BYP 1-1 (Continued)
Manager
Name of
report
Information report
would contain
How frequently
should it be
issued?
Mike Cichanowski
Analysis of
proposed
new product
line
Projected revenues
and expenses for a
possible new
product line
As needed and
requested
Diane Buswell
Company-
wide budget
analysis
Revenues, expenses,
and net income
compared to the
budgeted amounts
for each
Monthly
Deb Welch
Purchasing
History
List of items
purchased and most
recent cost for each
item
Monthly or
available on-
line
Bill Johnson
Sales
Summary
Sales by product
line and by
customer
Monthly or
weekly
Dave Thill
Cost of
Production
Report
Direct materials,
direct labor, and
manufacturing
overhead costs
assigned to each
product line
Monthly or
weekly
Rick Thrune
Cost of
Production
Report for
Composite
Kayaks
Detailed direct
material and direct
labor costs for the
composite kayaks
Weekly
BYP 1-1 (Continued)
(c) When Diane Buswell, controller for Current Designs, reviewed the
accounting records for a recent period, she noted the following items.
Payee
Purpose
Product Costs
Period
Costs
Direct
Materials
Direct
Labor
Manufacturing
Overhead
Winona Agency
Property insurance for
the manufacturing plant
X
Bill Johnson
(sales manager)
Payroll–payment to
sales manager
X
Xcel Energy
Electricity for
manufacturing plant
X
Winona Printing
Price lists for salespeople
X
Jim Kaiser (sales
representative)
Sales commissions
X
Dave Thill (plant
manager)
Payroll–payment to
plant manager
X
Dana Schultz (kayak
assembler)
Payroll–payment to
kayak assembler
X
Composite One
Bagging film used when
kayaks are assembled. It
is discarded after use.
X
Fastenal
Shop supplies–brooms,
paper towels, etc.
X
Ravago
Polyethylene powder
which is the main
ingredient for the
rotational molded kayaks
X
Winona County
Property taxes on
manufacturing plant
X
North American
Composites
Kevlar fabric for
composite kayaks
X
Waste Management
Trash disposal for the
company office building
X
None
Journal entry to record
depreciation of
manufacturing equipment
X
BYP 1-2 DECISION-MAKING ACROSS THE ORGANIZATION
Ending Raw Materials Inventory
Beginning raw materials + Raw materials purchased
= Direct materials used
$384,000 – Ending raw materials inventory = $350,000
Ending Work in Process Inventory
Direct materials + Direct labor + Manufacturing overhead
= Total manufacturing costs
= Total cost of work in process
= $25,000 + $750,000 = $775,000
Cost of goods manufactured + Beginning finished goods inventory
= Cost of goods available for sale
= Cost of goods manufactured
$775,000 – Ending work in process inventory = $732,000
Ending Finished Goods Inventory
Sales – Cost of goods sold = Gross profit
= Cost of goods sold
$770,000 – Ending finished goods inventory = $744,000
Ending finished goods inventory = $770,000 – $744,000 = $26,000
BYP 1-3 MANAGERIAL ANALYSIS
for each one.
(a) Jason Dennis Needs information on sales, perhaps by salesper–
son and by territory.
Peggy Groneman Needs cost information for her department.
Dave Marley Needs all accounting information.
Kevin Carson Needs product cost information.
for her department.
(b) Jason Dennis Income statement.
Peggy Groneman None.
Dave Marley All.
Kevin Carson Income statement and cost of goods manufactured
schedule.
Sally Renner None.
maintenance and updates of program, issued
monthly.
Dave Marley Cost of Preparing Reports—Detailed analysis of all
reports provided, their frequency, time, and estimated
cost to prepare, issued monthly.
Kevin Carson Cost of Product—Detailed cost by product line,
including a comparison with estimated costs for
BYP 1-4 REAL-WORLD FOCUS
increases in costs.
The current year events and their possible impact on the three manufacturing
cost elements are as follows:
Operational problems at a major furnace. The principal effect is on manufacturing
the malfunctioning of the furnace.
Higher downtime and costs and expenses associated with capital improvement
projects. Higher downtime causes higher indirect labor. Costs associated
Reduced fixed costs. Fixed costs such as insurance and rent are classified
as manufacturing overhead. Thus, this factor reduced overhead costs during
the year.
Productivity and efficiency gains. This factor could have resulted in reductions
BYP 1-5 REAL-WORLD FOCUS
finance.
(b) Student and Associate members receive most of the benefits of Regular
membership at a significant savings.
Unique access to the professional designation, the Certified Manage-
ment Accountant (CMA)
Specialized learning opportunities