BA213 – Principles of Accounting III (Managerial Accounting)Final AssignmentThis assignment is your BA213 final as scheduled on the course syllabus. The questions cover the major themesand casework covered during the term with a focus on chapters 8, 9, 10, 11, and 12.Due DateCompleted assignment must be turned in no later than the time and date of the final exam is scheduled. Earlysubmissions are allowed to my mailbox in the Business Department AC2685 or via emailharry.dewolf@mhcc.edu (if you do not receive an email receipt confirmation from me I did not received it).NOTE: Late submissions will not be accepted. No points will be earned for late submissions.Point ValueEach question has a maximum point value of 20 points. The entire assignment has a value of 200 points.Partial credit may be given if I am able to determine by examining your calculations where you made your error.If no calculation work is provided I will be unable to provide partial credit.Extra Credit: There are two options for extra credit. You may choose one (1) extra credit question: Question oneis easier and has a value of TEN (10) points or question two which is more challenging and has a value ofTWENTY (25) points. You may submit ONLY one or none at all. Completion of extra credit in NOT mandatory.Points earned are above and beyond the 200 available for questions 1 - 10.Submission Format: You may submit your answers handwritten (clearly and neatly) or you may submit usingMS Excel or Word. Include your name, date, class, section, and term. No plastic covers, no paperclips Answer all questions as complete and professionally as possible. If you use MS Excel to answer any question attach your work to your hardcopy submission.Group EvaluationsYou have been assigned to a second group to work through case studies and problems over the past four weeks.Now is the time to evaluate yourself and your group members you have worked with since the midtermassignment. The evaluation form is provided. Be honest and specific with your comments. Provide at least onenarrative comment for each group member – including you. Each student will earn up to 50 points for their groupwork participation (100 points for the term). The 50 group participation points are separate from the 200-pointfinal assignment.Evaluations are confidential and should not be shared by you and will not be shared by the instructor. There willbe a box available in class on the assignment due date to place your confidential evaluations in. If you submit yourfinal assignment early do not staple it to your final; simply place in my mailbox.Final course grades will be loaded to your official transcript (not the class portal) no later than Friday June 14thI will retain the final exams in my office until the end of the fall 2013 term. If you would like your exam back feelfree to come to my office in the fall or you may include a self-addressed stamped envelope with two(2) stampswith your final exam submission and I will be happy to mail your scored final exam to you.* The 2012-13 school year has been very challenging and rewarding for me. Thank you for trusting me with thispart of your education – it has been my honor to hopefully add some small value to your future.Remember - Anything worth achieving will always be challenging.BA213 Spring 2013Final, Version 2 200 PointsName: ____________________________________ Section _____________1. Profit MaximizingCh08A company believes it can sell 2,000,000 units of its proposed new bottle stopper at a priceof $16.00 each. If the company desires to make a profit of $3,000,000 on the bottlestopper, what is the target total cost for each bottle stopper?$16.00$14.50$17.50$9.672. Net Present Value – Comparing Two OptionsCh09Projects A and B both have an initial outflow of $100,000. Project A will return a cash flowof $30,000 each year for the next 5 years. Project B will return $40,000 in year 1, $30,000in year 2, $30,000 in year 3, $30,000 in year 4, and $20,000 in year 5.Which project will have the higher net present value?The answer cannot be determined withoutknowing the initial investment.Project AProject BThe answer cannot be determined withoutknowing the required rate of return.3. Production Budget – Material CostCh10Bake Time makes and sells baking pans. Each pan uses 0.70 pounds of aluminum.Budgeted production and sales of pans in units for the next five months is as follows:June July August September OctoberBudgetedproduction22,180 21,940 24,940 26,240 23,720Budgetedsales22,400 21,300 24,500 26,700 24,400The company wants to maintain monthly ending inventories of aluminum equal to 15% ofthe following month’s budgeted production needs, and monthly inventories of pans equalto 20% of the number needed for next month’s sales. The cost of aluminum is $0.85 perpound. How much is the cost of budgeted material purchases for August?$14,693$17,595$14,869$14,955$13,322None of theanswer choicesare correct.4. Cash Budget – Accounts Receivable – Cash FlowCh10Jazzy Janitors has found that only 10% of its invoiced amounts are paid in the same monththat the work is completed. Sixty percent are paid in the month after the work is completedand 30% are paid in the second month after the work is completed. During December2013, Jazzy Janitors’ invoiced $200,000 to clients. Projected revenues for the first sixmonths of 2014 are given below:Month RevenueJanuary $180,000February 215,000March 220,000April 218,000May 240,000June 255,000What is the projected Accounts Receivable balance at March 31, 2014?$114,000$280,500$222,000$262,500$180,000If you use Excel to answer, please attach to this assignmentQuestions 5 – 10 Standard Costs and Variance AnalysisCh 11Harris Manufacturing produces white sauce. It uses units as the cost driver for overhead. Thefollowing information was provided concerning its standard cost system for 2014:Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0005. How much the direct material quantity variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable6. How much the direct material price variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$456$480$900$420$456$480$900$420Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0007. How much the direct labor efficiency variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable8. How much is the direct labor rate variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$874$86$960$5,440$874$86$960$5,440Budgeted and Standard DataMaterial (standard)1/4 lb. @ $14 perpoundQuantity produced (actual) 6,200 unitsLabor (standard)1.4 hrs. @ $16 perhourMaterials purchased (actual)1,600 lbs. for$13.70/poundTotal fixed overhead $84,000 Materials used (AQu ) 1,520 lbs.Variable overhead $6.50 per unitLabor worked (actual)8,740 hrs.@$15.90/hourProduction (standard) 6,000 units Total overhead $122,0009. How much is the overhead volume variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable10. How much is the overhead controllable variance for 2014?Choose if the variance is favorable or unfavorable and then select the amount of the variance.FavorableUnfavorable$2,300$2,800$0$5,100$2,300$2,800$500$5,100Extra Credit:You may choose to submit one (1) extra credit question; but not both.Question one is easier and has a value of TEN (10) points.OrQuestion two is more challenging and has a value of TWENTY (25) pointsYou may submit ONLY one or none at all.Extra Credit #1NOPAT – Measuring Income and Invested Capital when Calculating ROICh12The 2014 income statement for the East Division of Procter Wells Company is as follows:Sales $1,800,000Operating expenses 1,380,000Net operating income 420,000Interest expense 120,000Earnings before taxes 300,000Income tax expense(40%)120,000Net income $ 180,000This division’s invested capital is $4,000,000.How much is the East Division’s return on investment?5.7%10.5%6.3%7.5%Extra Credit #2Net Present Value – Depreciation – Income TaxCh09Natchez, Inc. is considering the purchase of a new machine costing $200,000. Thecompany will incur $5,000 per year in operating expenses but it will allow the company toearn an additional $100,000 per year in revenues. Natchez expects the machine to providefuture benefits for 3 years and salvage value at the end of the 3-year period to be $10,000.The company uses straight-line depreciation method. The income tax rate is 30%. If therequired rate of return is 10%, how much is the net present value of this project?$43,769$12,629$20,143None of theseanswer choicesare correct.
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