50.1K

Verified Solution

Link Copied!

Neptune Transport Company makes per carriers, the Cat-allac. It is made of plastic with metal doors. Information for the product for the month of October is given in the following tables: Input Prices Direct Materials Plastic $4.5 per pound Metal $ 3 per pound Direct Manufacturing Labor $11 per direct manufacturing labor hours Manufacturing Overhead Rate $20.5 per direct manufacturing labor hours

Input Quantities per unit of output

Cal-allac

Direct Materials Plastic 5 Pounds Metal 1 Pounds Direct Manufacturing Labor 3 Hours Inventory Information, direct materials

Plastic Metal Beginning inventory 200 Pounds 75 Pounds Target ending inventory 280 Pounds 80 pounds Cost of beginning inventory $940 $240 Production & Inventory Information, finished goods Cal-allac Units of finished goods to be produced 520 Units of finished goods to be sold 500 Target ending inventory in units 50 Beginning inventory in units 30 Beginning inventory in dollars $3,150

Other Information: Current Assets $160,000 Long-Term Assets 340,000 Budgeted operating income 10,000 Markup Percentage on Full Cost 11.63% Instructions: I. Prepare a direct material usage budget. (5) II. Determine budgeted unit cost of ending finished goods inventory. (3)

Advanced Managerial Accounting Mid-Term SUMMER 2021 Course Instructor: ANI Total Marks: 40 III. Calculate Neptunes rate of return on investment. Compute the selling price for Cal-allac if Neptune charge 60% mark-up on its unit product cost. (1+2) IV. Assume that apart from direct materials, direct labor and 50% of itsMOH cost, other variable costs that Neptune incur per unit is $ 31.25. Calculate Neptunes mark-up percentage on variable cost per unit (3).

Answer & Explanation Solved by verified expert

See Answer