Transcribed Text
1
Exercise 1: Balance sheet and income statement
The following in formation is given:
Direct material purchase
123'000
Ending inventory finished goods
13'000
Direct manufacturing labor cost
12'000
Indirect manufacturing labor cost
15'000
Salary sales
50'000
Operating profit
-6'000 (Loss)
Manufacturing cost incurred during
163'000
this period
Sales and administration cost
26'000
Beginning inventory finished
10'000
goods
Ending inventory work in process
30'000
Beginning inventory direct
11'000
material
Ending inventory direct material
17'000
Beginning inventory work in
29'000
process
1.4
What is the gross profit?
A) 70'000
B) 55'000
C) 84'000
D) 77'000
E) None of the answers A)-D) is correct.
- 6000 + 50'000 + 26'000 = 70'000
Part ,,Management Accounting"
4
Exercise 4: Activity-based Costing
G.R.U Laboratories perform x-ray, ultrasound, CT scan and MRI
examinations. G.R.U. has been using a single, facility-wide overhead
allocation rate. They wish to obtain more disaggregated cost information.
Following information from the budget is known:
X-rays
Ultrasound
CT
MRI
Total
Techn.
64'000
104'000
119'000
106'000
393'000
laboratory
Depreciation
136'800
231'000
400'200
792'000
l'560'000
Materials
22'400
16'500
23'900
30'800
93'600
Administration
19'000
Maintenance
260'000
Sanitation
267'900
Utilities
121'200
CHF
CHF
CHF
CHF
CHF
223'200
351'500
543'100
928'800
2'714'700
No. of
2'555
4'760
3'290
2'695
procedures
Minutes to clean
10 Min.
10 Min.
20 Min.
40 Min.
after each
procedure
Minutes for each
5 Min.
20 Min.
15 Min.
40 Min.
procedure
The proposed allocation bases for overhead costs are after the
implementation of activity-based costing as follows:
Administration
Number of procedures
Maintenance
Capital cost of the equipment (use depreciation)
Sanitation
Total cleaning minutes (total of 246'750 minutes)
Utilities
Total procedure minutes (total of 265'125 minutes)
4.1
Calculate the budgeted costs per x-ray procedure, if the total
unallocated indirect costs are to be distributed among all procedures
and total direct costs of the technical laboratory are used as the
allocation base.
A) 93.21 CHF
B) 230.23 CHF
C) 804.44 CHF
D) 129.94 CHF
E) None of the answers A) - D) is correct.
64'000 + 136'800 + 22'400 + (668'100/393'000) * 64'000 =
64'000 + 136'800 + 22'400 + 1.7 * 64'000 =
64'000 + 136'800 + 22'400 + 108'800 = 332'000
332'000 / 2'555 = 129.9413
4.2
Calculate the total budgeted costs for MRI procedures, if the total
unallocated indirect costs are to be distributed among all procedures
and total direct costs of the technical laboratory are used as the
allocation base.
A) l'109'000 CHF
B) 1'142'000 CHF
C) l'355'700 CHF
D) 1'014'900 CHF
E) None of the answers A) - D) is correct.
106'000 + 792'000 + 30'800 + (668'100/393*000) * 106'000 =
106'000 + 792'000 + 30'800 + 1.7 * 106'000 =
106'000 + 792'000 + 30'800 + 180'200 = 1'109'000
4.3
Calculate the activity rate for "sanitation" after the implementation of
activity-based costing.
A) 1.6534 CHF
B) 1.2866 CHF
C) 1.0857 CHF
D) 1.5121 CHF
E) None of the answers A) - D) is correct.
267'900 / (2'555*10 + 4'760 * 10 + 3'290*20 + 2'695*40) =
267'900 / (25'550 + 47'600 + 65'800 + 107'800) =
267'000 / 246'750 = 1.0857
4.4
Calculate the activity rate for "maintenance".
A) 0.5973 CHF
B) 0.6224 CHF
C) 0.6455 CHF
D) 0.7236 CHF
E) None of the answers A) - D) is correct.
260'000 / l'560'000 = 0.1667
4.5
Calculate the total budgeted costs for CT procedures, if G.R.U.
allocated overhead costs using activity-based costing.
A) 724-913 CHF
B) 796'593 CHF
C) 708'510 CHF
D) 743'223 CHF
E) None of the answers A) - D) is correct.
Cleaning: 3'290*20 = 65'800
Procedures: 3'290*15 = 49'350
Administration: 19'000/(2'555+4'760+3'290+2'695)=19'000/13'300 = 1.4286
Maintenance: 260'000 / 1'560'000 = 0.1667
Sanitation: 267'900/246'750 = 1.0857 =
Utilities: 121'200 /265'125 =0.4571 =
119'000 + 400'200 + 23'900 + (1.4286*3'290) + (0.1667*400'200) +
(1.0857*65'800) + (0.4571*49'350) =
119'000 + 400'200 + 23'900 + 4'700 +66'713 + 71'439 + 22'558 = 708'510
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What is the gross profit?
Answer:
The key here is knowing the structure of income statement and the definitions of each heading.
In summary the income statement is structured in the following manner:
Sales Revenue
- Cost of Goods Sold, (including purchases, manufacturing costs)
= Gross Profit
- General & Administrative Expenses (this includes Sales and administration, Salaries other than manufacturing, in this case Sales)
= Operating Profit
…
Hence, the solution offered worked backward, starting from operating profit -6,000 adding back the General and Administrative expenses (there were only two offered) + 26,000 + 50,000 = 70,000...