I need help to solve this assignment. Thanks.

I need help to solve this assignment. Thanks.

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Question 1
Armidale Electronics manufactures surround sound systems and applies manufacturing
costs to production at a budgeted indirect­cost rate of $22 per direct­labor hour. The
following data are obtained from the accounting records for August 2012:
Direct materials
$350,000
Direct labor (7,000 hours @ $15/hour) $105,000
Indirect labor
$15,000
Plant lease
$75,000
Depreciation on plant and equipment
$40,000
Marketing expense
$20,000
Plant utilities
$15,000
Required:
a.
What actual amount of manufacturing overhead cost was incurred during August 2012?
b.
What amount of manufacturing overhead was allocated to all jobs during August 2012?
c.
For August 2012, was manufacturing overhead under­allocated or over­allocated?
Explain.
d.
What are the implications for the company, based on your outcome for ‘c’?
Question 2
Armidale Enterprises reports the year­end information from 2012 as follows:
Sales (100,000 units)
$ 250,000

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Less: Cost of goods sold
150,000
Gross profit
100,000
Operating expenses (includes $10,000 of Depreciation)
60,000
Net income
40,000
Michelle, the firm’s owner, is developing the 2013 budget. In 2013 the company would like
to increase selling prices by 10%, and as a result expects a decrease in sales volume of
5%. Cost of goods sold
as a percentage of sales
is expected to increase to 62%.
Other
than depreciation
, all operating costs are
variable
.
Required:
Prepare a budgeted income statement for 2013.
Question 3
Southern Company needs 1,000 motors in its manufacture of automobiles. It can buy the
motors from Armidale Motors for $1,250 each. Southern’s plant can manufacture the
motors for the following costs
per unit
:
Direct materials $ 500
Direct manufacturing labor 250
Variable manufacturing overhead 200
Fixed manufacturing overhead 350
Total $1,300
If
Southern buys the motors from Armidale Motors, 70% of the fixed manufacturing
overhead applied will not be avoided
.
Required:
a.
Should Southern Company make or buy the motors? Show your calculations
b.
What
additional (qualitative) factors
should Southern consider in deciding whether or

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