P3-1.

High Low Method

Electricity Cost Telephone Cost Water
Highest 2,110 633 1,440 98.8 34,100
Lowest 1,200 360 980 89.6 25,540
Difference 910 273 460 9 8,560
Change/Hr 0.3 0.02 0
TVC (H) 633 28.8 0
TVC (L) 360 19.6 0
FC (H) 0 70 60
FC (L) 0 70 60

Exp 2,200 1,500 32,000

FC + Variable 660 100 60

P3-2. Compensation
Regular Premium
Emilyn 400 30
Ray 400

WIP FOH
Productive Hrs 420
420 work hrs-idle
Premium 10 15-10 = prem
25
Idle 30
840 65 remember to record premium only. NOT entire overtime rate/hr.

P3-3. Budgeting.
Exp Sales 96,000 Actual Sales 90,000
Exp Shipment 664 Actual Shipment 600
Storage Bin 200 Storage Bin 225

Expected Actual
Product Handling 10,000 1.25 per 100 units
Storage 3 per 1 bin
Utilities 1,000 1.5 per 100 units
Clerks 1,000 1 per 1 shipment
Supplies 0.5 per 1 shipment

96,000 90,000
STATIC Expected Actual
Product Handling 11200 10,900 300
Storage 600 465 135
Utilities 2440 2,020 420
Clerks 1664 1,400 264
Supplies 332 340 -8
16236 15125 1,111

90,000 90,000
FLEXIBLE Expected Actual
Product Handling 11125 10,900 225
Storage 675 465 210
Utilities 2350 2,020 330
Clerks 1600 1,400 200
Supplies 300 340 -40
16050 15125 925
 Cost
60
60
0

OT entire overtime rate/hr.

 A B C
300,000 700,000 150,000 200,000 800,000
Assets Cost Assets Cost Assets
900,000 Central Office
350,000 HR

Total Assets 1,250,000

Total Costs 1,150,000
C
250,000
Cost
DIRECT METHOD
Central Office HR A
900,000 350,000 700,000
25 450,000 10 600,000 15 300,000
-900,000 216000
-350,000 175000

1,091,000

STEP METHOD
Central Office HR A
900,000 350,000 700,000
25 450,000 10 600,000 15 300,000
-900,000 291891.892 145945.946
-641,892 320945.946

1,166,892

CO 900,000 + 0.4545HR 55 0.45454545 support provided by HR

HR 350,000 + 0.3243*CO 1,850,000 0.32432432 support provided by CO

CO 1,242,219.02
HR 752,881.84

RECIPROCAL
Central Office HR A
900,000 350,000 700,000
25 450,000 10 600,000 15 300,000
-1,242,219 402881.844 201440.922
342219.018 -752,882 205331.411

0 0 1,106,772
 B C
200,000 250,000
5 150,000 10 800,000
108000 576000 Total Assets 1,250,000
58333.3333 116666.667 Total Emp 30

366,333 942,667

B C
200,000 250,000
5 150,000 10 800,000
72972.973 389189.189 Total Assets 1,850,000 1,250,000
106981.982 213963.964 Total Emp 40 30

379,955 853,153

B C
200,000 250,000
5 150,000 10 800,000
100720.461 537175.792 Total Assets
68443.8036 136887.607 Total Emp 55

369,164 924,063
P3-1 High Low Method.
Electricity Cost Telephone Cost Water
Highest 2,110 633 1,440 98.8 34,100
Lowest 1,200 360 980 89.6 26,800
DIFFERENCE 910 273 460 9 7,300
Change Ratio 0.3 0.02 0
TVC (H) 633 28.8 0
TVC (L) 360 19.6 0
Fixed Cost 0 70 60
0 70 60

Exp 2,200 1,500 32,000

Predicted Cost 660 100 60

P3-2. Overhead (Employment)

Productive - Emilyn 420
Productive - Ray 420
To WIP 840

Premium - Emilyn 10
Premium - Ray 25
Idle Time - Ray 30
To FOH 65

P3-3. Budgeting
COSTS Fixed Variable
Product Handling 10,000 1.25 per 100 units
Storage 3 per bin
Utilities 1,000 1.5 per 100 units
Shipping Clerks 1,000 1 per shipment
Supplies 0.5 per shipment

PROCESSED EXPECTED
90,000 units 96,000 units
600 shipments 664 shipments
225 storage bins 200 storage bins
STATIC whatever you expected, yun na.
Expected Actual Variance
Product Handling 11200 10,900 300
Storage 600 465 135
Utilities 2440 2,020 420
Shipping Clerks 1,664 1,400 264
Supplies 332 340 -8
16236 15125

FLEXIBLE adjust based on actual costs

Expected Actual Variance
Product Handling 11125 10,900 225
Storage 675 465 210
Utilities 2350 2,020 330
Shipping Clerks 1,600 1,400 200
Supplies 300 340 -40
16050 15125
Cost
60
60
0
DIRECT METHOD
Central HR A B C
900,000 350,000 700,000 200,000 250,000
CO -900,000 216000 108000 576000
HR -350,000 175000 58333.3333 116666.667
0 0 1,091,000 366,333 942,667

STEP METHOD
Central HR A B C
900,000 350,000 700,000 200,000 250,000
CO -900,000 291891.892 145945.946 72972.973 389189.189
HR -641,892 320945.946 106981.982 213963.964
0 0 1,166,892 379,955 853,153

RECIPROCAL METHOD
Central HR A B C
900,000 350,000 700,000 200,000 250,000
CO -1,242,218 402881.643 201440.822 100720.411 537175.524
HR 342218.929 -752,882 205331.357 68443.7857 136887.571
1 0 1,106,772 369,164 924,063
Total Emp 30
Total Assets 1250000

Total Emp (1st) 40

Total Assets 1850000

Total Emp (2nd) 30

Total Assets (2nd) 1250000

Total Emp (w/o HR) 55

Total Assets (w/o CO) 1850000

HR to CO 0.4545454545 55
CO to HR 0.3243243243 1850

CO=900000+.45*HR
HR=350000+.3243243CO

CO 1,242,218.40
HR 752881.64324
 1 Operating profit per unit for the brass style of faucet.
Traditional
SP 40
DM cost -8
DL cost -15
Overhead cost -12
5

2 Activity-cost driver rate for setup costs and inspection costs

3 ABC System
Brass Chrome White
# Units 30,000 50,000 40,000
SP 40 20 30
Total SP 1,200,000 1,000,000 1,200,000
DM 240000 200000 320000
DL 450000 150000 360000
Overhead
Total Setup Hours 30 25 40
Total Inspection Hours 900 1000 800
Setup Costs 147000 122500 196000
Inspection Costs 135166.666667 150185.185185 120148.148148
227,833 377,315 203,852
7.59 7.55 5.10
Overhead Cost/Unit 9.40555555556 5.4537037037 7.9037037037

4 Total Overhead 330000

Young Old
4.1 Sales Revenue 200,000 600,000 800,000
82500 247500

4.2 Miles (Travel) 80,000 40,000 120,000

Salaries + Paperwork (Admin) 3,000 9,000 12,000
Entertainment 50 75 125
Overhead for Travel 24000 12000
Overhead for Entertainment 57600 86400
Overhead for Entertainment 37500 112500
119100 210900

Salaries not included in overhead costs for administrative expense!

 95
2700