The number of X-rays taken and X-ray costs over the last nine months in a hospital are given below:

Month X-Rays Taken X-Ray Costs

January 6,250 $28,000

February 7,000 $29,000

March 5,000 $23,000

April 4,250 $20,000

May 4,500 $22,000

June 3,000     $17,000

July 3,750 $18,000

August 5,500 $24,000

September 6,750    $28,500

Using the high-low method, what is the hospital’s estimated monthly fixed X-ray cost?

Break-Even Sales Under Present and Proposed Conditions

Howard Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows:

The division of costs between variable and fixed is as follows:

Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable costs.

Required:

1. Determine the total fixed costs and the total variable costs for the current year.

2. Determine (a) the unit variable cost and (b) the unit contribution margin for the current year.

3. Compute the break-even sales (units) for the current year.
units

4. Compute the break-even sales (units) under the proposed program for the following year.
units

5. Determine the amount of sales (units) that would be necessary under the proposed program to realize the $692,500 of operating income that was earned in the current year.
units

6. Determine the maximum operating income possible with the expanded plant.
$

7. If the proposal is accepted and sales remain at the current level, what will the operating income or loss be for the following year?
$   

8. Based on the data given, would you recommend accepting the proposal?

1. In favor of the proposal because of the reduction in break-even point.
2. In favor of the proposal because of the possibility of increasing operating income.
3. In favor of the proposal because of the increase in break-even point.
4. Reject the proposal because if future sales remain at the current level, the operating income will increase.
5. Reject the proposal because the sales necessary to maintain the current operating income would be below the current year sales.

Europa Publications, Inc. specializes in reference books that keep abreast of the rapidly changing political and economic issues in Europe. The results of the company’s operations during the prior year are given in the following table. All units produced during the year were sold. (Ignore income taxes.)

Required:

1-a. Prepare a traditional income statement for the company.

1-b. Prepare a contribution income statement for the company.

2. What is the firm’s operating leverage for the sales volume generated during the prior year?

3. Suppose sales revenue increases by 12 percent. What will be the percentage increase in net income?

4. Which income statement would an operating manager use to answer requirement (3)?

Req. 1A

Req. 1B

Req. 2

What is the firm’s operating leverage for the sales volume generated during the prior year? (Round your answer to 2 decimal places.)

Req. 3

Suppose sales revenue increases by 12 percent. What will be the percentage increase in net income? (Do not round intermediate calculations. Round your answer to 1 decimal place.)

Req. 4

Which income statement would an operating manager use to answer requirement (3)?

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December:

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

2. Prepare On Company's statement of cost of goods manufactured for December.

3. Prepare On Company's income statement for December.

At the beginning of the current season on April 1, the ledger of Kokott Pro Shop showed Cash $3,000; Inventory $4,000; and Common Stock $7,000. These transactions occurred during April 2019.

Apr. 5Purchased golf bags, clubs, and balls on account from Hogan Co. $1,200, FOB shipping point, terms 2/10, n/60.

7Paid freight on Hogan Co. purchases $50.

9Received credit from Hogan Co. for merchandise returned $100.

10Sold merchandise on account to customers $600, terms n/30.

12Purchased golf shoes, sweaters, and other accessories on account from Duffer Sportswear $450, terms 1/10, n/30.

14Paid Hogan Co. in full.

17Received credit from Duffer Sportswear for merchandise returned $50.

20Made sales on account to customers $600, terms n/30.

21Paid Duffer Sportswear in full.

27Granted credit to customers for clothing that had flaws $35.

30Received payments on account from customers $600.

-PREPARE A TRIAL BALANCE ON APRIL 30 ,2019 DEBITS AND CREDITS

The production department of Zan Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

In addition, 15,750 grams of raw materials inventory is on hand at the start of the 1st Quarter and the beginning accounts payable for the 1st Quarter is $5,600.

Each unit requires 7 grams of raw material that costs $1.20 per gram. Management desires to end each quarter with an inventory of raw materials equal to 25% of the following quarter’s production needs. The desired ending inventory for the 4th Quarter is 8,000 grams. Management plans to pay for 60% of raw material purchases in the quarter acquired and 40% in the following quarter. Each unit requires 0.20 direct labor-hours and direct laborers are paid $15.50 per hour.

Required:

1-a. Prepare the company’s direct materials budget for the upcoming fiscal year. (Round "Unit cost of raw materials" answers to 2 decimal places.) Please also insert the year column after Quarter 4

*The chart ends after cost of raw materials to be purchased*

1-b. Prepare a schedule of expected cash disbursements for purchases of materials for the upcoming fiscal year.

2. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor-hours per unit" and "Direct labor cost per hour" answers to 2 decimal places.) Please also add the year column next to it. Thank you!

what is the difference between audit risk and engagement risk? Accounting Audit. a couple of paragraphs

explain the occurrence and completeness assertions? and how does failure to meet each of those two assertions affect the financial statements? these are two of the eight management assertions. Accounting auditing

list the three objectives of internal control and the five components of internal control and a very brief description of the five components.

What are the management assertion and its definitions?

Early in 2014, Jones Industries was formed with authorization to issue 125,000 shares of $20 par value common stock and 15,000 shares of $100 par value cumulative preferred stock.  During 2014, all the preferred stock was issued at par, and 90,000 shares of common stock were sold for $35 per share.  The preferred stock is entitled to a dividend equal to 5 percent of its par value before any dividends are paid on the common stock.

During its first five years of business (2014 through 2018), the company earned income totaling $3,850,000 and paid dividends of 55 cents per share each year on the common stock outstanding.  

On January 2, 2016, the company purchased 2,000 shares of its own common stock in the open market for $80,000.  On January 2, 2018, it reissued 1,200 shares of this treasury stock for $60,000. The remaining 800 shares were still held in treasury at December 31, 2018.

1. Distinguish between paid-in capital and retained earnings of a corporation.  Why is such a distinction useful?
   1. What are the major transactions and other financial activities that impact the amount of paid-in capital of a corporation?
   2. Identify for each major type of transaction or activity whether it increasesor decreasesthe amount of paid-in-capital.

DELSING CANNING COMPANY IS CONSIDERING AN EXPANSION OF ITS FACILITIES. ITS CURRENT INCOME STATEMENT IS AS FOLLOWS:

SALES............................................................................ 7,100,100
VARIABLE COSTS (50% OF SALES).............................3,550,000
FIXED COSTS.................................................................2,010,000
EBIT.................................................................................1,540,000
INTEREST (10% COST)....................................................620,000
EBT.....................................................................................920,000
TAX (30%)..........................................................................276,000
EAT.....................................................................................644,000
SHARES COMMON STOCK..............................................410,000
EPS...........................................................................................1.57

The company is currently financed with 50% debt and 50% equity (common stock, par value of $10). In order to expand the facilities, Mr. Delsing estimates a need for $4.1 million in additional financing. His investment banker has laid out three plans for him to consider:
1) Sell $4.1 million of debt at 11%
2) Sell $4.1 million of common stock at $20 per share
3) Sell $2.05 million of debt at 10% and $2.05 million of common stock at $25 per share.

Variable costs are expected to stay at 50% of sales, while fixed expenses will increase to $2,510,000 per year. Delsing is not sure how much this expansion will add to sales, but he estimates sales will rise by $2.05 million per year for the next 5 years.

Delsing is interested in a thorough analysis of his expansion plans and methods of financing. He would like you to analyze the following:

a. The break-even point for operating expenses before and after expansion (in sales dollars). ENTER YOUR ANSWERS IN DOLLARS NOT IN MILLIONS, I.E. $1,234,567.

b. The degree of operating leverage before and after expansion. Assume sales of $7.1 million before expansion, and $8.1 million after expansion. Use the formula
DOL = (S - TVC) / (S - TVC - FC). ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

c. The degree of financial leverage before expansion. ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

d. The degree of financial leverage for all three methods after expansion. Assume sales of $8.1 million for this question. ROUND YOUR ANSWERS TO 2 DECIMAL PLACES.

e. Compute EPS under all three methods of financing the expansion at $8.1 million in sales (first year) and $11.0 million in sales (last year). ROUND ANSWERS TO 2 DECIMAL PLACES.

FIFO and LIFO Costs Under Perpetual Inventory System

The following units of an item were available for sale during the year:

The firm uses the perpetual inventory system, and there are 14 units of the item on hand at the end of the year.

a. What is the total cost of the ending inventory according to FIFO?
$

b. What is the total cost of the ending inventory according to LIFO?
$

Trecek Corporation incurs research and development costs of $650,000 in 2017, 30 percent of which relate to development activities subsequent to IAS 38 criteria having been met that indicate an intangible asset has been created. The newly developed product is brought to market in January 2018 and is expected to generate sales revenue for 10 years.

Assume that a U.S.–based company is issuing securities to foreign investors who require financial statements prepared in accordance with IFRS. Thus, adjustments to convert from U.S. GAAP to IFRS must be made. Ignore income taxes.

Required:

1. Prepare journal entries for research and development costs for the years ending December 31, 2017, and December 31, 2018, under (1) U.S. GAAP and (2) IFRS.

2. Prepare the entry(ies) that Trecek would make on the December 31, 2017, and December 31, 2018, conversion worksheets to convert U.S. GAAP balances to IFRS.

Jordan Technologies, Inc. has three divisions. Jordan has a desired rate of return of 12.0 percent. The operating assets and income for each division are as follows:

Jordan headquarters has $129,000 of additional cash to invest in one of its divisions. The division managers have identified investment opportunities that are expected to yield the following ROIs:

1. . Calculate the residual income:

1. (1) At the corporate (headquarters) level before the additional investment.

2. (2) At the division level before the additional investment.

3. (3) At the investment level.

4. (4) At the division level after the additional investment.

San Lorenzo General Store uses a periodic inventory system and the retail inventory method to estimate ending inventory and cost of goods sold. The following data are available for the month of October 2018:

Required:
Complete the table below to estimate the average cost of ending inventory and cost of goods sold for October.