Business Finance Homework Help

Boyd Corporation is a manufacturer that uses job-order costing. On January 1, 2024, the company’s inventory balances were as follows:

Raw Materials Inventory 40,000$

Work-in-Process Inventory 18,000$

Finished Goods Inventory35,000$

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, 2024, the company’s predetermined overhead rate of $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. 

Requirement :

1. Compute the predetermined overhead allocation rate for fiscal year 2024. Use the blue shaded areas for inputs. (MOH Tab) 

2. Use Excel to journalize the transactions listed in the Transactions tab for the current year, 2024. (Journal Entries tab) 

3. Enter the beginning balances for the inventories in the T-accounts.  Assume the rest of the accounts have beginning balances of zero.  Post the journal entries to T-accounts.  T-account balances will automatically calculate except for Manufacturing Overhead.  You will need to calculate the appropriate balance in that account.  (T-Accounts tab) 

4. Adjust the manufacturing overhead account. (MOH adj tab)

5. Complete the Schedule of Cost of Goods Manufactured for 2024.   

6. Complete the Cost of Goods Sold schedule for 2024.  

7. Prepare income statements in good form for Boyd for 2024. 

Boyd makes its product for approximately $3,400 each and sells them for $5,600 each.  Management budgets monthly fixed costs of $530,750 for sales volumes between 0 and 1,000 units of product.  The company sold 500 units in 2024.  Use the information given to calculate the following for 2024: 

8. Use the contribution margin approach to prepare a contribution format income statement for Boyd Corporation

9.Use the contribution margin approach to compute the company’s annual breakeven point in units. 

10.Use the contribution margin ratio approach to compute the breakeven point in sales dollars.

11.Use the contribution margin approach to compute the annual sales level (in units) required to earn a target operating income of $755,000.

12.Use the contribution margin approach to compute the annual increase in net operating income if sales increase to 501 units.

13. Use the contribution margin approach to compute the annual decrease in net operating income if sales fall by 90 units.

14. Use the contribution margin approach to compute the change in net operating income if the selling price per unit increases by $20 and the sales volume decreases by 50 units.

15. Use the contribution margin approach to compute the change in net operating income if the sales increase by 10% and advertising spending is increased by $2,000.

16. Use the contribution margin approach to calculate margin of safety in dollars and as a percent.

17. Use the contribution margin approach to calculate operating leverage.  What is the estimated percent increase in net income if sales increase 10%? New Operating Income?