AC 205
Individual typewritten student project
Skybugs, Inc.
Read the entire case before beginning
1. This is an individual comprehensive student project.
2. The project must be completely typewritten and emailed to the instructor no later than the
beginning of class on the assigned to date (December 14)
3. Microsoft Word and or Excel may be used.
4. Only the first submittal from each student will be excepted and graded, other submittals will
not be reviewed.
5. The instructor will not answer any “how do you do this” type questions. Only procedural
questions will be answered.
Grading
1. This project is worth up to a maximum of 10 points toured the final class grade.
2. Any project sent in late (beyond the beginning of class on the due date) will lose a single
point. (additional points will be deducted for each additional late day.)
3. Content and clarity are important. If it’s difficult to make sense of the contents points will be
deducted.
These usually result from the following:
a) Not completing all of the requirements
b) Too much information in a single section or page
c) Improper use of page breaks
d) Poor formatting of tables and alignment of numerical values in decimal places
e) Inconsistent use of dollar signs and comma separators
(a,b,c) Look to number 5 in other info
b)
Item
Product Costs
Direct
Direct
Materials
Labor
DL
Manufacturing Period
Overhead
Costs
70,000
(d) Assume you have:
No beginning or ending raw materials inventory.
No beginning or endings work in process inventory.
Prepare a projected cost of goods manufactured schedule for the first
month of operations.
(e) Assume 10,000 helmets will be produced the first month of
operations.
(f) What type of cost accounting (job cost or process costing)
(g) Explain how you would assign costs in either job cost or
process costing
(h) Classify your cost as Variable Costs or Fixed Costs. (NO mixed costs)
Item
Variables Costs
Fixed Costs
Total Costs
(i) Compute unit variable cost
(J) Estimated number of helmets sold in December 2017=8,000 helmets
Projected wholesale selling price = $40 per helmet
Find: unit contribution margin And Contribution Margin ratio
(k) Find: Breakeven point in dollars And breakeven point in units
(L)
Prepare operating Budgets:
Sales Budget (8000 units)
Production budget: Desired ending finished goods units: 2,000
Beginning finished goods units:
0
Direct Materials Budget: unit to be produced: 10,000
DM/unit: 1KG
Cost per KG: $7
Desire ending DM= 0
Direct Labor Budget: Direct labor time (hours) per unit: 0.35
Direct labor cost per hour:
$20
Selling and Administrative Expenses budget.
Budgeted Income Statement.
(m) Prepare:
Cash budget
(n) Prepare:
Monthly flexible manufacturing costs budget
Other Info
1- Bicycle Helmet Company’s selling price is $40.00 per device.
2- Each helmet requires 1 kilogram (KG) of material, at a unit cost of $7.00
per kg, to produce.
3- It takes 0.35 direct labor hours to produce one helmet, at a unit price of
$20 per hour.
4- Income tax expense is 45% of income from operation.
5- The types of manufacturing and period costs that would be incurred in
making helmet, and assumed total dollar amounts are as follows:
a.
Rent on production equipment: $6,000
b.
Insurance on factory building: $1,500
c.
Raw Materials: $70,000
d.
Utility costs for the factory: $900
e.
Office supplies: $300
f.
Direct labor: $70,000
g.
Depreciation on office equipment: $800
h.
Miscellaneous manufacturing items: $1,000
i.
Administrative salaries: $15,500
j.
Property taxes on factory building: $400
k.
Advertising for the Helmets: $11,000
l.
Sales commissions: $40,000
m. Depreciation on factory building: $1,500
n.
Professional fees: $500
o.
Research and development: $10,000
p.