Net Present Value

For discount factors use Exhibit 12B-1 and Exhibit 12B-2.

Talmage Inc. has just completed development of a new printer. The new product is expected to produce annual revenues of $2,700,000. Producing the printer requires an investment in new equipment costing $2,880,000. The printer has a projected life cycle of 5 years. After 5 years, the equipment can be sold for $360,000. Working capital is also expected to decrease by $360,000, which Talmage will recover by the end of the new product’s life cycle. Annual cash operating expenses are estimated at $1,620,000. The required rate of return is 8%.

Required:

1. Prepare a schedule of the projected annual cash flows.

2. Calculate the NPV using only discount factors from Exhibit 12B.1
$

3. Calculate the NPV using discount factors from both Exhibits 12B.1 and 12B.2
$

Weighted Average Method, Separate Materials Cost Janbo Company produces a variety of stationery products. One product, sealing wax sticks, passes through two processes: blending and molding. The weighted average method is used to account for the costs of production. After blending, the resulting product is sent to the molding department, where it is poured into molds and cooled. The following information relates to the blending process for August: a. Work in Process on August 1, had 30,000 pounds, 20% complete. Costs associated with partially completed units were: Materials $220,000 Direct labor 30,000 Overhead applied 20,000 b. Work in Process on August 31, had 50,000 pounds, 40% complete. c. Units completed and transferred out totaled 480,000 pounds. Costs added during the month were (all inputs are added uniformly): Materials $5,800,000 Direct labor 4,250,000 Overhead applied 1,292,500 Required: 1a. Prepare a physical flow schedule. Janbo Company Physical Flow Schedule Units to account for: Units in beginning work in process Units started Total units to account for Units accounted for: Units completed From ending work in process Total units accounted for 1b. Prepare an equivalent unit schedule. Janbo Company Schedule of equivalent units Weighted Average Method Units completed Units in ending work in process Total equivalent units 2. Calculate the unit cost. Round unit cost value to three decimal places. $ 3. Compute the cost of EWIP and the cost of goods transferred out. Ending work in process $ Goods transferred out $ 4. Prepare a cost reconciliation. Janbo Company Cost Reconciliation Costs to account for: Beginning WIP $ August costs Total to account for $ Costs accounted for: Transferred out $ Ending WIP Total costs accounted for $ 5. Suppose that the materials added uniformly in blending are paraffin and pigment and that the manager of the company wants to know how much each of these materials costs per equivalent unit produced. The costs of the materials in BWIP are as follows: Paraffin $120,000 Pigment 100,000 The costs of the materials added during the month are also given: Paraffin $3,250,000 Pigment 2,550,000 Prepare an equivalent unit schedule with cost categories for each material. Paraffin Pigment Units completed Units in ending WIP Total equivalent units Unit cost computation: Costs in BWIP $ $ Costs added Total costs $ $ Calculate the cost per unit for each type of material. Round your answers to the nearest cent. Unit paraffin cost $per unit Unit pigment cost $per unit

compute two different unit cost for each of the cable division products. What managerial objectives are being served

600 metric tonne of raw material, costing RM430,032, were input to a process in a period. Conversion costs totalled RM119,328. Losses, in the form of reject product, are normally 12% of input. Reject product is sold for RM260·00 per metric tonne. 521 metric tonne of finished product passed inspection in the period. The remaining output was sold as reject product. There was no work-in-progress either at the beginning or the end of the period. Required: For the period:

(a) Calculate the cost per unit of normal output. [10 marks]

(b) Prepare the process account, including any abnormal losses/gains. [10 marks]

(c) Explain how the cost of the previous accounting period’s equivalent units is assigned into the work-in-process inventory using the First-In, First-Out [FIFO] process-costing method. [6 marks]

(d) Briefly state a distinctive feature of the FIFO process-costing method when dealing with work done on opening inventory. [4 marks]

Rental receipts for the period July 1, 2013, through June 30, 2014, were collected on June 30, 2013. The effects of these economic events on the 2013 financial statements for unearned revenue and rent revenue are ?

ROI can be compared with the rate of return on opportunities elsewhere, inside or outside the company” Discuss the statement. Similarly, compare and Contrast different methods of Financial Performance Measurement”.

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Complete this question by entering your answers in the tabs below.

• Required A
• Required B

Assume that only one product is being sold in each of the four following case situations:

Windsor Corporation was formed 5 years ago through a public subscription of common stock. Daniel Brown, who owns 15% of the common stock, was one of the organizers of Windsor and is its current president. The company has been successful, but it currently is experiencing a shortage of funds. On June 10, 2021, Daniel Brown approached the Topeka National Bank, asking for a 24-month extension on two $34,970 notes, which are due on June 30, 2021, and September 30, 2021. Another note of $5,970 is due on March 31, 2022, but he expects no difficulty in paying this note on its due date. Brown explained that Windsor’s cash flow problems are due primarily to the company’s desire to finance a $300,080 plant expansion over the next 2 fiscal years through internally generated funds.

The commercial loan officer of Topeka National Bank requested the following financial reports for the last 2 fiscal years.

(a)

Compute the following items for Windsor Corporation. (Round answers to 2 decimal places, e.g. 2.25 or 2.25%.)

Lucido Products markets two computer games: Claimjumper and Makeover. A contribution format income statement for a recent month for the two games appears below:

Required:

1. What is the overall contribution margin (CM) ratio for the company?

2. What is the company's overall break-even point in dollar sales?

3. Prepare a contribution format income statement at the company's break-even point that shows the appropriate levels of sales for the two products.

[The following information applies to the questions displayed below.]

Laker Company reported the following January purchases and sales data for its only product.

The Company uses a perpetual inventory system. For specific identification, ending inventory consists of 280 units, where 260 are from the January 30 purchase, 5 are from the January 20 purchase, and 15 are from beginning inventory.

Required:
1. Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.
2. Determine the cost assigned to ending inventory and to cost of goods sold using weighted average.
3. Determine the cost assigned to ending inventory and to cost of goods sold using FIFO.
4. Determine the cost assigned to ending inventory and to cost of goods sold using LIFO.

Complete the table to determine the cost assigned to ending inventory and cost of goods sold using specific identification.

Han Products manufactures 27,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is: Direct materials $ 3.50 Direct labor 10.00 Variable manufacturing overhead 2.50 Fixed manufacturing overhead 12.00 Total cost per part $ 28.00 An outside supplier has offered to sell 27,000 units of part S-6 each year to Han Products for $22 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $77,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier. Required: What is the financial advantage (disadvantage) of accepting the outside supplier’s offer?

Prepare all the journal entries necessary to record the transactions noted above as they occurred and any adjusting journal entries relative to the transactions that would be required to present fair financial statements at December 31. For simplicity, assume that adjusting entries are recorded only once a year on December 31

Boron Chemical Company produces a synthetic resin that is used in the automotive industry. The company uses a standard cost system. For each gallon of output, the following direct manufacturing costs are anticipated:

During December of the current year, Boron produced a total of 2,500 gallons of output and incurred the following direct manufacturing costs:

Boron records price variances for materials at the time of purchase.

Required:

Prepare journal entries for the following events and transactions.

1. Purchase, on credit, of direct materials.

2. Direct materials issued to production.

3. Direct labor cost of units completed this period.

4. Direct manufacturing cost (direct labor plus direct materials) of units completed and transferred to Finished Goods Inventory.

5. Sale (on credit), for $150.00 per gallon, of 2,000 gallons of output. (Hint: You will need two journal entries here.)

(For all requirements, if no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your answers to the nearest whole dollar amount.)

Service Department Charges

In divisional income statements prepared for LeFevre Company, the Payroll Department costs are charged back to user divisions on the basis of the number of payroll distributions, and the Purchasing Department costs are charged back on the basis of the number of purchase requisitions. The Payroll Department had expenses of $41,896, and the Purchasing Department had expenses of $15,370 for the year. The following annual data for Residential, Commercial, and Government Contract divisions were obtained from corporate records:

a. Determine the total amount of payroll checks and purchase requisitions processed per year by the company and each division.

b. Using the activity base information in (a), determine the annual amount of payroll and purchasing costs charged back to the Residential, Commercial, and Government Contract divisions from payroll and purchasing services. If required, round your answers to two decimal places. Do not round your interim calculations, round your answers to two decimal places, if required.

c. Residential's service department charge is   than the other two divisions because Residential is a   user of service department services. Residential has many employees on a weekly payroll, which translates into a   number of check-issuing transactions.

Gonzalez Tortilla Corporation produces tortillas in large batches and uses a process costing system. Three departments—Mixing, Rolling, and Packaging—are involved in the production process. Gonzalez Tortilla has the following transactions:

1. Direct materials totaling $25,000—$7,500 for the Mixing department, $6,250 for the Rolling department, and $11,250 for the Packaging department—are requisitioned and placed in production.
2. Each production department incurs the following direct labor costs (wages payable):

3. Manufacturing overhead costs are applied to each department as follows:

4. Products with a cost of $6,875 are transferred from the Mixing department to the Rolling department.
5. Products with a cost of $8,000 are transferred from the Rolling department to the Packaging department.
6. Products with a cost of $11,375 are completed and transferred from the Packaging department to the finished goods warehouse.
7. Products with a cost of $10,375 are sold to customers.

Perform the following steps for each transaction:

1. Prepare a journal entry to record the transaction.
2. Summarize the flow of costs through T-accounts (no need to include T-accounts for raw materials inventory, wages payable, or manufacturing overhead). Assume that there are no beginning balances in the work-in-process inventory, finished goods inventory, and cost of goods sold accounts.