Are relevant revenues and relevant costs the only information needed by managers to select among alternatives? Examples,

This time Ron is at his wits end. He has sent the accounting team out of his office to rework the numbers. "That simply cannot make sense. If I'm making more than I'm spending, it's a good decision; right?" He walks into your office for your weekly meeting and asks rhetorically "If I'm spending $2,000,000 today on a new plant and that new plant is going to produce $205,000 for each of the next ten years in income how can that possibly be a negative net decision for the company?"

Can you explain to Ron the concept involved and how that could be a "negative net decision"?

Provide constructive feedback to at least two other students' postings.

Your company is trying to decide between the following three projects. In your calculations, assume a 6% interest rate. Project A Project B Project C Project A has $400 in upfront costs in year 0 and gets 250 in benefits in year 0. It accrues $300 in benefits each year in years 1-3, and has annual costs of $200 in years 1-3. Project B costs $1300 in year 0 and has no benefits in year 0. It accrues $650 in benefits each year in years 1-3. Annual costs in years 1-3 are $450. Project C has $1000 in upfront benefits and 1600 in costs in year 0. It accrues 600 in benefits in years 1-3 and 350 in costs in years 1-3. Time value of money. Using the discounting techniques we learned in class (assume an interest rate of 6%), appropriately discount the costs and benefits of the three projects. Which project will have a higher return on investment? Be sure to show your work (10 pts). Which project achieves payback faster? (5 pts)?

For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.40 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. Despite the growing popularity of the company’s new LEC 90, profits have been declining steadily. Management is beginning to believe that there may be a problem with the company’s costing system. Direct material and direct labor costs per unit are as follows: LEC 40 LEC 90 Direct materials $ 30.00 $ 50.00 Direct labor (0.40 hours and 0.80 hours @ $15.00 per hour) $ 6.00 $ 12.00 Management estimates that the company will incur $912,000 in manufacturing overhead costs during the current year and 60,000 units of the LEC 40 and 20,000 units of the LEC 90 will be produced and sold. 1-a. compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor hours. 1-b. using this rate and other data from the problem, determine the unit product cost of each product. 2. management is considering using activity-based costing to assign manufacturing overhead cost to products. The activity-based costing systemm would have all following four activity cost pools: Activity Cost Pool Activity Measure Estimated Overhead Cost Maintaining parts inventory Number of part types $ 225,000 Processing purchase orders Number of purchase orders 182,000 Quality control Number of tests run 45,000 Machine-related Machine-hours 460,000 $ 912,000 Expected Activity Activity Measure LEC 40 LEC 90 Total Number of part types 600 900 1,500 Number of purchase orders 2,000 800 2,800 Number of tests run 500 1,750 2,250 Machine-hours 1,600 8,400 10,000 Determine the activity rate for each of the four activity cost pools. 3. using the activity rates you computed in part 2 a. determine the per unit amount of manufacturing overhead cost that would be assigned to each product using the activity based costing system,. b. compute the unit product cost of each product

Thalassines Kataskeves, S.A., of Greece makes marine equipment. The company has been experiencing losses on its bilge pump product line for several years. The most recent quarterly contribution format income statement for the bilge pump product line follows:

*Common costs allocated on the basis of machine-hours.

†Common costs allocated on the basis of sales dollars.

Discontinuing the bilge pump product line would not affect sales of other product lines and would have no effect on the company’s total general factory overhead or total Purchasing Department expenses.

Required:

What is the financial advantage (disadvantage) of discontinuing the bilge pump product line?

The following data were taken from the balance sheet of Nilo Company at the end of two recent fiscal years:

a. Determine for each year (1) the working capital, (2) the current ratio, and (3) the quick ratio. Round ratios to one decimal place.

b. The liquidity of Nilo has   from the preceding year to the current year. The working capital, current ratio, and quick ratio have all  . Most of these changes are the result of an   in current assets relative to current liabilities.

Execusmart Consultants has provided business consulting services for several years. The company has been using the percentage of credit sales method to estimate bad debts but switched at the end of the first quarter this year to the aging of accounts receivable method. The company entered into the following partial list of transactions.

1. During January, the company provided services for $350,000 on credit.
2. On January 31, the company estimated bad debts using 1 percent of credit sales.
3. On February 4, the company collected $175,000 of accounts receivable.
4. On February 15, the company wrote off a $450 account receivable.
5. During February, the company provided services for $300,000 on credit.
6. On February 28, the company estimated bad debts using 1 percent of credit sales.
7. On March 1, the company loaned $16,000 to an employee, who signed a 9% note due in 3 months.
8. On March 15, the company collected $450 on the account written off one month earlier.
9. On March 31, the company accrued interest earned on the note.
10. On March 31, the company adjusted for uncollectible accounts, based on the following aging analysis, which includes the preceding transactions (as well as others not listed). Prior to the adjustment, Allowance for Doubtful Accounts had an unadjusted credit balance of $9,000.

Required:

1. For items (a)–(j), analyze the amount and direction (+ or –) of effects on specific financial statement accounts and the overall accounting equation. TIP: In item (j), you must first calculate the desired ending balance before adjusting the Allowance for Doubtful Accounts. (Do not round intermediate calculations. Enter any decreases to Assets, Liabilities, or Stockholders Equity with a minus sign.)

Who are the stakeholders with whom a business should consult and what is the value of consultation and the involvement of stakeholders? 150–180 words

Please Follow Instructions And Do Not Copy and Paste From Another Source.

Menlo Company distrubutes a single product. The company's sales and expenses for last month follow: Sales $316, 000, per unit $20 Variable expenses 221,200 and 14 per unit Contribution margin 94,800 $6 Fixed expenses 74,400 Net operating income 20,400 1.what is the monthly break even point in unit sales and in dollar sales?2.Without resorting to computations, what id the total contribution margin at the break ever point? 3) How many units have to be sold each month to attain a target profit of $ 39,600? 4.Verify your answer by preparing a contribution format income statement at the target sales level. 5) what is the company's CM ratio? If sales increase by 81,000 per month and there is no change in fixed expense. by how much would expect monthly net operating income to increase?

Qualified Tuition Programs (QTP) allows taxpayers to buy in-kind tuition credits for qualified higher education expenses or to contribute to an account.

What are the inclusions of in-kind tuition credits for qualified higher education expenses and the contribution to the educational incentive account? Explain.

Can you show how you would write the 5 entries with notes

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1. In the 30 June 2018 annual report of Baker and Anderson Ltd, the equipment was reported as follows:

      Equipment                                                    $650,000

      Accumulated depreciation                         ($280,000)     $370,000

The equipment consisted of two machines, Machine X and Machine Y. Both machines are measured using the cost model and depreciated on a straight-line basis over a 10-year period. As at 30 June 2018, these machines were reported as follows:

Machine X – Cost                                        $380,000

Carrying amount                                          $190,000

Machine Y – Cost                                        $270,000

Carrying amount                                          $180,000                                                      

On 31 December 2018, the directors of Baker and Anderson Ltd decided to change the basis of measuring equipment from the cost model to fair value model. Machine X was revalued to $200,000 with an expected useful life of 6 years, and Machine Y was revalued to $160,000 with an expected useful life of 5 years.

On 1 July 2019, Machine X was assessed to have a fair value of $175,000 with an expected useful life of 5 years, and Machine Y’s fair value was $143,000 with an expected useful life of 4 years.

Required:

1. Prepare the revaluation journal entries for both Machines X and Y required for the event on 1 July 2019 (5 journal entries required). Show all workings.

The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data:

The following additional information is available:  

1. The company’s plant has a capacity of 100,400 direct labor-hours per year on a single-shift basis. The company’s present employees and equipment can produce all five products.

2. The direct labor rate of $10 per hour is expected to remain unchanged during the coming year.

3. Fixed manufacturing costs total $575,000 per year. Variable overhead costs are $2 per direct labor-hour.

4. All of the company’s nonmanufacturing costs are fixed.

5. The company’s finished goods inventory is negligible and can be ignored.

Required:

1. How many direct labor hours are used to manufacture one unit of each of the company’s five products?

2. How much variable overhead cost is incurred to manufacture one unit of each of the company’s five products?

3. What is the contribution margin per direct labor-hour for each of the company’s five products?

4. Assuming that direct labor-hours is the company’s constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its constrained resource?

5. Assuming that the company has made optimal use of its 100,400 direct labor-hours, what is the highest direct labor rate per hour that Walton Toy Company would be willing to pay for additional capacity (that is, for added direct labor time)?

Direct Labor Variances

The following data relate to labor cost for production of 7,200 cellular telephones:

a. Determine the direct labor rate variance, direct labor time variance, and total direct labor cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.

b. The employees may have been less-experienced or poorly trained, thereby resulting in a   labor rate than planned. The lower level of experience or training may have resulted in   efficient performance. Thus, the actual time required was   than standard.

On June 1, 2008, Coltec Industry purchased $503,000, 11% bonds, with interest payable on January 1 and July 1, for $366,844, INCLUDING accrued interest. The bonds mature on October 1, 2017. Amortization is recorded using the straight-line method and the bonds are classified as available-for-sale. On December 31, 2011, the bonds were adjusted to their proper carrying value when their fair value was $374,897. The fair market value of the bonds on December 31, 2010 was $436,050. What is the NET INCOME or LOSS recorded on the Income Statement of Coltec Industry for 2011 solely as a result of these bonds? Note: Accrue interest and amortize premium/discount on a monthly basis. Round your answer to the nearest whole dollar. If NET INCOME results, enter your answer as a positive number. If NET LOSS results, place a minus sign '-' prior to the amount of the loss.