Account 249 spring 2017 chapter 6: vader collectibles, inc. part 2

ACCOUNT 249

Spring 2017

Chapter 6: Vader Collectibles, Inc. Part 2 Graded Homework Assignment

15 points

 

Due Date

Monday, March 6, 2017:  Sections 01, 03, 06, 07, 09, 10, 11

Tuesday, March 7, 2017:  Sections 02, 04, 05, 08, 12

 

Assignment Learning Goals

This assignment is designed to help you learn how to:

1.    Understand the difference between the calculation of product costs under variable costing and absorption costing.

2.    Explain what causes a difference between net income under variable costing and absorption costing.

3.    Understand segmented income statements and calculate break-even sales for the company as a whole and for individual segments.

 

 

Required

1.    Read the information about Vader Collectibles, Inc.presented on page 2.

2.    Use the calculation forms presented on pages 3 & 4 to organize the information you have been given.

3.    Use concepts presented in Chapter 6to make the calculations necessary to determine the required information.

 

 

Guidelines and Policies for Graded Assignments

1.        Your assignment can be hand-written or computerized using Word or Excel.  However, you must present your answer using the forms presented on pages 3 and 4.  Five points will be deducted from your score if your answer is not presented using the T-accounts and forms presented on pages 3 and 4.

 

2.    All assignments will be collected at the beginning of the class period in which the assignment is due. 

 

3.        All assignments must be turned in during the class period in which they are due in order to receive full credit.  As stated in the course syllabus, grades will be reduced by 25% for assignments turned in by midnight of the day they are due.  No credit will be given for any assignment turned in after the day on which it is due unless the student discusses a specific situation with the instructor before the assignment is due. 

 

4.        Be sure your name and section number is on the assignment you turn in.

 

 

 

Chapter 6:  Vader Collectibles, Inc. Part 2 Graded Homework Assignment

Spring 2017

 

When Darth Vader isn’t too busy ridding the galaxy of rebel scum, he enjoys running his own business, Vader Collectibles, Inc. Vader Collectibles sells premium-quality model Death Stars. The model Death Stars include miniature superlasers with enough power to destroy the four Rebel Trooper action figures that are included with purchase.

 

After making Vader Collectibles, Inc. profitable by using the awesome power of managerial accounting, Darth Vader has decided to apply for a bank loan in order to obtain funds to expand the business. Up until now, Darth Vader has only been using contribution margin income statements and variable costing, but the bank has requested a traditional income statement that uses absorption costing, which is required by Galactic GAAP.

 

Information (used for Questions 1-4) on Vader Collectibles, Inc. for the past year is below:

 

Selling price per unit

$90

Units in beginning inventory

25,000

Units produced

65,000

Units sold

77,000

Units in ending inventory

13,000

Variable costs per unit:

 

         Direct Materials

$35

         Direct Labor

$14

         Variable manufacturing overhead

$8

         Variable selling and administrative

$11

Fixed costs

 

         Fixed manufacturing overhead (total)

$455,000

         Fixed manufacturing overhead (per unit)

$7

         Fixed selling and administrative

$650,000

 

Darth Vader realizes that none of the pesky rebels have been buying his model Death Stars, so he is missing out on a sizeable amount of customers.  In response, he plans to open a new business segment and sell model X-Wings, which should be more attractive to rebel customers.

 

Vader believes that if he adds the X-Wing segment, the following information (used for Questions 5 and 6) will be true:

 

Company-wide sales

$12,730,000

Company-wide variable expense ratio

68%

Company-wide net operating income

$1,525,000

Death Star segment variable expenses

$5,236,000

Death Star segment variable expenses ratio

70%

Death Star traceable fixed expenses

$1,025,000

X-Wing segment margin

$989,000

 

Requirements:

Using the information presented above, perform the following:

 

1.    Show how the amount of fixed manufacturing overhead per unit is calculated.

2.    Calculate product cost per unit using both variable and absorption costing.

3.    Calculate the amount of Net Operating Income under absorption costing.

4.    Prepare Vader Collectible’s absorption costing income statement.

5.    Prepare Vader Collectible’s segmented income statement.

6.    Calculate Vader Collectible’s company-wide break-even point in sales dollars.

 

Chapter 6:  Vader Collectibles, Inc. Graded Homework Assignment

 

Student Name:                                                                                                                                                            Section Number:                                

 

  1. Fixed manufacturing overhead per unit is $7. Show how this was calculated.

 

 

 

2. Calculate Vader’s product cost per unit using both variable costing and absorption costing.

           

 

Calculation

$ Amount

Variable costing product cost per unit

 

 

Absorption costing product cost per unit

 

 

 

 

3. If Variable Costing results in Net Operating Income of $589,000, calculate the amount of Net Operating Income under Absorption Costing. Present your answer in the form of a reconciliation report:

 

Variable Costing Net Operating Income

($ Amount)

 

 

(Label)

 

 

(Calculation)

 

 

($ Amount)

 

 

Absorption Costing Net Income

($ Amount)

 

 

     

 

4. Prepare Vader Collectibles, Inc.’s Absorption Costing Income Statement.

 

Label

Calculation

$ Amount

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

5. Prepare Vader Collectibles, Inc.’s segmented income statement with the Death Star and X-Wing Segments.Important:  for the X-Wing Segment’s variable expenses ratio and contribution margin ratio, round to the nearest whole percent (for example, 0.452 would round to 45%). Use these rounded amounts when using the X-Wing’s Segment’s variable expense or contribution margin ratio in any subsequent calculations.

 

 

Total Company

Death Star

X-Wing

 

$ Dollar Amounts

Ratios (%)

$ Dollar Amounts

Ratios (%)

$ Dollar Amounts

Ratios (%)

Sales

 

 

 

 

 

 

Variable Expenses

 

 

 

 

 

 

Contribution Margin

 

 

 

 

 

 

Traceable Fixed Expenses

 

 

 

 

 

 

Segment Margin

 

 

 

 

 

 

Common Fixed Expenses

 

         

Net Operating Income

 

         
               

 

 

 

6. Calculate Vader Collectible’s company-wide break-even point in sales dollars.

 

 

 

 

 

 

 

 

 

 

 

University Writings
Calculate your paper price
Pages (550 words)
Approximate price: -

Why Work with Us

Top Quality and Well-Researched Papers

We always make sure that writers follow all your instructions precisely. You can choose your academic level: high school, college/university or professional, and we will assign a writer who has a respective degree.

Professional and Experienced Academic Writers

We have a team of professional writers with experience in academic and business writing. Many are native speakers and able to perform any task for which you need help.

Free Unlimited Revisions

If you think we missed something, send your order for a free revision. You have 10 days to submit the order for review after you have received the final document. You can do this yourself after logging into your personal account or by contacting our support.

Prompt Delivery and 100% Money-Back-Guarantee

All papers are always delivered on time. In case we need more time to master your paper, we may contact you regarding the deadline extension. In case you cannot provide us with more time, a 100% refund is guaranteed.

Original & Confidential

We use several writing tools checks to ensure that all documents you receive are free from plagiarism. Our editors carefully review all quotations in the text. We also promise maximum confidentiality in all of our services.

24/7 Customer Support

Our support agents are available 24 hours a day 7 days a week and committed to providing you with the best customer experience. Get in touch whenever you need any assistance.

Try it now!

Calculate the price of your order

Total price:
$0.00

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

No need to work on your paper at night. Sleep tight, we will cover your back. We offer all kinds of writing services.

Essays

Essay Writing Service

No matter what kind of academic paper you need and how urgent you need it, you are welcome to choose your academic level and the type of your paper at an affordable price. We take care of all your paper needs and give a 24/7 customer care support system.

Admissions

Admission Essays & Business Writing Help

An admission essay is an essay or other written statement by a candidate, often a potential student enrolling in a college, university, or graduate school. You can be rest assurred that through our service we will write the best admission essay for you.

Reviews

Editing Support

Our academic writers and editors make the necessary changes to your paper so that it is polished. We also format your document by correctly quoting the sources and creating reference lists in the formats APA, Harvard, MLA, Chicago / Turabian.

Reviews

Revision Support

If you think your paper could be improved, you can request a review. In this case, your paper will be checked by the writer or assigned to an editor. You can use this option as many times as you see fit. This is free because we want you to be completely satisfied with the service offered.