ACCT 521 Connect Plus Homework 5 Solution (Liberty University)

Davis Fabricators buys metal for manufacturing from two suppliers, Alpha Metals and First Parts.

 If the metal is delivered late, the shipment to the customer is delayed. 

 Delayed shipments lead to contractual penalties that call for Davis to reimburse a portion of the purchase price to the customer.

 During the past quarter, the purchasing and delivery data for the two suppliers showed the following

Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community.

 The facility has the capacity to make 18,100 gallons of the single flavor, GUI Chewy, annually. 

 The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru.

 Annual orders for Chuck's total 8,600 gallons and annual orders for Marcee's total 3,900 gallons. 

 Variable manufacturing costs are $0.90 per gallon, and annual fixed manufacturing costs are $28,100

Cathy and Tom's Specialty Ice Cream Company operates a small production facility for the local community.

 The facility has the capacity to make 25,500 gallons of the single flavor, GUI Chewy, annually. 

 The plant has only two customers, Chuck's Gas & Go and Marcee's Drive & Chew DriveThru. 

 Annual orders for Chuck's total 12,750 gallons and annual orders for Marcee's total 6,375 gallons.

 Variable manufacturing costs are $.80 per gallon, and annual fixed manufacturing costs are $33,700.

 The ice cream business has two seasons, summer and winter. 

 Each season lasts exactly six months. 

 Chuck's orders 6,375 gallons in the summer and 6,375 gallons in the winter. 

 Marcee's is closed in the winter and orders all 6,375 gallons in the summer

Warren Ltd. has two production departments, Building A and Building B, and two service departments, Maintenance and Cafeteria. 

 Direct costs for each department and the proportion of service costs used by the various departments for the month of June follow:

University Printers has two service departments (Maintenance and Personnel) and two operating departments (Printing and Developing).

 Management has decided to allocate maintenance costs on the basis of machine-hours in each department and personnel costs on the basis of labor-hours worked by the employees in each.

 The following data appear in the company records for the current period:

Not-A-Mega Bank has three service departments (Administration, Communications, and Facilities), and two production departments (Deposits and Loans).

 A summary of costs and other data for each department prior to allocation of service department costs for the year ended December 31 follows

GB Service Corporation has two service departments, Administration and Accounting, and two operating departments, East and West.

 Administration costs are allocated on the basis of employees, and Accounting costs are allocated on the basis of number of transactions. 

 A summary of GB operations follows: