Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 995 hours each month to produce 1,990 sets of covers. The standard costs associated with this level of production are:
| Total | Per Set of Covers |
||||
| Direct materials | $ | 47,362 | $ | 23.80 | |
| Direct labor | $ | 8,955 | 4.50 | ||
| Variable manufacturing overhead (based on direct labor-hours) | $ | 2,388 | 1.20 | ||
| $ | 29.50 | ||||
During August, the factory worked only 1,000 direct labor-hours and produced 2,300 sets of covers. The following actual costs were recorded during the month:
| Total | Per Set of Covers |
||||
| Direct materials (8,800 yards) | $ | 50,600 | $ | 22.00 | |
| Direct labor | $ | 10,580 | 4.60 | ||
| Variable manufacturing overhead | $ | 4,600 | 2.00 | ||
| $ | 28.60 | ||||
At standard, each set of covers should require 3.5 yards of material. All of the materials purchased during the month were used in production.
Required:
1. Compute the materials price and quantity variances for August.
2. Compute the labor rate and efficiency variances for August.
3. Compute the variable overhead rate and efficiency variances for August.
(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
|
In: Accounting
Recent legislation requires CEOs of public corporations to sign an affidavit, a sworn statement, stating that all accountings put forth by the company are accurate and not misleading; not to the best of their knowledge, but that they are accurate and not misleading. Obviously, the CEO of most public corporations can't personally perform all aspects of these accountings. Instead, they must rely on the accuracy of employees assigned to perform such tasks at various levels. The legislation makes the CEO PERSONALLY liable, even criminally liable, for inaccurate accountings. Considering this, is it fair or equitable to find a CEO liable if a subordinate has committed fraud or a mistake in the preparation of the accounting?
In: Accounting
Shadee Corp. expects to sell 620 sun visors in May and 430 in June. Each visor sells for $16. Shadee’s beginning and ending finished goods inventories for May are 65 and 45 units, respectively. Ending finished goods inventory for June will be 70 units.
Required information
Required:
1. Determine Shadee's budgeted total sales for May and June.
2. Determine Shadee's budgeted production in units for May and
June.
Each visor requires a total of $4.50 in direct materials that
includes an adjustable closure that the company purchases from a
supplier at a cost of $2.00 each. Shadee wants to have 26 closures
on hand on May 1, 21 closures on May 31, and 22 closures on June
30. Additionally, Shadee’s fixed manufacturing overhead is $1,200
per month, and variable manufacturing overhead is $2.75 per unit
produced.
Required:
1. Determine Shadee's budgeted cost of closures purchased for May
and June. (Round your answers to 2 decimal places.)
2. Determine Shadee's budget manufacturing overhead for May and
June. (Do not round your intermediate values. Round your answers to
2 decimal places.)
Suppose that each visor takes 0.20 direct labor hours to produce
and Shadee pays its workers $8 per hour.
Required:
Determine Shadee's budgeted direct labor cost for May and June. (Do
not round your intermediate values. Round your answers to 2 decimal
places.)
In: Accounting
Bridgeport Company had the following stockholders’ equity as of
January 1, 2017.
| Common stock, $5 par value, 18,200 shares issued | $91,000 | |
| Paid-in capital in excess of par—common stock | 299,000 | |
| Retained earnings | 320,000 | |
| Total stockholders’ equity | $710,000 |
During 2017, the following transactions occurred.
| Feb. 1 | Bridgeport repurchased 1,990 shares of treasury stock at a price of $17 per share. | |
| Mar. 1 | 850 shares of treasury stock repurchased above were reissued at $15 per share. | |
| Mar. 18 | 530 shares of treasury stock repurchased above were reissued at $15 per share. | |
| Apr. 22 | 580 shares of treasury stock repurchased above were reissued at $19 per share. |
Prepare the journal entries to record the treasury stock transactions in 2017, assuming Bridgeport uses the cost method. (Credit account titles are automatically indented when amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts.)
Prepare the stockholders’ equity section as of April 30, 2017. Net income for the first 4 months of 2017 was $126,200. (Enter account name only and do not provide descriptive information.)
In: Accounting
A company manufactures three products using the same production process. The costs incurred up to the slit-off point are $200,000. These costs are allocated to the products on the basis of their sales value at the slit-off point. The number of units produced, the selling prices per unit of the three products at the split-off point and after further processing, and the additional processing costs are as follows: Product Number of Units Produced Selling Price at Split-Off Selling price after processing additional processing cost D 4,000 $10.00 $15.00 $14,000 E 6,000 11.60 16.20 20,000 F 2,000 19.40 22.60 9,000
Instructions (a) Which information is relevant to the decision on whether or not to process the products further? Explain why this information is relevant. (b) Which product(s) should be processed further and which should be sold at the spli-off point? (c) Would your decision be different is the company was using the quantity of output to allocate joint costs? Explain.
In: Accounting
Question 1: You are required to produce an amortisation table
for a home loan and a diagram demonstrating the link between loan
repayments and principal outstanding. Please see slide 31 from
Topic 2 (or p146 from text) for an example of the layout of the
table. The home loan is for $200,000 and is to be amortised over a
time period of 30 years requiring annual payments. All calculations
should be executed in excel. From your table produce a diagram that
demonstrates the relationship between the outstanding principal and
the number of years into the loan.
The interest rate to be used is 12% plus the last digit of your
student number. Assume that interest rates do not change over the
life of the laon.
In: Accounting
|
Journalize the following transaction for the Facedown Paper Company |
||||||||
|
Collections on account, 155,000 |
||||||||
|
Selling and administrative expenses paid 22,000 |
||||||||
|
Paid on account, 37,000 |
||||||||
|
Purchased direct materials on account 26,600 |
||||||||
|
Purchased indirect materials on account, 4,200 |
||||||||
|
Requested direct materials costing 8,750 and indirect materials 4,200 for production |
||||||||
|
Recorded the following wages direct labor, 23,300, indirect labor 19,700 |
||||||||
|
Paid the wages. |
||||||||
|
Depreciation on plant & equipment was $3,799 |
||||||||
|
Applied overhead at a rate of 110 percent of direct labor |
||||||||
|
Completed jobs at a cost of 53,020 |
||||||||
|
Shipped out job 425 at a cost of 48,500 and a selling price of 78,500 |
||||||||
In: Accounting
Alexandra Bay Ltd has five employees. According to their particular employment award, long-service leave can be taken after 12 years, at which time the employee is entitled to 10 weeks’ leave. If an employee were to leave before the completion of 12 years’ service, no entitlement would be paid.
|
|
Current |
Years of |
Years until |
|
Mike Black |
40 000 |
2 |
10 |
|
Jan White |
40 000 |
4 |
8 |
|
Noel Brown |
50 000 |
6 |
6 |
|
Peter Green |
60 000 |
8 |
4 |
|
Alvin Purple |
70 000 |
10 |
2 |
High-quality corporate bond rates exist with periods to maturity that exactly match the various periods that must still be served by the employees before LSL entitlements vest with them.
|
Corporate bond |
Bond rate (%) |
|
10 |
8.0 |
|
8 |
7.0 |
|
6 |
6.5 |
|
4 |
6.0 |
|
2 |
5.8 |
The projected inflation rate for the foreseeable future is 2 per cent. The projected probabilities that the employees will stay long enough for the LSL to vest—that is, for a total of 12 years—are as follows:
|
|
Probability (%) that |
|
Mike Black |
15 |
|
Jan White |
20 |
|
Noel Brown |
50 |
|
Peter Green |
70 |
|
Alvin Purple |
90 |
REQUIRED
(a)Calculate Alexandra Bay’s current obligation for long-service leave.
(b)If the opening provision for long-service leave is $12 500, provide the journal entry to record Alexandra Bay’s long-service leave expense
In: Accounting
Instructions
Phillips Brothers Printers (PBP) provides printing
services to a wide variety of customers. For most jobs, PBP submits
a bid and uses the job cost system to accumulate costs, but bills
the bid amount to the customers. They do have several customers who
routinely have "out of the ordinary" jobs and PBP bills those on a
cost-plus basis, with the customer paying the actual costs plus a
predetermined profit percentage on the total cost.
Sally Phillips, controller for PBP, is approached by the company President who asks her to look for ways to charge more of the production costs to the cost-plus jobs. His logic is that since those customers will pay all the costs plus a profit, they can improve their overall profitability by shifting costs from bid jobs to cost-plus jobs.
Answer the following questions:
Is the President correct about the increase in overall
company profits?
What classification of cost is most likely to be able
to be increased on the cost-plus jobs? Why?
Is what the President proposes ethical? Why or why
not?
What would you do if you were Sally? Why?
If Sally does go along with this proposal, are there
risks to the company? What are they?
In: Accounting
Job Costs At the end of August, Ingram Company had completed Jobs 40 and 42. Job 40 is for 1,000 units, and Job 42 is for 500 units. The following data relate to these two jobs: On August 4, raw materials were requisitioned for production as follows: 800 units for Job 40 at $10 per unit and 1,500 units for Job 42 at $20 per unit. During August, Ingram Company accumulated 800 hours of direct labor costs on Job 40 and 500 hours on Job 42. The total direct labor was incurred at a rate of $12 per direct labor hour for Job 40 and $20 per direct labor hour for Job 42. The predetermined factory overhead rate is $6.00 per direct labor hour.
a. Determine the balance on the job cost sheets for Jobs 40 and 42 at the end of August.
Job 40 $_______- Job 42 $_________
b. Determine the cost per unit for Jobs 40 and 42 at the end of August. If required, round your answers to the nearest cent.
Job 40 $ _________- Job 42 $__________
In: Accounting
A company is considering two mutually exclusive projects requiring an initial cash outlay of $100 each and with a useful life of 5 years. The company required rate of return is 10% and the appropriate corporate tax rate is 40%. The projects will be depreciated on a straight line basis. The before depreciation and taxes cash flows expected to b generated by the projects are as follows.
| Year | 1 | 2 | 3 | 4 | 5 |
| Project A ($) | 4,000 | 4,000 | 10,000 | 2,000 | 1,000 |
| Project B ($) | 6,000 | 3,000 | 2,000 | 5,000 | 5,000 |
Required
a) Determine the cashflow associated with the projects?
b) Which project should be accepted by using the appraisal method below;
In: Accounting
| Ratio | 2018 | 2017 | 2016 | 2018-industry average | |
| 1 | Inventory turnover | 62.65 | 42.42 | 32.25 | 53.25 |
| 2 | Days's sales in receivables | 113 | 98 | 94 | 130.25 |
| 3 | Debt to Equity | 0.75 | 0.85 | 0.9 | 0.88 |
| 4 | Profit Margin | 0.082 | 0.07 | 0.06 | 0.075 |
| 5 | Total Asset Turnover | 0.54 | 0.65 | 0.7 | 0.4 |
| 6 | Quick ratio | 1.028 | 1.03 | 1.029 | 1.031 |
| 7 | Current ratio | 1.33 | 1.21 | 1.15 | 1.25 |
| 8 | Times interest Earned | 0.9 | 4.375 | 4.45 | 4.65 |
Required
You are asked to provide the shareholders with an assessment of the firm's asset management ,profitability,efficiency,solvency and leverage .Be as complete as possible given the above information ,but do not use any irrelevant information
In: Accounting
Calculate the project cash flow generated for Project A and Project B using the NPV method.
Sample Template for Project A and Project B:
“Table showing investments and returns for Project A and Project B. Project A has $10,000 initial investment with $5,000 returns in each of the first 3 years. Project B has $55,000 initial investment with $20,000 in each of the first 3 years.”
I am looking for the formulas to use. I believe I am using them incorrectly. Thanks!
In: Accounting
Jay Brooks prints and publishes study materials. He
has prepared the following trial balance as at 30 June
2017: Dr
Cr
$
$
Purchases 60 000
Inventory at 1 July 2016 10 000
Sales 120 000
Distribution costs 13 200
Administrative and selling expenses 5 600
Trade receivables 12 200
Discount allowed 1 550
Bank balance 4 150
Capital account at 1 July 2016 73 100
Discount received 2 500
6% Bank loan 10 000
Non-current assets at carrying amount 102 500
Capital introduced in the year 5 000
Loan interest paid 300
Drawings 8 000
Trade payables 5 600
Wages 15 000
Suspense 8 000
228 350 228 350
The following is to be taken into account.
Inventory valuation at 30 June 2017 was $12
000
Jay decided to write off an irrecoverable receivable
of $1 000. This should be accounted for as an administrative and
selling expense.
The wages cost should be split equally between cost of
sales and administrative and selling expenses.
Discounts allowed should be accounted for as an
administrative and selling expense.
The bank loan was taken out on 1 July 2016
The depreciation charge for the year of $5 000 on
property, plant and equipment has not yet been accounted for. It
should be classified as a cost of sale.
The balance on the suspense account represents the
proceeds from the disposal of an item of property, plant and
equipment. At the date of disposal, that item had a net carrying
amount of $10 000. The gain or loss on disposal should be accounted
for as a cost of sale.
Prepare the statement of profit or loss for the
year ended 30 June 2017, together with the statement of financial
position as at 30 June 2017 on behalf of Jay Brooks
In: Accounting
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 $23.75 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) | 12,000 | hundred square feet |
| Travel to jobs | Miles driven | 193,000 | miles |
| Job support | Number of jobs | 2,100 | jobs |
| Other (organization-sustaining costs and idle capacity costs) | None | Not applicable | |
The total cost of operating the company for the year is $349,000 which includes the following costs:
| Wages | $ | 140,000 |
| Cleaning supplies | 32,000 | |
| Cleaning equipment depreciation | 9,000 | |
| Vehicle expenses | 32,000 | |
| Office expenses | 65,000 | |
| President’s compensation | 71,000 | |
| Total cost | $ | 349,000 |
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 | 80 | % | 13 | % | 0 | % | 7 | % | 100 | % |
| Cleaning supplies | 100 | % | 0 | % | 0 | % | 0 | % | 100 | % |
| Cleaning equipment depreciation | 66 | % | 0 | % | 0 | % | 34 | % | 100 | % |
| Vehicle expenses | 0 | % | 83 | % | 0 | % | 17 | % | 100 | % |
| Office expenses | 0 | % | 0 | % | 59 | % | 41 | % | 100 | % |
| President’s compensation | 0 | % | 0 | % | 26 | % | 74 | % | 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 600 square foot carpet-cleaning job at the Flying N Ranch—a 54-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 $142.50 (600 square feet @ $23.75 per hundred square feet). Calculate the customer margin earned on this job.
In: Accounting