Question text

FLEXIBLE BUDGET

Projections:
Units sold = 5000 units
Unit sales price = $20 per unit
Cost of goods sold = $5,000 per month and $10 per unit
Selling and administrative expense = $20,000 per month and $3 per unit

So for the month of March, create the flexible budget (select from each dropdown box):

How do I prepare a budget for a new plant being built compared to the existing plant data

Flexible Budgeting and Variance Analysis

I Love My Chocolate Company makes dark chocolate and light chocolate. Both products require cocoa and sugar. The following planning information has been made available:

I Love My Chocolate Company does not expect there to be any beginning or ending inventories of cocoa or sugar. At the end of the budget year, I Love My Chocolate Company had the following actual results:

Required:

1. Prepare the following variance analyses for both chocolates and the total, based on the actual results and production levels at the end of the budget year:

     a. Direct materials price variance, direct materials quantity variance, and total variance.

     b. Direct labor rate variance, direct labor time variance, and total variance.

Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

On this page of the practice set, you are asked to record all of the transactions that occurred during the month of June into the General Journal of the business. The transactions for the month of June are as follows:

Company A Ltd and Company B Ltd are both liquidated after combining to form Company C Ltd. Discuss in detail how the acquirer would be identified in this situation and why it is important.

Mayfield Company sells two products, Blue models and Plaid models. Blue models sell for $41per unit with variable costs of $40 per unit. Plaid models sell for $53

per unit with variable costs of $15 per unit. Total fixed costs for the company are $20,240. Mayfield Company typically sells three Blue models for every four

Plaid models. What is the breakeven point in total units? (Round any intermediary calculations to the nearest whole number.)

A. 12,891units

B. 133 units

C. 920 units

D. 131 units

​​​​​​When a company has positive net income, does that also mean they have positive cash flows? What is more important to a company - positive cash flow or net income? Is this true for both the long term and short term?

Buffalo Corporation is preparing the comparative financial statements for the annual report to its shareholders for fiscal years ended May 31, 2017, and May 31, 2018. The income from operations for the fiscal year ended May 31, 2017, was $1,800,000 and income from continuing operations for the fiscal year ended May 31, 2018, was $2,500,000. In both years, the company incurred a 10% interest expense on $2,400,000 of debt, an obligation that requires interest-only payments for 5 years. The company experienced a loss from discontinued operations of $600,000 on February 2018. The company uses a 40% effective tax rate for income taxes.

The capital structure of Buffalo Corporation on June 1, 2016, consisted of 1,000,000 shares of common stock outstanding and 20,000 shares of $50 par value, 6%, cumulative preferred stock. There were no preferred dividends in arrears, and the company had not issued any convertible securities, options, or warrants.

On October 1, 2016, Buffalo sold an additional 500,000 shares of the common stock at $20 per share. Buffalo distributed a 20% stock dividend on the common shares outstanding on January 1, 2017. On December 1, 2017, Buffalo was able to sell an additional 800,000 shares of the common stock at $22 per share. These were the only common stock transactions that occurred during the two fiscal years.

1.) Identify whether the capital structure is simple or complex and explain why

2.) Determine the Weighted-Average number of share used in calculating earnings per share for:
May 31, 2017:
May 31, 2018:

3.)Prepare a comparitive income statement beginning with income from operations for both the fiscal years .

On January 1, NewTune Company exchanges 18,688 shares of its common stock for all of the outstanding shares of On-the-Go, Inc. Each of NewTune’s shares has a $4 par value and a $50 fair value. The fair value of the stock exchanged in the acquisition was considered equal to On-the-Go’s fair value. NewTune also paid $35,250 in stock registration and issuance costs in connection with the merger.

Several of On-the-Go’s accounts’ fair values differ from their book values on this date:

Precombination book values for the two companies are as follows:

1. Assume that this combination is a statutory merger so that On-the-Go’s accounts will be transferred to the records of NewTune. On-the-Go will be dissolved and will no longer exist as a legal entity. Prepare a postcombination balance sheet for NewTune as of the acquisition date.
2. Assume that no dissolution takes place in connection with this combination. Rather, both companies retain their separate legal identities. Prepare a worksheet to consolidate the two companies as of the combination date.

Paintball is now played around the world. The process of making paintballs is actually quite similar to the process used to make certain medical pills. In fact, paintballs were previously often made at the same factories that made pharmaceuticals.

Instructions

a. Describe in sequence the primary steps used to manufacture paintballs.

b. Explain the costs incurred by the company that would fall into each of the following categories: materials, labor, and overhead. Of these categories, which do you think would be the greatest cost in making paintballs?

c. Discuss whether a paintball manufacturer would use job order costing or process costing.

Aurora Company is considering the purchase of a new machine. The invoice price of the machine is $140,000, freight charges are estimated to be $4,000, and installation costs are expected to be $6,000. Salvage value of the new equipment is expected to be zero after a useful life of 5 years. Existing equipment could be retained and used for an additional 5 years if the new machine is not purchased. At that time, the salvage value of the equipment would be zero. If the new machine is purchased now, the existing machine would have to be scrapped. Aurora’s accountant, Lisah Huang, has accumulated the following data regarding annual sales and expenses with and without the new machine.

With the class divided into groups, prepare an incremental analysis for the 5 years. (Ignore income tax effects.) (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

Should Aurora keep the existing machine or buy the new machine?

Q1-

A. What is a bank reconciliation and why is it important for companies to do it periodically?

B. Prepare a Bank Reconciliation Statement for Rana company that has:

• Bank statement of $8,000.

• Cash account of $7,200.

Additional information for the reconciliation:

• Deposit in transit.
• NSF Check.
• Outstanding check.
• Collections made by the bank.

Required: provide an amount of each information to bring the adjusted balances to be equal.

Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.55 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below: Activity Cost Pool Activity Measure Activity for the Year Cleaning carpets Square feet cleaned (00s) 12,500 hundred square feet Travel to jobs Miles driven 287,500 miles Job support Number of jobs 1,800 jobs Other (organization-sustaining costs and idle capacity costs) None Not applicable ________________________________________ The total cost of operating the company for the year is $359,000 which includes the following costs: Wages $ 144,000 Cleaning supplies 28,000 Cleaning equipment depreciation 8,000 Vehicle expenses 39,000 Office expenses 59,000 President’s compensation 81,000 Total cost $ 359,000 ________________________________________ Resource consumption is distributed across the activities as follows: Distribution of Resource Consumption Across Activities Cleaning Carpets Travel to Jobs Job Support Other Total Wages 73 % 13 % 0 % 14 % 100 % Cleaning supplies 100 % 0 % 0 % 0 % 100 % Cleaning equipment depreciation 71 % 0 % 0 % 29 % 100 % Vehicle expenses 0 % 81 % 0 % 19 % 100 % Office expenses 0 % 0 % 63 % 37 % 100 % President’s compensation 0 % 0 % 31 % 69 % 100 % ________________________________________ Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on. Required: 1. Prepare the first-stage allocation of costs to the activity cost pools. 2. Compute the activity rates for the activity cost pools. 3. The company recently completed a 200 square foot carpet-cleaning job at the Flying N Ranch—a 59-mile round-trip journey from the company’s offices in Bozeman. Compute the cost of this job using the activity-based costing system. 4. The revenue from the Flying N Ranch was $47.10 (200 square feet @ $23.55 per hundred square feet). Calculate the customer margin earned on this job.

What is the present value of $907 per year for 9 years if the required return is 6 percent.

The following data, presented in alphabetical order, are taken from the records of Wildhorse Corporation.

The investment in Sasse common stock is considered to be a long-term security.

Prepare a classified balance sheet at December 31, 2020. (List assets in order of liquidity. List Property, plant and equipment list in order of land, buildings and equipment.)