The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 6,000 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $2,880.

Each unit requires 8 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $11.50 per hour.

Required:

1.&2. Calculate the estimated grams of raw material that need to be purchased and the cost of raw material purchases for each quarter and for the year as a whole.

3. Calculate the expected cash disbursements for purchases of materials for each quarter and for the year as a whole.

4. Calculate the estimated direct labor cost for each quarter and for the year as a whole. Assume that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the estimated number of units produced.

A machine costing $214,400 with a four-year life and an estimated $18,000 salvage value is installed in Luther Company’s factory on January 1. The factory manager estimates the machine will produce 491,000 units of product during its life. It actually produces the following units: 122,100 in 1st year, 123,200 in 2nd year, 120,600 in 3rd year, 135,100 in 4th year. The total number of units produced by the end of year 4 exceeds the original estimate—this difference was not predicted. (The machine must not be depreciated below its estimated salvage value.)

  
Required:

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each depreciation method. (Round your per unit depreciation to 2 decimal places. Round your answers to the nearest whole dollar.)

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Straight-line depreciation.

Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Units of production.

• Compute depreciation for each year (and total depreciation of all years combined) for the machine under each Double-declining-balance.

  	DDB Depreciation for the Period End of Period Year Beginning of Period Book Value Depreciation Rate Depreciation Expense Accumulated Depreciation Book Value 1 % $0 2 % 0 3 % 0 4 % 0 $0

A firm is deciding to implement a new project: Investment costs are $1 million and anticipated cash flows are 300,000 for 5 years.

If the cost of capital (hurdle rate) is 12%, a) should the firm do the project? SHOW WORK

b) What determines the cost of capital? (word answer)

QUESTION 1

1. Even though an investee may be an associate of an investor, if the shares of that associate are traded in an active market, AASB128 Investment in Associates and Joint Ventures requires the application of the:

   		market valuation.
   		consolidation method.
   		equity method.
   		valuation made by an independent evaluator.

QUESTION 2

1. Indicia of an investor’s incapacity to exert significant influence over the policy-making decisions of an investee include:

   		the existence of a small group of ‘non-investor’ shareholders representing the majority of voting power in the investee.
   		the investor attempting to gain, but not gaining, board representation.
   		the investor attempting to gain, but not gaining, the financial information necessary to calculate its equity in the fair value of the investee’s net assets at the date of acquisition, or its equity in the post-acquisition earnings of the investee.
   		all of the above.

QUESTION 3

1. The accounting method applied to investments in associates, known as the equity method, is also known as the:

   		significant influence method.
   		multi-line consolidation method.
   		entity method of consolidation.
   		one-line consolidation method.

QUESTION 4

1. Goodwill acquired in an associate is:

   		amortised across its useful life.
   		carried as a separate asset in the accounting records of the investor.
   		written off immediately against the carrying amount of the investment.
   		not subject to amortisation.

QUESTION 5

1. Red Limited acquired a 30% investment in Blue Limited for $1,000,000. Blue declared and paid a dividend of $20,000 during the current year. Red Limited prepares consolidated financial statements. Which of the following is the appropriate entry for Red Limited to record this dividend?

   		DR    Dividends payable                   $6,000                CR                  Cash                                 $6,000
   		DR    Dividend revenue         $6,000                CR                  Investment in associate      $6,000
   		DR    Cash                                        $6,000                CR                  Dividend revenue         $6,000
   		DR    Cash                                           $6,000                CR                  Investment in associate      $6,000

Hi-Tek Manufacturing, Inc., makes two types of industrial component parts—the B300 and the T500. An absorption costing income statement for the most recent period is shown:

Hi-Tek produced and sold 60,100 units of B300 at a price of $21 per unit and 12,700 units of T500 at a price of $39 per unit. The company’s traditional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the company’s two product lines is shown below:

The company has created an activity-based costing system to evaluate the profitability of its products. Hi-Tek’s ABC implementation team concluded that $56,000 and $105,000 of the company’s advertising expenses could be directly traced to B300 and T500, respectively. The remainder of the selling and administrative expenses was organization-sustaining in nature. The ABC team also distributed the company’s manufacturing overhead to four activities as shown below:

Required:

1. Compute the product margins for the B300 and T500 under the company’s traditional costing system.

2. Compute the product margins for B300 and T500 under the activity-based costing system.

3. Prepare a quantitative comparison of the traditional and activity-based cost assignments.

1. The Cutting Department of Tangu Carpet Company provides the following data for December 2016. Assume that all materials are added at the beginning of the process.

   Work in process, December 1, 14,600 units, 80% completed		$178,704*
   *Direct materials (14,600 × $9.2)	$134,320
   Conversion (14,600 × 80% × $3.8)	44,384
   	$178,704
   Materials added during December from Weaving Department, 224,800 units		$2,101,880
   Direct labor for December		385,960
   Factory overhead for December		471,728
   Goods finished during December (includes goods in process, December 1), 227,400 units		—
   Work in process, December 31, 12,000 units, 35% completed		—

   a. Prepare a cost of production report for the Cutting Department. If an amount is zero or a blank, enter in "0". For the The rate used to allocate costs between completed and partially completed production.cost per equivalent unit computations, round your answers to two decimal places.

   Tangu Carpet Company
   Cost of Production Report-Cutting Department
   For the Month Ended December 31, 2016
   Unit Information
   Units charged to production:
   Inventory in process, December 1
   Received from Weaving Department
   Total units accounted for by the Cutting Department
   Units to be assigned costs:
   		Equivalent Units
   	Whole Units	Direct Materials	Conversion
   Inventory in process, December 1
   Started and completed in December
   Transferred to finished goods in December
   Inventory in process, December 31
   Total units to be assigned cost
   Cost Information
   Costs per equivalent unit:
   		Direct Materials	Conversion
   Total costs for December in Cutting Department		$	$
   Total equivalent units
   Cost per equivalent unit		$	$
   Costs assigned to production:
   	Direct Materials	Conversion	Total
   Inventory in process, December 1			$
   Costs incurred in December
   Total costs accounted for by the Cutting Department			$
   Costs allocated to completed and partially completed units:
   Inventory in process, December 1 balance			$
   To complete inventory in process, December 1		$
   Cost of completed December 1 work in process			$
   Started and completed in December	$
   Transferred to finished goods in December			$
   Inventory in process, December 31
   Total costs assigned by the Cutting Department			$

   Feedback

   b. Compute and evaluate the change in cost per equivalent unit for direct materials and conversion from the previous month (November). If required, round your answers to two decimal places.

   	Increase or Decrease	Amount
   Change in direct materials cost per equivalent unit	Decrease Increase	$
   Change in conversion cost per equivalent unit	Decrease Increase	$

1. Units of production data for the two departments of Continental Cable and Wire Company for June of the current fiscal year are as follows:

   	Drawing Department	Winding Department
   Work in process, June 1	5,400 units, 25% completed	3,000 units, 85% completed
   Completed and transferred to next processing department during June	74,000 units	72,900 units
   Work in process, June 30	4,100 units, 70% completed	4,100 units, 10% completed

   a. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for June for the Drawing Department. If an amount is zero, enter in "0".

   Drawing Department
   Direct Materials and Conversion Equivalent Units of Production
   For June
   	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
   Inventory in process, June 1	5400	0	4050
   Started and completed in June	68600	68600	68600
   Transferred to Winding Department in June	74000	68600	72650
   Inventory in process, June 30	4100	4100	2870
   Total	78100	72700	75520

   When are the materials added to the units? How much more needs to be done to the beginning units with respect to conversion costs to complete the units? How much has been added to the units in ending work in process inventory with respect to materials and conversion?

   Learning Objective 2.

   b. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for June for the Winding Department. If an amount is zero, enter in "0".

   Winding Department
   Direct Materials and Conversion Equivalent Units of Production
   For June
   	Whole Units	Direct Materials Equivalent Units	Conversion Equivalent Units
   Inventory in process, June 1
   Started and completed in June
   Transferred to finished goods in June
   Inventory in process, June 30
   Total

   When are the materials added to the units? How much more needs to be done to the beginning units with respect to conversion costs to complete the units? How much has been added to the units in ending work in process inventory with respect to materials and conversion?

Cade Industries operates a fleet of delivery vehicles that make scheduled pickups and deliveries for its customers in the Boulder area. The company is implementing an activity based costing system that has four activity cost pools: Travel, Pickup and Delivery, Customer Service and Other. The activity measures are as follows for each of the cost pools: Travel – Miles; Pickups and Deliveries - # of Pickups and Deliveries; Customer Service - # of Customers. The Other cost pool has no activity measure because it is an organization-sustaining activity. The following costs will be assigned using the activity based costing system:

The distribution of resource consumption across the activity cost pools is as follows:

1. If the company had the following activity, complete the Second Stage Allocations. Calculate to the nearest tenth of a penny.
   1. Miles Driven – 1,000,000
   2. Pickups and Deliveries – 5,000
   3. Number of Customers – 1,500
2. During 2018, Cade completed a number of deliveries for one of it’s customer’s Tank 7 Industries. Cade calculates revenues based on the miles driven. During the year, Cade drove 25,000 miles on 30 deliveries for Tank 7 Industries. Cade charges a premium on any deliver that is 250 miles or less of $100/delivery. Six of Tank 7’s deliveries were subject to this $100 surcharge. Cade charges Tank 7 $1.75/mile driven (plus any surcharges). Determine the profitability of Tank 7 Industries in 2018 for Cade.
3. Just do question 2. Please show all work

Weihong Corporation is about to emerge from a Chapter 11 reorganization. Assets of the emerging entity have a total book value of $3,000,000. Of these, assets with a book value of $600,000 are not needed to operate the emerging entity and will be sold for an expected price of $460,000. The remaining assets will be used in operations. Operations are expected to generate an annual net cash flow of $350,000. This amount is projected for the next five years; a discount rate of 10 percent is deemed appropriate. Required Calculate Weihong Corporation’s reorganization value. For convenience, assume the operating cash flows take place at the end of each year. Round your answer to the nearest whole number

PS: I already submitted this question but the answer was wrong, it is not 1786500

During June, the following changes in inventory item 27 took place:

            June   1     Balance                         1,400 units @ £24

                    14     Purchased                        900 units @ £36

                    24     Purchased                        700 units @ £30

                      8     Sold                                 400 units @ £50

                    10     Sold                              1,000 units @ £40

                    29     Sold                                 500 units @ £44

Perpetual inventories are maintained in units only.

Instructions

What is the cost of the ending inventory for item 27 under the following methods? (Show calculations.)

(a)   FIFO.

(b)   Average Cost.

This company uses a perpetual inventory system. It had the following beginning inventory and current year purchases of its product.

Jan 1. Beginning Inventory ..... 50 units @ $100 = $5,000

Jan 14. Purchase .......................150 units @ $120 = 18,000

Apr 30. Purchase........................ 200 units @ $150= 30,000

Sept 26th. Purchase................... 300 units @ $200= 60,000

The company transacted sales on the following dates at $350 per unit sales price.

Jan 10. 30 units (specific cost: 30 @ $100)

Feb 15. 100 units (specific cost: 100 @ $120)

Oct 5. 350 units (specific cost: 100 @ $150 and 250 @ $200)

USING (THE WEIGHTED AVERAGE COSTING METHOD) ANSWER THE FOLLOWING QUESTIONS:

A. Identify and compute the costs to assign to the units sold. (Round per unit costs to three decimals.)

B. Identify and compute the costs to assign to the units in ending inventory. (Round inventory balances toe the dollar)

C. How likely is it that the Weighted Average method will reflect the actual physical flow of goods? How relevant is that factor in determining wether this is an acceptable method to use?

D. What is the impact of this method versus others in determining net income and income taxes?

E. How closely does the ending inventory amount reflect replacement cost?

On January 1, Morris Company offered a customer a 10% trade discount if the customer purchases 1,000 units of an item within the next 6 months. Each item sells for $100. Based on the customer’s previous purchase history, Morris believes there is a 60% chance that the customer will purchase more than 1,000 units. On January 10, the customer purchases 200 units on credit. Required: How much revenue should Morris recognize related to this customer? Prepare the entry to record the sale on account on January 10.

Requirement 2:

The company has just hired a new marketing manager who insists that unit sales can be dramatically increased by dropping the selling price from $8 to $7. The marketing manager would like to use the following projections in the budget:

a. What are the total expected cash collections for the year under this revised budget?

b. What is the total required production for the year under this revised budget?

c. What is the total cost of raw materials to be purchased for the year under this revised budget?

d. What are the total expected cash disbursements for raw materials for the year under this revised budget?

Mastery Problem: Activity-Based Costing

WoolCorp

WoolCorp buys sheep’s wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing, and vendors. The company is also examining its method of assigning overhead to products. You’ve just been hired as a production manager at WoolCorp.

Currently WoolCorp makes two products: (1) raw, clean wool to be used as stuffing or insulation and (2) wool yarn for use in the textile industry.

The company would like you to evaluate its costing methods for its raw wool and wool yarn.

Single Plantwide Rate

WoolCorp is currently using the single plantwide factory overhead rate method, which uses a predetermined overhead rate based on an estimated allocation base such as direct labor hours or machine hours. The rate is computed as follows:

Single Plantwide Factory Overhead Rate = (Total Budgeted Factory Overhead) ÷ (Total Budgeted Plantwide Allocation Base)

WoolCorp has been using combing machine hours as its allocation base.

The company would like to consider activity-based costing. In order to understand their current system better, you evaluate WoolCorp’s current method of costing for raw wool and wool yarn. The production staff has compiled the following information for you on the production of 450 pounds of either raw wool or wool yarn:

In the following table, use combing machine hours as the allocation base for assigning overhead costs to each product. When required, round your answers to the nearest dollar.

Single Plantwide Factory Overhead Rate: $ per combing hour

Feedback

Review the single plantwide factory overhead rate method, and allocate the costs using a single plantwide factory overhead rate and the combing hours used by each product.

Activity-Based Costing

In order to compare WoolCorp’s current method with activity-based costing, you interview the production staff and compile the following information, which relates to the costs for raw wool and wool yarn.

In the following table, compute and enter the activity rate for each of the three activities. If required, round your answers to the nearest cent.

In the following table, allocate the costs of sorting, cleaning, and combing based on the rates of activity consumed by each product’s process. When required, round your answers to the nearest dollar.