Company: PLAY IT AGAIN SAM, INC.You are a middle manager of Play it Again Sam, Inc., a manufacturer and seller of electronic keyboardinstruments, digital pianos, and other musical electronics.You are primarily responsible for two products sold by Play It Again Sam, Inc., made in Lincoln, NE. One is astandard electronic keyboard that sells for $920 and in constructed from medium-grade materials. The othermodel is a customized digital piano. The digital piano sells for $1,275. Both instruments require 14 hours ofdirect labor to produce, but the digital piano is manufactured by more experienced workers who are paid at ahigher rate. Selected information regarding sales, production, and cost information for last year is as follows:Sales and production volume in unitsTotal direct labor hours (12 hours per unit)More information:Unit Costs:Direct materialsDirect laborManufacturing overheadTotal Unit CostsManufacturing overhead costs:Indirect MaterialsSupervisionBuilding depreciationMaintenancePurchasingInspectionElectronic Keyboard700 units9,800 hoursElectronic Keyboard$ 395280Digital Piano300 units4,200 hours$ 22,10045,36867,20023,80019,81216,320Digital Piano$ 620364Total Amounts77Total manufacturing overhead costsThe company allocates overhead costs using conventional costing using direct labor hours. You areconcerned that the conventional cost-allocation system the company is using may not be generating accurateinformation so the resulting sales prices may also be improperly determined. You decide to perform somecomputations and report your results to your superior, Sandy Andersen.Create a spreadsheet with an output section that:(a) determines the overhead application rate per direct labor hour under conventional costing,(b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (showmaterial, labor and overhead separately to enhance manager usefulness)(c) determines the total cost to manufacture one unit digital piano using conventional costing (show material,labor and overhead separately to enhance manager usefulness) as well as(d) the current per-unit gross profit generated by the sale of an electronic keyboard, and(e) the current per-unit gross profit generated by the sale of a digital piano.

There are various overheads costs incurred by the Business entity to Complete the Manufacturing of…

Create a spreadsheet with an output section that: (a) determines the overhead application rate per direct labor hour under conventional costing, (b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (show material, labor and overhead separately to enhance manager usefulness) (c) determines the total cost to manufacture one unit digital piano using conventional costing (show material, labor and overhead separately to enhance manager usefulness) as well as (d) the current per-unit gross profit generated by the sale of an electronic keyboard, and (e) the current per-unit gross profit generated by the sale of a digital piano.

Create a spreadsheet with an output section that: (a) determines the overhead application rate per direct labor hour under conventional costing, (b) determines the total cost to manufacture one unit electronic keyboard using conventional costing (show material, labor and overhead separately to enhance manager usefulness) (c) determines the total cost to manufacture one unit digital piano using conventional costing (show material, labor and overhead separately to enhance manager usefulness) as well as (d) the current per-unit gross profit generated by the sale of an electronic keyboard, and (e) the current per-unit gross profit generated by the sale of a digital piano.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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