Little Things Manufactures Toys For Each Item Listed

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EA1 LO 4.1 Little Things manufactures toys. For each item listed, identify whether it is a product cost, a period cost, or not an expense. A. internet provider services B. material expense C. raw materials inventory D. production equipment rental E. showroom rental F. factory employee salary G. Human Resource Director salary EA 2 . LO 4.2 Table 4.3 shows a list of expenses involved in the production of custom, professional lacrosse sticks. A. For each item listed, state whether the cost should be applied to manufacturing or sales and administration. B. If the cost is a manufacturing cost, state whether it is direct materials, direct labor, or manufacturing overhead. C. If the cost is a manufacturing overhead cost, state whether it is indirect materials, indirect labor, or another type of manufacturing overhead. Expenses Involved in Lacrosse Stick Production Lacrosse Stick Production Costs Manufacturing or Sales & Administration Cost? If Manufacturing: Direct Materials, Direct Labor, or Overhead? If Overhead: Indirect Materials, Indirect Labor, or Other? Carbon, fiberglass Administrative building rent Accountant salary Factory building depreciation Strings for the pocket Advertising Production supervisor salary Paint for sticks Research and development costs Wages of person who strings the sticks Cutting machine depreciation Human resources salaries Factory maintenance Table 4.3 EA 5 . LO 4.3 Sterling’s records show the work in process inventory had a beginning balance of $4,000 and an ending balance of $3,000. How much direct labor was incurred if the records also show: EA 6 . LO 4.3 Logo Gear purchased $2,250 worth of merchandise during the month, and its monthly income statement shows cost of goods sold of $2,000. What was the beginning inventory if the ending inventory was $1,000? EA 7 . LO 4.4 A company estimates its manufacturing overhead will be $750,000 for the next year. What is the predetermined overhead rate given the following independent allocation bases? A. Budgeted direct labor hours: 60,000 B. Budgeted direct labor expense: $1,500,000 C. Estimated machine hours: 100,000 EA 9 . LO 4.4 A new company started production. Job 10 was completed, and Job 20 remains in production. Here is the information from job cost sheets from their first and only jobs so far: Using the information provided, A. What is the balance in work in process? B. What is the balance in the finished goods inventory? C. If manufacturing overhead is applied on the basis of direct labor hours, what is the predetermined overhead rate? EA 14 . LO 4.7 A company’s individual job sheets show these costs: Overhead is applied at 1.25 times the direct labor cost. Use the data on the cost sheets to perform these tasks: A. Apply overhead to each of the jobs. B. Prepare an entry to record the assignment of direct materials to work in process. C. Prepare an entry to record the assignment of direct labor to work in process. D. Prepare an entry to record the assignment of manufacturing overhead to work in process. image2.jpeg image3.jpeg image1.jpeg BUS/721 v8 Vision Framework Worksheet BUS/721v8 Vision FrameworkWorksheet Part A: Write a 175- to 260-word response to each prompt below. Ensure each response is · thorough and complete · supported with rationale · edited carefully for grammar, punctuation, and spelling errors · formatted according to course-level APA guidelines (where applicable) · cited correctly (where applicable) Prompt 1 –Exploring the Vision Identify up to 3 possible optimization opportunities in data analytics relevant to your chosen organization. In your response be sure to: · Describe the optimization issues clearly. · Explain the proposed opportunity or remedy for each issue. · Provide sufficient context for each issue and opportunity. Click to add your response. Prompt 2 –Developing the Vision For each opportunity you identified, make connections to Figure 1.1, “The Work of Leaders Overview,†in Ch. 1 of The Work of Leaders . Use the questions below to guide your response. · How willyou demonstrate open-mindedness as you develop your vision? · How willyou prioritize the “Big Picture†of your vision? · How will your solutions embody boldness? Click to add your response. Prompt 3 – Desired Outcomes Describe the intended result of implementing your vision for optimization of operations. Be sure to include legal and ethical considerations. Provide rationale for your response. Click to add your response. Prompt4 – Leadership Competencies Describe the leadership competencies necessary to align and execute this vision. Specify any particular milestones necessary for the plan. Click to add your response.

Paper For Above instruction

In the competitive landscape of toy manufacturing, understanding the distinction between costs and expenses is crucial for effective financial management and strategic planning. This paper aims to analyze various costs involved in the manufacturing process of toys at Little Things, a toy manufacturing company, and address related managerial accounting questions. Additionally, the discussion extends to a comprehensive understanding of cost behavior, and how these costs impact decision-making, profitability, and operational efficiency within the organization.

Classification of Costs at Little Things

Identifying whether specific expenses are product costs, period costs, or not expenses aids managers in pricing, budgeting, and financial reporting. For example, internet provider services (A) are considered a period cost because they are not directly tied to production and are incurred regardless of manufacturing output. Material expenses (B), on the other hand, are classified as product costs, as they relate directly to the creation of toys. Raw materials inventory (C) is a product cost account that tracks the cost of materials not yet used in production. Production equipment rental (D) and factory employee salaries (F) are classified as manufacturing overhead costs because they are necessary for production but are not directly traceable to individual products. Showroom rental (E) and Human Resource Director salary (G) are treated as period costs, reflecting expenses that support administrative functions rather than manufacturing activities.

Cost Behavior in Lacrosse Stick Production

When analyzing expenses involved in manufacturing lacrosse sticks, it is essential to categorize each cost correctly according to its nature and application. Manufacturing costs include raw materials (carbon, fiberglass, strings, paint), direct labor (wages of workers stringing sticks), and manufacturing overhead (depreciation of machinery, factory maintenance). For example, the wages of the person who strings the sticks are classified as direct labor, while factory depreciation and maintenance are overhead costs. Administrative expenses such as office rent and accountant salaries are classified as selling, general, and administrative expenses, contributing to sales and administrative activities rather than manufacturing.

Work in Process Inventory and Cost Analysis

Understanding the flow of costs through work-in-process (WIP) inventory involves analyzing beginning and ending balances. Sterling’s records show a beginning WIP of $4,000 and an ending WIP of $3,000. To determine the direct labor incurred, we use the formula: Beginning WIP + Direct Materials + Direct Labor + Manufacturing Overhead - Cost of Goods Manufactured = Ending WIP. Assuming cost of goods manufactured can be derived from the inventory data and other costs, the direct labor incurred can be calculated accordingly. Similarly, inventory valuation involves understanding purchases, beginning inventory, and ending inventory. With total purchases of $2,250 and COGS of $2,000, the beginning inventory was $1,750, computed as beginning inventory = ending inventory + COGS - purchases.

Manufacturing Overhead Rate and Job Costing

Estimating manufacturing overhead involves dividing the budgeted overhead by an appropriate allocation base. For example, using direct labor hours, the predetermined overhead rate is calculated as Overhead / Budgeted direct labor hours. Given a projected overhead of $750,000 and 60,000 or $1,500,000 of labor expense, the overhead rate can be determined, affecting job costing accuracy. When jobs are completed, applying overhead based on direct labor hours ensures cost accuracy and proper product pricing.

Work in Process and Finished Goods Balances

Analyzing specific job costs allows us to determine the Work in Process (WIP) and Finished Goods inventories. The balance in WIP is calculated from the sum of costs of ongoing jobs, while Finished Goods includes costs of completed jobs ready for sale. Using the provided data, the calculation involves assigning direct materials, direct labor, and overhead to each job, and adjusting inventories accordingly. Accurate application of overhead at 1.25 times direct labor costs ensures precise cost allocation.

Strategic Implications and Leadership

Effective managerial accounting supports strategic decision-making by providing detailed insights into costs and profitability. Leaders need to demonstrate competencies such as analytical thinking, ethical judgment, and strategic vision to implement cost management initiatives. Milestones such as establishing cost allocations, improving inventory management, and monitoring job costs are essential for progress. Supporting theories like Activity-Based Costing further enhance cost accuracy and operational efficiency by assigning costs more precisely to activities and products.

Conclusion

Understanding the classification and behavior of costs within a manufacturing environment is paramount for operational efficiency and profitability. Through meticulous analysis of costs, proper allocation, and strategic leadership, companies like Little Things can optimize their production processes, improve financial outcomes, and maintain competitive advantage in the toy industry. Accurate cost management also fosters transparency and supports sustainable growth aligned with legal and ethical standards.

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