Description
Complete Problems 5-63 and 5-65 in the textbook.
It is okay to prepare Problem 5-63 using Word or Excel. Problem 5-65 should be prepared using Excel. Please note, you must show your work in Excel, which includes providing the formulas in the cells, not just the summary value. You may not earn full points if you do not show your work in detail.
Save your assignment as Lastname_FirstnameACC650_T3.docx.
Use at least one reference, APA
Req. 1
1 Process time: steps
Inspection time: steps
Move time: steps
Waiting time: steps
Storage time: steps
Req. 2
(a)
Step 1:
(b)
Step 2:
(c)
Step 4:
(d)
Step 5:
(e)
Step 5:
(f)
Step 6:
(g)
Step 7:
(h)
Step 7:
(i)
Step 7:
(j)
Step 9:
(k)
Step 10:
(l)
Step 11:
Req. 1
Customer-profitability analysis:
Trace Telecom
Sales revenue
Cost of goods sold
Gross margin
Selling and administrative
costs:
General selling costs
General
costs
administrative
Customer-related costs:
Sales activity
Order taking
Special handling
Special shipping
Total
selling
and
administrative costs
Operating income
Caltex Computer
DATA INPUT
Customer-Related Activities
Sales activity
Order taking
Cost Driver Base
Cost Driver Rate
Special handling
Special shipping
Customer-Related Activities
Sales activity
Order taking
Trace Telecom
Caltex Computer
Trace Telecom
Caltex Computer
Special handling
Special shipping
Sales revenue
Cost of goods sold
General selling costs
General administrative costs
SOLUTION
1. Customer-profitability analysis:
Trace Telecom
Sales revenue
$
Cost of goods sold
Gross margin
$
Selling and administrative costs:
General selling costs
$
General administrative costs
Customer-related costs:
Sales activity
Order taking
Special handling
Special shipping
Total selling and administrative costs
$
Operating income
$
Caltex Computer
– $
– $
–
–
–
$
–
–
–
–
–
$
$
–
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Problem 5-65
Customer-Profitability Analy-
sis; Activity-Based Costing
(LO 5-9)
1. Operating income, Trace
Telecom: $7,000
Fresno Fiber Optics, Inc. manufactures fiber optic cables for the computer and telecommunications
industries. At the request of the company vice president of marketing, the cost management staff has
recently completed a customer-profitability study. The following activity-based costing information was
the basis for the analysis.
Chapter 5 Activity-Based Costing and Management
225
Customer Related Activities
Cost Driver Base
Cost Driver Rate
$1,000
200
Sales activity
Order taking
Special handling
Special shipping
Sales visits
Purchase orders
Units handled
Shipments
50
500
Cost-driver data for two of Fresno’s customers for the most recent year are
Customer-Related Activities
Trace Telecom
Caltex Computer
8 visits
6 visits
Sales activity
Order taking
Special handling.
Special shipping
15 orders
800 units handled
18 shipments
20 orders
600 units handled
20 shipments
The following additional information has been compiled for Fresno Fiber Optics for two of its cus-
tomers, Trace Telecom and Caltex Computer, for the most recent year:
Sales revenue.
Cost of goods sold
General selling costs.
General administrative costs
Trace Telecom
$190,000
80,000
24,000..
19,000.
Caltex Computer
$123,800
62,000
18,000
16,000
с
Required:
1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Refer to
Exhibit 5-13 for guidance.)
2. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how
the solution will change if the following information changes: Trace Telecom’s sales revenue was
$185,000 and Caltex Computer’s cost of goods sold was $59,000.
5
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VITTUVICIU
(LO 5-2,5-5)
amajigs, and whatchamacallits. (You may wish to refer to Exhibit 5–10 for guidance. Because of round-
ing in the calculation of the product costs, there will be a small rounding error in this cost distortion
analysis as well.)
Traditional system undercosts
product W by $120.25 per unit
Problem 5-63
Basic Elements of a Produc-
tion Process; Non-Value-
Added Costs
(LO 5-7,5-8,5-10)
Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The
production process consists of the following steps.
1. Ingredients, such as flour and raisins, are received and inspected. Then they are stored until needed.
2. Ingredients are carried on hand carts to the mixing room.
3. Dough is mixed in 40-pound batches in four heavy-duty mixers.
4. Dough is stored on large boards in the mixing room until a bagel machine is free.
5. A board of dough is carried into the bagel room. The board is tipped, and the dough slides into
the hopper of a bagel machine. This machine pulls off a small piece of dough, rolls it into a cylin-
drical shape, and then squeezes it into a doughnut shape. The bagel machines can be adjusted
in a setup procedure to accommodate different sizes and styles of bagels. Workers remove the
uncooked bagels and place them on a tray, where they are kept until a boiling vat is free.
6. Next the trays of uncooked bagels are carried into an adjoining room, which houses three
50-gallon vats of boiling water. The bagels are boiled for approximately one minute.
7. Bagels are removed from the vats with a long-handled strainer and placed on a wooden board.
The boards full of bagels are carried to the oven room, where they are kept until an oven rack is
free. The two ovens contain eight racks which rotate but remain upright, much like the seats on a
Ferris wheel. A rack full of bagels is finished baking after one complete revolution in the oven.
When a rack full of bagels is removed from the oven, a fresh rack replaces it. The oven door is
opened and closed as each rack completes a revolution in the oven.
8. After the bagels are removed from the oven, they are placed in baskets for cooling.
9. While the bagels are cooling, they are inspected. Misshapen bagels are removed and set aside.
(Most are eaten by the staff.)
10. After the bagels are cool, the wire baskets are carried to the packaging department. Here the
bagels are dumped into the hopper on a bagging machine. This machine packages a half-dozen
bagels in each bag and seals the bag with a twist tie.
11. Then the packaged bagels are placed in cardboard boxes, each holding 24 bags. The boxes are placed
on a forklift and are driven to the freezer, where the bagels are frozen and stored for shipment.
Required:
1. Identify the steps in the bagel-production process that fall into each of the following categories:
process time, inspection time, move time, waiting time, storage time.
2. List the steps in the production process that could be candidates for non-value-added activities.
с
5
Purchase answer to see full
attachment
1 Process time: steps
Inspection time: steps
Move time: steps
Waiting time: steps
Storage time: steps
Req. 2
(a)
Step 1:
(b)
Step 2:
(c)
Step 4:
(d)
Step 5:
(e)
Step 5:
(f)
Step 6:
(g)
Step 7:
(h)
Step 7:
(i)
Step 7:
(j)
Step 9:
(k)
Step 10:
(l)
Step 11:
Req. 1
Customer-profitability analysis:
Trace Telecom
Sales revenue
Cost of goods sold
Gross margin
Selling and administrative
costs:
General selling costs
General
costs
administrative
Customer-related costs:
Sales activity
Order taking
Special handling
Special shipping
Total
selling
and
administrative costs
Operating income
Caltex Computer
DATA INPUT
Customer-Related Activities
Sales activity
Order taking
Cost Driver Base
Cost Driver Rate
Special handling
Special shipping
Customer-Related Activities
Sales activity
Order taking
Trace Telecom
Caltex Computer
Trace Telecom
Caltex Computer
Special handling
Special shipping
Sales revenue
Cost of goods sold
General selling costs
General administrative costs
SOLUTION
1. Customer-profitability analysis:
Trace Telecom
Sales revenue
$
Cost of goods sold
Gross margin
$
Selling and administrative costs:
General selling costs
$
General administrative costs
Customer-related costs:
Sales activity
Order taking
Special handling
Special shipping
Total selling and administrative costs
$
Operating income
$
Caltex Computer
– $
– $
–
–
–
$
–
–
–
–
–
$
$
–
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53%
Fri 1:30 PM
Brad VandeLune
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Х
Activity-Based Costing | Loud X
Grand Canyon University – Dic X
managerial_accounting_creati x
Brad
E → C
Secure https://viewer.gcu.edu/mqBcBY
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75 %
255
of 848
Q
C
III
Problem 5-65
Customer-Profitability Analy-
sis; Activity-Based Costing
(LO 5-9)
1. Operating income, Trace
Telecom: $7,000
Fresno Fiber Optics, Inc. manufactures fiber optic cables for the computer and telecommunications
industries. At the request of the company vice president of marketing, the cost management staff has
recently completed a customer-profitability study. The following activity-based costing information was
the basis for the analysis.
Chapter 5 Activity-Based Costing and Management
225
Customer Related Activities
Cost Driver Base
Cost Driver Rate
$1,000
200
Sales activity
Order taking
Special handling
Special shipping
Sales visits
Purchase orders
Units handled
Shipments
50
500
Cost-driver data for two of Fresno’s customers for the most recent year are
Customer-Related Activities
Trace Telecom
Caltex Computer
8 visits
6 visits
Sales activity
Order taking
Special handling.
Special shipping
15 orders
800 units handled
18 shipments
20 orders
600 units handled
20 shipments
The following additional information has been compiled for Fresno Fiber Optics for two of its cus-
tomers, Trace Telecom and Caltex Computer, for the most recent year:
Sales revenue.
Cost of goods sold
General selling costs.
General administrative costs
Trace Telecom
$190,000
80,000
24,000..
19,000.
Caltex Computer
$123,800
62,000
18,000
16,000
с
Required:
1. Prepare a customer profitability analysis for Trace Telecom and Caltex Computer. (Hint: Refer to
Exhibit 5-13 for guidance.)
2. Build a spreadsheet: Construct an Excel spreadsheet to solve requirement (1) above. Show how
the solution will change if the following information changes: Trace Telecom’s sales revenue was
$185,000 and Caltex Computer’s cost of goods sold was $59,000.
5
Chrome
File
Edit
View
History Bookmarks
People
Window
Help
53%
Fri 1:30 PM
Brad VandeLune
www.iowatreasurers.org
Х
Student Portal | Main
Х
Activity-Based Costing | Loud X
Grand Canyon University – Dic X
managerial_accounting_creati x
Brad
E → C
Secure https://viewer.gcu.edu/mqBcBY
Apps AdvoCare
Apple iCloud
Yahoo!
News
Popular
| Imported From Safari
GCU Login
sim market
Other Bookmarks
+
100 %
253 of 848
Q
C
III
VITTUVICIU
(LO 5-2,5-5)
amajigs, and whatchamacallits. (You may wish to refer to Exhibit 5–10 for guidance. Because of round-
ing in the calculation of the product costs, there will be a small rounding error in this cost distortion
analysis as well.)
Traditional system undercosts
product W by $120.25 per unit
Problem 5-63
Basic Elements of a Produc-
tion Process; Non-Value-
Added Costs
(LO 5-7,5-8,5-10)
Better Bagels, Inc. manufactures a variety of bagels, which are frozen and sold in grocery stores. The
production process consists of the following steps.
1. Ingredients, such as flour and raisins, are received and inspected. Then they are stored until needed.
2. Ingredients are carried on hand carts to the mixing room.
3. Dough is mixed in 40-pound batches in four heavy-duty mixers.
4. Dough is stored on large boards in the mixing room until a bagel machine is free.
5. A board of dough is carried into the bagel room. The board is tipped, and the dough slides into
the hopper of a bagel machine. This machine pulls off a small piece of dough, rolls it into a cylin-
drical shape, and then squeezes it into a doughnut shape. The bagel machines can be adjusted
in a setup procedure to accommodate different sizes and styles of bagels. Workers remove the
uncooked bagels and place them on a tray, where they are kept until a boiling vat is free.
6. Next the trays of uncooked bagels are carried into an adjoining room, which houses three
50-gallon vats of boiling water. The bagels are boiled for approximately one minute.
7. Bagels are removed from the vats with a long-handled strainer and placed on a wooden board.
The boards full of bagels are carried to the oven room, where they are kept until an oven rack is
free. The two ovens contain eight racks which rotate but remain upright, much like the seats on a
Ferris wheel. A rack full of bagels is finished baking after one complete revolution in the oven.
When a rack full of bagels is removed from the oven, a fresh rack replaces it. The oven door is
opened and closed as each rack completes a revolution in the oven.
8. After the bagels are removed from the oven, they are placed in baskets for cooling.
9. While the bagels are cooling, they are inspected. Misshapen bagels are removed and set aside.
(Most are eaten by the staff.)
10. After the bagels are cool, the wire baskets are carried to the packaging department. Here the
bagels are dumped into the hopper on a bagging machine. This machine packages a half-dozen
bagels in each bag and seals the bag with a twist tie.
11. Then the packaged bagels are placed in cardboard boxes, each holding 24 bags. The boxes are placed
on a forklift and are driven to the freezer, where the bagels are frozen and stored for shipment.
Required:
1. Identify the steps in the bagel-production process that fall into each of the following categories:
process time, inspection time, move time, waiting time, storage time.
2. List the steps in the production process that could be candidates for non-value-added activities.
с
5
Purchase answer to see full
attachment
Categories: