Wilson Products uses standard costing. It allocates manufachuring ove.pdf

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Wilson Products uses standard costing. It allocates manufachuring overhead (beth variablo and fixed) to products on the basin of standard direct manufacturing labor hours (DUH). (1) (Click the icon to view addisional informasion.) The actual costs, compered with the arrual tuggent and 112 of the anrual budget, ans = followes: (Cick the icon to viow the data) 1. Caicutate total manufacturing evechead costs allocated Begin by eomputing the budgeted hours per unit. Determine the formula, then comgute the anount Now calculate the remaining liated amounts for Wilson Products for May 2017. Be sure to identfy each varlance as favorablo (F) or unfovorabie (U). 2. The variable manufacturing overhead spending variance is 3. The fixed manufacturing overhead spending varianco is 4. The variable manufacturing overhead efficiency variance is 5. The production-volume variance is Data table.

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To determine the cost of goods we have to determine the factory overhead. Cost of goods are included all the costs occurred during the production including direct and indirect material, labor and all the factory overhead costs. We use allocation method to determine the factory overhead costs. If we can’t determine the factory overhead costs we can’t find out the actual cost of the goods those are produced and the sale value we can’t determine correctly. Because cost of a good is consisted with factory overhead costs. Factory overhead expenses should be determined otherwise understated rate of a good can occur. Because if we can’t determine the factory overhead costs we can’t actually determine the cost of a good that is prepared for sale. Allocation methods are used to determine factory overhead costs. Organizations use Applied or Actual factory overhead allocation methods to determine the Factory overhead costs. Cost of goods are lied with these factory overhead costs. So if we need to determine the amount in which we need to sale a good we need to determine it’s total manufacturing costs. Otherwise loss will occur.

WHY IS THE ALLOCATION METHOD USED IN ACCOUNTING FOR THE DIFFERENCE BETWEEN AP...

Mashfiq Albartross

ACC 207 Final Project Milestone One Guidelines and Rubric Draft of Costs (Section I) Overview: Classifying a company’s costs allows for an in-depth analysis of the impact that changes in output have on revenues, costs, and net income or net loss. A cost-volume-profit (CVP) analysis will be completed in order to determine the breakeven point. Relevant costs will be used to prepare a flexible budget. Additionally, an appropriate costing system should be selected and the choice should be substantiated with reasonable rationale. Finally, a memo should be prepared for management that summarizes the results of the quantitative analysis and makes recommendations for an optimal costing system to be ethically used by key decision makers. For Milestone One, you will use the MDE Manufacturing Budget (Table I) to analyze costs, contribution margin, and breakeven point for the bird feeder division of the company. In Tab 1 of your Student Workbook, classify costs as either product or period costs. Briefly explain the difference between the types of costs. Then, analyze the actual costs and, using Tab 2 of your Student Workbook, complete a cost-volume-profit analysis to determine how many bird feeders must be sold at the current cost and sales price level to earn a $10,000 profit and how much the sales price would have to increase to earn a $10,000 profit at the same cost and sales volume level. Submit the Student Workbook with Tabs 1 and 2 completed with your cost calculations and a 1–2 page Word document that explains the implications of your findings and addresses all of the critical elements in Section I. Specifically, the following critical elements must be addressed: I. Costs a) Classify all product and period costs appropriately. b) Compute a cost-volume-profit analysis. What are the implications of this analysis? c) Compute contribution margin per unit and contribution margin ratio. d) Determine the breakeven quantity and the breakeven revenue accurately. e) Determine if the company is breaking even. What are cost-volume-profit analysis implications on short-term planning? Guidelines for Submission: Your paper must be submitted using the Student Workbook to present your calculations and a 1–2 page Microsoft Word document with double spacing, 12-point Times New Roman font, and one-inch margins to explain your findings. Instructor Feedback: This activity uses an integrated rubric in Blackboard. Students can view instructor feedback in the Grade Center. For more information, review these instructions. Critical Elements Proficient (100%) Needs Improvement (75%) Not Evident (0%) Value Costs: Period Costs Classifies all product and period costs appropriately Classifies all product and period costs but not all classifications are appropriate Does not classify product and period costs 18 http://snhu-media.snhu.edu/files/course_repository/undergraduate/acc/acc207/acc207_mde_manufacturing_bud.

ACC 207 Final Project Milestone One Guidelines and Rubric .docx

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Wilson Products uses standard costing. It allocates manufachuring ove.pdf