Coma- BlackHeath Manufacturing company - Revisited (has errors)

8/17/2019 Coma- BlackHeath Manufacturing company - Revisited (has errors)

1/44

January Acti

Estimate Actual

Production 2350 2250

Sales Revenu 14000 15750

raw mat end 600 D Material 1762.5 1660

all unpaid Direct Labor 237.5 2!12

Indirect Lab 470 !5

Electricity 235 325

Other overh 1175 1600

Indirect Mat 1350 1570

Factory Insu 562.5 562

ofce expen 3514.5 2260

commission 1400 1400


2/44

ity

"ariance "ariance #

100 4.2553114

$1750 $12.5

102.5 5.!15602!37

125.5 4.272340426

$425 $0.425531

$0 $3!.27!723

$425 $36.170212!

$220 $16.26263

0.5 0.0!!!!!!!

1254.5 35.64775

0 0


3/44

Note Strai%&t 'ine (epreciation assumed

All )%ures in *

A!!E"!

1 +urrent Assets

2 +as& ,507

3 Receiva-les 15330

4 Raw aterials 525

/0.75unit

5 inis&ed %ood inventor 520!

/*4.6unit

6 oce eupment 12027 actor euipment 66625

! 'and 5000

otal Assets 114223.5


4/44

#LA$%&EA"& MAN'FA$"'(IN) $OM*AN+

#ALAN$E !&EE" A! ON MA($& ,-

1

2

1

2


5/44

LIA#ILI"IE!

Accounts Paa-le 1500

otes Paa-le 30000

!"O$%&OLDE( E.'I"+

+apital 8 ra9al%ar :lac;&eat& !56!7

Retained Earnin%s 240

!317

otal 'ia-


6/44


7/44

ote 8

All )%ures in *

#LA$%&EA"& $OM*AN+

$ash #ud/et

As on March ,-

JAN FE# MA($&

Initial $ash #alanc 10,000 !,!4! ,0!5

$ollections 13510 14350 14210

$ash Available 23,510 23,1! 23,25

*ayments

( purc&ase 1762.5 1537.5 1500

(irect 'a-or 237.5 2562.5 2500=ndirect 'a-or 470 410 400

Electricit 235 205 200

=ndirect aterials 1350 1350 1350

actor =nsurance 562.5 563 563

>t&er >ver&ead 45 45 45

+ommisions 1400 1540 1330

Personal 1400 1400 1400

+onsultin% 9ee 00 00 00

Salaries 1!00 1!00 1!00

Rent 00 00 00

?tilities 450 450 450

"otal *ayments 14662.5 14113 137!!

Endin/ $ash #alan !,!4! ,0!5 ,507

+as& :urn 1,153 $237 $422


8/44

Note

1

2

3

4

5

6

7


9/44

Strai%&t 'ine (epreciation assumed

All )%ures in *


IN$OME !"A"EMEN" FO( *E(IOD ENDIN) MA($&

JAN'A(+ FE#('A(+

Sales Revenue 14000 15400

+ost o9 %ood sold 1000 10060

@ross ar%in 3100 5340

S,@A eBpenses and ot&ers 7214.5 7354.5

E:= $4114.5 $2014.5

=ncome aBC25# 0 0

et =ncome $4114.5 $2014.5


10/44

$olumn- Jan 0eb

co/s 1000 10060

dm 1762.5 1537.5

MA($& .'A("E( dl 237.5 2562.5

over&ead plu 6200 560

13300 42700

20 30!!0

33!0 11!20 Mar1etin/ and !ales23ariable4

7144.5 21713.5 JAN FE#

$3764.5 $!3.5 per unit Sale 7 7

0 0 EBpected uni 2000 2200

$3764.5 $!3.5 @ross Sale 14000 15400

Sales commi 1400 1540

)eneral admin expenses

per mont&/D

7!1per wee; 3514.5

"O"AL !)A expense

Jan Feb March

414.5 5054.5 4!44.5

other expe

Jan

*ersonal Expenses 0or 1400

$onsultin/ 0ees 00

total 5mont 2300


11/44

march total

20 30!!0

1500 4!00

2500 !000

520 1!0!0

MA($&

7

100

13300

1330

.5

ses

Feb March

1400 1400

00 00

2300 2300


12/44

#'D)E"

3A(IA#LE $O!"!

$ost Formula

per unit cost

0.75

1.25

0.2

0.1

0.5

FI6ED $O!"!

FA$"O(+

=ndirect la-or per wee;

=ndirect materials per wee;

Electricit per wee;

actor =nsurance per wee;

>t&er over&ead per wee;

(epreciation

otal +ost

+ost?nit

OFFI$E

Salaries /includin% 9rin%e -ene)ts and paroll taB

Rent on oce(epreciation on oce euipment

?tilities

otal +ost

O"&E(!


13/44

Personal EBpenses 9or ra9al%ar

+onsultin% 9ees

"O"AL FI6ED $O!" per month

2assumin/ - month 7 89 days4

$O!"!

otal "aria-le +ost o9 production

Sales commision paid /10# o9 %ross sales

>A' =E( +>S per mont&

"otal estimated costs per month

1

2

1

2

3

4

M

1

2


14/44

3

1

2

3

4

1

2

3

4

5

1

2

3

4

56


15/44

All $ost In :

$ost Item January

*ro;ected units produce

2350

Material 1762.5

Direct Labor 237.5

Indirect Labor 470

Electricity 235

Other overhead Err850

"otal 3ariable $ost o0 productio 65!0

cost per wee; per mont&/D4.2!

100 42!

300 12!4

75 321

125 535

110 470.!

262.5 1125

72.5 4163.!

cost per wee; per mont&/D4.2!

400 1712

200 !56!1 346.6!

100 42!

7!1 3342.6!

per mont&


16/44

1400

00

10134.5

JAN FE#

65!0 5740

1400 1540

10134.5 10134.5

-9-- -?F 1!!0

iBed >F 315


17/44

(epreciation 1125

otal >F 6200


*(OD'$"ION #'D)E"

JAN'A(+

EBpected Sale /o. o9 ?nits 2000

E> =nventor 1100

:> =nventor 750

Production Estimate 2350


DI(E$" MA"E(IAL '!E #'D)E"

JAN'A(+

?nits Produced 2350

( per unit 1

:ud%eted ( 2350

+ost o9 ( per unit 0.75

:ud%eted ( +ost 1762.5


DI(E$" MA"E(IAL *'($&A!E #'D)E"

JAN'A(+

( reuired 2350

E> Raw aterial 700

:> Raw aterial !00

( Purc&ase 2250

( costunit 0.75:ud%et ( cost 16!7.5


18/44

Note

$olumn- Feburary

(a@ Material used *ro;ected units produce

2350 2050

1537.5

2562.5

410

205

Err850

5740

per mont&/4.5

450

1350

337.5

562.5

45

1125

4320

per mont&/4.5

1!00

00364.5

450

3514.5


19/44

MA($&

5600

1330

10134.5

-?B

#'D)E"

FE#('A(+ MA($&

2200 100

7 7

15400 13300

FE#('A(+ MA($&

2050 2000

1 1

2050 2000

1.25 1.25

2562.5 2500

FE#('A(+ MA($&

1640 1600

315 315


20/44

1125 1125

560 520

FE#('A(+ MA($&

2200 100

50 1050

1100 50

2050 2000

FE#('A(+ MA($&

2050 2000

1 1

2050 2000

0.75 0.75

1537.5 1500

FE#('A(+ MA($&

2050 2000

700 700

700 700

2050 2000

0.75 0.751537.5 1500


21/44

Strai%&t 'ine (epreciation assumed

All )%ures in *

$olumn8 March

(a@ Material used *ro;ected units produce

2050 2000

1500

2500

400

200

Err850

5600

Mar1etin/ and !ales23ariable4

JAN

per unit Sale price 7

EBpected unit Sale 2000

@ross Sale 14000

Sales commision paid /10# o9 %ross s 1400

3ariable Manu0 Overhead Jan

Indirect Labor 470

Electricity 235Other overhead 1175

otal 1!!0

Fixed Manu0 Overhead

710per wee;

plus depreciation 1125


22/44

+olumn1 Jan

co/s 1000

dm 1762.5

dl 237.5

over&ead plus depr 6200

?nits sold 2350

cost per unit 4.63!27!723

.'A("E(

6100

7

0

Err850!

.'A("E(

6400

1

6400

1.25

!000

.'A("E(

5120

Err850


23/44

Err850!

1!0!0

.'A("E(

6100

1050

750

6400

.'A("E(

6400

1

6400

0.75

4!00

.'A("E(

6400

700

!00

6300

0.754725


24/44

$olumn, $olumn<

(a@ Material used

2000

"ar (c

"ar (+

"ar >F

"ar >F

"ar >F

FE# MA($&

7 7

2200 100

15400 13300

1540 1330

Feb March

410 400

205 2001025 1000

1640 1600

per mont&/D4.5

315

4320


25/44

0eb march total

10060 20 Err850!

1537.5 1500 Err850!

2562.5 2500 Err850!

560 520 Err850!

2050 2000

4.073170732 4.6

+ontri-ution ar%in

/Revenue$ All "aria-le +osts

JAN'A(+ FE#('A(+

EBpected Sale /o. o9 2000 2200

otal Revenues 14000 15400 otal "aria-le +ost 65!0 5740

+ontr-ution 7420 660

+ontri-ution ar%in/# 53 62.72727273


26/44


27/44

Depriciation on 0actory and eCuipment

5 ears 60 mont&s

70000 2500

per mont& cost o9 depreciation

1125


28/44

MA($& .'A("E(

100 6100

13300 427005600 1720

7700 247!0

57.!4736!421 5!.0327!6!


29/44


30/44

-= *roduction #ud/et

9or Gan,9e-,marc&

ont&

(ecem-er

Hanuar

e-ruar

arc&

April

ont& EBpected Sales

(ec 1!00

Han 2000

e- 2200

arc& 100

April 2100

#LA$%&EA"& MAN

*(OD'$"ION #'D)

1 EBpected Sale /o. o

2 E> =nventor

3 :> =nventor

4 Production Estimate


31/44

#LA$%&EA"& MAN

DI(E$" MA"E(IAL

1 ?nits Produced

2 ( per unit

3 :ud%eted (

4 +ost o9 ( per unit

5 :ud%eted ( +ost

#LA$%&EA"& MAN

DI(E$" MA"E(IAL

1 ( reuired

2 E> Raw aterial3 :> Raw aterial

4 ( Purc&ase

5 ( costunit

6 :ud%et ( cost


32/44

(a@ Materials !chedule

EBpected Sales

1!00

2000

2200

100

2100

E> ar%et =nventor /&al9 o9 eBpected sales o9 neBt mont&

1100

50

1050

IREJ

Final "ables *roduction and ra@ material

'FA$"'(IN) $OM*AN+

" JAN'A(+

2000

1100

750

2350


33/44

'FA$"'(IN) $OM*AN+

'!E #'D)E"

JAN'A(+

2350

1

2350

0.75

1762.5

'FA$"'(IN) $OM*AN+

*'($&A!E #'D)E"

JAN'A(+

2350

700!00

2250

0.75

16!7.5


34/44

KEL

E> End o9 mont&

:> :e% o9 mont&

ont&

octo-er

novem-er

Raw aterial "alue in :>

Raw aterial uantit :cost o9 raw material/uni

E> Raw aterial /not less t&an 700 :> Raw material

700 !00

700 700

700 700

700 700

FE#('A(+ MA($&

2200 100

50 1050

1100 50

2050 2000


35/44

FE#('A(+ MA($&

2050 2000

1 1

2050 2000

0.75 0.75

1537.5 1500

FE#('A(+ MA($&

2050 2000

700 700700 700

2050 2000

0.75 0.75

1537.5 1500


36/44

Note Strai%&t 'ine (epreciati

All )%ures in *

Actual Sales

1500

2300

Han/* 600

Han/units !00 0.75

:> =nventor Production Raw aterial ?se

750 2350 Err850

1100 2050 Err850

50 2000 Err850

1050 Err850

.'A("E(

6100

Err850

Err850

Err850!


37/44

.'A("E(

Err850!

1

6400

0.75

4!00

.'A("E(

Err850!

700!00

Err850!

0.75

Err850!


38/44

on assumed

Raw aterial to purc&ase +ost o9 Production +ost o9 Purc&ase

4.72 0.75

at t&e rate o9 *unit at t&e rate o9 *unit

2250 1102 16!7.5

2050 676 1537.5

2000 440 1500


39/44


40/44

(ou/h

@ross ar%in M @PS

@ross Pro)t

/pro9. measure

et mar%in M npns

Pro)t mar%in /t&e ratio o9 net income to net sales

+>@S M "ARSS /eBcludin% admin


41/44

et Sales

onl prod cost no

sales$var

/not )Bed over&ead

n% inventor and 9or determinin% t&e c


42/44

RevMsalesMnet sales

income M pro)t

rom an accountin% standpoint, sales do not occur until t&e product

salesMprice paid - cB

revenue M total amount o9 mone ta;en in 9rm all activities inc sale

over&ead, paroll, taBation, and interest paments.

Sales$+>@S$ot&er "ar+osts

t&ree measures o9 a companOs pro)t mar%in

@ross ar%in M @PS

operatin% pr mar%innet pro)t mar%in

et sales /revenue

N +ost o9 %oods sold

@ross Pro)t

N S@A eBpenses /com-ined costs o9 operatin% t&e compan

N R(

E:=(A

N (epreciation and amortiation

E:=

N =nterest eBpense /cost o9 -orrowin% mone

E:

N aB eBpense

et =ncome /EA :>> '=E

"aria-le costin% is a mana%erial accountin% cost concept. ?nder t&i


43/44

account rec

%ross pro)t a9ter prod cost

pro)t a9ter op costsde-t interest, taBes and an additional costs

met&od, manu9acturin% over&ead is incurred in t&e p


44/44

riod t&at a product is produced.

Documents

Coma- BlackHeath Manufacturing company - Revisited (has errors)