Munoz sporting equipment manufactures baseball bats and tennis rackets. department b produces the baseball bats, and department t produces the tennis rackets. munoz currently uses plantwide allocation to allocate its overhead to all products. direct labor cost is the allocation base. the rate used is 200 percent of direct labor cost. last year, revenue, materials, and direct labor were as follows:
baseball bats tennis rackets
revenue $1,350,000 $900,000
direct labor $250,000 $125,000
direct materials $550,000 $275,000
required
a. compute the profit for each product using plantwide allocation.
b. maria, the manager of department t, was convinced that tennis rackets were really more profitable than baseball bats. she asked her colleague in accounting to break down the overhead costs for the two departments. she discovered that had department rates been used, department b would have had a rate of 150 percent of direct labor cost and department t would have had a rate of 300 percent of direct labor cost. re-compute the profits for each product using each department’s allocation rate (based on direct labor cost).
c. why are the results different in requirements (a) and (b)?

The maximum tax rate on estates and gifts

•broussard skateboard’s sales are expected to increase by 15% from $8 million in 2016 to $9.2 million in 2017. its assets totaled $5 million at the end of 2016. broussard is already at full capacity, so its assets must grow at the same rate as projected sales. at the end of 2016, current liabilities were $1.4 million, consisting of $450,000 of accounts payable, $500,000 of notes payable, and $450,000 of accruals. the after-tax profit margin is forecasted to be 6%, and the forecasted payout ratio is 40%. use the afn equation to forecast broussard’s additional funds needed for the coming year

The owners of backstreets italian restaurant are considering starting a delivery service forpizza and their other italian dishes in the small college town where they are located. theycan purchase a used delivery van and have it painted with their name and logo for $21,500.they can hire part-time drivers who will work in the evenings from 5 p. m. to 10 p. m. for$8 per hour. the drivers are mostly college students who study at the restaurant when theyare not making deliveries. during the day, there are so few deliveries that the regular employeescan handle them. the owners estimate that the van will last 5 years (365 days per year)before it has to be replaced and that each delivery will cost about $1.35 in gas and othermaintenance costs (including tires, oil, scheduled service, they also estimate that onaverage each delivery order will cost $15 for direct labor and ingredients to prepare andpackage, and will generate $34 in revenue. a. how many delivery orders must backstreets make each month in order for the service to break even? b. the owners believe that if they have approximately the break-even number of deliveries during the week, they will at least double that number on fridays, saturdays, and sundays. if that’s the case, how much profit will they make, at a minimum, from their delivery service each month (4 weeks per month)?