QUESTIONS: Determine the cost of manufacturing one custom kitchen assuming the units given. Assume the MOH costs are allocated based on the direct labor hours per unit. Please show all calculations


  1. Determine the absorb of manufacturing one prescription kitchen grand the items attached.  Assume the MOH absorbs are classifyd unwandering on the trodden strive hours per item.  Gladden pretence all calculations and globular to the straightforward dollar.   I would commend that you investigate the MOH per kitchen pristine.  Debate other options (at smallest 2 options) for the air low and the avail of the MOH allocation.   Do multiple effect rows application the MOH allocation?  What happens if MOH is not classifyd suitably?
  2. What are the capricious absorbs for this effect row?  What are the unwandering absorbs?  I would commend that you pretence a catalogue for each area on a year-by-year plea.  For the capricious absorbs, too, pretence them on a per item (800 items)   How does a crew substantiate each sign of absorb?  Can a absorb appoint be radical aggravate term? If yes, elucidate how and furnish an smallest two issues.  If no, elucidate why?
  3. Prepare a Job Appoint Absorb quibble for the aftercited prescription kitchen:  Materials $3,500 and 30 hours of strive.  What is the prescriptioner appraisement?

What other factors would application the sales appraisement for this sign of crew?  Can a crew trust on opposition appraisement unwandering on honorable a % on absorb?

  1. What is the Contribution Margin (CM) in sum dollars, CM% and per item for the sale of 800 kitchen cabinets?  Elucidate the avail of CM and how it can be used by companies to foretell advenient allowance.  Create some issues in surpass after a while total to pretence how it can be used.
  2. Prepare a transmitted Allowance Proposition grand a dimensions of 800 items.  For the absorb of consequence sold, gladden use the per item absorb you investigated in #1.  You do not enjoy to appoint any afurban catalogues.  I would use a harmonious format to reveal 16-8 on page 737 or from your disquisition voices.  I commend that you roll out all at-liberty absorbs attached overhead.  Do not use honorable Selling and General/Administrative Expenses for your categories.  Points achieve be obsolete by not rolling out all limit absorbs.  You can overlook cause and allowance tax absorb.
  3. Prepare three CVP Allowance Statements using the aftercited year-by-year dimensionss:  400, 800 and 1,200.  Link this catalogue to scrutiny #2 for VC and FC investigated.   Keep in spirit how capricious and unwandering absorbs behave.  The transmitted allowance proposition from #5 should be environing the identical net allowance as the 800 items for the CVP format.(use reveal 20-12 page 893 as your issue – gladden voice that it is mislaying a designation and your total are for a year.)

Discuss the avail of these calculations to a crew.  Compare and opposition the transmitted vs CVP format. Fully debate the differences (at smallest 3) betwixt the transmitted vs CVP format.  Furnish issues attended by total in surpass of how you would use these calculations as the CFO of the crew.

  1. If the aftercited transmutes were to be made, investigate a new CVP Allowance Statement:  Trodden Material absorbs abate by 10%; unwandering absorbs growth by 15% and sales appraisement would growth by 5%.  Assume you are selling the 800 items.  Should the crew observe these transmutes? Why or why not?  This scrutiny is not honorable unwandering on the new net allowance.  Gladden criticism the generous allowance proposition for transmutes.  What if the sales dimensions transmutes?  Does this transmute your retort?  I would commend using dimensionss surpassing and inferior to see how the transmutes application your retort.  Conceive CVP allowance propositions in surpass that are needed to foundation your retort.

Discuss legitimate issues of absorb growths for unwandering absorbs (at smallest 2) and abates for trodden materials (at smallest 2) that could be implemented for this office. Can the crew growth appraisement?  What other areas faculty be applicationed due to the appraisement growth?  You are the CFO of this office what is dignified to observe?  Furnish 2 assiduity inequitable details that can application this debateion. Do some inquiry for this assiduity.  It is frequently dignified to conceive the assiduity that you are in as some industries enjoy divergent factors that application sales and profitability.

Additional notification for another effect row

     Assume another effect row is too life observeed – bathroom cabinets.  Only use this notification for the scrutinys rolled troddenly adown.

  • Higher skilled workers would be required which achieve effect in paying them $18 per hour.
  • Additional MOH absorbs for the year achieve be $170,000.    These absorbs achieve be in restitution to the absorbs already life incurred.  These absorbs are due to the afurban effect row and too kindred to the floating effect rows for afurban effection abilities.  The two rows achieve portion-out all MOH absorbs.
  1. Should the crew observe using ABC?  Advantages and disadvantages? Debate why or why not?  Areas to conceive in the debateion but not scant to the aftercited:  application on effect absorb, implications of not using the suitable allocation and its application on appraisement if any, what sign of companies use ABC etc….
  2. How inequitableally would ABC succor classify MOH absorbs?

•The erection of the disquisition should conceive an gap article environing the crew in a account instrument.  3pts achieve be deducted for not including an gap article.

•The debateion scrutinys should be retorted in the appoint rolled (questions are in italics).  However, do not enumerate the scrutinys.  Instead, the debateion should series from one theme to the proximate and conceive as a poverty the scrutinys signed.   

  • Please use a memo format for the disquisition and address it to the Board of Directors.

• The calculations should be conceived as catalogues in surpass which are enumerateed and referenced to each debateion.  A debateion after a whileout referring to the total achieve not be observeed full.  Do not debate/elucidate your calculations in the disquisition but instead retort the scrutinys kindred to your calculations.  All catalogues should be conceived in surpass and use formulas after a while negotiative formatting.  A peculiar who is balbutiation the surpass catalogues should not enjoy any scrutinys on what is life investigated as all total are labeded.  Not using formulas achieve effect in a poverty 1 pace diminution.  I commend continuity the catalogues. 

 •You should be thinking environing all of the concepts that you enjoy literary from this series and their avail to a office proprietor or investor.  I should shape balbutiation your disquisition and see the concepts and some assiduity cognizance demonstrated through the debateion and the partition.

•Finally, the after a whiledrawal article(s) should digest the disquisition. 3pts achieve be deducted for not including a after a whiledrawal article.

•Plan to dedicate term to letter and criticisming the disquisition.  Groups can enjoy telling pace diminutions for disquisitions that are not polite written (spelling, expression etc..)  I would commend that the disquisition be no further than 6 double spaced pages after a while unintoxicated margins.  

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