IG009_Assessment_Scenarios

IG009 Assessment ScenariosPart I: Performance Report and Variances HBC Static Budget Report Honey Bear Confections (HBC) Manufacturing Overhead Static Budget Report For Month Ended June 20XX Budget Actual Variance (U or F) Production in bags of candy 10,000 12,000 2,000F Costs:   Indirect labor $26,000 $31,200 $5,200U   Supplies 25,000 29,500 4,500U   Utilities 19,000 22,500 3,500U TOTAL $70,000 $83,200 $13,200U Part II: Making Investment Decisions Using NPV, ARR, IRR, and Payback Investments Investment A Investment B Required Investment $50,000 $150,000 Annual Cash Flows 20,000 56,000 Annual Net Income 8,000 34,000 Project Life 5 years 5 years Cost of Capital 10% 10% Part V: Computing Variances Using Standard and Actual Costs Healing Touch Standard and Actual Costs Standard Cost Sheet: Massage Chair Metal tubing 6 meters @ $3 $18.00 Leather 2 square meters @ $7
14.00 Padding 3 kilograms @$4 12.00 Direct labor 4 hours @ $15 60.00 Total standard cost $104.00 Actual Costs Incurred for the Month: Massage Chair Metal tubing 3,100 meters $9,455 Leather 1,100 square meters 7,722 Padding 1,600 kilograms 6,560 Direct Labor 1,800 hours 27,270 Total cost $51,007 Part VI: Break-Even Point Dr. Lucy Zang—Happy Feet Store Selling Price $220 per shoe Operating Costs: Cost of shoes $110 per shoe Other Costs:   Fixed Rent $13,333 monthly   Variable Rent 3% of sales   Other $38,000 monthly   Interest $11,667 monthly