Amcor Corporation has several production plants nationwide

Subject:AccountingPrice: Bought3

Share With

Amcor Corporation has several production plants nationwide. A newly

opened plant in Warsaw produces and sells one product. The plant is a profit center. The unit standard costs for a production unit, with overhead applied based on direct labor hours, are as follows.


Manufacturing costs (per unit based on expected activity of 18,000 units or 36,000 direct labor hours)

-Direct Materials (2.5 pounds at $10) $25.00
-Direct Labor (2.0 hours at $40) $80.00
-Variable Overhead (2.0 hours at $25) $50.00
-Fixed Overhead (2.0 hours at $35)$70.00
-Standard Cost per unit $225.00
-Budgeted Selling and Administrative Costs
-Variable $4 per unit
-Fixed $1,5000,000

Expected sales activity: 14,000 units at $380 per unit
Desired ending inventories: 12% of sales


This is the first year of operations for the Warsaw plant. During the year, the company had the following activity.

-Units Produced 17,000Units
-Sold 15,500Unit
-Selling Price $375
-Direct Labor Hour worked 33,500
-Direct Labor Costs $1,373,500
-Direct Materials Purchased 46,500 pounds
-Direct Materials Costs $465,000
-Direct Materials used 46,500 pounds
-Actual Fixed Overhead $ 1,000,000
-Actual Variable Overhead $800,000
-Actual Selling and Administrative Costs $1,756,000

Jamcor Corporation is planning to change its evaluation of business operations in all plants from the profit center format to the investment center format. If the average invested capital at the Warsaw plant is $9,090,000, compute the return on investment (ROI) for the first year of operations. Use the DuPont method of evaluation to compute the return on sales (ROS) and capital turnover (CT) for the plant. Percentages must be rounded to 2 decimal places.


Calculate

-actual plant operating profit for the yearWhat am i doing wrong?
Sales 15500 * 375= 5,812,000


Direct Labor 1,373,500
Direct Materials 465,000
Actual Fixed Overhead 1,000,000
Actual Variable Overhead 800,000
Selling and Admin costs 1,756,000


Operating = 5812500 - 5394500= 418000 wrong


In addition, all over- or underapplied overhead and all product cost variances are adjusted to cost of goods sold.