ACCT 346

Student Name
Bravo Baking Company began operations in May of 2010 with the production and sales of speciality breads.
The company has experienced a good market demand for its high protein, low carbohydrate product called "Hi-Lo"
Hi-Lo's success has required that Bravo continue to make only this one product, however, Bravo's customers,
the local retailers, have been asking for more specialty breads from the company. The decision to expand will be made
in the coming weeks.
Weekly Assignments: Complete the assigned Tab each week.
In each worksheet there are several Green colored cells. These cells must be filled in with your response.
Due
Points
Available
Points
Earned
Tab1) Product vs. Period Costs Week 1 10 10.00
Tab 2) Cost of Goods Manufactured Schedule Week 2 30 30.00
Tab 3) Break Even Analysis Week 3 40 40.00
Tab 4) Incremental Analysis Week 5 40 40.00
Tab 5) Capital Budgeting Week 6 40 40.00
Tab 6) Variance Analysis Week 7 40 40.00
200 200.00
Terry Hedrick
Bravo Baking Company began operations in May of 2010 with the production and sales of speciality breads.
The company has experienced a good market demand for its high protein, low carbohydrate product called "Hi-Lo"
Hi-Lo's success has required that Bravo continue to make only this one product, however, Bravo's customers,
the local retailers, have been asking for more specialty breads from the company. The decision to expand will be made
In each worksheet there are several Green colored cells. These cells must be filled in with your response.
Total
ACCT 346
Student Name
10 points
Table A
Flour used in baking bread Correct
Factory Supervisor Salaries Correct
Bakers wages Correct
Rent for Executive Offices Correct
Sales Commissions Correct
Utilities used in the factory Correct
Advertising costs Correct
Delivery truck costs Correct
Paper wrappers for bread Correct
Depreciation on bake ovens Correct
Eggs, salt, water used for baking Correct
Interest on bank loan Correct
Factory Insurance Correct
Terry Hedrick
For Tables A : From the list below, identify if the cost item is a
"Product Cost" or "Period Cost" by typing "Product" or "Period" in the
appropriate box.
Product
Product
Product
Enter either "Product" or "Period"
Product
Product
Product
Period
Product
Period
Period
Product
Period
Period
Table B
Flour used in baking bread Correct
Factory Supervisor Salaries Correct
Bakers wages Correct
Factory Insurance Correct
Rent for Factory Correct
Utilities used in the factory Correct
Cleaning Bake Ovens Correct
Insurance on Factory Correct
Paper wrappers for bread Correct
Depreciation on bake ovens Correct
Eggs used for baking Correct
Small amounts of salt used Correct
Factory Insurance Correct
Points 10.00
Direct
Indirect
Direct
For Table B: From the list below, identify if the cost item is a "Direct
Cost" or "Indirect Cost" by typing "Direct" or "Indirect" in the
appropriate box.
Enter either "Direct" or "Indirect"
Indirect
Indirect
Indirect
Indirect
Indirect
Direct
Indirect
Direct
Indirect
Indirect
ACCT 346
Student Name
Table C Cost of Goods Manufactured Schedule
Materials used in baking bread 32,000 Correct Beginning Work In Process
Factory Supervisor Salaries 20,000 Materials
Bakers wages $32,000 Beginning Inventory Materials
Rent for Executive Offices 36,000 Plus: Purchases
Sales Commissions 10000 Materials Available
Utilities used in the factory 5000 Less: Ending Inventory Materials
Advertising costs 12000 Materials Used
Delivery truck costs 25000 Direct Labor
Depreciation on bake ovens 500 Overhead
Interest on bank loan 250 Factory Rent
Beginning Inventory Materials 10,000 Depreciation on bake ovens
Beginning Work in Process 8000 Utilities used in Factory
Ending Inventory Materials 4000 Other Overhead costs
Inventory Purchases 26000 Total Overhead
Ending Work in Process 2500 Total Manufacturing Costs
Other Overhead costs 1200 Total Work in Process
Beginning Finished Goods Inventory 7500 Less: Ending Work in Process
Ending Finished Goods Inventory 6000 Cost of Goods Manufactured
Rent for Factory 7500
Complete only the Green cells. Values in Red are from the schedule above.
Cost of Goods Sold Schedule
Beginning Finished Goods Inventory
Beginning Work In Process
Materials
Beginning Inventory Materials
Plus: Purchases
Materials Available
Less: Ending Inventory Materials
Materials Used
Direct Labor
Overhead
Factory Rent
Depreciation on bake ovens
Utilities used in Factory
Other Overhead costs
Total Overhead
Total Manufacturing Costs
Total Work in Process
Less: Ending Work in Process
Cost of Goods Manufactured
Use the information provided below to prepare the Cost of Good Manufactured Schedule:Bravo had the following costs as of Dec 31, 2010. Enter the correct values in
the Green shaded cells.
Goods Available for Sale
Less: Ending Finished Goods Inventory
Cost of Goods Sold Schedule
(TCO 2) 30 points
Cost of Goods Manufactured Schedule
$8,000 Correct
$10,000 Correct
$26,000 Correct
$36,000 Correct
Less: Ending Inventory Materials $4,000 Correct
$32,000 Correct
$32,000 Correct
$7,500 Correct
$500 Correct
$5,000 Correct
$1,200 Correct
$14,200 Correct
$78,200 Correct
$86,200 Correct
$2,500 Correct
Cost of Goods Manufactured $83,700 Correct
Complete only the Green cells. Values in Red are from the schedule above.
Beginning Finished Goods Inventory $7,500 Correct
$8,000 Correct
Beginning Inventory Materials $10,000 Correct
$26,000 Correct
$36,000 Correct
Less: Ending Inventory Materials $4,000 Correct
$32,000 Correct
$32,000 Correct
$7,500 Correct
$500 Correct
$5,000 Correct
$1,200 Correct
$14,200 Correct
$78,200 Correct
$86,200 Correct
$2,500 Correct
Cost of Goods Manufactured $83,700 Correct
Use the information provided below to prepare the Cost of Good Manufactured Schedule:Bravo had the following costs as of Dec 31, 2010. Enter the correct values in
the Green shaded cells.
$91,200 Correct
Less: Ending Finished Goods Inventory $6,000 Correct
$85,200 Correct
Points 30.00
ACCT 346
Student Name
Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs. (TCO 4)
Units produced 14,000
Table A Variable Fixed
Materials used in baking bread 2.29
Factory Supervisor Salaries 0.12
Bakers wages 2.29
Rent for Executive Offices 3,000
Sales Commissions 3500
Utilities used in the factory 0.50
Advertising costs 1000
Delivery truck depreciation 400
Depreciation on bake ovens 0.07
Interest on bank loan 500
Total Costs $5.26 $8,400.00
Price Charged per unit $7.89
Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs. (TCO 4) 40 Points
Part I Enter your solution in the green cells for each of the following:
Using the costs from Table A compute
A) Breakeven units (rounded to 2 decimal places) 3193.92 Correct
B) Break-even sales dollars 25200.00 Correct
C) Contribution Margin 2.63 Correct
D) Contribution Margin Ratio (%) 0.33 Correct
Part II Complete the following requirements
A) If Bravo requires a profit of $5,000 how many units must it sell? 5095.06 Correct
B) What is the total revenue from A above? 40200.00 Correct
C) If Bravo actually sells 8,000 units
1) What is the margin of safety in Dollars? 37920.00 Correct
2) What is the margin of safety percentage? 0.60 Correct
Total Correct
Points 40
Hint: use spreadsheet formulas to compute your answers
ACCT 346
Student Name
Bravo Baking Co has expanded its product line to include several other specialty breads. The operating results for the last quarter are provided below.
Product Hi-Lo Whole Grain Fruit & Nuts Total
Revenues $67,575 $31,800 $15,900 $115,275
Variable product costs $27,030 $12,720 $6,360 $46,110
Variable Selling & Administrative costs $13,515 $6,360 $3,180 $23,055
Contribution Margin $27,030 $12,720 $6,360 $46,110
Fixed Product Costs $5,000 $5,000 $5,000 $15,000
Fixed Selling and Administrative Costs $5,700 $2,850 $2,850 $11,400
Allocated Common Costs $5,000 $2,500 $2,500 $10,000
Net Income $11,330 $2,370 -$3,990 $9,710
Required: Bravo wants to know the effect on Net Income if it decides to discontinue the Fruit & Nuts product.
If Bravo eliminates Fruit & Nuts 50% of fixed costs can be avoided.
Prepare and incremental analysis showing the Net Income Effect of eliminating the Fruit & Nuts product.
What woud you advise Bravo to do?
Using the Table below, compute the Net Income for Bravo Baking after eliminating the Fruit & Nuts product.
Product Hi-Lo Whole Grain Fruit & Nuts Total
Revenues $67,575 $31,800 $99,375 Correct
Variable product costs $27,030 $12,720 $39,750 Correct
Variable Selling & Administrative costs $13,515 $6,360 $19,875 Correct
Contribution Margin $27,030 $12,720 $39,750 Correct
Fixed Product Costs $7,500 $5,000 $12,500 Correct
Fixed Selling and Administrative Costs $7,125 $2,850 $9,975 Correct
Allocated Common Costs $6,250 $2,500 $8,750 Correct
Net Income $6,155 $2,370 $8,525 Correct
Points 40
Bravo Baking Co has expanded its product line to include several other specialty breads. The operating results for the last quarter are provided below. (TCO 7) 40 Points
Required: Bravo wants to know the effect on Net Income if it decides to discontinue the Fruit & Nuts product.
Using the Table below, compute the Net Income for Bravo Baking after eliminating the Fruit & Nuts product.
ACCT 346
Student Name
Bravo Baking Co is considering replacing an older freezer with a larger unit to freeze some of its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell an more bread each year. From these additional sales
the after tax cash flow is expected to be $4,000. In addition to more sales, the new freezer will save $1,200 in electricity each year.
However, the new freezer will cost an additional $2,000 each year for maintenance. The cost of the new unit is $25,000 and it is
expected to last 10 years. The salvage value at the end of its life is $6,000. The old unit is fully depreciated and can be disposed at cost.
Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should Bravo purchase the freezer?
Use the format below to complete the NPV computations:
(Note: Use PV Tables on pages 342 and 343. Also, be sure to show costs as negative values)
Cash
Flow
PV
Factors
PV
Amounts
Cost of new refrigeration unit -25,000 1 -25000
After tax cash flow 4,000 5.22 Correct 20,864.40
Annual electricity savings 1,200 5.2161 Correct 6259.32
Additional annual maintenance costs -2,000 5.2161 Correct -10432.2
Amount collected from disposal of unit 6,000 0.2697 Correct 1618.2
Net present value -6690.28
Points
Bravo Baking Co is considering replacing an older freezer with a larger unit to freeze some of its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell an more bread each year. From these additional sales
the after tax cash flow is expected to be $4,000. In addition to more sales, the new freezer will save $1,200 in electricity each year. TCO 9
However, the new freezer will cost an additional $2,000 each year for maintenance. The cost of the new unit is $25,000 and it is 40 Points
expected to last 10 years. The salvage value at the end of its life is $6,000. The old unit is fully depreciated and can be disposed at cost.
Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should Bravo purchase the freezer?
Correct
Correct
Correct
Correct
Correct
Correct
40
ACCT 346
Student Name
Bravo Baking uses standard costing to analyze its performance. The data below is provided for your use in determining Bravo's variances.
Standard Cost per unit Cost /Unit Amount/Unit Standard Cost
Material Cost (Ingredients) (.5 lbs) 2.29 .5 lbs $4.58
Direct Labor( .25 hrs * $9/hr) 2.25 .25 hrs $9.00
Overhead 0.57
Total 5.11
During the month, Bravo sold 9,000 loaves of bread and used 4,650 pounds of ingredients. Also during the month, Bravo
purchased 5,000 pounds of ingredients at a cost of $22,500. Employees worked a total of 2200 hours and actual labor costs were $19,998
= ( 4.50 -
= (400.00) Fav/Unf >
Correct
= ( 4,650.00 -
= $687.00 Fav/Unf
Correct
= ( 9.09 -
= 200.00 Fav/Unf >
Correct
= ( 2,200.00 -
= ($450.00) Fav/Unf
Correct
Required:
Labor Efficiency Variance =
Part a. Compute the material price and quantity variance.
Material Price Variance =
Material Quantity Variance =
Labor Rate Variance =
TCO 10
40 Points
Bravo Baking uses standard costing to analyze its performance. The data below is provided for your use in determining Bravo's variances.
During the month, Bravo sold 9,000 loaves of bread and used 4,650 pounds of ingredients. Also during the month, Bravo
purchased 5,000 pounds of ingredients at a cost of $22,500. Employees worked a total of 2200 hours and actual labor costs were $19,998
$4.58 ) * 5,000.00
Correct
4,500.00 ) * 4.58
Correct
$9.00 ) * 2,200.00
Correct
2,250.00 ) * 9.00
Correct Points 40
Required:
Labor Efficiency Variance =
Fav
Part a. Compute the material price and quantity variance.
Material Price Variance =
Unf
Material Quantity Variance =
Unf
Labor Rate Variance =
Fav