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