Managerial Accounting
Managerial Accounting
15th Edition
ISBN: 9781337912020
Author: Carl Warren, Ph.d. Cma William B. Tayler
Publisher: South-Western College Pub
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Chapter 13, Problem 21E

a.

To determine

Prepare a table showing percentage of individual activity cost to total process cost.

b.

To determine

Calculate the average process cost per payment, assuming there are 10,000 payments.

c.

To determine

Prepare a table showing the improvements in the activity costs as a result of the changes proposed by management.

d.

To determine

Calculate the average process cost per payment, assuming there are 10,000 payments.

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Sunland Company manufactures outdoor fireplaces. For the first 9 months of 2020, the company reported the following operating results while operating at 80% of plant capacity: Sales (79,900 units) $7,111,100 Cost of goods sold 5,093,625 Gross profit 2,017,475 Operating expenses 799,000 Net income $1,218,475 Cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed. In October; Sunland Company receives a special order for 4,200 fireplaces at $61 each from Langston's Landscape Company. Acceptance of the order would result in an additional $7,600 of shipping costs but no increase in fixed operating expenses. (a) Prepare an incremental analysis for the special order. (Enter loss using either a negative sign preceding the number e.g. -2,945 or parentheses e.g. (2,945).) Revenues $ +A Costs Cost of Goods Sold Operating Expenses Shipping Expenses Net Income Reject order Accept order Net Income Increase (Decrease) $ $ S SA SA

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Managerial Accounting

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