# Project #60511 - ACCOUNTING 202 MODULE 2 ASSIGNMENT3

*****All must be answered in Excel******

Problem 16A-17B: Computing equivalent units and assigning costs to completed units and ending work in process; no beginning inventory or cost transferred in (30-45min)

Sue Electronics makes CD players in three processes: assembly, programming, and packaging. Direct materials are added at the beginning of the assembly process. Conversion costs are incurred evenly throughout the process. The Assembly Department had no work in process on March 31. In mid-April, Sue Electronics started production on 100,000 CD players. Of this number, 76,100 CD players were assembled during April and transferred out to the Programming Department. The April 30 work in process in the Assembly Department was 40% of the way through the assembly process. Direct materials costing \$375,720 were placed in production in Assembly during April, and direct labor of \$375,720 were placed in production in Assembly during April, and direct labor of \$157,700 and manufacturing overhead of \$98,505 were assigned to that department.

Requirements

1. Draw a time for the Assembly Department.

2. Use the time line to help you compute the number of equivalent units and the cost per equivalent unit in the Assembly Department for April.

3. Assign total total costs in the Assembly Department to (a) units completed and transferred to Programming during April and (b) units still in process at April 30.

4. Prepare a T-account for Work in Process Inventory--- Assembly to show its activity during April, including the April 30 balance.

Problem 18-24A: Break even sales; sales to earn a target operating income; contribution margin income statement (30-45 min)

British Productions performs London shows. The average show sells 1,200 tickets at \$50 per ticket. There are 120 shows a year. The average show has a cast of 70, each earning an average of \$300 per show. The cast is paid after each show. The other variable cost is a program-printing cost of \$7 per guest. Annual fixed costs total \$459,000.

Requirements

1. Compute revenue and variable costs for each show.

2. Use the income statement equation approach to compute the number of shows British Productions must perform each year to break even

3. Use the contribution margin approach to compute the number of shows needed each year to earn a profit of \$3,825,000. Is this profit goal realistic give your reasoning.

4. Prepare British Productions’ contribution margin income statement for 120 shows for 2011. Report only two categories of costs: variable and fixed.

Problem 18-26A: Computing breakeven sales and sales needed to earn a target operating income; graphing CVP relationships; sensitivity analysis (30-45).

Big Time Investor Group is opening an office in Dallas. Fixed monthly costs are office rent (\$8,200), depreciation on office furniture (\$1,500), utilities (\$2,300), special telephone lines (\$1,300), a connection with an online brokerage service (\$2,900), and the salary of a financial planner (\$11,800). Variable costs include payments to the financial planner (9% of revenue), advertising (12% of revenue), supplies and postage (4% of revenue), and usage fees for the telephone lines and computerized brokerage service (5% of revenue).

Requirements

1. Use the contribution margin ratio CVP formula to compute Big Time’s breakeven revenue in dollars. If the average trade leads to \$800 in revenue for Big Time, how many trades must be made to break even?

2. Use the income statement equation approach to compute the dollar revenues needed to earn a target monthly operating income of \$11,200.

3. Graph Big Time’s CVP relationships. Assume that an average trade leads to \$800 in revenue for Big Time. Show the breakeven point, the sales revenue line, the fixed cost line, the total cost line, the operating loss area, the operating income area, and the sales in units (trades) and dollars when monthly operating income of \$11,200 is earned. The graph should range from 0 to 80 units.

4. Suppose that the average revenue Big Time earns increase to \$900 per trade. Compute the new breakeven point in trades. How does this affect the breakeven point?

DUE BY MARCH 3, 2015

 Subject Business Due By (Pacific Time) 03/03/2015 12:00 am
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