I need help with this accounting problem Chocolate Bars, Inc. (CBI), manufactures creamy deluxe chocolate candy bars. The firm has developed three distinct products: AlmondDream, Krispy Krackle, and Creamy Crunch.CBl is profitable, but management is quite concerned about the profitability of each product and the product costing methods currentlyemployed. In particular, management questions whether the overhead allocation base of direct labor-hours accurately reflects thecosts incurred during the production process of each product.In reviewing cost reports with the marketing manager, Steve Hoffman, who is the cost accountant, notices that Creamy Crunch appearsexceptionally profitable and that Almond Dream appears to be produced at a loss. This surprises both him and the manager, and aftermuch discussion, they are convinced that the cost accounting system is at fault and that Almond Dream is performing very well at thecurrent market priceSteve decides to hire Jean Sharpe, a management consultant, to study the firm's cost system over the next month and present herfindings and recommendations to senior management. Her objective is to identify and demonstrate how the cost accounting systemmight be distorting the firm's product costs.Jean begins her study by gathering information and documenting the existing cost accounting system. It is rather simplistic, using asingle overhead allocation base-direct labor-hours-to calculate and apply overhead rates to all products. The rate is calculated bysumming variable and fixed overhead costs and then dividing the result by the number of direct labor-hours. The product cost isdetermined by multiplying the number of direct labor-hours required to manufacture the product by the overhead rate and adding thisamount to the direct labor and direct material costs.CBI engages in two distinct production processes for each product. Process 1 is labor intensive, using a high proportion of directmaterials and labor. Process 2 uses special packing equipment that wraps each individual candy bar and then packs it into a box of 24bars. The boxes are then packaged into cases, each of which has six boxes. Special packing equipment is used on all three productsand has a monthly capacity of 3,000 cases, each containing 144 candy bars (= 6 boxes x 24 bars).To illustrate the source of the distortions to senior management, Jean collects the cost data for the three products, Almond Dream,Krispy Krackle, and Creamy Crunch.KrispyKrackleAlmondCreamyCrunchDreamProduct costsLabor-hours per caseTotal cases producedMaterial cost per case7.83.81.01,000$ 8.80$ 46.801,000$ 9.30$ 6.001,000$ 2.80$ 22.80Direct labor cost per caseLabor-hours per productTotal overhead = $73,500Total labor-hours = 12,6007,8003,8001,000Direct labor costs per hour = $6.00Allocation rate per labor-hour = (a).Costs of productsMaterial cost per caseDirect labor cost per caseAllocated overhead per case (to be computed)$ 8.80$ 2.80$ 9.3046.8022.806.00(b)(c)(f)(d)Product cost(e)(9)(g)CBI recently adopted a general policy to discontinue all products whose gross profit margin percentages [(Gross margin - Sellingprice) x 100] were less than 10 percent. By comparing the selling prices to the firm's costs and then calculating the gross marginpercentages, Jean could determine which products, under the current cost system, should be dropped. The current selling prices ofAlmond Dream, Krispy Krackle, and Creamy Crunch are $93.00, $65.00, and $30.00 per case, respectively. Overhead will remain$73,500 per month under all alternatives. Required:a-1. Complete the table under the current cost system.a-2. Determine which product(s), if any, should be dropped.c-1. Assume that CBI drops the product(s) identified in requirement (a) above. Calculate the gross profit margin percentage for theremaining products. Assume that CBI can sell all products that it manufactures and that it will use the excess capacity from dropping aproduct to produce more of the most profitable product.c-2. If CBI maintains its current rule about dropping products, which additional products, if any, should CBI drop under the existing costsystem?d-1. Assume that CBI drops the products identified in requirements (a) and (c) above. Recalculate the gross profit margin percentagefor the remaining product(s) and ascertain whether any additional product(s) should be dropped.d-2. Which additional products, if any, should CBI drop under the existing cost system?Complete this question by entering your answers in the tabs below.Req AlReq A2Req C1Req C2Req D1Req D2Complete the table under the current cost system. (Round your intermediate calculations and final answers to 2 decimalplaces. Negative values should be indicated with a minus sign.)Almond Dream Krispy Krackle Creamy CrunchProduct costs:Labor-hours per case7.803.801.00Total cases produced1,0001,0001,000Material cost per case$ 2.808.809.30Direct labor cost per case46.80$ 22,806.00Labor-hours per product7,8003,8001,000Total overhead$ 73,500Total labor-hours12,600Direct labor costs per hour6.00Allocation rate per labor-hourCosts of products:Material cost per case8,802.809.30Direct labor cost per case46.8022.806.00Allocated overhead per caseProduct cost$ 25.60 $ 15.3055.60Selling priceGross profit margin percentage< Reg A1Req A2 >

Name: I need help with this accounting problem Chocolate Bars, Inc. (CBI), m
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Description: I need help with this accounting problem Chocolate Bars, Inc. (CBI), manufactures creamy deluxe chocolate candy bars. The firm has developed three distinct products: AlmondDream, Krispy Krackle, and Creamy Crunch.CBl is profitable, but management is

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Chocolate Bars, Inc. (CBI), manufactures creamy deluxe chocolate candy bars. The firm has developed three distinct products: Almond Dream, Krispy Krackle, and Creamy Crunch. CBI is profitable, but management is quite concerned about the profitability of each product and the product costing methods currently employed. In particular, management questions whether the overhead allocation base of direct labor-hours accurately reflects the costs incurred during the production process of each product. In reviewing cost reports with the marketing manager, Steve Hoffman, who is the cost accountant, notices that Creamy Crunch appears exceptionally profitable and that Almond Dream appears to be produced at a loss. This surprises both him and the manager, and after much discussion, they are convinced that the cost accounting system is at fault and that Almond Dream is performing very well at the current market price. Steve decides to hire Jean Sharpe, a management consultant, to study the firm's cost system over the next month and present her findings and recommendations to senior management. Her objective is to identify and demonstrate how the cost accounting system might be distorting the firm's product costs. Jean begins her study by gathering information and documenting the existing cost accounting system. It is rather simplistic, using a single overhead allocation base-direct labor-hours-to calculate and apply overhead rates to all products. The rate is calculated by summing variable and fixed overhead costs and then dividing the result by the number of direct labor-hours. The product cost is determined by multiplying the number of direct labor-hours required to manufacture the product by the overhead rate and adding this amount to the direct labor and direct material costs. CBI engages in two distinct production processes for each product. Process 1 is labor intensive, using a high proportion of direct materials and labor. Process 2 uses special packing equipment that wraps each individual candy bar and then packs it into a box of 24 bars. The boxes are then packaged into cases, each of which has six boxes. Special packing equipment is used on all three products and has a monthly capacity of 3,000 cases, each containing 144 candy bars (= 6 boxes x 24 bars). To illustrate the source of the distortions to senior management, Jean collects the cost data for the three products, Almond Dream, Krispy Krackle, and Creamy Crunch.