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1. Using ABB principles, justify the workforce needed for the cake decorating department within the local grocery store. The following data is available regarding the time necessary to bake and assemble small, large, and wedding cakes, as well as the time necessary to decorate each of these products. The baking and assembling of the cakes is broken down into "units." It takes an employee 1 hour to bake and assemble 4 units. A small cake represents 1 unit A large cake represents 2 units A wedding cake represents 4 units The following chart summarizes the time necessary to decorate one cake: Small cake 15 minutes Large cake 30 minutes Wedding cake 2 hours The following is the expected sales budget in units for the next month: Small cakes budgeted to be made 100 Large cakes budgeted to be made 30 Wedding cakes budgeted to be made 10 In addition, 1 employee will need 1 hour of worktime in order to setup for the day, and 1 employee will need 2 hours per day to clean up. Assume a 20-day month with 40-hour work weeks. How many employees will be needed for the required workload? Please provide information as to how you arrived at your response. 2. Discuss at least 5 of the different types of budgets. 3. All sales at Heritage Company are made on credit. Experience has shown that 70% of the accounts receivable are collected in the month of the sale, 26% are collected in the month following the sale, and the remaining 4% are uncollectible. Actual sales for March and budgeted sales for the following four months are given below: March (actual sales)............ $200,000 April................................... $300,000 May.................................... $500,000 June.................................... $700,000 July..................................... $400,000 Compute the amount of cash, in total, which the company can expect to collect in May. 4. The Bull Company has the following historical sales data: Year Sales 2007 $11,000 2008 $18,000 2009 $22,000 Required: 1. Using the Moving Average Method, predict the sales for 2010. 2. Using Exponential Smoothing, predict the sales for 2010. Assume that the most recent years are the most representative of future sales. 5. The mission of Humpty Dumpty Preschool is to become the premier provider of childcare for children who are ages 2 through 5. At the time of the review process, management needs to be sure that the planned course of action will lead to the fulfillment of the organization’s mission. Name and give an example of the next four steps that the preschool should take in articulating its strategic goals, beginning with defining strategy. 6. Provide a brief discussion of how you might use ONE of the four common qualitative forecasting methods in your organization. 7. Smith company expects to sell 5,000 units Each unit requires: 2 pounds of direct material at $10 per pound 2 direct labor hours at $12 per credit labor hour The manufacturing overhead rate is $7 per direct labor hour. The beginning inventories are as follows: Direct materials: 1,000 pounds Finished goods: 2,500 units The planned ending inventories are as follows: Direct materials: 2,ooo pounds Finished Goods 1,500 units Required: 1. What is the planned production? 2. What are the required direct material purchases for the planned production? 8. Brown Corporation produces ignition equipment and programs for small equipment manufacturers. One of the most important parts of the company's new just-in-time production process is quality control. Initially, a traditional cost accounting system was used to assign quality control costs to products. All of the costs of the Quality Control Department were included in the plant's overhead cost rate and allocated to products based on direct labor dollars. Recently, the firm implemented an activity-based costing system. The activities, cost drivers, and rates for the quality control function are summarized below, along with cost allocation information from the traditional system. Also shown is information related to one order of the Speedy line. Traditional Costing Approach: Quality control costs were assigned at a rate of 14% of direct labor dollars. Order Speedy 7: Charged with $15,000 of direct labor costs. Activity-Based Approach for the Quality Control Function: Activities Cost Drivers Cost Assignment Rates Order Speedy 7 Activity Usage Incoming Materials Inspection Type of material used $15.75 per type of material 10 types of material In-Process Inspection Number of products $0.95 per product 600 products Tool and Gauge Control Number of processes per cell $7 per process 21 processes Product Certification Per order $65 per order 1 order Required: 1. Compute the quality control cost that would be assigned to the Ace order under both the traditional approach and the activity-based costing approach to cost assignment. 2. What was the impact on the costs assigned to the Ace order as a result of shifting to the activity-based costing approach. 9. The Reflex Company produces two products: wipers and gas caps. The following information is available: Wipers Gas Caps Unit Selling Price $20 $10 Unit Variable Costs 14 6 Unit Contribution Margin 6 4 Sales Mix 70% 30% Additional information: Total company-wide fixed costs are $158,000. Given the stated sales mix, how many wipers will need to be sold in order to obtain a profit of $58,000? 10. The management of JC Auditorium believes that the number of events each month is measure of activity for total clean-up cost. Shown below are event figures and total clean-up costs for the past months: Number of events Total clean-up Cost January 28 $30,900 February 34 $34,200 March 16 $20,700 April 22 $28,200 1. Using the high-low method, estimate the variable cost per event and total fixed cost per month. (Round off the variable cost per function to the nearest cent and the total fixed cots to the nearest dollar) 2. Using the least-squares regression method, estimate the variable cost per event and the total fixed cost per month. (round off the variable cost per function to the nearest cent and the total fixed cost to the nearest dollar)

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