E sales minus cogs minus sa underapplied overhead net

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Unformatted text preview: nufacturing overhead. d. COGS = $180,000 + $840,000 - $140,000 = $880,000 e) Net income or loss after closing underapplied or overapplied manufacturing overhead. e. Sales minus COGS minus S&A – Underapplied overhead = Net Loss $950,000 - $880,000 - $150,000 - $31,250 = $(111,250) Question 5 (20 marks – estimated time required: 30 minutes) Brinkman Corp manufactures and sells small plastic toys. The Human resources department provides hiring services to all the departments of the corporation. During the year 2008 the company had an average of 3,000 employees. The hiring division of the Human Resource department of Brinkman is organized in the following four areas of specialization: • Hiring of employees for production and all related activities (production and related activity employees comprise 2/3 of all employees of the company); • Hiring of marketing and sales representatives ( slightly more than 10% of all employees perform marketing and sales related activities); • Hiring of employees for accounting and finance functions (10% of all employees in the company perform accounting and finance related activities); • Hiring of information technology spets (almost 10% of all Brinkman employees are hired to perform IT functions). The following figure presents a simplified organizational chart of Brinkman Corp. CEO Human Resources Hiring Production Production Payroll Marketing and Sales Employee relations Accounting & Finance Marketing and Sales Accounting & Finance Information Technology Benefits Information Technology Each of the five departments at Brinkman Corp. is treated as a profit center. The respective managers are awarded year-end performance bonuses on the basis of meeting and exceeding the budgeted profit. All costs incurred by the hiring division of the Human Resource Department are allocated to the other departments of Brinkman using the number of hirings as an allocation basis. The 2008 budget for the hiring division totaled $240,000 for 200 completed hires at an average cost per hire of $1,200 (this was also known as the ‘allocation rate’). The budget was completed based on the requests for new hires from each department as follows: Accounting and Finance 25 Information Technology 20 Marketing and Sales 25 Production 130 Actual costs incurred by the hiring division during 2008 were $286,000 and actual hires demanded from each department were as follows: Accoun...
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This note was uploaded on 02/11/2014 for the course ADMS 2510 taught by Professor Beavis during the Spring '08 term at York University.

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