Posted: April 20th, 2022

ACC 601 Managerial Accounting

ACC 601 Managerial Accounting
Group Case three (160 factors)
Directions:
1. As a gaggle, full the next actions in good kind. Use excel or
phrase solely. Present all supporting calculations to point out the way you arrived at
your numbers
2. Add solely the names of group members who participated within the completion
of this task.
three. Submit just one copy of your accomplished work by way of Moodle. Don’t ship it to
me by electronic mail.
four. Due: No later than the final day of Module 7. Please word that your professor
has the appropriate to vary the due date of this task.
Half A: Capital Budgeting Choices
Chee Firm has gathered the next information on a proposed funding undertaking:
Funding required in gear…………. $240,000
Annual money inflows……………………………. $50,000
Salvage worth …………………………………….. $zero
Lifetime of the funding …………………………. eight years
Required fee of return ………………………… 10%
Belongings can be depreciated utilizing straight
line depreciation methodology

Required:
Utilizing the online current worth and the interior fee of return strategies, is that this an excellent funding?
Half B: Grasp Funds
You will have simply been employed as a brand new administration trainee by Earrings Limitless, a distributor of
earrings to numerous stores positioned in purchasing malls throughout the nation. Previously, the
firm has completed little or no in the best way of budgeting and at sure instances of the 12 months has
skilled a scarcity of money. Since you’re nicely skilled in budgeting, you’ve gotten determined to
put together a grasp price range for the upcoming second quarter. To this finish, you’ve gotten labored with
accounting and different areas to collect the data assembled beneath.
The corporate sells many kinds of earrings, however all are offered for a similar value—$10 per pair. Precise
gross sales of earrings for the final three months and budgeted gross sales for the following six months observe (in pairs
of earrings):
January (precise) 20,000 June (price range) 50,000
February (precise) 26,000 July (price range) 30,000
March (precise) 40,000 August (price range) 28,000
April (price range) 65,000 September (price range) 25,000
Could (price range) 100,000
The focus of gross sales earlier than and through Could is because of Mom’s Day. Enough stock ought to
be readily available on the finish of every month to provide 40% of the earrings offered within the following month.
Suppliers are paid $four for a pair of earrings. One-half of a month’s purchases is paid for within the month
of buy; the opposite half is paid for within the following month. All gross sales are on credit score. Solely 20% of a
month’s gross sales are collected within the month of sale. An extra 70% is collected within the following
month, and the remaining 10% is collected within the second month following sale. Unhealthy money owed have been
negligible.
Month-to-month working bills for the corporate are given beneath:
Variable:
Gross sales commissions four% of gross sales
Mounted:
Promoting $ 200,000
Lease $ 18,000
Salaries $ 106,000
Utilities $ 7,000
Insurance coverage $ three,000
Depreciation $ 14,000
Insurance coverage is paid on an annual foundation, in November of every 12 months.
The corporate plans to buy $16,000 in new gear throughout Could and $40,000 in new
gear throughout June; each purchases can be for money. The corporate declares dividends of
$15,000 every quarter, payable within the first month of the next quarter.
The corporate’s stability sheet as of March 31 is given beneath:
Belongings
Money $ 74,000
Accounts receivable ($26,000 February gross sales; $320,000 March gross sales) 346,000
Stock 104,000
Pay as you go insurance coverage 21,000
Property and gear (internet) 950,000
Complete belongings $ 1,495,000
Liabilities and Stockholders’ Fairness
Accounts payable $ 100,000
Dividends payable 15,000
Widespread inventory 800,000
Retained earnings 580,000
Complete liabilities and stockholders’ fairness $ 1,495,000
The corporate maintains a minimal money stability of $50,000. All borrowing is completed at the start
of a month; any repayments are made on the finish of a month.
The corporate has an settlement with a financial institution that permits the corporate to borrow in increments of
$1,000 at the start of every month. The rate of interest on these loans is 1% per 30 days and for
simplicity we are going to assume that curiosity isn’t compounded. On the finish of the quarter, the corporate
would pay the financial institution all the gathered curiosity on the mortgage and as a lot of the mortgage as potential
(in increments of $1,000), whereas nonetheless retaining no less than $50,000 in money.
Required:
Put together a grasp price range for the three-month interval ending June 30. Embody the next detailed
schedules:
1. a. A gross sales price range, by month and in whole.
b. A schedule of anticipated money collections, by month and in whole.
c. A merchandise purchases price range in items and in . Present the price range by month and
in whole.
d. A schedule of anticipated money disbursements for merchandise purchases, by month and in
whole.
2. A money price range. Present the price range by month and in whole. Decide any borrowing that will
be wanted to take care of the minimal money stability of $50,000.
three. A budgeted revenue assertion for the three-month interval ending June 30. Use the
contribution strategy.
four. A budgeted stability sheet as of June 30.
Half C: Variance Assessment for Determination Making
Bronfenbrenner Co. makes use of a normal value system for its single product wherein variable overhead is
utilized on the premise of direct labor hours. The next info is given:
Normal prices per unit:
Uncooked supplies (1.5 grams at $16 per gram) ………………………. $24.00
Direct labor (zero.75 hours at $eight per hour)……………………………. $6.00
Variable overhead (zero.75 hours at $three per hour)…………………… $2.25
Precise expertise for present 12 months:
Items produced ……………………………………………………………… 22,400 items
Purchases of uncooked supplies (21,000 grams at $17 per gram) .. $357,000
Uncooked supplies used………………………………………………………… 33,400 grams
Direct labor (16,750 hours at $eight per hour)………………………… $134,000
Variable overhead value incurred………………………………………. $48,575
Required:
Compute the next variances for uncooked supplies, direct labor, and variable overhead,
assuming that the value variance for supplies is acknowledged at level of buy:
a. Direct supplies value variance.
b. Direct supplies amount variance.
c. Direct labor fee variance.
d. Direct labor effectivity variance.
e. Variable overhead spending variance.
f. Variable overhead effectivity variance.
g. As a supervisor, why is variance Assessment necessary?
Half D: Analysis of Decentralized Organizations
The Clipper Company had internet working revenue of $380,000 and common working belongings of
$2,000,000. The company requires a return on funding of 18%.
Required:
a. Calculate the corporate’s return on funding (ROI) and residual revenue (RI).
b. Clipper Company is contemplating an funding of $70,000 in a undertaking that may generate
annual internet working revenue of $12,950. Would it not be in the very best pursuits of the corporate to
make this funding?
c. Clipper Company is contemplating an funding of $70,000 in a undertaking that may generate
annual internet working revenue of $12,950. If the division planning to make the funding
presently has a return on funding of 20% and its supervisor is evaluated primarily based on the
division’s ROI, will the division supervisor be inclined to request funds to make this
funding?
d. Clipper Company is contemplating an funding of $70,000 in a undertaking that may generate
annual internet working revenue of $12,950. If the division planning to make the funding
presently has a residual revenue of $50,000 and its supervisor is evaluated primarily based on the
division’s residual revenue, will the division supervisor be inclined to request funds to make
this funding?
Half E: Making ready Assertion of Money Flows
Boscia Company’s stability sheet seems beneath:
Comparative Steadiness Sheet
Ending
Steadiness
Starting
Steadiness
Belongings:
Money and money equivalents……………………. $ 44 $ 38
Accounts receivable ……………………………. 82 69
Stock …………………………………………… 71 69
Plant and gear ……………………………. 537 500
Collected depreciation……………………. ( 240) ( 201)
Complete belongings………………………………………… $494 $475
Liabilities and stockholders’ fairness:
Accounts payable ……………………………….. $ 70 $ 60
Wages payable……………………………………. 24 21
Taxes payable …………………………………….. 19 22
Bonds payable ……………………………………. 226 300
Deferred taxes…………………………………….. 19 18
Widespread inventory……………………………………. 22 20
Retained earnings……………………………….. 114 34
Complete liabilities and stockholders’ fairness .. $494 $475
The online revenue for the 12 months was $108. Money dividends had been $28.
Required:
Put together a press release of money flows in good kind utilizing the oblique methodology.

—————–

Case three in ACC 601 Managerial Accounting Group (160 factors)

Directions:

1. Full the next actions in good kind as a gaggle. Use excel or

phrase solely. Present all supporting calculations to point out the way you arrived at

your numbers

2. Add solely the names of group members who participated within the completion

of this task.

three. Submit just one copy of your accomplished work by way of Moodle. Don’t ship it to

me by electronic mail.

four. Due: No later than the final day of Module 7. Please word that your professor

has the appropriate to vary the due date of this task.

Half A: Capital Budgeting Choices

Chee Firm has gathered the next information on a proposed funding undertaking:

Funding required in gear…………. $240,000

Annual money inflows

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