ACC1 346

SLudenL name
Bravo Baking Company began operations in May oI 2010 with the production and sales oI speciality breads.
The company has experienced a good market demand Ior its high protein, low carbohydrate product called "Hi-Lo"
Hi-Lo's success has required that Bravo continue to make only this one product, however, Bravo's customers,
the local retailers, have been asking Ior more specialty breads Irom the company. The decision to expand will be made
in the coming weeks.
Weekly Assignments: Complete the assigned Tab each week.
In each worksheet there are several Green colored cells. These cells must be Iilled in with your response.
Due
Points
Available
Points
Earned
Tab1) Product vs. Period Costs Week 1 10 10.00
Tab 2) Cost oI Goods ManuIactured Schedule Week 2 30 0.00
Tab 3) Break Even Analysis Week 3 40 40.00
Tab 4) Incremental Analysis Week 5 40 40.00
Tab 5) Capital Budgeting Week 6 40 0.00
Tab 6) Variance Analysis Week 7 40 0.00
200 90.00 Total
ACC1 346
SLudenL name
10 polnLs
1ab|e A 1ab|e 8
llour used ln baklng bread CorrecL llour used ln baklng bread
lacLory Supervlsor Salarles CorrecL lacLory Supervlsor Salarles
8akers wages CorrecL 8akers wages
8enL for LxecuLlve Cfflces CorrecL lacLory lnsurance
Sales Commlsslons CorrecL 8enL for lacLory
uLlllLles used ln Lhe facLory CorrecL uLlllLles used ln Lhe facLory
AdverLlslng cosLs CorrecL Cleanlng 8ake Cvens
uellvery Lruck cosLs CorrecL lnsurance on lacLory
aper wrappers for bread CorrecL aper wrappers for bread
uepreclaLlon on bake ovens CorrecL uepreclaLlon on bake ovens
Lggs salL waLer used for baklng CorrecL Lggs used for baklng
lnLeresL on bank loan CorrecL Small amounLs of salL used
lacLory lnsurance CorrecL lacLory lnsurance
o|nts
Maggle aproL
Ior 1ab|es A Irom the ||st be|ow |dent|fy |f the cost |tem |s a
roduct Cost or er|od Cost by typ|ng roduct or er|od |n the
appropr|ate box
roducL
roducL
roducL
LnLer elLher roducL or erlod
ulrecL
lndlrecL
ulrecL
Ior 1ab|e 8 Irom the ||st be|ow |dent|fy |f the cost |tem |s a
Cost or Ind|rect Cost by typ|ng D|rect or Ind|rect |n the
appropr|ate box
LnLer elLher ulrecL or
roducL
roducL
roducL
erlod
roducL
erlod
erlod
roducL
erlod
erlod
lndlrecL
lndlrecL
lndlrecL
lndlrecL
lndlrecL
ulrecL
lndlrecL
ulrecL
lndlrecL
lndlrecL
n
n
n
n
n
n
n
n
n
n
n
n
n

ACC1 346
SLudenL name
1ab|e C Cost of Goods Manufactured Schedu|e
MaLerlals used ln baklng bread 8eglnnlng Work ln rocess
lacLory Supervlsor Salarles 20000 Mater|a|s
8akers wages $32000 8eglnnlng lnvenLory MaLerlals
8enL for LxecuLlve Cfflces 36000 lus urchases
Sales Commlsslons 10000 MaLerlals Avallable
uLlllLles used ln Lhe facLory 3000 Less Lndlng lnvenLory MaLerlals
AdverLlslng cosLs 12000 MaLerlals used
uellvery Lruck cosLs 23000 ulrecL Labor
uepreclaLlon on bake ovens 300 Cverhead
lnLeresL on bank loan 230 lacLory 8enL
8eglnnlng lnvenLory MaLerlals 10000 uepreclaLlon on bake ovens
8eglnnlng Work ln rocess 8000 uLlllLles used ln lacLory
Lndlng lnvenLory MaLerlals 4000 CLher Cverhead cosLs
lnvenLory urchases 26000 1ota| Cverhead
Lndlng Work ln rocess 2300 1oLal ManufacLurlng CosLs
CLher Cverhead cosLs 1200 1oLal Work ln rocess
8eglnnlng llnlshed Coods lnvenLory 7300 Less Lndlng Work ln rocess
Lndlng llnlshed Coods lnvenLory 6000 Cost of Goods Manufactured
8enL for lacLory 7300
CompleLe only Lhe Green cells values ln ked are from Lhe schedule above
Cost of Goods So|d Schedu|e
8eg|nn|ng I|n|shed Goods Inventory
8eg|nn|ng Work In rocess $0
Mater|a|s
8eg|nn|ng Inventory Mater|a|s $0 1ry Aga|n
|us urchases $0 1ry Aga|n
Mater|a|s Ava||ab|e $0 1ry Aga|n
Less Lnd|ng Inventory Mater|a|s $0 1ry Aga|n
Mater|a|s Used $0 1ry Aga|n
D|rect Labor $0 1ry Aga|n
Cverhead
Iactory kent $0 1ry Aga|n
Deprec|at|on on bake ovens $0 1ry Aga|n
Ut|||t|es used |n Iactory $0 1ry Aga|n
Cther Cverhead costs $0 1ry Aga|n
1ota| Cverhead $0 1ry Aga|n
1ota| Manufactur|ng Costs $0
1ota| Work |n rocess $0
Less Lnd|ng Work |n rocess $0
Cost of Goods Manufactured $0
Goods Ava||ab|e for Sa|e
Less Lnd|ng I|n|shed Goods Inventory
Cost of Goods So|d Schedu|e
use Lhe lnformaLlon provlded below Lo prepare Lhe CosL of Cood ManufacLured Schedule8ravo had Lhe followlng cosLs as of uec 31 2010 LnLer Lhe correcL v
Lhe Green shaded cells
Maggle aproL
%1CC 2) 30 polnLs
1ry Aga|n
1ry Aga|n
1ry Aga|n
1ry Aga|n
1ry Aga|n
o|nts 000
ACC1 346
SLudenL name
8ravo 8ak|ng |dent|f|ed the costs be|ow to determ|ne |ts cost of one un|t of product and |ts month|y operat|ng costs (1CC 4)
Un|ts produced 14000
art I Lnter your so|ut|on |n the green ce||s for each of the fo||ow|ng
1ab|e A varlable llxed uslng Lhe cosLs from 1able A compuLe
MaLerlals used ln baklng bread 229 A) 8reakeven unlLs (rounded Lo 2 declmal places)
lacLory Supervlsor Salarles 012 8) 8reakeven sales dollars
8akers wages 229 C) ConLrlbuLlon Margln
8enL for LxecuLlve Cfflces 3000 u) ConLrlbuLlon Margln 8aLlo ()
Sales Commlsslons 3300
uLlllLles used ln Lhe facLory 030 arL ll CompleLe Lhe followlng requlremenLs
AdverLlslng cosLs 1000 A) lf 8ravo requlres a proflL of $3000 how many unlLs musL lL sell?
uellvery Lruck depreclaLlon 400 8) WhaL ls Lhe LoLal revenue from A above?
uepreclaLlon on bake ovens 007 C) lf 8ravo acLually sells 8000 unlLs
lnLeresL on bank loan 300 1) WhaL ls Lhe margln of safeLy ln uollars?
2) WhaL ls Lhe margln of safeLy percenLage?
1oLal CosLs $326 $840000
rlce Charged per unlL $789
1oLal CorrecL
PlnL use spreadsheeL formulas Lo compuLe your answers
Maggle aproL
40 olnLs
319392 CorrecL
2320000 CorrecL
263 CorrecL
033 CorrecL
309306 CorrecL
4020000 CorrecL
3792000 CorrecL
060 CorrecL
9
ACC1 346
SLudenL name
8ravo 8aklng Co has expanded lLs producL llne Lo lnclude several oLher speclalLy breads 1he operaLlng resulLs for Lhe lasL quarLer are provlded below (1CC 7)
roducL PlLo Whole Craln lrulL nuLs 1oLal
8evenues $67373 $31800 $13900 $113273
varlable producL cosLs $27030 $12720 $6360 $46110
varlable Selllng AdmlnlsLraLlve cosLs $13313 $6360 $3180 $23033
ConLrlbuLlon Margln $27030 $12720 $6360 $46110
llxed roducL CosLs $3000 $3000 $3000 $13000
llxed Selllng and AdmlnlsLraLlve CosLs $3700 $2830 $2830 $11400
AllocaLed Common CosLs $3000 $2300 $2300 $10000
neL lncome $11330 $2370 $3990 $9710
kequ|red 8ravo wanLs Lo know Lhe effecL on neL lncome lf lL decldes Lo dlsconLlnue Lhe lrulL nuLs producL
lf 8ravo ellmlnaLes lrulL nuLs 30 of flxed cosLs can be avolded
repare and lncremenLal analysls showlng Lhe neL lncome LffecL of ellmlnaLlng Lhe lrulL nuLs producL
WhaL woud you advlse 8ravo Lo do?
uslng Lhe 1able below compuLe Lhe neL lncome for 8ravo 8aklng afLer ellmlnaLlng Lhe lrulL nuLs producL
roducL PlLo Whole Craln lrulL nuLs 1oLal
8evenues $67373 $31800 $0 $99373 CorrecL
varlable producL cosLs $27030 $12720 $0 $39730 CorrecL
varlable Selllng AdmlnlsLraLlve cosLs $13313 $6360 $0 $19873 CorrecL
ConLrlbuLlon Margln $27030 $12720 $0 $39730 CorrecL
llxed roducL CosLs $3000 $3000 $2300 $12300 CorrecL
llxed Selllng and AdmlnlsLraLlve CosLs $3700 $2830 $1423 $9973 CorrecL
AllocaLed Common CosLs $3000 $2300 $1230 $8730 CorrecL
neL lncome $11330 $2370 $3173 $8323 CorrecL
o|nts 40
Maggle aproL
40 olnLs
ACC1 346
SLudenL name
Bravo Baking Co is considering replacing an older Ireezer with a larger unit to Ireeze some oI its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell an more bread each year. From these additional sales
the aIter tax cash Ilow is expected to be $4,000. In addition to more sales, the new Ireezer will save $1,200 in electricity each year.
However, the new Ireezer will cost an additional $2,000 each year Ior maintenance. The cost oI the new unit is $25,000 and it is
expected to last 10 years. The salvage value at the end oI its liIe is $6,000. The old unit is Iully depreciated and can be disposed at cost.
Determine the Net Present Value oI purchasing the new Ireezer using a required rate oI return oI 14. Should Bravo purchase the Ireezer?
use Lhe formaL below Lo compleLe Lhe nv compuLaLlons
(Note: Use PV Tables on pages 342 and 343. Also, be sure to show costs as negative values)
Cash
FIow
PV
Factors
PV
Amounts
Cost oI new reIrigeration unit
AIter tax cash Ilow
Annual electricity savings
Additional annual maintenance costs
Amount collected Irom disposal oI unit
Net present value
9
,aggle aproL
TCO 9
40 Points
ACC1 346 1CC 10
SLudenL name 40 olnLs
8ravo 8aklng uses sLandard cosLlng Lo analyze lLs performance 1he daLa below ls provlded for your use ln deLermlnlng 8ravos varlances
SLandard CosL per unlL CosL /unlL AmounL/unlL SLandard CosL
MaLerlal CosL (lngredlenLs) (3 lbs) 229 3 lbs $438
ulrecL Labor( 23 hrs * $9/hr) 223 23 hrs $900
Cverhead 037
1oLal 311
uurlng Lhe monLh 8ravo sold 9000 loaves of bread and used 4630 pounds of lngredlenLs Also durlng Lhe monLh 8ravo
purchased 3000 pounds of lngredlenLs aL a cosL of $22300 Lmployees worked a LoLal of 2200 hours and acLual labor cosLs were $19998

lav/unf

lav/unf

lav/unf

lav/unf
9
Required:
Labor Efficiency Variance =
!,rt , CompuLe Lhe maLerlal prlce and quanLlLy varlance
ateriaI Price Variance =
ateriaI Quantity Variance =
Labor Rate Variance =