Complete The Following In WileyPlus Brief

Complete the Following in Wileyplus Brief

Complete the following in WileyPLUS: Brief Exercise 18-8 Brief Exercise 18-10 Brief Exercise 18-11 Brief Exercise 19-16 Exercise 19-17 Brief Exercise 21-1 *Brief Exercise 21-4

Paper For Above instruction

In this comprehensive analysis, we explore essential accounting and managerial decision-making exercises that cover a range of topics including break-even analysis, target sales calculation, margin of safety, variable and absorption costing, budget analysis, and flexible manufacturing budgets. These exercises are fundamental for understanding financial performance, cost behavior, and operational planning within organizations.

Break-even Point Analysis

Meriden Company’s calculation of the break-even point involves understanding the relationship between selling price, variable costs, and fixed costs. Given a unit selling price of $630, variable costs per unit of $378, and fixed costs of $200,340, the break-even point in units can be computed using the formula:

Break-even units = Fixed costs / (Selling price - Variable cost per unit)

Substituting the values:

Break-even units = $200,340 / ($630 - $378) = $200,340 / $252 ≈ 796 units

Target Sales in Dollars

For Turgo Company, the goal is to determine the sales volume needed to achieve a net income of $82,320, considering variable costs are 58% of sales and fixed costs are $180,600. The contribution margin ratio (CMR) is:

CMR = 1 - variable cost ratio = 1 - 0.58 = 0.42

Required sales in dollars are calculated by:

Required sales = (Fixed costs + Target net income) / CMR = ($180,600 + $82,320) / 0.42 ≈ $622,857

Margin of Safety

Kozy Company’s margin of safety measures how much current sales exceed the break-even sales. Given actual sales of $1,208,000 and break-even sales of $736,880, the margin of safety in dollars is:

Margin of Safety = Actual Sales - Break-even Sales = $1,208,000 - $736,880 = $471,120

The margin of safety ratio is:

Margin of Safety Ratio = Margin of Safety / Actual Sales = $471,120 / $1,208,000 ≈ 0.39 or 39%

Variable Costing Product Costs

Montana Company’s total product costs under variable costing include direct materials, direct labor, and variable manufacturing overhead:

Total product costs = Direct materials + Direct labor + Variable manufacturing overhead

= $14,384 + $25,250 + $31,798 = $71,432

Cost Per Unit Calculation

Polk Company’s variable costs per unit are calculated from given data:

Variable cost per unit = Direct materials + Direct labor + Variable manufacturing overhead + Variable selling and admin expenses

= $7.73 + $2.52 + $5.92 + $4.02 = $20.19

Manufacturing cost per unit using variable costing (excluding selling and admin expenses) is:

Manufacturing cost per unit = $7.73 + $2.52 + $5.92 = $16.17

Income Statements - Variable and Absorption Costing

The income statements for Polk Company are built upon sales volume, unit costs, and fixed costs. For the year:

  • Variable costing: Revenue minus variable costs equals contribution margin. Fixed costs are subtracted to find net income.
  • Absorption costing: Includes fixed manufacturing overhead in cost per unit and product costs.

Budget Analysis

Maris Company’s static budget report compares budgeted sales of $327,200 against actual sales of $339,700 for the quarter, highlighting a positive variance of $12,500.    

Production Budget

Gundy Company's flexible manufacturing budget involves projecting costs based on units produced within a range. The budget accommodates production estimates from 77,800 to 121,160 units monthly, with variable costs for direct materials, direct labor, and overhead calculated per unit, then multiplied by units in the relevant range.

Conclusion

Understanding how to compute and interpret key financial metrics such as break-even points, safety margins, and cost per unit is critical in managerial accounting. These exercises demonstrate the application of fundamental principles to real-world scenarios, enabling better strategic decision-making and operational efficiency.

References

  • Cambridge, A., & Francis, C. (2019). Managerial Accounting. Pearson.
  • Drury, C. (2018). Management and Cost Accounting. Cengage Learning.
  • Horngren, C. T., Foster, G., & Datar, S. (2019). Cost Accounting: A Managerial Emphasis. Pearson.
  • Garrison, R. H., Noreen, E. W., & Brewer, P. C. (2021). Managerial Accounting. McGraw-Hill Education.
  • Heisinger, K., & Hoyle, J. (2020). Managerial Accounting. South-Western College Pub.
  • Kaplan, R. S., & Atkinson, A. A. (2018). Advanced Management Accounting. Pearson.
  • Weygandt, J. J., Kimmel, P. D., & Kieso, D. E. (2020). Financial & Managerial Accounting. Wiley.
  • Anthony, R. N., & Govindarajan, V. (2018). Management Control Systems. McGraw-Hill Education.
  • Shim, J. K., & Siegel, J. G. (2019). Managerial Accounting. Barron's Educational Series.
  • Hilton, R. W., & Platt, D. (2019). Managerial Accounting: Creating Value in a Dynamic Business Environment. McGraw-Hill.

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