1. B6021 Module 1 Assignment 3 Calculating
Inventory
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B6021 Module 1 Assignment 3 Calculating Inventory
Finlon Upholstery Inc. uses a job-order costing system to accumulate
manufacturing costs. The company's work-in-process on December 31,
2001, consisted of one job (no. 2077), which was carried on the year-end
balance sheet at $156,800. There was no finished-goods inventory on
this date.
Finlon applies manufacturing overhead to production on the basis of
direct-labor cost. (The budgeted direct-labor cost is the company's
practical capacity, in terms of direct-labor hours multiplied by the
budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and
manufacturing overhead are $4,200,000 and $5,460,000, respectively.
Actual results for the year are as follows:
Actual Results
Direct Materials Used
$5,600,000.00

2. Direct Labor
$4,350,000.00
Indirect Material Used
$65,000.00
Indirect Labor
$2,860,000.00
Factory Depreciation
$1,740,000.00
Factory Insurance
$59,000.00
Factory Utilities
$830,000.00
Selling and Administrative Expenses
$2,160,000.00
Total
$17,664,000.00

3. Job No. 2077 was completed in January 2002 and there was no work in
process at year-end. All jobs produced during 2002 were sold with the
exception of Job No. 2143, which contained direct-material costs of
$156,000 and direct-labor charges of $85,000. The company charges any
under- or over-applied overhead to the cost of goods sold category.
Using the above information, do the following:
Calculate the company’s predetermined overhead application rate.
Calculate the additions to the work-in-process inventory account for the
direct material used, direct labor, and manufacturing overhead.
Calculate the finished-goods inventory for the 12/31/01 balance sheet.
Calculate the over-applied or under-applied overhead at year-end.
Explain if it is appropriate to include selling and administrative expenses
in the cost of goods sold category.
Perform your calculations in an Excel spreadsheet and copy the
calculations into a Word document. Your final product should be a 1-
page paper in Word format. Apply APA standards to citation of sources.
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B6021 Module 2 Assignment 2 Borealis
Manufacturing Company
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4. B6021 Module 2 Assignment 2 Borealis Manufacturing Company
Borealis Manufacturing has just completed a major change in its quality
control (QC) process. Previously, products had been reviewed by QC
inspectors at the end of each major process, and the company's 10 QC
inspectors were charged to the operation or job as direct labor. In an
effort to improve efficiency and quality, a computerized video QC
system was purchased for $250,000. The system consists of a
minicomputer, fifteen video cameras, and other peripheral hardware and
software. The new system uses cameras stationed by QC engineers at
key points in the production process. Each time an operation changes or
there is a new operation, the cameras are moved, and a new master
picture is loaded into the computer by a QC engineer. The camera takes
pictures of the units in process, and the computer compares them to the
picture of a “good” unit. Any differences are sent to a QC engineer, who
removes the bad units and discusses the flaws with the production
supervisors. The new system has replaced the 10 QC inspectors with two
QC engineers.
The operating costs of the new QC system, including the salaries of the
QC engineers, have been included as factory overhead in calculating the
company's plant-wide manufacturing-overhead rate, which is based on
direct-labor dollars. The company's president is confused. His vice
president of production has told him how efficient the new system is.
Yet there is a large increase in the overhead rate. The computation of the
rate before and after automation is as follows:
Before After
Budgeted Manufacturing Overhead 1,900,000 2,100,000
Budgeted Direct Labor Cost 1,000,000 700,000
Budgeted Overhead Rate 190% 300%

5. “Three hundred percent,” lamented the president. “How can we compete
with such a high overhead rate?”
Using the module readings and the Argosy University online library
resources, research manufacturing overhead.
Review the situation. Complete the following:
•Define “manufacturing overhead,” and:
◦Cite three examples of typical costs that would be included in
manufacturing overhead.
◦Explain why companies develop predetermined overhead rates.
•Explain why the increase in the overhead rate should not have a
negative financial impact on Borealis Manufacturing.
•Explain how Borealis Manufacturing could change its overhead
application system to eliminate confusion over product costs.
•Describe how an activity-based costing system might benefit Borealis
Manufacturing.
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B6021 Module 2 Assignment 2 Manufacturing
Overhead
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6. B6021 Module 2 Assignment 2 Manufacturing Overhead
Finlon Upholstery Inc. uses a job-order costing system to accumulate
manufacturing costs. The company's work-in-process on December 31,
2001, consisted of one job (no. 2077), which was carried on the year-end
balance sheet at $156,800. There was no finished-goods inventory on
this date.
Finlon applies manufacturing overhead to production on the basis of
direct-labor cost. (The budgeted direct-labor cost is the company's
practical capacity, in terms of direct-labor hours multiplied by the
budgeted direct-labor rate.) Budgeted totals for 2002 for direct labor and
manufacturing overhead are $4,200,000 and $5,460,000, respectively.
Actual results for the year are as follows:
Actual Results
Direct Materials Used
$5,600,000.00
Direct Labor
$4,350,000.00
Indirect Material Used
$65,000.00
Indirect Labor
$2,860,000.00

7. Factory Depreciation
$1,740,000.00
Factory Insurance
$59,000.00
Factory Utilities
$830,000.00
Selling and Administrative Expenses
$2,160,000.00
Total
$17,664,000.00
Job No. 2077 was completed in January 2002 and there was no work in
process at year-end. All jobs produced during 2002 were sold with the
exception of Job No. 2143, which contained direct-material costs of
$156,000 and direct-labor charges of $85,000. The company charges any
under- or over-applied overhead to the cost of goods sold category.
Using the above information, do the following:
Calculate the company’s predetermined overhead application rate.
Calculate the additions to the work-in-process inventory account for the
direct material used, direct labor, and manufacturing overhead.
Calculate the finished-goods inventory for the 12/31/01 balance sheet.
Calculate the over-applied or under-applied overhead at year-end.

8. Explain if it is appropriate to include selling and administrative expenses
in the cost of goods sold category.
Perform your calculations in an Excel spreadsheet and copy the
calculations into a Word document. Your final product should be a 1-
page paper in Word format. Apply APA standards to citation of sources.
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B6021 Module 3 Assignment 2 LASA 1 Cost and
Decision-Making Analysis
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B6021 Module 3 Assignment 2 LASA 1 Cost and Decision-Making
Analysis
Cost and Decision-Making Analysis
Cheryl Montoya picked up the phone and called her boss, Wes Chan,
Vice President of Marketing at Piedmont Fasteners Corporation.
Cheryl: “Wes, I'm not sure how to go about answering the questions that
came up at the meeting with the President yesterday.”
Wes: “What's the problem?”

9. Cheryl: “The president wanted to know the break-even point for each of
the company's products, but I am having trouble figuring them out.”
Wes: “I'm sure you can handle it, Cheryl. And, by the way, I need your
analysis on my desk tomorrow morning at 8:00 sharp in time for the
follow-up meeting at 9:00.”
Piedmont Fasteners Corporation makes three different clothing fasteners
at its manufacturing facility in North Carolina. Data concerning these
products appear below:
Velcro
Metal
Nylon
Normal annual sales volume
100, 000 units
200,000 units
400,000 units
Unit selling price
$1.65
$1.50

10. $0.85
Variable cost per unit
$1.25
$0.70
$0.25
Total fixed expenses are $400,000 per year.
All three products are sold in highly competitive markets, so the
company is unable to raise its prices without losing unacceptably large
numbers of customers.
The company has a very effective lean production system, so there is no
beginning or ending work in process or finished-goods inventories.
Using the module readings, the Argosy University online library
resources, and the Internet, research break-even point and costing
systems. Analyze the case based on your research and what you have
learned so far in the course.
Respond to the following:
Calculate the company's overall break-even point in total sales dollars.
Explain your methodology.
Of the total fixed costs of $400,000: $20,000 could be avoided if the
Velcro product were dropped, $80,000 if the Metal product were
dropped, and $60,000 if the Nylon product were dropped. The remaining
fixed costs of $240,000 consist of common fixed costs such as
administrative salaries and rent on the factory building that could be
avoided only by going out of business entirely (approximately 2 pages):

11. Calculate the break-even point in units for each product. Explain your
methodology.
Determine the overall profit of the company if the company sells exactly
the break-even quantity of each product. Present your results.
Evaluate costing systems for this company. Explain if this company
should be using a job order or process-costing system to accumulate
costs (1 page).
Your final product will be a Word document, approximately 5-6 pages
in length.
Apply APA standards to citation of sources. Be sure to include your
calculations in Microsoft excel format.
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B6021 Module 4 Assignment 2 Applying
Decision-Making Skills
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B6021 Module 4 Assignment 2 Applying Decision-Making Skills

12. As a manager, part of your role is to develop strategy, and share this
strategy with various stakeholders within the organization. This
assignment will allow you to take your findings as a manager and
communicate these findings to those who are affected.
Your company has been presented with a decision on replacing a piece
of equipment for a new computerized version that promotes efficiency
for the upcoming year.
As manager you will need to decide whether or not the purchase of the
new equipment is a worthwhile investment and to communicate your
recommendations to Executive Management for a final decision. To be
convincing, sufficient support for your recommendations must be
provided in order to be considered valid and accepted.
Existing Equipment
Original Cost 60,000
Present Book Value 30,000
Annual Cash Operating Costs 145,000
Current Market Value 15,000
Market Value in Ten Years 0
Remaining useful Life 10 years
Replacement Equipment
Cost 600,000
Annual Cash Operating Costs 50,000
Market Value in Ten Years 0
Useful Life 10 years
Other Information
Cost of Capital 10%
Payback requirement 6 years

13. In this assignment, use the information above to develop a
comprehensive analysis using NPV, Payback Method, and IRR to
develop a recommendation on replacing the existing equipment with a
new computerized version.
Develop an executive summary of your findings in a Microsoft
PowerPoint presentation format to present to Executive Management.
Do the following in your presentation:
Include a statement of the problem or topic, a concise analysis of the
findings, and a recapitulation of any main conclusions or
recommendations.
Be sure to incorporate specific details to highlight or support the
summary including calculations.
Using your knowledge of capital budgeting techniques, explain how
principles of capital budgeting, such as the payback method, IRR, and
NPV, can be used to assess the potential projects and assist in the
decision-making process.
Develop a 10-12 slide presentation in PowerPoint format. Apply APA
standards to citation of sources. Use the following file naming
convention: LastnameFirstInitial_M4_A2.ppt.
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B6021 Module 5 Assignment 2 LASA 2
Manufacturing Budget Analysis

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B6021 Module 5 Assignment 2 LASA 2 Manufacturing Budget
Analysis
Tom Emory and Jim Morris strolled back to their plant from the
administrative offices of Ferguson & Son Manufacturing Company.
Tom is manager of the machine shop in the company's factory; Jim is
manager of the equipment maintenance department.
The men had just attended the monthly performance evaluation meeting
for plant department heads. These meetings had been held on the third
Tuesday of each month since Robert Ferguson, Jr., the president's son,
had become plant manager a year earlier.
As they were walking, Tom Emory spoke: “Boy, I hate those meetings! I
never know whether my department's accounting reports will show good
or bad performance. I'm beginning to expect the worst. If the
accountants say I saved the company a dollar, I'm called ‘Sir,’ but if I
spend even a little too much—boy, do I get in trouble. I don't know if I
can hold on until I retire.”
Tom had just been given the worst evaluation he had ever received in his
long career with Ferguson & Son. He was the most respected of the
experienced machinists in the company. He had been with the company
for many years and was promoted to supervisor of the machine shop
when the company expanded and moved to its present location. The
president (Robert Ferguson, Sr.) had often stated that the company's

15. success was due to the high-quality work of machinists like Tom. As
supervisor, Tom stressed the importance of craftsmanship and told his
workers that he wanted no sloppy work coming from his department.
When Robert Ferguson, Jr., became the plant manager, he directed that
monthly performance comparisons be made between actual and
budgeted costs for each department. The departmental budgets were
intended to encourage the supervisors to reduce inefficiencies and to
seek cost reduction opportunities. The company controller was
instructed to have his staff “tighten” the budget slightly whenever a
department attained its budget in a given month; this was done to
reinforce the plant manager's desire to reduce costs. The young plant
manager often stressed the importance of continued progress toward
attaining the budget; he also made it known that he kept a file of these
performance reports for future reference when he succeeded his father.
Tom Emory's conversation with Jim Morris continued as follows:
Emory: I really don't understand. We've worked so hard to meet the
budget, and the minute we do so they tighten it on us. We can't work any
faster and still maintain quality. I think my men are ready to quit trying.
Besides, those reports don't tell the whole story. We always seem to be
interrupting the big jobs for all those small rush orders. All that setup
and machine adjustment time is killing us. And quite frankly, Jim, you
were no help. When our hydraulic press broke down last month, your
people were nowhere to be found. We had to take it apart ourselves and
got stuck with all that idle time.
Morris: I'm sorry about that, Tom, but you know my department has had
trouble making budget, too. We were running well behind at the time of
that problem, and if we had spent a day on that old machine, we would
never have made it up. Instead, we made the scheduled inspections of
the forklift trucks because we knew we could do those in less than the
budgeted time.

16. Emory: Well, Jim, at least you have some options. I'm locked into what
the scheduling department assigns to me and you know they're being
harassed by sales for those special orders. Incidentally, why didn't your
report show all the supplies you guys wasted last month when you were
working in Bill's department?
Morris: We're not out of the woods on that deal yet. We charged the
maximum we could to other work and haven't even reported some of it
yet.
Emory: Well, I'm glad you have a way of getting out of the pressure.
The accountants seem to know everything that's happening in my
department, sometimes even before I do. I thought all that budget and
accounting stuff was supposed to help, but it just gets me into trouble.
It's all a big pain. I'm trying to put out quality work; they're trying to
save pennies.
Review the case. Respond to the following:
Identify the problems that appear to exist in Ferguson & Son
Manufacturing Company's budgetary control system and explain how
the problems are likely to reduce the effectiveness of the system.
Explain how Ferguson & Son Manufacturing Company's budgetary
control system could be revised to improve its effectiveness.
Explain how the use of an activity-based costing system could change
the results of the budget, if utilized.
As stated in the case, many employees have “quit trying” and have
altered behavior on the job. Provide specific ways for how one would
use a budget to change employee behavior and align goals in the
organization.
Explain how goal alignment can improve profitability and overall return
to the shareholders of the company.

17. Synthesize data to explain the concept of ROI and describe how the use
of an activity-based costing system can improve the company’s ROI and
the potential impact on free cash flow.
Write a 6–8 page report in Word format. Apply APA standards to
citation of sources.
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