Garver Industries has budgeted the following unit sales:

The finished goods units on hand on December 31, 2016, was 2,000 units. Each unit requires 3 pounds of raw materials that are estimated to cost an average of $4 per pound. It is the company's policy to maintain a finished goods inventory at the end of each month equal to 20% of next month's anticipated sales. They also have a policy of maintaining a raw materials inventory at the end of each month equal to 30% of the pounds needed for the following month's production. There were 8,640 pounds of raw materials on hand at December 31, 2016.
For the first quarter of 2017, prepare a production budget.

For the first quarter of 2017, prepare a direct materials budget.

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Johnson Computers repairs computers, along with selling and installing software on computers. Brian handles the repairs for the computers and is constantly asked by family and friends for assistance when they experience computer issues. In an effort to provide more personal income, Brian started doing repairs from his home on weekends and evenings, as a part-time venture. As most of the business is for family and friends, he does not want to charge as much as Johnson Computers does. During the budget process, Brian increased the budget for computer parts, and once approved, started to buy as many as the budget would allow. For the additional parts not needed by Johnson Computers, Brian took the parts home to use in his business. Brian makes sure the amount spent never exceeds the budgeted amount.

Explain how Brian’s use of the budget is considered fraudulent, and how the budget process should have found this issue.

What policies and procedures should Johnson Computers have in place to protect the business assets and prevent the business risk?

Exercise 21A-5 a-c

Sage Hill Leasing Company signs an agreement on January 1, 2017, to lease equipment to Cole Company. The following information relates to this agreement.

a. Assuming the lessor desires a 8% rate of return on its investment, calculate the amount of the annual rental payment required.

b. Prepare an amortization schedule that is suitable for the lessor for the lease term.

c. Prepare all of the journal entries for the lessor for 2017 and 2018 to record the lease agreement, the receipt of lease payments, and the recognition of revenue. Assume the lessor’s annual accounting period ends on December 31, and it does not use reversing entries.

Fey Company’s organization chart includes the president; the vice president of production; three assembly plants—Dallas, Atlanta, and Tucson; and two departments within each plant—Machining and Finishing. Budget and actual manufacturing cost data for July 2017 are as follows.

Finishing Department—Dallas: direct materials $42,500 actual, $44,000 budget; direct labor $83,400 actual, $82,000 budget; manufacturing overhead $51,000 actual, $49,200 budget.

Machining Department—Dallas: total manufacturing costs $220,000 actual, $219,000 budget.

Atlanta Plant: total manufacturing costs $424,000 actual, $420,000 budget.

Tucson Plant: total manufacturing costs $494,200 actual, $496,500 budget.

The Dallas plant manager’s office costs were $95,000 actual and $92,000 budget. The vice president of production’s office costs were $132,000 actual and $130,000 budget. Office costs are not allocated to departments and plants. Instructions Using the format shown in Illustration 10-19 (page 427), prepare the reports in a responsibility system for:

(a) The Finishing Department—Dallas.

(b) The plant manager—Dallas.

(c) The vice president of production.

how does Apple INC. use Activity Based costing? 1. Describe the company and its business. 2. What was the scope of the ABC project? 3. What were the goals for the ABC project? 4. Summarize the results of the project.

a) How do standard costs are developed.

b) How do we calculate and interpret variances for direct materials.

c) What are the advantages and disadvantages of decentralization.

You have recently been hired by Bio Lux Company, in its relatively new treasury management department. Bio Lux was founded five years ago by Jessica Parker. Jessica found a method to produce high quality shampoo using natural ingredients. The shampoo produced by Bio Lux is in a good position to compete with other more established shampoo producers. The company is privately owned by Jessica Parker and her family, and it had sales of $12 million last year.

Bio Lux primarily sells its products through a wholesaler who distributes the products through its network of retailers throughout the country. Bio Lux’s growth to date has come from its innovation, quality, and low costs. When the company had sufficient capital, it would expand production. Relatively little formal analysis has been used in its capital budgeting process. Jessica has just read about capital budgeting techniques and has come to you for help. For starters, the company has never attempted to determine its cost of capital, and Jessica would like you to perform the analysis. Because the company is privately owned, it is difficult to determine the cost of equity for the company. Jessica wants you to use a similar company to estimate the cost of capital (WACC) for Bio Lux, and she has chosen Procter & Gamble as a representative company. The following questions will lead you through the steps to calculate this estimate.

1. To estimate the cost of equity for Procter & Gamble, go to finance.yahoo.com and enter the ticker symbol “PG.” Follow the various links at this website to find answers to the following questions:

a) What is the most recent stock price (and provide the associated date) listed for Procter & Gamble?

b) What is the market value of equity, or market capitalization?

c) How many shares of stock does Procter & Gamble have outstanding?

d) What is the beta for Procter & Gamble?

e) Now go back to finance.yahoo.com and follow the “Bonds” link. What is the yield on three-month Treasury bills? Using a 6 percent market risk premium, what is the cost of equity for Procter & Gamble using the CAPM?

Requirements (Part one):Prepare an income statement for Petunia's Posies​, a​ merchandiser, for the year ended December​ 31, 2016.

Part One​: In 2015​, Petunia Conway opened Petunia's Posies​, a small retail shop selling floral arrangements

On December​ 31, 2016​, her accounting records show the​ following:

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Requirements (Part two):

Part Two​: Petunia's Posies was so successful that Petunia decided to manufacture her own brand of floral​ supplies: Floral Mart Manufacturing.

At the end of December 2017​, her accounting records show the​following:

Part​ Three: Show the ending inventories that would appear on these balance​ sheets:

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month: Direct labor $ 16.40 q Indirect labor $ 4,000 + $ 1.70 q Utilities $ 5,600 + $ 0.50 q Supplies $ 1,600 + $ 0.40 q Equipment depreciation $ 18,200 + $ 2.40 q Factory rent $ 8,400 Property taxes $ 2,900 Factory administration $ 13,100 + $ 0.80 q The actual costs incurred in March in the Production Department are listed below: Actual Cost Incurred in March Direct labor $ 72,120 Indirect labor $ 10,830 Utilities $ 8,240 Supplies $ 3,610 Equipment depreciation $ 28,520 Factory rent $ 8,800 Property taxes $ 2,900 Factory administration $ 15,930. Actual Labor Hours 44,300, and Budget Labor Hours 4,500

Required: 3. Complete the Production Department’s flexible budget performance report for March, including both the spending and activity variances.

Explain how duties are segregated in payroll. Specifically, who or which departments conduct the authorization, timekeeping, recording, and custody functions?

A shift in the sales mix from products with a low contribution margin ratio towards products with a high contribution margin ratio will lower the break even point in the company as a whole.

The answer is True. But why? Can this be proven with a numerical example?

You have just started a new job with a significant increase in salary above what you were earning when you originally negotiated your student loan repayment. The salary increase affords you the opportunity of increasing your monthly loan payments, thereby allowing you to retire the debt sooner than originally planned. You have six years remaining in the original payback plan on a loan of $55,000, with an interest rate of 2.4% and a monthly payment of $566.74. With your new salary, you can afford a monthly payment of $672. You also will be eligible for end-of-year bonuses. PART 1: Use the concepts and techniques that you have learned throughout the semester to create a worksheet containing a loan calculator and an amortization schedule. Determine how soon you can retire the student loan debt with the new higher monthly payments. Assuming that you earn yearly bonuses of $6,000 at the end of each year, when could you pay off the remaining balance on your student loan if you kept the lower monthly payment? PART 2: Would you opt for increasing your monthly payment, or using any earned bonus money to retire the debt early? Explain the reason for your choice. PART 3: Create a PowerPoint presentation in which you summarize the spreadsheet and your decisions based on the spreadsheet. Choose your design, layout, font size, colors, and number of slides for the presentation. Please remember that PowerPoint is a visual and NOT a Word document. Considerations: Assume this is a fixed rate loan. Most loans do not penalize for pre-payment. In order to arrive at your answers, you will need to determine the following: A.Number of years for the original loan. There is a financial function that will help you obtain this information. To locate it, select the Formulas tab, click on Insert Function in the Function Library section. In the pop-up, type a brief description of what you want to do in the box provided, and then click Go. Once you select the appropriate function, specify the required parameters. B.Amortization schedule of the original loan. You will need to provide the Principal and Interest portion for each period (month). Follow the same steps specified in A above to locate the necessary functions. Please note that, as time goes on, the principal amount paid in each period (month) will increase while the interest amount paid will decrease. The principal portion plus the interest portion will always equal the total amount paid on each period (month). C.Amount of loan still owed. You can obtain this from the amortization table of the original loan and the information provided of the current period (month) of the loan. D.Period (month) on which you will complete paying the loan, based on the new payment amount. You may either develop an adjusted amortization schedule for the remaining payments, or find a function that provides the number of periods based on the remaining amount in the loan, the fixed interest rate, and the new monthly payments. Follow the same steps specified in A above to locate any functions you may need. E.Apply the annual bonus to the loan payments. Please follow prior steps to determine the impact of using your annual bonus to accelerate the payment of your loan.

Why are some fixed assets susceptible to theft?

Prepare a bank reconciliation for Blue Moon Company dated June 30, 2011 3.) Prepare any necessary journal entries based on the following data regarding the bank reconciliation prepared by Bootlegger Company on February 28, 2011. a) Outstanding cheques amount to $650. b) The service charges for February amount to $40. c) Cheque #665 for $3,525 for the cash purchase of office equipment was erroneously recorded by the bookkeeper as $3,552 d) The bank erroneously credited Bootlegger Company’s account for $300 for a deposit made by Bootlegger Company. e) A deposit ticket correctly prepared for $975 appeared on the bank statement as a deposit for $795 f) Cheque #650 for $100 for utilities expense was erroneously recorded by the bookkeeper as $10. g) A customer’s cheque for $250 was returned with the bank statement and stamped NSF. h) Bank balance on Feb.28 was $20,671 i) Cash account showed a balance of $20,254 on Feb. 28