Clicker Question Preparation Guide: Ch. 10 Clicker questions will be asked in class based on your completion of this preparation guide. Example in class question: “Question 1) What are the total manufacturing costs when 900 units are produced?” You will not have time to complete this guide in class! 1. Cyber Construction’s manufacturing costs for August when production was 1,000 units appear below: Direct Materials $11,000 Direct Labor $8,500 Variable Overhead $6,000 Factory Depreciation $4,000 Factory Supervisory Salaries $9,800 Other Fixed Factory Costs $1,500 Compute the flexible budget manufacturing cost amount for a month when 900 units are produced. Direct Materials Direct Labor Variable Overhead Factory Depreciation Factory Supervisory Salaries Other Fixed Factory Costs Total 2. Point, Inc. produces men’s shirts. The following budgeted and actual amounts are for 2018: Cost Budgeted Amounts at 2,500 units Actual Amounts at 2,900 units Direct materials $55,000 $65,000 Direct labor $80,000 $83,000 Fixed overhead $30,000 $34,500 Prepare a responsibility report for Point, Inc. for the year. POINT, INC. Manufacturing Performance Responsibility Report For the Year Ended December 31, 2018 Budget (2,900 units) Actual Differences Direct Materials $65,000 Direct Labor $83,000 Fixed Overhead $34,500 Total costs3. The service division of Smithberg Industries reported the following results for 2018. Sales $800,000 Variable Costs $500,000 Controllable Fixed Costs $125,000 Average Operating Assets $825,000 Compute the controllable margin and the return on investment for 2018. 4. Management is considering the following independent courses of action in 2019 in order to maximize the return on investment for this division. (Based on original financial information above). Compute the controllable margin and the expected ROI for each proposed alternative. a) Reduce average operating assets by $125,000 with no change in controllable margin. b) Increase sales by $100,000 with no change in the contribution margin percentage (contribution margin
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