Two-Stage ABC for Manufacturing
Detroit Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:

The following data are for the production of single batches of two products, C23 Cams and U2 Shafts during the month of August:

Determine the unit costs of C23 Cams and U2 Shafts using ABC.
Round cost per gallon to two decimal places.

In terms of having a small company (family owned) --> posted a similar question already with way more information but no one has answered yet.

1. How should the compliance or lack of compliance with government regulations (such as filing of a W-2 or 1099 for the president of the company) be addressed ?????

2. What if management doesn't comply???

3. Should legal counsel be hired ? Is a forensic accountant required ???

Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 32,000 Rets per year. Costs associated with this level of production and sales are given below: Unit Total Direct materials $ 25 $ 800,000 Direct labor 10 320,000 Variable manufacturing overhead 3 96,000 Fixed manufacturing overhead 7 224,000 Variable selling expense 4 128,000 Fixed selling expense 6 192,000 Total cost $ 55 $ 1,760,000 The Rets normally sell for $60 each. Fixed manufacturing overhead is $224,000 per year within the range of 22,000 through 32,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 22,000 Rets through regular channels next year. A large retail chain has offered to purchase 10,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company would have to purchase a special machine to engrave the retail chain’s name on the 10,000 units. This machine would cost $20,000. Polaski Company has no assurance that the retail chain will purchase additional units in the future. What is the financial advantage (disadvantage) of accepting the special order? (Round your intermediate calculations to 2 decimal places.) 2. Refer to the original data. Assume again that Polaski Company expects to sell only 22,000 Rets through regular channels next year. The U.S. Army would like to make a one-time-only purchase of 10,000 Rets. The Army would pay a fixed fee of $1.60 per Ret, and it would reimburse Polaski Company for all costs of production (variable and fixed) associated with the units. Because the army would pick up the Rets with its own trucks, there would be no variable selling expenses associated with this order. What is the financial advantage (disadvantage) of accepting the U.S. Army's special order? 3. Assume the same situation as described in (2) above, except that the company expects to sell 32,000 Rets through regular channels next year. Thus, accepting the U.S. Army’s order would require giving up regular sales of 10,000 Rets. Given this new information, what is the financial advantage (disadvantage) of accepting the U.S. Army's special order?

Steve Pratt, who is single, purchased a home in Spokane, Washington, for $400,000. He moved into the home on February 1 of year 1. He lived in the home as his primary residence until June 30 of year 5, when he sold the home for $725,000. (Leave no answer blank. Enter zero if applicable.)

a. What amount of gain will Steve be required to recognize on the sale of the home?

Tropic Zone Corporation experienced the following variances: materials price $260 U, materials quantity $1,260 F, labor price $590 F, labor quantity $370 F, and overhead $890 U. Sales revenue was $68,200, and cost of goods sold (at standard) was $38,200. Determine the actual gross profit.

Actual gross profit $

Dividends Per Share

Seventy-Two Inc., a developer of radiology equipment, has Shares of ownership of a corporation.stock outstanding as follows: 70,000 shares of cumulative preferred 3% stock, $20 A dollar amount assigned to each share of stock.par, and 410,000 shares of $25 par common.

During its first four years of operations, the following amounts were distributed as dividends: first year, $31,000; second year, $76,000; third year, $100,000; fourth year, $110,000.

Calculate the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0.00".

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Explain incremental revenues and incremental costs. Provide a business example for each of these terms.

On January 1, 2017, Corgan Company acquired 70 percent of the outstanding voting stock of Smashing, Inc., for a total of $1,120,000 in cash and other consideration. At the acquisition date, Smashing had common stock of $830,000, retained earnings of $380,000, and a noncontrolling interest fair value of $480,000. Corgan attributed the excess of fair value over Smashing's book value to various covenants with a 20-year remaining life. Corgan uses the equity method to account for its investment in Smashing.

During the next two years, Smashing reported the following:

Corgan sells inventory to Smashing using a 60 percent markup on cost. At the end of 2017 and 2018, 30 percent of the current year purchases remain in Smashing's inventory.

1. Compute the equity method balance in Corgan's Investment in Smashing, Inc., account as of December 31, 2018.
2. Prepare the worksheet adjustments for the December 31, 2018, consolidation of Corgan and Smashing.

Placid Lake Corporation acquired 80 percent of the outstanding voting stock of Scenic, Inc., on January 1, 2017, when Scenic had a net book value of $450,000. Any excess fair value was assigned to intangible assets and amortized at a rate of $8,000 per year.

Placid Lake's 2018 net income before consideration of its relationship with Scenic (and before adjustments for intra-entity sales) was $350,000. Scenic reported net income of $160,000. Placid Lake declared $150,000 in dividends during this period; Scenic paid $45,000. At the end of 2018, selected figures from the two companies' balance sheets were as follows:

During 2017, intra-entity sales of $100,000 (original cost of $52,000) were made. Only 20 percent of this inventory was still held within the consolidated entity at the end of 2017. In 2018, $140,000 in intra-entity sales were made with an original cost of $64,000. Of this merchandise, 30 percent had not been resold to outside parties by the end of the year.

Each of the following questions should be considered as an independent situation for the year 2018.

1. What is consolidated net income for Placid Lake and its subsidiary?

2. If the intra-entity sales were upstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?

3. If the intra-entity sales were downstream, how would consolidated net income be allocated to the controlling and noncontrolling interest?

4. What is the consolidated balance in the ending Inventory account?

5. Assume that no intra-entity inventory sales occurred between Placid Lake and Scenic. Instead, in 2017, Scenic sold land costing $35,000 to Placid Lake for $60,000. On the 2018 consolidated balance sheet, what value should be reported for land?

1. f-1. Assume that no intra-entity inventory or land sales occurred between Placid Lake and Scenic. Instead, on January 1, 2017, Scenic sold equipment (that originally cost $150,000 but had a $65,000 book value on that date) to Placid Lake for $90,000. At the time of sale, the equipment had a remaining useful life of five years. What worksheet entries are made for a December 31, 2018, consolidation of these two companies to eliminate the impact of the intra-entity transfer?

2. f-2. For 2018, what is the noncontrolling interest’s share of Scenic’s net income?

With the expansion of international business and global capital markets, the business community have shown an increased interest in single high-quality accounting standards. do you agree?

Tony's Tire and Auto Repair has two divisions split up by region—a Southern Division and a Northern Division. The following segmented income statement is for the most recent fiscal year ended December 31:

Tony's Tire and Auto Repair
Segmented Income Statements

Tony's Tire and Auto Repair
Segmented Balance Sheet Statements

1. Calculate average operating assets for each division. (Hint: Land held for sale is not an operating asset.)
2. Calculate ROI for each division.
3. What does the ROI tell you about each division at Tony's Tire and Auto Repair?
4. Assuming the cost of capital is 6%, calculate residual income (RI) for each division. How should this information be used to evaluate each division manager?
5. Assuming the cost of capital is still 6% and that management wants to make three adjustments to calculate EVA, apply the following adjustments:
   • Adjustment 1: Marketing costs will be capitalized and amortized over several years. On the balance sheet, average operating assets will increase by the unamortized amount of $73,500 for the Southern Division and $2,940,000 for the Northern Division. On the income statement, marketing expense for the year will be added back to operating income; marketing amortization expense for 1 year will be deducted. Assume that marketing amortization expense for the year is $31,500 for the Southern Division and $1,260,000 for the Northern Division. No adjustments will be made for previous years' marketing expenditures.
   • Adjustment 2: Land held for sale is not an operating asset and thus is deducted from average operating assets.
   • Adjustment 3: All current liabilities are noninterest bearing and thus are deducted from average operating assets.
6. Calculate EVA for each division.
7. What does the EVA show for each division?

When production of a product is started you know a % of those are going to fail and be returned to the store which you will have to credit your customer for. When you are spreading out the cost, do you add a set % to your part cost knowing that you are going to have some that fail in the field?