The production supervisor of the Machining Department for Niland Company agreed to the following monthly static budget for the upcoming year:
Niland Company Machining Department Monthly Production Budget |
|
Wages | $1,535,000 |
Utilities | 63,000 |
Depreciation | 105,000 |
Total | $1,703,000 |
The actual amount spent and the actual units produced in the first three months in the Machining Department were as follows:
Amount Spent | Units Produced | |||
January | $1,602,000 | 128,000 | ||
February | 1,531,000 | 117,000 | ||
March | 1,451,000 | 105,000 |
The Machining Department supervisor has been very pleased with this performance because actual expenditures for January–March have been significantly less than the monthly static budget of 1,703,000. However, the plant manager believes that the budget should not remain fixed for every month but should “flex” or adjust to the volume of work that is produced in the Machining Department. Additional budget information for the Machining Department is as follows:
Wages per hour | $22 |
Utility cost per direct labor hour | $0.9 |
Direct labor hours per unit | 0.5 |
Planned monthly unit production | 140,000 |
a. Prepare a flexible budget for the actual units produced for January, February, and March in the Machining Department. Assume depreciation is a fixed cost. If required, use per unit amounts carried out to two decimal places.
Niland Company | |||
Machining Department Budget | |||
For the Three Months Ending March 31 | |||
January | February | March | |
Units of production | 128,000 | 117,000 | 105,000 |
$ | $ | $ | |
Total | $ | $ | $ |
Supporting calculations: | |||
Units of production | 128,000 | 117,000 | 105,000 |
Hours per unit | x | x | x |
Total hours of production | |||
Wages per hour | x $ | x $ | x $ |
Total wages | $ | $ | $ |
Total hours of production | |||
Utility costs per hour | x $ | x $ | x $ |
Total utilities | $ | $ | $ |
b. Compare the flexible budget with the actual expenditures for the first three months.
January | February | March | |
Total flexible budget | $ | $ | $ |
Actual cost | |||
Excess of actual cost over budget | $ | $ | $ |
What does this comparison suggest?
The Machining Department has performed better than originally thought. | |
The department is spending more than would be expected. |
In: Accounting
In: Accounting
In the current economic environment, there has been a lot of discussion related to the excessiveness of executive pay. Agree or disagree as to whether you believe it is excessive and explain your position. What other alternatives may be there be to executive pay?
In: Accounting
Delaware Chemical Company uses oil to produce two types of plastic products, P1 and P2. Delaware budgeted 26,600 barrels of oil for purchase in June for $66 per barrel. Direct labor budgeted in the chemical process was $228,200 for June. Factory overhead was budgeted at $316,000 during June. The inventories on June 1 were estimated to be:
Oil | $16,000 |
P1 | 10,700 |
P2 | 9,100 |
Work in process | 13,200 |
The desired inventories on June 30 were:
Oil | $17,600 |
P1 | 9,800 |
P2 | 8,700 |
Work in process | 13,700 |
Use the preceding information to prepare a cost of goods sold budget for June. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
Delaware Chemical Company | |||
Cost of Goods Sold Budget | |||
For the Month Ending June 30 | |||
$ | |||
$ | |||
Direct materials: | |||
$ | |||
$ | |||
$ | |||
$ | |||
$ | |||
$ | |||
$ |
In: Accounting
You are required to prepare a written research assignment that
addresses one of the provided topics
below. The purpose of the task is for you to demonstrate high-level
critical reflection and analytical
reasoning skills in the context of the application of Australian
taxation law and taxation law policy. You
must undertake academic research which demonstrates the
following:
1. An in-depth your understanding of how the specific tax law
applies,
2. The policy context of the law and if relevant how other
jurisdictions deal with similar issues,
3. Critical reflection as to whether the law achieves its stated
purpose aligns with principles of
good tax policy or could be improved/amended. These critical
reflections should be
supported by the research you have undertaken as well as your own
independent thought.
TOPIC:
Division 7A (treatment of private company loans) -
discuss and critically evaluate Division 7A
as a specific anti-avoidance provision. You should include a
discussion of the overall policy
objectives and your evaluation of whether the Division currently
meets these objectives or
whether further amendments are necessary.
In: Accounting
The financial statements of Lowz Company appear below:
LOWZ COMPANY Comparative Balance Sheet December 31 |
|||||||||
2020 | 2019 | ||||||||
Assets | |||||||||
Cash | $36,000 | $23,000 | |||||||
Accounts receivable | 25,000 | 34,000 | |||||||
Merchandise Inventory | 32,000 | 15,000 | |||||||
Property, plant, and equipment | 50,000 | 78,000 | |||||||
Accumulated depreciation | (21,000 | ) | (24,000 | ) | |||||
Total | $122,000 | $126,000 | |||||||
Liabilities and Stockholder's Equity | |||||||||
Accounts payable | $18,000 | $23,000 | |||||||
Income taxes payable | 9,000 | 8,000 | |||||||
Bonds payable | 8,000 | 33,000 | |||||||
Common stock | 28,000 | 24,000 | |||||||
Retained earnings | 59,000 | 38,000 | |||||||
Total | $122,000 | $126,000 |
LOWZ COMPANY Income Statement For the Year Ended December 31, 2020 |
|||||
Sales | $400,000 | ||||
Cost of goods sold | 270,000 | ||||
Gross profit | 130,000 | ||||
Operating expenses | 45,000 | ||||
Income from operations | 85,000 | ||||
Interest expense | 5,000 | ||||
Income before income taxes | 80,000 | ||||
Income tax expense | 24,000 | ||||
Net income | $56,000 |
The following additional data were provided: | ||
1. | Dividends declared and paid were $35,000. | |
2. | During the year, equipment was sold for $17,000 cash. This equipment cost $28,000 originally and had a book value of $17,000 at the time of sale. | |
3. | All depreciation expense is in the operating expenses. | |
4. | All sales and purchases are on account. | |
5. | Accounts payable pertain to merchandise suppliers. | |
6. | All operating expenses except for depreciation were paid in cash. |
Prepare a statement of cash flows for Lowz Company using the direct
method. (Show amounts that decrease cash flow with
either a - sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
In: Accounting
Diego Company manufactures one product that is sold for $73 per unit in two geographic regions—the East and West regions. The following information pertains to the company’s first year of operations in which it produced 44,000 units and sold 39,000 units.
Variable costs per unit: | |||
Manufacturing: | |||
Direct materials | $ | 23 | |
Direct labor | $ | 16 | |
Variable manufacturing overhead | $ | 2 | |
Variable selling and administrative | $ | 4 | |
Fixed costs per year: | |||
Fixed manufacturing overhead | $ | 748,000 | |
Fixed selling and administrative expenses | $ | 400,000 | |
The company sold 29,000 units in the East region and 10,000 units in the West region. It determined that $180,000 of its fixed selling and administrative expenses is traceable to the West region, $130,000 is traceable to the East region, and the remaining $90,000 is a common fixed cost. The company will continue to incur the total amount of its fixed manufacturing overhead costs as long as it continues to produce any amount of its only product.
5. What is the company’s total gross margin under absorption costing?
6. What is the company’s net operating income (loss) under absorption costing?
7. What is the amount of the difference between the variable costing and absorption costing net operating incomes (losses)?
8a. What is the company’s break-even point in unit sales?
8b. Is it above or below the actual sales volume?
Above | |
Below |
9.If the sales volumes in the East and West regions had been reversed, what would be the company’s overall break-even point in unit sales?
10. What would have been the company’s variable costing net operating income (loss) if it had produced and sold 39,000 units?
In: Accounting
(THERE IS NO ADDITIONAL INFORMATION PROVIDED OR NEEDED, SIMPLY NEED THIS CREATED IN EXCEL)
Credit Card Amortization Schedule (MUST BE IN EXCEL)
Starter File Name: None
Difficulty: Level 3
Credit cards can offer people considerable flexibility when it comes to purchasing power. However, this flexibility usually comes at a cost through a high APR on any unpaid balances. If only the minimum payment is made on a credit card balance, this debt could be carried for many years and cost thousands of dollars in interest expense. The purpose of this exercise is to design an amortization schedule for a credit card where only the minimum payment is made. Assume the bank charges an APR of 16% and that the current balance on the credit card is $5,000. The minimum payment is established on a fourteen year repayment period and payments are made at the end of each month. The design of your amortization table must include the following:
Design is limited to one worksheet.
Assume credit card statements are issued on the first day of each month. Show the statement date for each payment and the statement month on the amortization schedule. The date for the first statement is 9/1/2020.
For each payment, show the total payment, how much of the payment is interest expense, and how much is used to reduce the balance of the credit card. The schedule should also show the credit card balance at the beginning of every month.
Once the amortization table is complete, use the data to create a PivotTable on a second worksheet. The PivotTable should show how much total interest is paid each year and the total interest paid on the $5,000 balance after fourteen years. Also show the total amount of principal paid each year. The row heading should be the year sorted in chronological order beginning with 2020. Finally, show the number of payments made each year. Since the first statement is 9/1/2020, the year 2020 will have four payments.
Use column and/or row headings, add titles to your worksheets, and rename the worksheet tabs with appropriate labels. Also, use appropriate number formats on both the amortization worksheet and the PivotTable.
In: Accounting
Hickory Company manufactures two products—14,000 units of Product Y and 6,000 units of Product Z. The company uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products Y and Z: Activity Cost Pool Activity Measure Estimated Overhead Cost Expected Activity Machining Machine-hours $ 198,000 10,000 MHs Machine setups Number of setups $ 86,400 180 setups Production design Number of products $ 82,000 2 products General factory Direct labor-hours $ 248,000 12,000 DLHs Activity Measure Product Y Product Z Machine-hours 6,800 3,200 Number of setups 50 130 Number of products 1 1 Direct labor-hours 7,800 4,200
5. What is the activity rate for the Product Design activity cost pool?
6. What is the activity rate for the General Factory activity cost pool? (Round your answer to 2 decimal places.)
7. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Y? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)
8. Using the ABC system, how much total manufacturing overhead cost would be assigned to Product Z? (Do not round intermediate calculations and round your final answer to the nearest dollar amount.)
In: Accounting
You are the owner of a lawn service company (LawnCo) which provides grounds and maintenance services to a range of corporate customers. Customers are expected to pay on the first of each month, in advance of receiving services. One of your corporate customers is an eldercare facility whose grounds you have maintained for many years. The customer has not paid for the last three months of services (from Oct.–Dec. 2020); nevertheless, to maintain a positive relationship, your company continued to provide mowing and weed control services to the eldercare facility during that time. Your company ceased providing services in January 2021 and found out in that same month that the eldercare facility filed for bankruptcy in September. Your company now believes that collection of the missed payments is extremely unlikely. Your company has already issued financial statements to lenders (for the period ending 12/31/20) which reflected revenue and a corresponding account receivable related to this customer of $10,000 per month for services provided to this customer. Those financial statements also reflected the company’s standard allowance (reserve) amount on receivables, of 4% of sales. In total, your company’s average monthly sales amount to $500,000.
Required:
Your paper should be structured in the format of an issues memo.
1. Evaluate whether receipt of this information indicates you have a change in accounting estimate or whether the customer’s bankruptcy should result in this event being considered an error in previously issued financial statements.
2. Next, describe the accounting treatment (as required by the Codification) for each alternative, then support your explanations with draft journal entries.
3. Finally, briefly state which treatment appears to be more appropriate given the circumstances. If you must make any assumptions in reaching this conclusion, state these.
In: Accounting
In: Accounting
An inexperienced accountant prepared this condensed income
statement for Cullumber Company, a retail firm that has been in
business for a number of years.
CULLUMBER
COMPANY Income Statement For the Year Ended December 31, 2017 |
||
Revenues | ||
Net sales | $901,000 | |
Other revenues | 23,320 | |
924,320 | ||
Cost of goods sold | 588,300 | |
Gross profit | 336,020 | |
Operating expenses | ||
Selling expenses | 115,540 | |
Administrative expenses | 109,180 | |
224,720 | ||
Net earnings | $111,300 |
As an experienced, knowledgeable accountant, you review the
statement and determine the following facts.
1. | Net sales consist of sales $965,660, less freight-out on merchandise sold $34,980, and sales returns and allowances $29,680. | |
2. | Other revenues consist of sales discounts $19,080 and rent revenue $4,240. | |
3. | Selling expenses consist of salespersons’ salaries $84,800; depreciation on equipment $10,600; advertising $13,780; and sales commissions $6,360. The commissions represent commissions paid. At December 31, $3,180 of commissions have been earned by salespersons but have not been paid. All compensation should be recorded as Salaries and Wages Expense. | |
4. | Administrative expenses consist of office salaries $49,820; dividends $19,080; utilities $12,720; interest expense $2,120; and rent expense $25,440, which includes prepayments totaling $6,360 for the first quarter of 2018. |
Prepare a correct detailed multiple-step income statement. Assume a
25% tax rate. (List other revenues before other
expenses. Round answers to 0 decimal places, e.g.
5,125.)
In: Accounting
Product Decisions Under Bottlenecked Operations
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a A condition that occurs when product demand exceeds production capacity.production bottleneck. Total fixed costs are $200,000 for the company as a whole. In addition, the following information is available about the three products:
Large | Medium | Small | ||||
Unit selling price | $94 | $281 | $232 | |||
Unit variable cost | 74 | 230 | 204 | |||
Unit contribution margin | $ 20 | $ 51 | $ 28 | |||
Autoclave hours per unit | 2 | 6 | 4 | |||
Total process hours per unit | 6 | 12 | 8 | |||
Budgeted units of production | 4,500 | 4,500 | 4,500 |
a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.
Large | Medium | Small | Total | |
Units produced | ||||
Revenues | $ | $ | $ | $ |
Variable costs | ||||
Contribution margin | $ | $ | $ | $ |
Fixed costs | ||||
Income from operations | $ |
b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent.
Large | Medium | Small | |
Contribution margin | $ | $ | $ |
Autoclave hours per unit | |||
Unit contribution margin per production bottleneck hour | $ | $ | $ |
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In: Accounting
Described below are three independent and unrelated situations
involving accounting changes. Each change occurs during 2018 before
any adjusting entries or closing entries are prepared.
Required:
1. Identify the type of change.
2. Prepare any journal entry necessary as a direct
result of the change as well as any adjusting entry for 2018
related to the situation described. (Ignore income tax
effects.)
In: Accounting
Smithson Company uses a job-order costing system and has two manufacturing departments—Molding and Fabrication. The company provided the following estimates at the beginning of the year:
Molding | Fabrication | Total | ||||
Machine-hours | 23,000 | 33,000 | 56,000 | |||
Fixed manufacturing overhead costs | $ | 730,000 | $ | 220,000 | $ | 950,000 |
Variable manufacturing overhead per machine-hour | $ | 5.00 | $ | 5.00 | ||
During the year, the company had no beginning or ending inventories and it started, completed, and sold only two jobs—Job D-75 and Job C-100. It provided the following information related to those two jobs:
Job D-75: | Molding | Fabrication | Total | |||
Direct materials cost | $ | 377,000 | $ | 329,000 | $ | 706,000 |
Direct labor cost | $ | 210,000 | $ | 170,000 | $ | 380,000 |
Machine-hours | 18,000 | 5,000 | 23,000 | |||
Job C-100: | Molding | Fabrication | Total | |||
Direct materials cost | $ | 280,000 | $ | 290,000 | $ | 570,000 |
Direct labor cost | $ | 100,000 | $ | 220,000 | $ | 320,000 |
Machine-hours | 5,000 | 28,000 | 33,000 | |||
Smithson had no overapplied or underapplied manufacturing overhead
during the year.
Assume Smithson uses departmental overhead rates based on machine-hours.
2-a. Compute the predetermined departmental overhead rates. (Round your answer to 2 decimal places.)
2-b. Compute the total manufacturing costs assigned to Job D-75 and Job C-100. (Round your intermediate calculations to 2 decimal places.)
2-c. If Smithson establishes bid prices that are 120% of total manufacturing costs, what bid price would it have established for Job D-75 and Job C-100? (Round your intermediate calculations to 2 decimal places.)
2-d. What is Smithson’s cost of goods sold for the year? (Round your intermediate calculations to 2 decimal places.)
In: Accounting