company’s common stock sold for $2.75 per share at the end of this year. The company paid a common stock dividend of $0.55 per share this year. It also provided the following data excerpts from this year’s finan

> Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: During the year, Ravenna paid a $6,000 cash dividend and it sold a

> Cardinal Company is considering a five-year project that would require a $2,975,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 14%. The project would provide net operati

> Cane Company manufactures two products called Alpha and Beta that sell for $120 and $80, respectively. Each product uses only one type of raw material that costs $6 per pound. The company has the capacity to annually produce 100,000 units of each product

> Westerville Company reported the following results from last year’s operations: Sales .................................................................$1,000,000 Variable expenses ................................................300,000 Contribution marg

> Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows: The planning budget for March was based on producing and selling 25,000

3.99

See Answer