Accounts Assignment

GROUP MEMBERS:
RNEL THOMPSON
807003431
KWASI JEROME
811003623
RAHIMAH KHAN
811000568
ANWYKO TRIM
809004144
SAMANTHA SEECHARAN
811003741
CLASS GROUPING: FSA (FULLTIME)
CLASS LECTURER: NICOLE JOSEPH
QUESTION 1.
(1)
Burlington Northern Corporation
Revenue Budget
For the Year 2010
Products
Units
Price
Total
Widget
60000
198
11880000
Thingamajig
40000
300
12000000
Total Sales
100000
23880000
(2)
Production Budget
For the Year 2010
Widget
Thingamajig
Estimated unit sales
60000
40000
Add : Desired ending finished
27000
11000
Total units required
87000
51000
Less : Beginning finished
22000
100000
65000
41000
goods inventory
goods inventory
Estimated goods to be
manufactured
(3)
Direct Materials Purchases Budget (quantities)
For the Year 2010
Direct materials
Direct materials to be
used :
Widget
Thingamajig
Total material
needed for
production
Add : Estimated
ending direct
materials inventory
Total materials
required
Less: Beginning
direct material
inventory
Direct materials to
be bought
260000
205000
465000
130000
123000
253000
_
41000
41000
36000
32000
7000
501000
285000
48000
32000
29000
6000
469000
256000
42000
* Widget direct materials

A.
4 x 65000 = 260000
B.
2 x 65000=130000
C.
0 x65000= 0
** Thingamajig direct materials

A.
5x 41000 = 205000
B.
3 x41 000=123000
C.
1 x41000= 41000
(4)
Direct Materials Purchases Budget (dollars)
For the Year 2010
Direct materials
bought
Cost per unit/kg of
direct material
Total cost of direct
materials to be
bought
469000
256000
42000
14
6566000
7
1792000
5
210000
(5)
Direct Manufacturing Labour Budget (dollars)
For the Year 2010
Widget
Thingamajig
Units to be produced
60000
40000
Direct Labor hours per unit
Total direct Labor hours
120000
120000
Cost per hour
15
19
Total direct labor cost
1800000
2280000
required
(6)
Budgeted Finished Goods Inventory
For the Year Ending December 31, 2010
$
Widget:
Direct materials costs:
A, 4 pounds $14
B, 2 pounds $7
Direct manufacturing labor costs,
2 hours $15
Manufacturing overhead costs at $24 per direct
manufacturing labor-hour (2 hours $24)
Budgeted manufacturing costs per unit
Finished goods inventory of Widget
$148 27,000 units
Thingamajig:
Direct materials costs:
A, 5 pounds $14
B, 3 pounds $7
C, 1 each $5
Direct manufacturing labor costs,
3 hours $19
Manufacturing overhead costs at $24 per direct
manufacturing labor-hour (3 hours $24)
Budgeted manufacturing costs per unit
Finished goods inventory of Thingamajig
$225 11,000 units
Budgeted finished goods inventory,
December 31, 2010
56
14
30
48
148
3996000
70
21
5
57
72
225
2475000
6471000
3-43 (1) The Walk Rite Shoe Company has the same operating income under the fixed salary
plan and the lower fixed salary and commission plan when the sales volume is 54,000 pairs of
shoes
Lower Fixed Salary and Commission

Plan
No. of CM
units
per
sold
Unit
CM
Fixed
Costs
Fixed Salary Commission Plan
Operating CM
Income
per
Unit
40,000 $9.00 $360,000 $360,000 0
CM
Fixed
Costs
Operating Difference
Income
in favor
of fixedsalaryplan
$
$10.50 $420,000 $441,000 (21,000)
$(21,000)
42,000
9.00
378,000
360,000 18,000
10.50
441,000
441,000 0
(18,000)
44,000
9.00
396,000
360,000 36,000
10.50
462,000
441,000 21,000
(15,000)
46,000
9.00
414,000
360,000 54,000
10.50
483,000
441,000 42,000
(12,000)
48,000
9.00
432,000
360,000 72,000
10.50
504,000
441,000 63,000
(9,000)
50,000
9.00
450,000
360,000 90,000
10.50
525,000
441,000 84,000
(6,000)
52,000
9.00
468,000
360,000 108,000
10.50
546,000
441,000 105,000
(3,000)
54,000
9.00
486,000
360,000 126,000
10.50
567,000
441,000 126,000
56,000
9.00
504,000
360,000 144,000
10.50
588,000
441,000 147,000
3,000
58,000
9.00
522,000
360,000 162,000
10.50
609,000
441,000 168,000
6,000
60,000
9.00
540,000
360,000 180,000
10.50
630,000
441,000 189,000
9,000
62,000
9.00
558,000
360,000 198,000
10.50
651,000
441,000 210,000
12,000
64,000
9.00
576,000
360,000 216,000
10.50
672,000
441,000 231,000
15,000
66,000
9.00
594,000
360,000 234,000
10.50
693,000
441,000 252,000
18,000
This is calculated by the unit sales level at which both plans have the same total costs:
Let Q = unit sales level at which total costs are the same for both plans
$21Q + $360,000=$19.50Q + $360,000 + $ $81,000

$21Q-$19.50Q
= $360000+$81000-$360000
$1.50 Q = $81,000
Q = 54,000 pairs

Accounts Assignment

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GROUP MEMBERS:

CLASS GROUPING: FSA (FULLTIME)

CLASS LECTURER: NICOLE JOSEPH

Estimated unit sales

Add : Desired ending finished

Total units required

Less : Beginning finished

* Widget direct materials

** Thingamajig direct materials

Direct Labor hours per unit

Total direct Labor hours

Cost per hour

Total direct labor cost

Lower Fixed Salary and Commission

Fixed Salary Commission Plan

40,000 $9.00 $360,000 $360,000 0

$21Q + $360,000=$19.50Q + $360,000 + $ $81,000

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