Consider the following information regarding the performance of a money manager in a recent month. The table presents the actual return of each sector of the manager’s portfolio in column (1), the fraction of the portfolio allocated to each sector in column (2), the benchmark or neutral sector allocations in column (3), and the returns of sector indexes in column (4). (1) Actual Return (2) Actual Weight (3) Benchmark Weight (4) Index Return Equity 2.8% 0.40 0.30 2.9% (S&P 500) Bonds 1.1 0.40 0.50 1.8 (Aggregate Bond Index) Cash 0.9 0.20 0.20 0.9 a-1. What was the manager’s return in the month? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Manager’s return 0.36 % a-2. What was her over or underperformance? (Input the value as positive value. Do not round intermediate calculations. Round your answer to 2 decimal places.) % b. What was the contribution of security selection to relative performance? (Negative value should be indicated by a minus sign. Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution of security selection % c. What was the contribution of asset allocation to relative performance? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Contribution of asset allocation %
In: Accounting
Dollar-Value LIFO Retail
Johns Company adopts the dollar-value LIFO retail inventory method on January 1, 2016. The following information for 2016 is obtained from Johns' records:
| Cost | Retail | |
|---|---|---|
| Inventory, January 1, 2016 | $20,000 | $29,000 |
| Purchases | 60,000 | 92,000 |
| Net additional markups | — | 1,000 |
| Net markdowns | — | 3,000 |
| Sales | — | 75,000 |
The price index on January 1, 2016, was 100, and on December 31, 2016, it was 110.
Required:
Compute the cost of the inventory on December 31, 2016. Round the cost-to-retail ratio to three decimal places.
| JOHNS COMPANY | ||
| Calculation of cost of inventory using Dollar-Value LIFO | ||
| December 31, 2016 | ||
| Cost | Retail | |
| Beginning inventory | $20,000 | $29,000 |
| Purchases | 60,000 | $92,000 |
| Add: Markups (net) | 1,000 | |
| Less: Markdowns (net) | (3000) | |
| $90,000 | ||
| Goods available for sale | $80,000 | $119,000 |
| Less: Sales | 75,000 | |
| Ending inventory at retail | $44,000 | |
| Ending inventory at cost | $ ? | |
In: Accounting
Kitchen Magician, Inc. has assembled the following data pertaining to its two most popular products.
| Blender | Electric Mixer | ||||||
| Direct material | $ | 22 | $ | 32 | |||
| Direct labor | 15 | 43 | |||||
| Manufacturing overhead @ $54 per machine hour | 54 | 108 | |||||
| Cost if purchased from an outside supplier | 75 | 146 | |||||
| Annual demand (units) | 38,000 | 45,000 | |||||
Past experience has shown that the fixed manufacturing overhead component included in the cost per machine hour averages $27. Kitchen Magician’s management has a policy of filling all sales orders, even if it means purchasing units from outside suppliers.
Required:
If 80,000 machine hours are available, and management desires to follow an optimal strategy, how many units of each product should the firm manufacture? How many units of each product should be purchased?
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With all other things constant, if management is able to reduce the direct material for an electric mixer to $22 per unit, how many units of each product should be manufactured? Purchased?
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In: Accounting
On January 1, 2018, A Co. purchased a machine at a cost of $84,000. The machine is expected to last 5 years and has a residual value of $14,000.
Required:
1. Compute depreciation for the five year periods ending December 31 using the straight-line, sum-of-the-years digits and DDB method.
2. The machine is sold on January 1,2020 for $40,000. Compute the gain or loss for each method.
In: Accounting
In: Accounting
Flexible Overhead Budget
Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 9,000 hours of productive capacity in the department:
| Variable overhead cost: | ||
| Indirect factory labor | $81,900 | |
| Power and light | 3,870 | |
| Indirect materials | 25,200 | |
| Total variable overhead cost | $110,970 | |
| Fixed overhead cost: | ||
| Supervisory salaries | $38,840 | |
| Depreciation of plant and equipment | 24,410 | |
| Insurance and property taxes | 15,540 | |
| Total fixed overhead cost | 78,790 | |
| Total factory overhead cost | $189,760 |
Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 7,000, 9,000, and 11,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.
| Leno Manufacturing Company | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Factory Overhead Cost Budget-Press Department | ||||||||||||||||||||||||||||||||||||||||||||||||||
| For the Month Ended November 30 | ||||||||||||||||||||||||||||||||||||||||||||||||||
| Direct labor hours | 7,000 | 9,000 | 11,000 | |||||||||||||||||||||||||||||||||||||||||||||||
| Variable overhead cost:
Flexible Overhead Budget Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 9,000 hours of productive capacity in the department:
Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 7,000, 9,000, and 11,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.
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In: Accounting
Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model A: Variable costs, $17.00 per unit Annual fixed costs, $986,400 Model B: Variable costs, $11.80 per unit Annual fixed costs, $1,114,000 The selling price is $68 per unit for the universal gismo, which is subject to a 5 percent sales commission. (In the following requirements, ignore income taxes.)
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How many units must the company sell to break even if Model A is selected? Calculate the net income of the two systems if sales and production are expected to average 42,000 units per year and which of the two systems would be more profitable? Assume Model B requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $450,000 and will be depreciated over a five-year life by the straight-line method. How many units must the company sell to earn $973,000 of income if Model B is selected? As in requirement (2), sales and production are expected to average 42,000 units per year. Ignoring the information presented in part (3), at what volume level will the annual total cost of each system be equal? |
In: Accounting
. Explain the following terms:
a. Purpose of an audit
b. Accounting cycle and transaction process
c. Balances
d. Presentation and disclosure
In: Accounting
Gatco Industries is a decentralized firm. It has two production
centres: Vancouver and Kamloops. Each one is evaluated based on its
return on investment. Vancouver has the capacity to manufacture
100,000 units of component TR222. Vancouver's variable costs are
$150 per unit. Kamloops uses component TR222 in one of its
products. Kamloops adds $90 of variable costs to the component and
sells the final product for $450.
Requirements Consider the following independent situations:
(a) Vancouver can sell all 100,000 units of TR222 on the open
market at a price of $250 per unit. Kamloops is willing to buy
10,000 of those units. What should the transfer price be? Explain
your decision. (b) Of the 100,000 units of component TR222 it can
produce, Vancouver can sell 70,000 units on the open market at a
price of $250 per unit. Kamloops is willing to buy an additional
10,000 units. What should the transfer price be? Explain your
decision. (c) Of the 100,000 units of component TR222 it can
produce, Vancouver can sell 80,000 units on the open market at a
price of $250 per unit. Kamloops is willing to buy an additional
30,000 units. What should the transfer price be? Explain your
decision. (d) The head office of West-Coast has asked the two
centres to negotiate a transfer price. List the advantages and
disadvantages of negotiated transfer prices. (adapted from
CGA-Canada, now CPA Canada)
In: Accounting
When managing the performance of an organization, the leadership is always balancing between the risks and rewards of using financial and non-financial information as well as internally and externally sourced information, in its performance report.
(a) Define and provide an example of each of the following:
i. financial information and non-financial information.
ii. internally and externally sourced information.
Word count should be a minimum 150 words, not exceeding 250 words.
(b) Elaborate on the benefits and issues of using the following information:
i. financial information versus non-financial information. (6.5 marks)
ii. internally sourced information versus externally sourced information. (6.5 marks)
For each set of information, there should be at least two advantages and two disadvantages provided (no tables allowed, your answers should have proper headers and paragraphs and word count should be a minimum 350 words, not exceeding 450 words. Marks will be awarded for format.
In: Accounting
THE COFFEE CLUB celebrates almost three decades of really good food, great service and excellent coffee. It manages 400 stores throughout 9 countries, with upwards of 40 million dedicated customers. THE COFFEE CLUB has identified Westfield Parramatta and Sunshine Marketplace as two possible locations for a new Wimpy franchise given the considerable growth in the local economy. The cost of the feasibility study amounted to $30 000. Assume that you are the capital budgeting manager of THE COFFEE CLUB and have been assigned to this project. Consider the following information and calculate the relevant cash flows for the two mutually exclusive locations. The coffeehouses will have the same serving capacity, i.e. they are the same size.
before setting up a new franchise to ensure the maximum profitability.
Marketplace.
Parramatta the annual rent will amount to $200 000 whereas the annual rent in Sunshine
Marketplace will be slightly less, namely $170 000.
and $450 000 p.a. for Sunshine Marketplace.
be higher (and thus assets are exposed to more wear and tear). THE COFFEE CLUB expects to get less for Westfield Parramatta’s assets than those of Sunshine Marketplace. It is thus expected that Westfield Parramatta’s assets could be sold after 5 years for $18 000 whereas Sunshine Marketplace’s could be sold for $20 000.
Therefore, you are required to:
In: Accounting
[The following information applies to the questions displayed below.]
Juliette formed a new business to sell sporting goods this year. The business opened its doors to customers on June 1. Determine the amount of start-up costs Juliette can immediately expense (not including the portion of the expenditures that are amortized over 180 months) this year in the following alternative scenarios: (Leave no answer blank. Enter zero if applicable.)
Problem 10-72 Part a
a. She incurred start-up costs of $2,000.
b. She incurred start-up costs of $45,000.
c. She incurred start-up costs of $53,500.
d. She incurred start-up costs of $63,000.
e. How would you answer parts (a) through (d) if she formed a partnership or a corporation and she incurred the same amount of organizational expenditures rather than start-up costs (how much of the organizational expenditures would be immediately deductible)?
In: Accounting
various provisions of IFRS/FASB related to Franchise Accounting
In: Accounting
Access the FASB website and identify the three most recent exposure drafts issued by the FASB.
In: Accounting
Assess the FASB website. Examine 2014, 2015 and 2016 ASU's. Identify and list the PCC ASU's.
In: Accounting