Managerial Accounting Essay Example | Topics and Well Written Essays - 1000 words - 1

Managerial Accounting - Essay Example This money would be classified as cash until the salaries are actually paid. At that point, salaries would come upon a specific salary section on the balance sheet or may even be considered a business expense and taken of the balance sheet altogether. 2) a) The predetermined overhead rate for the year is $5 per direct labor hour. (Manufacturing Overhead/ Direct Labor-hours) ($80,000/ 16,000) = $5 per direct labor hour. b) The amount of overhead charged to jobs during the year is $75,000. (Actual direct labor-hours * Predetermined overhead rate) (15,000 * $5) = $75,000 c) The amount of underapplied or overapplied overhead for the year is $3,000 underapplied. (Actual overhead costs – Applied overhead costs) ($78,000 - $75,000) = $3,000 d) The unit cost that would appear on the job cost sheet for Job #315 is $59. (Direct Materials + Direct Labor + Overhead applied)/ 100. ($1,500 + $2,400 + $2,000) = $5,900. $5,900/ 100 = $59. 3) $20,000 + $201,000 = $221,000. $221,000 - $35,000 = $186,000 4) a) TVC = $118,008/ 2,400 = $49.17. $49.17 * 2,500 = $122,925 b) TFC = $9,000/ 2,400 = $3.75. $3.75 * 2,500 = $9,375 c) TC = $122,925 + $9,375 = $132,300 d) AVC = $122,925/ 2,500 = $49.17 e) AFC = $9,375/ 2,500 = $3.75 f) ATC = $49.17 + $3.75 = $52.92 5) Sales = Variable expenses + Fixed expenses + Desired Profit $170Q = $39.10 + $641,410 + $65,450 $130.90 = $706,860 Q = $706,860/ $130.90 per unit Q = 5,400 units 6) The absorption costing net operating income for last year was $66,600. Inventory increased by 900 units. Fixed manufacturing overhead cost per unit was $3. 900 units * $3 = $2,700. Absorption cost equals variable costing net operating income times the total inventory cost. $63,000 + $2,700 = $66,600. 7) Activity-based costing is used to identify activities in an organization and assigns costs to an activity based on the actual consumption of an activity. The benefit to this type of costing model is that each activity is separate from the other and it is easie r to see which areas are performing well and which areas are performing not so well. The five levels of an activity-based cost system typically are unit-level activities, batch-level activities, product-level activities, organization-sustaining activities, and customer-level activities. The first three levels of activities are all different stages of production. Each stage of production is broken down so that it can be seen what can be cut back on. The fourth and fifth activities have more to do with management of the organization. Organization-sustaining activities are those that affect the employees of an organization, while customer-level activities deal with how customers perceive an organization to