Question

kindly answer from number 4 to 8

exce Midwest Manufacturing Statement of Income 2018 2017 2016 s 5,645,357 5,814,718 6,163,601 Sales Cost of Goods Sold 1,467,793 1,395,532 1,787,444 523,325 Variable Costs 369,816 395,175 Fixed Costs 1,862,968 1,918,857 2,157,260 Total Cost of Goods Sold 3,782,389 3,895,861 4,006,341 Gross Profit Administrative& Selling Expenses: Variable Administrative & Selling Costs Fixed Administrative & Selling Costs 523,906 523,325 395,175 959,711 1,104,796 1,016,994 1,354,886 1,628,121 1,540,900 Total Administrative Costs 2,427,504 2,267,740 2,465,440 Net Income Supplemental Information 2018 2017 2016 Unit Costing Summary: 118,531 107,680 100,810 Units Sold 77,045 75,376 75,607 Direct Labor Hours Attached is the financial information needed from Midwest Manufacturing to answer the questions below The questions below must be turned in June 10, 2019 at 11:59 PM This assignment is required to be completed using Excel, all calculations must be reflected in your spreadsheet 1)) What is the (a) breakeven in units and (b) margin of safety in units for (i) 2016, (ii) 2017, and (i) 2018? (25 Points) A new piece of manufacturing equipment is being considered for purchase. This machine is projected to reduce total cost of goods sold by 18% (based on 2018 actual results) and have a useful life of 5 years. 2) If the machine costs $2,500,000 should it be purchased? Explain. (20 Points) The company has calculated that 40% of the variable cost of goods sold are attributable to direct materials, and that 60% of the variable cost of goods sold are associated with direct labor. 3) What is the direct materials cost per item for 2018? (10 Points) It is projected that the number of units sold for 2019 will increase by 5% from 2018. No change in inventory is scheduled for 2019: 4) What is the production budget, in units, for 2019 in units? (10 Points) It is expected that the cost of direct materials will increase by 3% from 2018 to 2019. 5) What is the direct materials budget, in dollars, for 2019? (15 Points) 6) What was the direct labor hours per unit for (rounded to the nearest.01)()2017 and (ii) 2018? (15 Points) It is budgeted that the direct labor hours per unit from 2018 will be the same for 2019. It is also budgeted that the direct labor rate for 2019 will increase by 2% from 2018 What is the direct labor budget, in dollars, for 2019? (15 Points) 7) When drafting the budget for 2018 the standard hourly rate was set at $12.56 for direct labor What is the direct labor rate variance for 2018? (15 Points) 8)

Answer 1

4.

Production Budget for 2019
Units Sold in 2018	118531
Increase in sales of 5%	5927
Expected Sales in 2019 (units)	124458
NO change in inventory
Production for 2019	124458

5.

Direct Material Budget
Variable cost of goods sold in 2018	$ 17,87,444.00
Attributable to Direct Material 40%	$   7,14,977.60
Units Sold	118531
Direct Material Per unit sold in 2018	$                6.03
Increase in Price 3%	$                0.18
Direct Material Price for 2019	$                6.21
Units Production in 2019	124458
Direct Material Cost for 2019	$   7,73,251.07

6.

	2017	2018
Direct Labor Hours	75376	77045
Units Sold	107680	118531
Direct Labor hour per unit	0.7	0.65

7.

Direct Labor Budget
Variable cost of goods sold in 2018	$ 17,87,444.00
Attributable to Direct Labor 60%	$ 10,72,466.40
Direct Labor Hours in 2018	77045
Rate per direct labor hour in 2018	$              13.92
Increase in Rate by 2%	$                0.28
Rate per direct labor hour in 2019	$              14.20
Units Produced in 2019	124458
Direct Labor Hours per unit	0.65
Total Direct Labor hours in 2019	80897.7
Direct Labor Cost for 2019	$ 11,48,617.90

8. Direct Labor Rate Variance = (Actual Rate - Standard Rate) x Actual Hours

= ($14.20 - $12.81) x 80897.70 = $112447.80 (U)
Standard Rate for 2019 = 12.56 x 1.02 = $12.81