Mile High Cycles

1868 words 8 pages
Week 3 Individual Assignment 1:
Mile High Cycles Case Analysis Questions 1, 2, & 3

ACCT 6273, Section 7
Identifying Strategic Implications in Accounting Data

MILE HIGH CYCLES CASE ANALYSIS

* (Exhibit 3 Below) * (Exhibit 4 Below) * The variances are due to the Mile High Cycle company not forecasting for increased production. The company budgeted for the production of 10,000 cycles but the actual production was 10,800 units. When the company increased production, the production efficiency decreased. The company had to use or rework parts that added extra cost to the expenses; the reworked parts added $25,000 of extra expenses to the wheel assembly production and $45,000 to the final assembly process. The material,
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00.00 | $ 250,000.00 | $250,000.00 | $0.00 | F | Total Overhead | $ 1,200,000.00 | $ 1,240,000.00 | $ 1,300,000.00 | $60,000.00 | U | Total Annual Costs | $ 10,895,000.00 | $ 18,287,800.00 | $ 18,514,974.00 | $227,174.00 | U | Net Income | $ 1,142,037.04 | $ (5,287,800.00) | $ (5,514,974.00) | ($227,174.00) | U | | Master Budget | Flexible Budget | Actual Budget | Flexible Budget Variances | Favorable or Unfavorable | Production | 10,000 bicycles | 10,800 | 10,800 | | | Sales Revenue | $ 12,037,037.04 | $ 13,000,000.00 | $13,000,000 | $0.00 | | Variable Costs | | | | | | Steel Tubing | $ 3,300,000.00 | $ 3,564,000.00 | $ 3,572,100.00 | $8,100.00 | U | Paint | $ 25,000.00 | $ 27,000.00 | $ 28,187.00 | $1,187.00 | U | Labor | $ 1,500,000.00 | $ 1,620,000.00 | $ 1,528,050.00 | ($91,950.00) | F | Total Frame | $ 4,825,000.00 | $ 5,211,000.00 | $ 5,128,337.00 | ($82,663.00) | F | Wheel Parts | $ 1,200,000.00 | $ 1,296,000.00 | $ 1,317,600.00 | $21,600.00 | U | Parts Rework | -- | -- | $ 25,000.00 | $ 25,000.00 | U | Labor | $ 65,000.00 | $ 70,200.00 | $ 74,250.00 | $4,050.00 | U | Total Wheel | $ 1,265,000.00 | $ 1,366,200.00 | $ 1,416,850.00 | $50,650.00 | U | Final Assesmbly Parts | $ 3,500,000.00 | $ 3,780,000.00 | $ 3,963,600.00 | $183,600.00 | U | Assembly Parts Rework | 0 | 0 | $ 45,000.00 | $ 45,000.00 | U | Assembly Labor | $

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