G.G Toys Exhibit 1 G.G Toys Operating results ( March 2000) Corperate level Chic
ID: 2455127 • Letter: G
Question
G.G Toys
Exhibit 1 G.G Toys Operating results ( March 2000)
Corperate level
Chicago Facility
Springfield facility
TOTAL
Sales
$ -
$ 786,000
$ 125,400
$ 911,400
Direct labour
$ -
$ 72,000
$ 22,500
$ 94,500
Direct Materials
$ -
$ 144,000
$ 36,000
$ 180,000
Man. Overhead
Machine realated
$ -
$ 112,000
$ -
$ 112,000
Plant management
$ -
$ 33,333
$ 6,667
$ 40,000
Setup Labour
$ -
$ 13,333
$ -
$ 13,333
Receiving
$ -
$ 60,000
$ 3,000
$ 63,000
Packaging and shipping
$ -
$ 50,000
$ 3,000
$ 53,000
Total Man. Overhead
$ 268,666
$ 12,667
$ 281,333
Selling , General , Admin
$ 296,650
$ -
$ -
$ 296,650
Operating income (pretax)
$ 58,917
Activity Based Cost Analysis for Manufacturing Overhead (Chicago Plant)
TOTAL
Geoffrey
#106
Other
Allocation Base
Total cost
activity
per base
activity
cost
activity
cost
activity
cost
Machine realated
MH
$ 112,000
11200
$ 10.00
3750
$ 37,500
1200
$ 12,000
6250
$ 62,500
Plant management
Units
$ 33,333
24000
$ 1.39
7500
$ 10,417
4000
$ 5,556
12500
$ 17,361
Setup Labour
setups
$ 13,333
160
$ 83.33
10
$ 833
100
$ 8,333
50
$ 4,167
Receiving
units
$ 60,000
24000
$ 2.50
7500
$ 18,750
4000
$ 10,000
12500
$ 31,250
Packaging and shipping
shipment
$ 50,000
300
$ 166.67
10
$ 1,667
220
$ 36,667
70
$ 11,667
Total
$ 268,666
$ 69,167
$ 72,555
$ 126,944
Exhibit 2 Product Profitablity (March 2000)
Geoffrey Doll
Specialty-Branded Doll #106
Cradles
Direct Labour cost ($)
3.00
3.75
7.50
Direct material cost ($)
5.00
6.00
12.00
Manufacturing overhead ($)
11.19
13.99
4.20
Standard unit cost ($)
19.19
23.74
23.70
Selling Price ($)
21.00
36.00
30.00
Margin
9%
34%
21%
Exhibit 3 Product Data
Geoffrey Doll
Specialty-Branded Doll #106
Cradles
Materials cost per unit
$ 5.00
$ 6.00
$ 12.00
Production-run direct labour per unit
0.2
0.25
0.5
Production-run direct labour $/unit @ 15DL hours
$ 3.00
$ 3.75
$ 7.50
Machine hours per unit
0.5
0.3
0
Exhibit 4 Monthly production and operating statistics (March 2000)
Chicago Plant
Springfield plant
Geoffrey Doll
Specialty-Branded Doll #106
Other specialty- branded dolls
total
Cradles
Total
Production (units)
7500
4000
12500
24000
3000
3000
Machine Hours
3750
1200
6250
11200
0
0
Setups
10
100
50
160
0
0
Poduction runs
10
100
50
160
1
1
Number of Shipments
10
220
70
300
50
50
Question: Using the Analysis and the existing direct materials costs, direct labour costs and selling price for each of the Geoffrey and Doll #106 products, prepare revised gross margin percentage for each.
Exhibit 1 G.G Toys Operating results ( March 2000)
Corperate level
Chicago Facility
Springfield facility
TOTAL
Sales
$ -
$ 786,000
$ 125,400
$ 911,400
Direct labour
$ -
$ 72,000
$ 22,500
$ 94,500
Direct Materials
$ -
$ 144,000
$ 36,000
$ 180,000
Man. Overhead
Machine realated
$ -
$ 112,000
$ -
$ 112,000
Plant management
$ -
$ 33,333
$ 6,667
$ 40,000
Setup Labour
$ -
$ 13,333
$ -
$ 13,333
Receiving
$ -
$ 60,000
$ 3,000
$ 63,000
Packaging and shipping
$ -
$ 50,000
$ 3,000
$ 53,000
Total Man. Overhead
$ 268,666
$ 12,667
$ 281,333
Selling , General , Admin
$ 296,650
$ -
$ -
$ 296,650
Operating income (pretax)
$ 58,917
Explanation / Answer
Preparation of Revised Gross Margin Percentage
Geoffrey Doll #106 Selling Price 21 36 - Prime Cost: Direct Labour 3 3.75 Direct Material 5 6 13 26.25 x Units produced 7500 4000 97500 105000 - Overheads: Machine Related 37500 12000 Plant Management 10417 5556 Set up Labor 833 8333 Receiving 18750 10000 Packaging and shipping 1667 36667 Gross Profit 28333 32444 Sales 157500 144000 Gross Profit % 17.99% 22.53%Related Questions
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