ACCT 346

Student Name
Jorge Omar Delgado Alizaga
Bravo Baking Company began operations in May of 2010 with the production and sales of specialty
The company has experienced a good market demand for its high protein, low carbohydrate product
Hi-Lo's success has required that Bravo continue to make only this one product, however, Bravo's c
the local retailers, have been asking for more specialty breads from the company. The decision to e
in the coming weeks.

Weekly Assignments: Complete the assigned Tab each week.

In each worksheet there are several Green colored cells. These cells must be filled in with your resp
Points
Due Available
Tab1) Product vs. Period Costs
Week 1
10
Tab 2) Cost of Goods Manufactured Schedule
Week 2
30
Tab 3) Break Even Analysis
Week 3
40
Tab 4) Incremental Analysis
Week 5
40
Tab 5) Capital Budgeting
Week 6
40
Tab 6) Variance Analysis
Week 7
40
200

ction and sales of specialty breads.

, low carbohydrate product called "Hi-Lo"
roduct, however, Bravo's customers,
ompany. The decision to expand will be made

t be filled in with your response.

Points
Earned
10.00
30.00
40.00
40.00
40.00
40.00
200.00 Total

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

For Tables A : From the list below, identify if the cost item is a
"Product Cost" or "Period Cost" by typing "Product" or "Period" in the
appropriate box.
10 points

Table A
Flour used in baking bread
Factory Supervisor Salaries
Bakers wages
Rent for Executive Offices
Sales Commissions
Utilities used in the factory
Advertising costs
Delivery truck costs
Paper wrappers for bread
Depreciation on bake ovens
Eggs, salt, water used for baking
Interest on bank loan
Factory Insurance

Enter either "Product" or "Period"

Product
Product
Product
Period
Period
Product
Period
Period
Product
Product
Product
Period
Product

Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct

For Table B: From the list below, identify if the cost item is a "Direct Cost"
or "Indirect Cost" by typing "Direct" or "Indirect" in the appropriate box.

Table B
Flour used in baking bread
Factory Supervisor Salaries
Bakers wages
Factory Insurance
Rent for Factory
Utilities used in the factory
Cleaning Bake Ovens
Insurance on Factory
Paper wrappers for bread
Depreciation on bake ovens
Eggs used for baking
Small amounts of salt used
Factory Maintenance

Enter either "Direct" or "Indirect"

Direct
Correct
Indirect
Correct
Direct
Correct
Indirect
Correct
Indirect
Correct
Indirect
Correct
Indirect
Correct
Indirect
Correct
Direct
Correct
Indirect
Correct
Direct
Correct
Indirect
Correct
Indirect
Correct

Points

10.00

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

Use the information provided below to prepare the Cost of Good Manufactured Schedule:Bravo had the following costs as of
Green shaded cells.

Table C
Materials used in baking bread
Bakers wages
Rent for Executive Offices
Sales Commissions
Utilities used in the factory
Advertising costs
Delivery truck costs
Depreciation on bake ovens
Interest on bank loan
Beginning Inventory Materials
Beginning Work in Process
Ending Inventory Materials
Inventory Purchases
Ending Work in Process
Other Overhead costs
Beginning Finished Goods Inventory
Ending Finished Goods Inventory
Rent for Factory

32,000 Correct
$32,000
36,000
10000
5000
12000
25000
500
250
10,000
8000
4000
26000
2500
1200
7500
6000
7500

Correct

Materials Used
Direct Labor
Overhead
Factory Rent
Depreciation on bake ovens
Utilities used in Factory
Other Overhead costs
Total Overhead
Total Manufacturing Costs
Total Work in Process
Less: Ending Work in Process
Cost of Goods Manufactured

Goods Available for Sale

Less: Ending Finished Goods Inventory
Cost of Goods Sold Schedule

actured Schedule:Bravo had the following costs as of Dec 31, 2010. Enter the correct values in the
30 points
Cost of Goods Manufactured Schedule
Beginning Work In Process
Materials
Beginning Inventory Materials
Plus: Purchases
Materials Available
Less: Ending Inventory Materials
Materials Used
Direct Labor
Overhead
Factory Rent
Depreciation on bake ovens
Utilities used in Factory
Other Overhead costs
Total Overhead
Total Manufacturing Costs
Total Work in Process
Less: Ending Work in Process
Cost of Goods Manufactured

$8,000 Correct
$10,000
$26,000
$36,000
$4,000

Correct
Correct
Correct
Correct
Correct
Correct
Correct

$32,000
$32,000
$7,500
$500
$5,000
$1,200
$14,200
$78,200
$86,200
$2,500
$83,700

Complete only the Green cells. Values in Red are from the schedule above.
Cost of Goods Sold Schedule
Beginning Finished Goods Inventory
Beginning Work In Process
$8,000
Materials
Beginning Inventory Materials
$10,000
Plus: Purchases
$26,000
Materials Available
$36,000
Less: Ending Inventory Materials
$4,000
Materials Used
$32,000
Direct Labor
$32,000
Overhead
Factory Rent
$7,500
Depreciation on bake ovens
$500
Utilities used in Factory
$5,000
Other Overhead costs
$1,200
Total Overhead
$14,200
Total Manufacturing Costs
$78,200
Total Work in Process
$86,200
Less: Ending Work in Process
$2,500
Cost of Goods Manufactured
$83,700

Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct

$7,500 Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct
Correct

Correct
Correct

Goods Available for Sale

Less: Ending Finished Goods Inventory
Cost of Goods Sold Schedule

$91,200 Correct
$6,000 Correct
$85,200 Correct

Points

30

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

Bravo Baking identified the costs below to determine its cost of one unit of product and its monthly operating costs. (TCO
Units produced
14,000

Table A
Materials used in baking bread
Sales Commissions
Bakers wages
Rent for Executive Offices
Factory Supervisor Salaries
Utilities used in the factory
Advertising costs
Delivery truck depreciation
Depreciation on bake ovens
Interest on bank loan

Variable Fixed
2.29
0.12
2.29
3,000
3500
0.50
1000
400
0.07
500

Total Costs

$5.27

Price Charged per unit

$7.77

$8,400.00

unit of product and its monthly operating costs. (TCO 4)

40 Points

Part I Enter your solution in the green cells for each of the following:
Using the costs from Table A compute
A) Breakeven units (rounded to 2 decimal places)
B) Break-even sales dollars
C) Contribution Margin
D) Contribution Margin Ratio (enter as % for example 51% or decimal .51)
Part II Complete the following requirements
A) If Bravo requires a profit of $5,000 how many units must it sell?
B) What is the total revenue from A above?
C) If Bravo actually sells 8,000 units (Hint: Use Break Even $ from B Above)
1) What is the margin of safety in Dollars?
2) What is the margin of safety percentage?

3360.00
$26,107.20
$2.50
32%

Correct
Correct
Correct
Correct

5360.00 Correct
$41,647.20 Correct
$36,052.80 Correct
58% Correct

Total Correct

Points

40

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

Bravo Baking Co has expanded its product line to include several other specialty breads. The operating results for the last qua
Product
Revenues
Variable product costs
Variable Selling & Administrative costs

Hi-Lo
Whole Grain Fruit & Nuts Total
$67,575
$31,800
$15,900 $115,275
$27,030
$12,720
$6,360 $46,110
$13,515
$6,360
$3,180 $23,055

Contribution Margin
Fixed Product Costs
Fixed Selling and Administrative Costs
Allocated Common Costs

$27,030
$5,000
$5,700
$5,000

$12,720
$5,000
$2,850
$2,500

$6,360
$5,000
$2,850
$2,500

$46,110
$15,000
$11,400
$10,000

Net Income

$11,330

$2,370

($3,990)

$9,710

Required:

Bravo wants to know the effect on Net Income if it decides to discontinue the Fruit & Nuts product.
If Bravo eliminates Fruit & Nuts 50% of fixed costs can be avoided.
Prepare and incremental analysis showing the Net Income Effect of eliminating the Fruit & Nuts product.
What would you advise Bravo to do?
Using the Table below, compute the Net Income for Bravo Baking after eliminating the Fruit & Nuts product.
Product
Hi-Lo
Whole Grain Fruit & Nuts Total
Revenues
$67,575
$31,800
$0 $99,375 Correct
Variable product costs
$27,030
$12,720
$0 $39,750 Correct
Variable Selling & Administrative costs
$13,515
$6,360
$0 $19,875 Correct
Contribution Margin
$27,030
$12,720
$0 $39,750 Correct
Fixed Product Costs
$10,000
$2,500
$0 $12,500 Correct
Fixed Selling and Administrative Costs
$5,700
$4,275
$0
$9,975 Correct
Allocated Common Costs
$5,000
$5,000
$0 $10,000 Correct
Net Income
$6,330
$945
$0
$7,275 Correct

Points

40

Based on your analysis, what recommendation would you make about Fruit & Nuts? Explain.

I belive that fruit and Nuts should not be eliminated because while it is true that by eliminating the fruit & nuts products the c

erating results for the last quarter are provided below.

(TCO 7)

40 Points

t & Nuts product.

uts product.

he fruit & nuts products the company will save money in fixed costs it is also true that by eliminating the products the company will suffer

e products the company will suffer losses also because if you were to compare the net income of each product in the current state and in

roduct in the current state and in the state that will occur if the company eliminates Fruit & nuts products you can see that the company w

ts you can see that the company will suffer lose of net income in the remaining two product brands.

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

Bravo Baking Co is considering replacing an older freezer with a larger unit to freeze some of its bread.
The new unit has a larger capacity and Bravo estimates it can produce and sell more bread each year. From these add
the annual after-tax cash flow is expected to be $4,000. In addition to more sales, the new freezer will save $1,200 in
However, the new freezer will cost an additional $2,000 each year for maintenance. The cost of the new unit is $25,0
expected to last 10 years. The salvage value at the end of its life is $6,000. The old unit is fully depreciated and can
Determine the Net Present Value of purchasing the new freezer using a required rate of return of 14%. Should Bravo
Use the format below to complete the NPV computations:

Note: Use PV Tables found in the PV tabs in the workbook. Be sure to enter 4 decimal places. Also, be sure to show

Cash Flow
Cost of new refrigeration unit
After tax cash flow
Annual electricity savings
Additional annual maintenance costs
Amount collected from disposal of unit
Net present value

$ (25,000.00)
$ 4,000.00
$ 1,200.00
$ (2,000.00)
$ 6,000.00

PV
Factors
100%
5.2161
5.2161
5.2161
0.2697

Correct
Correct
Correct
Correct

Based on your analysis, what is your recommendation regarding the new freezer? Explain

I belive that the freezer should be purchased and the reason bieng is that in the long run the company will have more benfiti

some of its bread.

bread each year. From these additional sales
new freezer will save $1,200 in electricity each year.
The cost of the new unit is $25,000 and it is
unit is fully depreciated and can be disposed at cost.
of return of 14%. Should Bravo purchase the freezer?

TCO 9
40 Points

mal places. Also, be sure to show costs as negative values.

PV Amounts
$
$
$
$
$
$

Points

(25,000.00)
20,864.40
6,259.32
(10,432.20)
1,618.20
(6,690.28)

Correct
Correct
Correct
Correct
Correct
Correct
40.00

he company will have more benfitis that they will obtain from owning the new freezer in comparison to keeping the current freezer. Mean

eeping the current freezer. Meaning that the amount that the new freezer will generate plus the amount that the company will save outw

nt that the company will save outwieghs the cost of maitnance in the long run. If you were to compare the current costs and benifits that

the current costs and benifits that the company has with thier current freezer and you compare it with the potentital costs and benifits fr

he potentital costs and benifits from the newer freeezer you can see that in the long run it is better for the company to purchase the new

the company to purchase the new freezer because its a good investment for the company to have not only will they increase their tax flo

nly will they increase their tax flow by $4000 they will also lower the costs of maintaining the freezer operating.

ACCT 346
Student Name

Jorge Omar Delgado Alizaga

Bravo Baking uses standard costing to analyze its performance. The data below is provided for your use in determining Bravo
Amount/Unit
Standard Cost per unit
Cost /Unit
Standard Cost
Material Cost (Ingredients) (.5 lbs)
2.29
.5 lbs
$4.58
Direct Labor( .25 hrs * $9/hr)
2.25
.25 hrs
$9.00
Overhead
0.57
Total
5.11

During the month, Bravo sold 9,000 loaves of bread and used 4,650 pounds of ingredients. Also during the month, Bravo
purchased 5,000 pounds of ingredients at a cost of $22,500. Employees worked a total of 2200 hours and actual labor costs w

Required:
Part a . Compute the material price and quantity variance.
Material Price Variance =
=

4.50
(400.00)
Correct

Fav/Unf >

4,650.00
$687.00
Correct

Fav/Unf

Material Quantity Variance =

=

Labor Rate Variance =

=

9.09
198.00
Correct

Fav/Unf >

2,200.00
($450.00)
Correct

Fav/Unf

Labor Efficiency Variance =

=
=

TCO 10
40 Points

ur use in determining Bravo's variances.

uring the month, Bravo

urs and actual labor costs were $19,998

4.58

5,000.00
fav

Correct
4,500.00

4.58
unf

Correct
$9.00

2,200.00
unf

Correct
2,250.00

9.00
fav

Correct

Points

40

Present Value of $1 to be Received at the End of N Periods (PVIF)

Period
1.00%
2.00%
3.00%
4.00%
5.00%
1.00
0.9901
0.9804
0.9709
0.9615
0.9524
2.00
0.9803
0.9612
0.9426
0.9246
0.9070
3.00
0.9706
0.9423
0.9151
0.8890
0.8638
4.00
0.9610
0.9238
0.8885
0.8548
0.8227
5.00
0.9515
0.9057
0.8626
0.8219
0.7835
6.00
0.9420
0.8880
0.8375
0.7903
0.7462
7.00
0.9327
0.8706
0.8131
0.7599
0.7107
8.00
0.9235
0.8535
0.7894
0.7307
0.6768
9.00
0.9143
0.8368
0.7664
0.7026
0.6446
10.00
0.9053
0.8203
0.7441
0.6756
0.6139
11.00
0.8963
0.8043
0.7224
0.6496
0.5847
12.00
0.8874
0.7885
0.7014
0.6246
0.5568
13.00
0.8787
0.7730
0.6810
0.6006
0.5303
14.00
0.8700
0.7579
0.6611
0.5775
0.5051
15.00
0.8613
0.7430
0.6419
0.5553
0.4810
16.00
0.8528
0.7284
0.6232
0.5339
0.4581
17.00
0.8444
0.7142
0.6050
0.5134
0.4363
18.00
0.8360
0.7002
0.5874
0.4936
0.4155
19.00
0.8277
0.6864
0.5703
0.4746
0.3957
20.00
0.8195
0.6730
0.5537
0.4564
0.3769
21.00
0.8114
0.6598
0.5375
0.4388
0.3589
22.00
0.8034
0.6468
0.5219
0.4220
0.3418
23.00
0.7954
0.6342
0.5067
0.4057
0.3256
24.00
0.7876
0.6217
0.4919
0.3901
0.3101
25.00
0.7798
0.6095
0.4776
0.3751
0.2953
26.00
0.7720
0.5976
0.4637
0.3607
0.2812
27.00
0.7644
0.5859
0.4502
0.3468
0.2678
28.00
0.7568
0.5744
0.4371
0.3335
0.2551
29.00
0.7493
0.5631
0.4243
0.3207
0.2429
30.00
0.7419
0.5521
0.4120
0.3083
0.2314
31.00
0.7346
0.5412
0.4000
0.2965
0.2204
32.00
0.7273
0.5306
0.3883
0.2851
0.2099
33.00
0.7201
0.5202
0.3770
0.2741
0.1999
34.00
0.7130
0.5100
0.3660
0.2636
0.1904

6.00%
0.9434
0.8900
0.8396
0.7921
0.7473
0.7050
0.6651
0.6274
0.5919
0.5584
0.5268
0.4970
0.4688
0.4423
0.4173
0.3936
0.3714
0.3503
0.3305
0.3118
0.2942
0.2775
0.2618
0.2470
0.2330
0.2198
0.2074
0.1956
0.1846
0.1741
0.1643
0.1550
0.1462
0.1379

7.00%
0.9346
0.8734
0.8163
0.7629
0.7130
0.6663
0.6227
0.5820
0.5439
0.5083
0.4751
0.4440
0.4150
0.3878
0.3624
0.3387
0.3166
0.2959
0.2765
0.2584
0.2415
0.2257
0.2109
0.1971
0.1842
0.1722
0.1609
0.1504
0.1406
0.1314
0.1228
0.1147
0.1072
0.1002

8.00%
0.9259
0.8573
0.7938
0.7350
0.6806
0.6302
0.5835
0.5403
0.5002
0.4632
0.4289
0.3971
0.3677
0.3405
0.3152
0.2919
0.2703
0.2502
0.2317
0.2145
0.1987
0.1839
0.1703
0.1577
0.1460
0.1352
0.1252
0.1159
0.1073
0.0994
0.0920
0.0852
0.0789
0.0730

9.00%
0.9174
0.8417
0.7722
0.7084
0.6499
0.5963
0.5470
0.5019
0.4604
0.4224
0.3875
0.3555
0.3262
0.2992
0.2745
0.2519
0.2311
0.2120
0.1945
0.1784
0.1637
0.1502
0.1378
0.1264
0.1160
0.1064
0.0976
0.0895
0.0822
0.0754
0.0691
0.0634
0.0582
0.0534

10.00%
0.9091
0.8264
0.7513
0.6830
0.6209
0.5645
0.5132
0.4665
0.4241
0.3855
0.3505
0.3186
0.2897
0.2633
0.2394
0.2176
0.1978
0.1799
0.1635
0.1486
0.1351
0.1228
0.1117
0.1015
0.0923
0.0839
0.0763
0.0693
0.0630
0.0573
0.0521
0.0474
0.0431
0.0391

11.00%
0.9009
0.8116
0.7312
0.6587
0.5935
0.5346
0.4817
0.4339
0.3909
0.3522
0.3173
0.2858
0.2575
0.2320
0.2090
0.1883
0.1696
0.1528
0.1377
0.1240
0.1117
0.1007
0.0907
0.0817
0.0736
0.0663
0.0597
0.0538
0.0485
0.0437
0.0394
0.0355
0.0319
0.0288

12.00%
0.8929
0.7972
0.7118
0.6355
0.5674
0.5066
0.4523
0.4039
0.3606
0.3220
0.2875
0.2567
0.2292
0.2046
0.1827
0.1631
0.1456
0.1300
0.1161
0.1037
0.0926
0.0826
0.0738
0.0659
0.0588
0.0525
0.0469
0.0419
0.0374
0.0334
0.0298
0.0266
0.0238
0.0212

13.00%
0.8850
0.7831
0.6931
0.6133
0.5428
0.4803
0.4251
0.3762
0.3329
0.2946
0.2607
0.2307
0.2042
0.1807
0.1599
0.1415
0.1252
0.1108
0.0981
0.0868
0.0768
0.0680
0.0601
0.0532
0.0471
0.0417
0.0369
0.0326
0.0289
0.0256
0.0226
0.0200
0.0177
0.0157

14.00%
0.8772
0.7695
0.6750
0.5921
0.5194
0.4556
0.3996
0.3506
0.3075
0.2697
0.2366
0.2076
0.1821
0.1597
0.1401
0.1229
0.1078
0.0946
0.0829
0.0728
0.0638
0.0560
0.0491
0.0431
0.0378
0.0331
0.0291
0.0255
0.0224
0.0196
0.0172
0.0151
0.0132
0.0116

15.00%
0.8696
0.7561
0.6575
0.5718
0.4972
0.4323
0.3759
0.3269
0.2843
0.2472
0.2149
0.1869
0.1625
0.1413
0.1229
0.1069
0.0929
0.0808
0.0703
0.0611
0.0531
0.0462
0.0402
0.0349
0.0304
0.0264
0.0230
0.0200
0.0174
0.0151
0.0131
0.0114
0.0099
0.0086

Start Rate

1.00%

Rate

1.00%

Present Value of an Annuity of $1 per Period for N Periods (PVIFA)

Period
1.00%
2.00%
3.00%
4.00%
5.00%
1.00
0.9901
0.9804
0.9709
0.9615
0.9524
2.00
1.9704
1.9416
1.9135
1.8861
1.8594
3.00
2.9410
2.8839
2.8286
2.7751
2.7232
4.00
3.9020
3.8077
3.7171
3.6299
3.5460
5.00
4.8534
4.7135
4.5797
4.4518
4.3295
6.00
5.7955
5.6014
5.4172
5.2421
5.0757
7.00
6.7282
6.4720
6.2303
6.0021
5.7864
8.00
7.6517
7.3255
7.0197
6.7327
6.4632
9.00
8.5660
8.1622
7.7861
7.4353
7.1078
10.00
9.4713
8.9826
8.5302
8.1109
7.7217
11.00
10.3676
9.7868
9.2526
8.7605
8.3064
12.00
11.2551 10.5753
9.9540
9.3851
8.8633
13.00
12.1337 11.3484 10.6350
9.9856
9.3936
14.00
13.0037 12.1062 11.2961 10.5631
9.8986
15.00
13.8651 12.8493 11.9379 11.1184 10.3797
16.00
14.7179 13.5777 12.5611 11.6523 10.8378
17.00
15.5623 14.2919 13.1661 12.1657 11.2741
18.00
16.3983 14.9920 13.7535 12.6593 11.6896
19.00
17.2260 15.6785 14.3238 13.1339 12.0853
20.00
18.0456 16.3514 14.8775 13.5903 12.4622

6.00%
0.9434
1.8334
2.6730
3.4651
4.2124
4.9173
5.5824
6.2098
6.8017
7.3601
7.8869
8.3838
8.8527
9.2950
9.7122
10.1059
10.4773
10.8276
11.1581
11.4699

7.00%
0.9346
1.8080
2.6243
3.3872
4.1002
4.7665
5.3893
5.9713
6.5152
7.0236
7.4987
7.9427
8.3577
8.7455
9.1079
9.4466
9.7632
10.0591
10.3356
10.5940

8.00%
0.9259
1.7833
2.5771
3.3121
3.9927
4.6229
5.2064
5.7466
6.2469
6.7101
7.1390
7.5361
7.9038
8.2442
8.5595
8.8514
9.1216
9.3719
9.6036
9.8181

9.00%
0.9174
1.7591
2.5313
3.2397
3.8897
4.4859
5.0330
5.5348
5.9952
6.4177
6.8052
7.1607
7.4869
7.7862
8.0607
8.3126
8.5436
8.7556
8.9501
9.1285

10.00%
0.9091
1.7355
2.4869
3.1699
3.7908
4.3553
4.8684
5.3349
5.7590
6.1446
6.4951
6.8137
7.1034
7.3667
7.6061
7.8237
8.0216
8.2014
8.3649
8.5136

11.00%
0.9009
1.7125
2.4437
3.1024
3.6959
4.2305
4.7122
5.1461
5.5370
5.8892
6.2065
6.4924
6.7499
6.9819
7.1909
7.3792
7.5488
7.7016
7.8393
7.9633

12.00%
0.8929
1.6901
2.4018
3.0373
3.6048
4.1114
4.5638
4.9676
5.3282
5.6502
5.9377
6.1944
6.4235
6.6282
6.8109
6.9740
7.1196
7.2497
7.3658
7.4694

13.00%
0.8850
1.6681
2.3612
2.9745
3.5172
3.9975
4.4226
4.7988
5.1317
5.4262
5.6869
5.9176
6.1218
6.3025
6.4624
6.6039
6.7291
6.8399
6.9380
7.0248

14.00%
0.8772
1.6467
2.3216
2.9137
3.4331
3.8887
4.2883
4.6389
4.9464
5.2161
5.4527
5.6603
5.8424
6.0021
6.1422
6.2651
6.3729
6.4674
6.5504
6.6231

15.00%
0.8696
1.6257
2.2832
2.8550
3.3522
3.7845
4.1604
4.4873
4.7716
5.0188
5.2337
5.4206
5.5831
5.7245
5.8474
5.9542
6.0472
6.1280
6.1982
6.2593