{"id":53140,"date":"2022-04-16T21:28:47","date_gmt":"2022-04-16T21:28:47","guid":{"rendered":"https:\/\/assignmenttutors.net\/blog\/intergartive-exercises-accounting-homework-help\/"},"modified":"2022-04-16T21:28:47","modified_gmt":"2022-04-16T21:28:47","slug":"intergartive-exercises-accounting-homework-help","status":"publish","type":"post","link":"https:\/\/assignmenttutors.net\/blog\/intergartive-exercises-accounting-homework-help\/","title":{"rendered":"Intergartive exercises | Accounting homework help"},"content":{"rendered":"
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Cost Behavior and Cost\u00adVolume \u00adProfit Analysis for Many Glacier Hotel
Using the High\u00adLow Method to Estimate Variable and Fixed Costs
Located on Swiftcurrent Lake in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. In an effort to supplement its lodging revenue, the hotel decided in 2003 to begin manufacturing and selling small wooden canoes decorated with symbols hand painted by Native Americans living near the park. Due to the great success of the canoes, the hotel began manufacturing and selling paddles as well in 2006. Many hotel guests purchase a canoe and paddles for use in self\u00adguided tours of Swiftcurrent Lake. Because production of the two products began in different years, the canoes and paddles are produced in separate production facilities and employ different laborers. Each canoe sells for $500, and each paddle sells for $50. A 2006 fire destroyed the hotel’s accounting records. However, a new system put into place before the 2007 season provides the following aggregated data for the hotel’s canoe and paddle manufacturing and marketing activities:<\/p>\n

Required:
1.\u00a0 High\u00adLow Cost Estimation Method
a. Use the high\u00adlow method to estimate the per\u00adunit variable costs and total fixed costs for the canoe product line.Variable cost per unit $
Total fixed cost $
b. Use the high\u00adlow method to estimate the per\u00adunit variable costs and total fixed costs for the paddle product line.
Variable cost per unit $
Total fixed cost $<\/p>\n

2.\u00a0 Cost\u00adVolume\u00adProfit Analysis, Single\u00adProduct Setting
Use CVP analysis to calculate the break\u00adeven point in units for
a. The canoe product line only (i.e., single\u00adproduct setting)
BE units
\u00a0\u00a0 canoes
b. The paddle product line only (i.e., single\u00adproduct setting)
BE units
\u00a0\u00a0 paddles
3.\u00a0\u00a0 Cost\u00adVolume\u00adProfit Analysis, Multiple\u00adProduct Setting
The hotel’s accounting system data show an average sales mix of approximately 300 canoes and 1,200 paddles each season. Significantly more paddles are sold relative to canoes because some inexperienced canoe guests\u00a0 accidentally break one or more paddles, while other guests purchase additional paddles as presents for friends and\u00a0
relatives. In addition, for this multiple\u00adproduct CVP analysis, assume the existence of an additional $30,000 of\u00a0 common fixed costs for a customer service hotline used for both canoe and paddle customers. Use CVP analysis to\u00a0 calculate the break\u00adeven point in units for both the canoe and paddle product lines combined (i.e., the multiple\u00ad product setting).
Canoe BE units
\u00a0\u00a0 canoes
Paddle BE units<\/p>\n

\u00a0\u00a0 paddles<\/p>\n

4.\u00a0 Cost Classification
a. Classify the manufacturing costs, marketing costs, and customer service hotline costs either as production\u00a0 expenses or period expenses.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
b. For the period expenses, further classify them into either selling expenses or general and administrative expenses. The input in the box below will not be graded, but may be reviewed and considered by your instructor.
5.\u00a0\u00a0 Sensitivity Cost\u00adVolume\u00adProfit Analysis and Production Versus Period Expenses, Multiple\u00adProduct Setting If both the variable and fixed production expenses (refer to your answer to Requirement 1) associated with the canoe\u00a0 product line increased by 5% (beyond the estimate from the high\u00adlow analysis), how many canoes and paddles would\u00a0 need to be sold in order to earn a target income of $96,000? Assume the same sales mix and additional fixed costs\u00a0 as in Requirement 3, and if required, round the number of packages in intermediate calculations up to the nearest\u00a0 whole number (for example, 10.1 would round up to 11).
Canoe target income units
\u00a0\u00a0 canoes
Paddle target income units<\/p>\n

\u00a0\u00a0 paddles<\/p>\n

6.\u00a0\u00a0 Margin of Safety
Calculate the margin of safety (both in units and in sales dollars) for Many Glacier Hotel, assuming the same facts as in Requirement 3, and assuming it sells 700 canoes and 2,500 paddles next year.
\u00a0total MOS units above total BE units
$ MOS in sales dollars<\/p>\n

Cost System Choices, Budgeting, and Variance Analyses for Sacred Heart Hospital
The Two Cost Systems
Sacred Heart Hospital (SHH) faces skyrocketing nursing costs, all of which relate to its two biggest nursing service lines\u2014the Emergency Room (ER) and the Operating Room (OR). SHH’s current cost system assigns total nursing costs to the ER and OR based on the number of patients serviced by each line. Total hospital annual nursing costs forthese two lines are expected to equal $300,000. The table below shows expected patient volume for both lines.<\/p>\n

Required:
1.\u00a0 Using the current cost system, calculate the hospital\u00adwide rate based on number of patients.$ per patient
2.\u00a0 Calculate the amount of nursing costs that the current cost system assigns to the ER and to the OR.The nursing cost, assigned to the ER $
The nursing cost, assigned to the OR $<\/p>\n

3.\u00a0 Using the results from Requirement 2, calculate the cost per OR nursing hour under the current cost system.\u00a0 $ per OR hour
After discussion with several experienced nurses, Jack Bauer (SHH’s accountant) decided that assigning nursing\u00a0 costs to the two service lines based on the number of times that nurses must check patients’ vital signs might more\u00a0 closely match the underlying use of costly hospital resources. Therefore, for comparative purposes, Jack decided to\u00a0 develop a second cost system on his computer that assigns total nursing costs to the ER and OR based on the\u00a0 number of times nurses check patients’ vital signs. This system is referred to as the “vital\u00adsigns costing system”. The\u00a0 earlier table also shows data for vital signs checks for lines.
4.\u00a0 Using the vital\u00adsigns costing system, calculate the hospital\u00adwide rate based on the number of vital signs checks. $ per vital signs check
5.\u00a0 Calculate the amount of nursing costs that the vital\u00adsigns costing system assigns to the ER and to the OR. The vital\u00adsigns cost, assigned to the ER $
The vital\u00adsigns cost, assigned to the OR $
6.\u00a0 Using the results from Requirement 5, calculate the cost per OR nursing hour under the vital\u00adsigns costing\u00a0 system.
$ per OR hour
Budgeting and Variance Analysis
In an effort to better plan for and control OR costs, SHH management asked Jack to calculate the flexible budget\u00a0 variance (i.e., flexible budget costs\u00adactual costs) for OR nursing costs, including the price variance and efficiency\u00a0 variance that make up the flexible budget variance for OR nursing costs. Given that Jack is interested in comparing\u00a0 the reported costs of both systems, he decided to prepare the requested OR variance analysis for both the current\u00a0 cost system and the vital signs costing system. In addition, Jack chose to use each cost system’s estimate of the cost\u00a0 per OR nursing hour as the standard cost per OR nursing hour. Jack collected the following additional information for\u00a0 use in preparing the flexible budget variance for both systems:
Actual number of surgeries performed = 950
Standard number of nursing hours allowed for each OR surgery = 5
Actual number of OR nursing hours used = 5,000
Actual OR nursing costs = $190,000
If there is no variance, enter “0” and select “No variance” from the dropdown.
7.\u00a0 For the OR service line, use the information above and the cost per OR nursing hour under the current cost system
to calculate the
a.flexible budget variance. (Hint: Use your answer to Requirement 3 as the standard cost per OR nursing hour for the current cost system.) $
b.price variance.$
c.efficiency variance.$
8.\u00a0 For the OR service line, use the information above and the cost per OR nursing hour under the vital signs cost system to calculate the
a.flexible budget variance. (Hint: Use your answer to Requirement 6 as the standard cost per OR nursing hour for the vital signs cost system.)$
b.price variance.$
c.efficiency variance.$
Discussion of Reported Costs and Variances from the Two Systems
9.\u00a0 Consider SHH’s need to control its skyrocketing costs, Jack’s discussion with experienced nurses regarding their use of hospital resources, and the reported costs that you calculated from each cost system. Based on these considerations, which cost system (current or vital signs) should Jack choose? Briefly explain the reasoning behind your choice.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
10.\u00a0 What does each of the calculated variances suggest to Jack regarding actions that he should or should not take with respect to investigating and improving each variance? Also, briefly explain why the variances differ between the two cost systems.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.<\/p>\n

Relevant Costing, Cost\u00adBased Pricing, Cost Behavior, and Net Present Value Analysis for NoFat
Special Sales Offer Relevant Analysis
NoFat manufactures one product, olestra, and sells it to large potato chip manufacturers as the key ingredient in nonfat snack foods, including Ruffles, Lays, Doritos, and Tostitos brand products. For each of the past 3 years, sales of olestra have been far less than the expected annual volume of 125,000 pounds. Therefore, the company has ended each year with significant unused capacity. Due to a short shelf life, NoFat must sell every pound of olestra that it produces each year. As a result, NoFat’s controller, Allyson Ashley, has decided to seek out potential special sales offers from other companies. One company, Patterson Union (PU)\u2014a toxic waste cleanup company\u2014offered to buy 10,000 pounds of olestra from NoFat during December for a price of $2.20 per pound. PU discovered through its research that olestra has proven to be very effective in cleaning up toxic waste locations designated as Superfund Sites by the U.S. Environmental Protection Agency. Allyson was excited, noting that “This is another way to use our expensive olestra plant!”
The annual costs incurred by NoFat to produce and sell 100,000 pounds of olestra are as follows:<\/p>\n

\uf0b7In addition, Allyson met with several of NoFat’s key production managers and discovered the following information:
\uf0b7 The special order could be produced without incurring any additional marketing or customer service costs. NoFat owns the aging plant facility that it uses to manufacture olestra.<\/p>\n

NoFat incurs costs to set up and clean its machines for each production run, or batch, of olestra that it produces. The total set\u00adup costs shown in the previous table represent the production of 20 batches during the year.NoFat leases its plant machinery. The lease agreement is negotiated and signed on the first day of each year. NoFat currently leases enough machinery to produce 125,000 pounds of olestra. PU requires that an independent quality team inspects any facility from which it makes purchases. The\u00a0 terms of the special sales offer would require NoFat to bear the $1,000 cost of the inspection team.
Required:
1.\u00a0 Conduct a relevant analysis of the special sales offer by calculating the following:
a. The relevant revenues associated with the special sales offer $
b. The relevant costs associated with the special sales offer $
c. The relevant profit associated with the special sales offer (Enter loss, if any, as negative amount.) $
2.\u00a0 Based solely on financial factors, explain why NoFat should accept or reject PU’s special sales offer.
NoFat should\u00a0 PU’s special sales offer. Explain.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
3.\u00a0 Describe at least one qualitative factor that NoFat should consider, in addition to the financial factors, in making its final decision regarding the acceptance or rejection of the special sales offer.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.
Cost\u00adBased Pricing
Assume that NoFat rejected PU’s special sales offer because the $2.20 price suggested by PU was too low. In\u00a0 response to the rejection, PU asked NoFat to determine the price at which it would be willing to accept the special sales offer. For its regular sales, NoFat sets prices by marking up variable costs by 10%.
4.\u00a0 If Allyson decides to use NoFat’s 10% mark\u00adup pricing method to set the price for PU’s special sales offer,
a. Calculate the price that NoFat would charge PU for each pound of olestra. Round your answer to the nearest cent. $ per unit
b. Calculate the relevant profit that NoFat would earn if it set the special sales price by using its mark\u00adup pricing\u00a0 method. Enter loss, if any, as negative amount. (Hint: Use the estimate of relevant costs that you calculated in\u00a0 response to Requirement 1b.)$
c. Explain why NoFat should accept or reject the special sales offer if it uses its mark\u00adup pricing method to set the\u00a0 special sales price.
NoFat should\u00a0 PU’s special sales offer. Explain.
The input in the box below will not be graded, but may be reviewed and considered by your instructor.<\/p>\n

\uf0b7 Incorporating a Long\u00adTerm Horizon into the Decision Analysis
Assume that Allyson’s relevant analysis reveals that NoFat would earn a positive relevant profit of $10,000 from the\u00a0 special sale (i.e., the special sales alternative). However, after conducting this traditional, short\u00adterm relevant\u00a0 analysis, Allyson wonders whether it might be more profitable over the long\u00adterm to downsize the company by reducing its manufacturing capacity (i.e., its plant machinery and plant facility). She is aware that downsizing requires\u00a0 a multiyear time horizon because companies usually cannot increase or decrease fixed plant assets every year.\u00a0
Therefore, Allyson has decided to use a 5\u00adyear time horizon in her long\u00adterm decision analysis. She has identified the following information regarding capacity downsizing (i.e., the downsizing alternative):
\uf0b7 The plant facility consists of several buildings. If it chooses to downsize its capacity, NoFat can immediately\u00a0 sell one of the buildings to an adjacent business for $30,000.
If it chooses to downsize its capacity, NoFat’s annual lease cost for plant machinery will decrease to $9,000. Therefore, Allyson must choose between these two alternatives: Accept the special sales offer each year and earn a\u00a0 $10,000 relevant profit for each of the next 5 years or reject the special sales offer and downsize as described above.<\/p>\n

5.\u00a0 Assume that NoFat pays for all costs with cash. Also, assume a 10% discount rate, a 5\u00adyear time horizon, and all\u00a0 cash flows occur at the end of the year. Use an NPV approach to discount future cash flows to present value. To
determine NPV, use the Exhibit to locate the present value of $1 to be multiplied by the cash inflow in Year 1.
a. Calculate the NPV of accepting the special sale with the assumed positive relevant profit of $10,000 per year (i.e.,\u00a0 the special sales alternative). Round your answer to the nearest dollar. $
b. Calculate the NPV of downsizing capacity as previously described (i.e., the downsizing alternative). Round your\u00a0 answer to the nearest dollar.<\/p>\n

c. Based on the NPV of Calculations a and b, identify and explain which of these two alternatives is best for NoFat to pursue in the long term. The\u00a0 is best for NoFat to pursue in the long term. Explain.<\/p>\n<\/div>\n","protected":false},"excerpt":{"rendered":"

Cost Behavior and Cost\u00adVolume \u00adProfit Analysis for Many Glacier HotelUsing the High\u00adLow Method to Estimate Variable and Fixed CostsLocated on Swiftcurrent Lake in Glacier National Park, Many Glacier Hotel was built in 1915 by the Great Northern Railway. In an effort to supplement its lodging revenue, the hotel decided in 2003 to begin manufacturing and […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[16],"tags":[],"class_list":["post-53140","post","type-post","status-publish","format-standard","hentry","category-education"],"_links":{"self":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/53140","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/comments?post=53140"}],"version-history":[{"count":0,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/posts\/53140\/revisions"}],"wp:attachment":[{"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/media?parent=53140"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/categories?post=53140"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/assignmenttutors.net\/blog\/wp-json\/wp\/v2\/tags?post=53140"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}