Study Guides (234,578)
Canada (113,214)
York University (9,732)
ADMS 2510 (45)
Final

Winter_2006_Examination.doc

16 Pages
133 Views
Unlock Document

School
York University
Department
Administrative Studies
Course
ADMS 2510
Professor
John Kucharczuk
Semester
Summer

Description
Last name (surname): ____________________ First name: ________________________ Student number: ________________________ Indicate Section o 2510M - Tuesday; 4 - 7pm; Gary Spraakman o 2510N - Wednesday; 7 - 10pm; Joe Nemi o 2510P - Monday; 7 - 10pm; Gary Spraakman o 2510Q - Internet; John Parkinson o 2510R - Thursday; 7 - 10pm; Gary Spraakman o 2510S - Tuesday; 7 - 10pm; Gary Spraakman o 2510T - Thursday; 7 - 10pm; John Harris o 2510U - Friday; 2:30-5:30pm; Lisa Baillargeon o Deferred from earlier term Sign-in Number (to be filled when you sign in only): _______________ School of Administrative Studies Atkinson Faculty of Liberal and Professional Studies York University ADMS2510 April 8, 2006, 7 to 10 pm Instructions: - This is a closed book examination and no collaboration is allowed. . - There are a total of 100 marks. - Write your name, student number, and section at the top of the page. - There are five questions. Answer each question on the examination paper, and on the back of a page if necessary. - You must write in pencil or pen. Programmable calculators are not allowed. Cell phones cannot be used as calculators. Dictionaries are not allowed. - You have three hours; you must not leave before 9:00 pm - Place photo identification on your desk at the beginning of the examination to facilitate vérification. Good Luck. Question 1: ________ Question 2: ________ Question 3: ________ Question 4: ________ Question 5: ________ Total: /100 1 Question 1 (20 marks) York Plastics makes large plastic water bottles and plastic composite control panels for aircraft. Plastic bottles are relatively simple to produce and are made in large quantities. The control panels are more complicated to produce because they must be customized to individual plane types. York sells 200,000 plastic bottles annually and 5,000 control panels. A variety of information follows related to the annual production and sale of these products. Plastic Bottles Control Panels Revenues $12,000,000 $26,000,000 Direct labor hours 2,000 53,000 Machine hours 120,000 80,000 Direct material 1,300,000 1,200,000 Labor is paid at $28 per hour. Production overhead consists of $19,000,000 of supervisors' salaries, labor fringe benefits, design and engineering, and other human-related costs and $5,000,000 of machine-related costs. Administrative costs total $2,400,000 and are allocated to individual product lines. Required: a. Calculate the profit or loss on each product if total overhead (production and administrative) is assigned according to direct labor hours. b. Calculate the profit or loss on each product if total overhead (production and administrative) is assigned according to machine hours. c. Calculate the profit or loss on each product if human-related overhead is assigned according to direct labor hours, machine-related overhead is assigned according to machine hours, and administrative overhead is assigned according to dollars of revenue. 2 a. Overhead: $26,400,000 ÷ 55,000 DLHs = $480 per DLH (8 marks) Plastic Bottles Control Panels Revenue $12,000,000 $26,000,000 Direct material (1,300,000) (1,200,000) Direct labor (56,000) (1,484,000) Overhead a (960,000) b(25,440,000) Profit (loss) $9,684,000 $(2,124,000) a $480 x 2,000 = $960,000 b $480 x 53,000 = $25,440,000 b. Overhead: $26,400,000 ÷ 200,000 MHs = $132 per MH (8 marks) Plastic Bottles Control Panels Revenue $ 12,000,000 $26,000,000 Direct material (1,300,000) (1,200,000) Direct labor a (56,000) b (1,484,000) Overhead (15,840,000) (10,560,000) Profit (loss) $(5,196,000) $12,756,000 a b$132 x 120,000 = $15,840,000 $132 x 80,000 = $10,560,000 3 c. Overhead: $19,000,000 ÷ 55,000 DLHs = $345.45 per DLH $5,000,000 ÷ 200,000 MHs = $25 per MH $2,400,000 ÷ $38,000,000 = $0.063 per revenue $ (4 marks) Plastic Bottles Control Panels Revenue $12,000,000 $26,000,000 Direct material (1,300,000) (1,200,000) Direct labor (56,000) (1,484,000) Overhead - HR: 345.45 x 2,000, 53,000 (690,909) (18,308,850) - MOH: 25 x 120,000, 80,000 (3,000,000) (2,000,000) - Adm.: 0.063158 x 12 M, 26 M, (758,160) (1,642,108) Profit $ 6,195,931 $ 1,366,000 4 Question 2 (20 marks) Robin Randers Ltd. makes miniature holiday wax figurines, which are sold in gift shops. The selling price is $3.25 each. Randers' costs are as follows: Variable production cost per unit $1.10 Fixed production cost per unit 0.38 Randers pays her salespeople a 11% commission on all sales. Other period expenses are all fixed in total at $50,000 per year. Fenmores, a large department store, has asked Randers to bid on providing 1,000 figurines for the Christmas season. Robin Randers Ltd. has sufficient unused capacity to fill the order and has already done sufficient business to be profitable for the year prior to the bid request. Required: a. What is the lowest bid price that would not result in a loss on this special order? b. What price should Randers bid to make a 11% profit on the order? c. Accepting this order will increase fixed expenses by $500. What price should Randerss bid for the 1,000 figurines in order to earn 6% profit on the order? 5 a. Selling price = incremental cost of production + commission (8 marks) SP = $1.10 + 0.11SP SP = $1.236 1,000 x 1.236 = $1,236 bid price b. SP = $1.10 + 0.11SP + 0.11SP (6 marks) SP = $1.4103; 1,000 x $1,4103 = $1,410 bid price c. SP = $1.10 + ($500 ÷ 1,000) + 0.11SP +0.06SP (6 marks) SP = $1.60 + 0.17SP SP = $1.928, 1,000 x 1.928 = $1,928 bid price 6 Question 3 (20 marks) The Joseph Atkinson Co. is a new company. The information below pertains to the operations of Atkinson for the three months from January to March (that is, the first quarter, Q1) of 2006. Expenses for Quarter 1 Depreciation $80,000 Manufacturing overhead 20,000 Income taxes 30,000 Payroll 60,000 Selling costs (Commission: 2% of sales) 16,000 Administrative costs 20,000 Costs are assumed to be incurred evenly throughout the year with the exception of the following: • Depreciation is taken on new assets starting in the quarter subsequent to the quarter in which the item was purchased. • Income taxes are payable in half-yearly installments, on the first day of each six-month period, based on last year's actual tax expense of $60,000. Other information: i. Sales (made evenly throughout the quarter) Q1, actual $ 800,000 Q2, forecast 800,000 Q3, forecast1,600,000 Collection from sales is as follows: 50% in the quarter of the sale; 45% in the quarter following; 5% uncollectible . ii. Purchases (made evenly throughout the quarter) Q1, actual$400,000 Q2 ? Note that merchandise purchased during a quarter would equal inventory to meet the current quarter's sales demands plus 25% of the next quarter's forecasted sales. The gross margin ratio is constant at 60%. Cash payments for purchases are as follows: 50% in the quarter of purchase; 50% in the quarter thereafter. iii. The company purchased capital equipment in the amount of $200,000 in February 2006. The estimated useful life of this equipment is 10 years; estimated scrap value is $0. Dividends of $40,000 are declared on the last day of each quarter, to be paid at the end of the following month. Cash in the bank at the end of Q1 equals $50,000. 7 Required: Prepare a cash budget for Atkinson for Q2 of 2006. Show all your supporting calculations. Cash collections from sales: Q1: $800,000 * 45%: $360,000 Q2: $800,000 * 50%: 400,000 $760,000 Purchases: For Q2 sales: $800,000 * 40%: $320,000 For Q3 sales: $1,600,000 * 40% * 25%: 160,000 Less: opening inventory: $800,000 * 40% * 25%: (80,000) Total purchases in Q2: $400,000 Cash disbursements for purchases: For Q1 purchases: $400,000 * 50%: $200,000 For Q2 purchases: $400,000 * 50%: 200,000 $400,000 Other cash expenditures: Manufacturing overhead: $ 20,000 Payroll: 60,000 Selling costs: 16,000 Adminoistration costs: 20,000 Dividends: 40,000 $156,000 Cash Budget: Cash on hand as at 1/4/2008: $ 50,000 (2 marks) Add cash receipts from sales: 760,000 (4 marks) Available: $810,000 Less: cash disbursements: For purchases: $400,000 (8 marks) Other: 156,000 (6 marks) 556,000 Cash balance as at 30/6/2008: $254,000 8 Question 4 (20 marks) You are a division manager of Rexdale Design Co. Your performance as a division manager is evaluated primarily on one measure: after-tax divisional segment income less the cost of capital invested in divisional assets. For existing operations in your division, projections for 2006 follow: Sales $ 80,000,000 Expenses (70,000,000) Segment income $ 10,000,000 Taxes
More Less

Related notes for ADMS 2510

Log In


OR

Don't have an account?

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.

Submit