# Acc349 Managerial Accounting: Week 5 Assignment (P8-2A and P11-4A)

Acc349 Managerial Accounting
Week 5 Assignment (P8-2A and P11-4A)

P8-2A:
Bolus Computer Parts Inc. is the process of setting a selling price on a new component it has just designed and developed.
The following cost estimates for this new component have been provided by the accounting department for a budgeted volume of 50,000 units.
Per Unit Total
Direct Materials 50
Direct Labor 25
Variable selling and administrative expenses 18
Fixed selling and administrative expenses 400,000

Bolus Computer Parts management requests that the total cost per unit be used in cost-plus pricing its products.
On this particular product, management also directs that the target price be set to provide a 25% return on investment (ROI) on invested assets of \$1,200,000.

Instructions:
(Round all calculations to two decimal places)
a) Compute the markup percentage and target selling price that will allow Bolus Computer Parts to earn its desired ROI of 25% on this new component.
b) Assuming that the volume is 40,000 units, compute the markup percentage and target selling price that will allow Bolus Computer Parts to earn its desired ROI of 25% on this new component.

P11-4A
Crede Manufacturing Company uses a standard cost accounting system. In 2005, 33,000 units were produced. Each unit took several pounds of direct materials and 11/3 standard hours of direct labor at a standard hourly rate of \$12.00. Normal capacity was 42,000 direct labor hours. During the year, 132,000 pounds of raw materials were purchased at \$0.90 per pound. All pounds purchased were used during the year.

Instructions
(a) If the materials price variance was \$3,960 unfavorable, what was the standard materials price per pound?
(b) If the materials quantity variance was \$2,871 favorable, what was the standard materials quantity per unit?
(c) What were the standard hours allowed for the units produced?
(d) If the labor quantity variances was \$8,400 unfavorable, what were the actual direct labor hours worked?
(e) If the labor price variance was \$4,470 favorable, what was the actual rate per hour?
(f) If total budgeted manufacturing overhead was \$327,600 at normal capacity, what was the predetermined overhead rate per direct labor hour?
(g) What was the standard cost per unit of product?
(h) How much overhead was applied to production during the year?
(i) If the standard fixed overhead rate was \$2.50, what was the overhead volume variances?
(j) If the overhead controllable variance was \$3,000 favorable, what were the total variable overhead costs incurred? (Assume that the overhead controllable variances relates only to variable costs).
(k) Using selected answers above, what ever the total costs assigned to work in process?