# Acc 6-29 budget costs, 8-29 comprehensive variance, 7-36 direct

ACC 6-29 Budget Costs, 8-29 Comprehensive Variance, 7-36 Direct Materials

Don't use plagiarized sources. Get Your Custom Essay on
Acc 6-29 budget costs, 8-29 comprehensive variance, 7-36 direct
Just from \$13/Page

16-28

Comparison of alternative joint-cost-allocation methods, further-processing decision, chocolate products.

The Chocolate Factory manufactures and distributes chocolate products. It purchases cocoa beans and processes them into two intermediate products: chocolate-powder liquor base and milk chocolate liquor base. These two intermediate products become separately identifiable at a single splitoff point. Every 1,500 pounds of cocoa beans yield 60 gallons of chocolate-powder liquor base and 90 gallons o milk-chocolate liquor base.

The chocolate-powder liquor base is further processed into chocolate powder. Every 60 gallons of chocolate powder liquor base yield 600 pounds of chocolate powder. The milk-chocolate liquor base is further processed into milk chocolate. Every 90 gallons of milk-chocolate liquor base yield 1,020 pounds of milk chocolate.

Production and sales data for August 2012 are as follows (assume no beginning inventory)

Cocoa beans processed, 15,000 pounds

Costs of processing cocoa beans to sliptoff point (including purchase of beans), 30,000

Production          Sales      Selling Price        Separable Processing Costs

Choco. Powder                 6,000lb            6,000lb       \$4per lb                \$12,750

Milk chocolate                   10,200 lb     10,200lb       \$5 per lb                \$26,250

Chocolate Factory fully processes both of its intermediate products into chocolate powder or milk chocolate. There is an active market for these intermediate products. In August 2012, Chocolate Factory could have sold the chocolate-powder liquor base for \$21 a gallon and the milk-chocolate liquor base for \$26 a gallon.

1.       Calculate how the point costs of \$30,000 would be allocated between chocolate powder and milk chocolate under the following methods:

a)      Sales value at splitoff

b)      Physical-measure (gallons)

c)       NRV

d)      Constant gross-margin percentage NRV

2.       What are the gross-margin percentages of chocolate powder and milk chocolate under each of the methods on requirement  1?

3.       Could Chocolate Factory have increased its operating income by a change in its decision to fully process both of its intermediate products? Show computations

16-34

Process further or sell, byproduct. (CMA, adapted) Rochester Mining Company (RMC)mines coal, puts it through a one-step crushing process, and loads the bulk raw coal onto river barges for shipment to customers.

RMC’s management is currently evaluating the possibility of further processing the raw coal by sizing and cleaning it and selling it to an expanded set of customers at higher prices. The option of building a new sizing and cleaning plant is ruled out as being financially infeasible. Instead, Amy Kimbell, a mining engineer is asked to explore outside-contracting arrangements for the cleaning and sizing process. Kimbell puts together the following summary:

Kimbell also learns that 75% of the material loss that occurs in the cleaning and sizing process can be salvaged as coal fines, which can be sold to steel manufacturers for their furnaces. The sale of coal fines is erratic and RMC may need to stockpile it in a protected area for up to one year. The selling price of coal fine ranges from \$16 to \$27 per ton and costs of preparing coal fines for sale range from \$2 to \$4 per ton.

1.       Prepare an analysis to show whether it is more profitable for RMC to continue selling raw bulk coal or to process it further through sizing and cleaning. (Ignore coal fines in your analysis)

2.       How would your analysis be affected if the cost of producing raw coal could be held down to \$17 per ton?

3.       Now consider the potential value of the coal fines and prepare an addendum that shows how their value affects the results of your analysis prepared in requirement 1.

21-30 NVP, IRR, and sensitivity analysis. Crumbly Cookie Company is considering expanding by buying a new (additional) machine that costs \$62,000, has zero terminal disposal value, and has 10-year useful life. It expects the annual increase in cash revenues from the expansion to be \$28,000 per year. It expects additional annual cash costs to be \$18,000 per year. Its cost of capital is \$8%. Ignore taxes.

1.       Calculate the net present value and internal rate of return for its investment.

2.       Assume the finance manager of Crumble Cookie Company is not sure about the cash revenues and costs.The revenues could be anywhere from 10% higher to 10% lower than predicted. Assume cash costs are still \$18,000 per year. What are NVP,and IRR at the high and low points for revenue?

3.       The finance manager thinks that costs will vary with revenues, amd if the revenues are 10% higher, the costs will be 7% higher. If the revenues are 10% lower, the costs will be 10% lower. Recalculate the NPV and IRR at the high and low revenue points with this new cost information.

4.       The finance manager has decided that the company should earn 2% more than the cost capital on any project. Recalculate the original NPV in requirement 1 using the new discount rate and evaluate the investment opportunity.

5.       Discuss how the changes in assumptions have affected the decision to expand.

21-31

Grab 16% Discount On This Paper
Pages (550 words)
Approximate price: -

Why Choose Us

Quality Papers

We value our clients. For this reason, we ensure that each paper is written carefully as per the instructions provided by the client. Our editing team also checks all the papers to ensure that they have been completed as per the expectations.

Over the years, MyEssay.Help has managed to secure the most qualified, reliable and experienced team of writers. The company has also ensured continued training and development of the team members to ensure that it keep up with the rising Academic Trends.

Affordable Prices

Our prices are fairly priced in such a way that ensures affordability. Additionally, you can get a free price quotation by clicking on the "Place Order" button.

On-Time delivery

We pay strict attention on deadlines. For this reason, we ensure that all papers are submitted earlier, even before the deadline indicated by the customer. For this reason, the client can go through the work and review everything.

100% Originality

At MyEssay.help, all papers are plagiarism-free as they are written from scratch. We have taken strict measures to ensure that there is no similarity on all papers and that citations are included as per the standards set.

Our support team is readily available to provide any guidance/help on our platform at any time of the day/night. Feel free to contact us via the Chat window or support email: support@myessay.help.

Try it now!

## Grab 16% Discount On This Paper

We'll send you the first draft for approval by at
Total price:
\$0.00

How it works?

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Our Services

MyEssay.help has stood as the world’s leading custom essay writing services providers. Once you enter all the details in the order form under the place order button, the rest is up to us.

## Essay Writing Services

At MyEssay.help, we prioritize on all aspects that bring about a good grade such as impeccable grammar, proper structure, zero-plagiarism and conformance to guidelines. Our experienced team of writers will help you completed your essays and other assignments.