For Yum Brands! Inc, describe the Product Cost Life Cycle. Does the company employ target costing? If so, how does the company manage costs to reach the target level?

On July 1, 2016, the City of Belvedere accepted a gift of cash in the amount of $3,200,000 from a number of individuals and foundations and signed an agreement to establish a private-purpose trust. The $3,200,000 and any additional gifts are to be invested and retained as principal. Income from the trust is to be distributed to community nonprofit groups as directed by a Board consisting of city officials and other community leaders. The agreement provides that any increases in the market value of the principal investments are to be held in trust; if the investments fall below the gift amounts, then earnings are to be withheld until the principal amount is re-established.

1. On July 1, the original gift of cash was received.
2. On August 1, $2,200,000 in XYZ Company bonds were purchased at par plus accrued interest ($18,333). The bonds pay an annual rate of 5 percent interest semiannually on April 1 and October 1.
3. On August 2, $900,000 in ABC Company common stock was purchased. ABC normally declares and pays dividends semiannually, on January 31 and July 31.
4. On October 1, the first semiannual interest payment ($55,000) was received from XYZ Company. Note that part of this is for accrued interest due at the time of purchase; the remaining part is an addition that may be used for distribution.
5. On January 31, a cash dividend was received from ABC Company in the amount of $25,000.
6. On March 1, the ABC stock was sold for $921,000. On the same day, DEF Company stock was purchased for $965,000.
7. On April 1, the second semiannual interest payment was received from XYZ Company.
8. During the month of June, distributions were approved by the Board and paid in cash in the amount of $82,500.
9. Administrative expenses were recorded and paid in the amount of $5,500.
10. An accrual for interest on the XYZ bonds was made as of June 30, 2017.
11. As of June 30, 2017, the fair value of the XYZ bonds, exclusive of accrued interest, was determined to be $2,203,000. The fair value of the DEF stock was determined to be $961,000.
12. Closing entries were prepared.
    

Required:
a. The above events and transactions occurred during the fiscal year ended June 30, 2017. Record them in the Belvedere Community Trust Fund.
b. Prepare (1) a Statement of Changes in Fiduciary Net Position for the Belvedere Community Trust Fund and (2) a Statement of Fiduciary Net Position

Venus Creations sells window treatments (shades, blinds, and awnings) to both commercial and residential customers. The following information relates to its budgeted operations for the current year.

The controller, Peggy Kingman, is concerned about the residential product line. She cannot understand why this line is not more profitable given that the installations of window coverings are less complex for residential customers. In addition, the residential client base resides in close proximity to the company office, so travel costs are not as expensive on a per client visit for residential customers. As a result, she has decided to take a closer look at the overhead costs assigned to the two product lines to determine whether a more accurate product costing model can be developed. Here are the three activity cost pools and related information she developed:

Compute the activity-based overhead rates for each of the three cost pools. (Round answers to 2 decimal places, e.g. 12.25.)

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Partially correct answer iconYour answer is partially correct.

Determine the overhead cost assigned to each product line. (Round answers to 0 decimal places, e.g. 1,575.)

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Incorrect answer iconYour answer is incorrect.

Compute the operating income for each product line, using the activity-based overhead rates. (Round answers to 0 decimal places, e.g. 1,575.)

Exercise 9-5 Departmental expense allocations LO P2

Woh Che Co. has four departments: materials, personnel, manufacturing, and packaging. In a recent month, the four departments incurred three shared indirect expenses. The amounts of these indirect expenses and the bases used to allocate them follow.

Departmental data for the company’s recent reporting period follow.

1. Use this information to allocate each of the three indirect expenses across the four departments.
2. Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

Use this information to allocate each of the three indirect expenses across the four departments.

Prepare a summary table that reports the indirect expenses assigned to each of the four departments.

Net Present Value

Use Exhibit 12B.1 and Exhibit 12B.2 to locate the present value of an annuity of $1, which is the amount to be multiplied times the future annual cash flow amount.

Each of the following scenarios is independent. Assume that all cash flows are after-tax cash flows.

1. Campbell Manufacturing is considering the purchase of a new welding system. The cash benefits will be $480,000 per year. The system costs $1,350,000 and will last 10 years.
2. Evee Cardenas is interested in investing in a women's specialty shop. The cost of the investment is $230,000. She estimates that the return from owning her own shop will be $50,000 per year. She estimates that the shop will have a useful life of 6 years.
3. Barker Company calculated the NPV of a project and found it to be $63,900. The project's life was estimated to be 8 years. The required rate of return used for the NPV calculation was 10%. The project was expected to produce annual after-tax cash flows of $135,000.

Required:

1. Compute the NPV for Campbell Manufacturing, assuming a discount rate of 12%. If required, round all present value calculations to the nearest dollar. Use the minus sign to indicate a negative NPV.
$

Should the company buy the new welding system? YES/NO

2. Conceptual Connection: Assuming a required rate of return of 8%, calculate the NPV for Evee Cardenas' investment. Round to the nearest dollar. If required, round all present value calculations to the nearest dollar. Use the minus sign to indicate a negative NPV.
$

Should she invest? YES/NO

What if the estimated return was $135,000 per year? Calculate the new NPV for Evee Cardenas' investment. Would this affect the decision? What does this tell you about your analysis? Round to the nearest dollar.
$

The shop (SHOULD/SHOULD NOT) be purchased. This reveals that the decision to accept or reject in this case is affected by differences in estimated (INVESTMENT/RETURNS/CASHFLOW)

3. What was the required investment for Barker Company's project? Round to the nearest dollar. If required, round all present value calculations to the nearest dollar.
$

The beginning inventory was 320 units at a cost of $10 per unit. Goods available for sale during the year were 1,360 units at a total cost of $15,060. In May, 620 units were purchased at a total cost of $6,820. The only other purchase transaction occurred during October. Ending inventory was 580 units.

Required:

a. Calculate the number of units purchased in October and the cost per unit purchased in October.

b-1. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using FIFO method. (Enter all values as a positive value.)

b-2. Assume the periodic inventory system is used. Calculate cost of goods sold and ending inventory using LIFO method. (Enter all values as a positive value.)

Identify a product that you think you have paid either too little for or too much for. Identify the pricing strategy you think the company is trying to implement (based on the assigned reading) and evaluate the effectiveness of the strategy. Use at least two sources to justify your answer. You should also use outside research (at least two sources), evaluate the effectiveness of the strategy, and address the competitors response to the pricing decision.

Dell is considering replacing one of its material handling systems. The old system was purchased 7 years ago for $130,000 and was depreciated as MACRS-GDS 5-year property since the system is used in the manufacture of electronic components. It has an annual O&M cost of $48,000, a remaining operational life of 8 years, and an estimated salvage value of $6,000 at that time. A new system can be purchased for $175,000. It will be worth $50,000 in 8 years, and it will have annual O&M costs of only $17,000 per year due to new technology. If the new system is purchased, the old system will be traded in for $55,000, even though the old system can be sold for only $45,000 on the open market. Leasing a new system will cost $31,000 per year, payable at the beginning of the year, plus operating costs of $15,000 per year payable at year-end. If the new system is leased, the existing material handling system will be sold for its market value of $45,000. Use an 8-year planning horizon, an annual worth analysis, a tax rate of 40 percent, and an after-tax MARR of 9 percent to decide which material handling system to recommend: keep existing, trade in existing and purchase new, or sell existing and lease.

a. Use the cash flow approach (insider’s viewpoint approach). (11.2.2)

b. Use the cash flow approach (insider’s viewpoint approach), except note that a Section 1031 like-kind property exchange is to be used. The equipment replaced will continue to be replaced by like-kind investments in the United States indefinitely. Recall that a Section 1031 like-kind property exchange does not apply to leases. (11.4)

Hearty Soup Co. uses a process cost system to record the costs of processing soup, which requires the cooking and filling processes. Materials are entered from the cooking process at the beginning of the filling process. The inventory of Work in Process-Filling on April 1 and debits to the account during April 2016 were as follows:

During April, 700 units in process on April 1 were completed, and of the 7,400 units entering the department, all were completed except 500 units that were 90% completed.

Charges to Work in Process-Filling for May were as follows:

During May, the units in process at the beginning of the month were completed, and of the 9,500 units entering the department, all were completed except 400 units that were 35% completed.

Cost of Production Report- April

Cost of Production Report- May

Final Question:

The cost per equivalent unit for direct materials (increased, decreased) from March to May. The cost per equivalent unit for conversion costs (increased, decreased) from March to May. These changes(should, need not) be investigated for their underlying causes, and any necessary corrective actions should be taken.

List the four financial statements and explain each one. What does each statement tell us? Provide an example of each statement using the corporation like Publix Super Market. Next, explain the connections between the financial statements.

Milo Company manufactures beach umbrellas. The company is preparing detailed budgets for the third quarter and has assembled the following information to assist in the budget preparation:

The Marketing Department has estimated sales as follows for the remainder of the year (in units):

The selling price of the beach umbrellas is $12 per unit.

All sales are on account. Based on past experience, sales are collected in the following pattern:

Sales for June totaled $264,000.

The company maintains finished goods inventories equal to 15% of the following month’s sales. This requirement will be met at the end of June.

Each beach umbrella requires 4 feet of Gilden, a material that is sometimes hard to acquire. Therefore, the company requires that the ending inventory of Gilden be equal to 50% of the following month’s production needs. The inventory of Gilden on hand at the beginning and end of the quarter will be:

Gilden costs $0.80 per foot. One-half of a month’s purchases of Gilden is paid for in the month of purchase; the remainder is paid for in the following month. The accounts payable on July 1 for purchases of Gilden during June will be $48,920.

Calculate the estimated sales, by month and in total, for the third quarter.

Calculate the expected cash collections, by month and in total, for the third quarter.

Calculate the estimated quantity of beach umbrellas that need to be produced in July, August, September, and October.

Calculate the quantity of Gilden (in feet) that needs to be purchased by month and in total, for the third quarter.

Calculate the cost of the raw material (Gilden) purchases by month and in total, for the third quarter.

Calculate the expected cash disbursements for raw material (Gilden) purchases, by month and in total, for the third quarter.

Seven metrics

The following data were taken from the financial statements of Woodwork Enterprises Inc. for the current fiscal year. Assuming that there are no intangible assets.

Determine the following: (a) debt ratio, (b) ratio of fixed assets to long-term liabilities, (c) ratio of liabilities to stockholders’ equity, (d) asset turnover, (e) return on total assets, (f) return on stockholders’ equity, and (g) return on common stockholders' equity. Round to two decimal places.

Feedback

(a) Divide total liabilities by total assets. Use the accounting equation to find total assets i.e., Total Assets = Total liabilities + Total Stockholders’ Equity

(b) Divide property, plant and equipment (net) by long-term liabilities.

(c) Divide total liabilities by total stockholders’ equity.

(d) Divide net sales by average total assets, excluding long-term investments. Average Total Assets = (Beginning Total Assets + Ending Total Assets) ÷ 2
To find ending total assets, use the accounting equation and substitute ending liabilities + stockholders’ equity for the amount.

(e) Divide the sum of net income plus interest expense by average total assets. Average Total Assets = (Beginning Total Assets + Ending Total Assets) ÷ 2
To find ending total assets, use the accounting equation and substitute ending liabilities + stockholders’ equity for the amount.

(f) Divide net income by average stockholders’ equity. Average Total Stockholders’Equity = (Beginning Stockholders’Equity + Ending Stockholders’Equity) ÷ 2

(g) Divide net income minus preferred dividends by average common stockholders’ equity. Common stockholders’ equity = Common stock + Retained earnings
Average common stockholders’ equity = (Beginning common stockholders’ equity + Ending common stockholders’ equity) ÷ 2

Manny, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December he performed $24,000 of legal services for a client. Manny typically requires his clients to pay his bills immediately upon receipt. Assume Manny’s marginal tax rate is 37 percent this year and next year, and that he can earn an after-tax rate of return of 7 percent on his investments.

a. What is the after-tax income if Manny sends his client the bill in December?

b. What is the after-tax income if Manny sends his client the bill in January?

3. Hank, a calendar-year taxpayer, uses the cash method of accounting for his sole proprietorship. In late December, he performed $20,000 of legal services for a client. Hank typically requires his clients to pay his bills immediately upon receipt. Assume his marginal tax rate is 32 percent this year and will be 37 percent next year, and that he can earn an after-tax rate of return of 12 percent on his investments.

a. What is the after-tax income if Hank sends his client the bill in December?

b. What is the after-tax income if Hank sends his client the bill in January?

Someone else - what kind of account is "allowance for doubtful accounts".

1. Tell us about aging of receivables. Why would we age them?

2. What method are we using when we estimate bad debts?

3. what are the two methods of estimating bad debts? Which is easier for you to remember and why?

4. If you were focusing on your income statement (matching expenses to revenues), which method of estimating would you use?

Can you please solve this problem. The correct answer that should be found is below. Thank You

Early in 2015, Logan Corporation engaged Reese, Inc. to design and construct a complete modernization of Logan's manufacturing facility. Construction was begun on January 1, 2015 and was completed on December 31, 2015. Logan made the following payments to Reese, Inc. during 2015:

In order to help finance the construction, Logan issued $2,000,000 of 10-year, 9% bonds payable, issued at par on January 2, 2015, with interest payable annually on December 31.

In addition to the 9% bonds payable, the only debt outstanding during 2015 was a $500,000, 12% note payable dated January 1, 2010 and due January 1, 2020, with interest payable annually on January 1 and a $1,000,000, 10% bond payable dated July 1, 2011 due June 30, 2021 with interest paid annually.

Compute the interest to be capitalized in 2015. Logan uses the specific interest method. Show computations. The correct answer should be $244,200