Vitex, Inc. manufactures a popular consumer product and it has provided the following data excerpts from its standard cost system:

*Applied to Work in Process during the period.

The company's manufacturing overhead cost is applied to production on the basis of direct labor-hours. All of the materials purchased during the period were used in production. Work in process inventories are insignificant and can be ignored.

Required:

1. How many units were produced last period?

2. How many pounds of direct material were purchased and used in production?

3. What was the actual cost per pound of material? (Round your answer to 2 decimal places.)

4. How many actual direct labor-hours were worked during the period?

5. What was the actual rate paid per direct labor-hour? (Round your answer to 2 decimal places.)

6. How much actual variable manufacturing overhead cost was incurred during the period?

The manager of a book store at City College purchases T-shirts from a vendor at a cost of $25 per shirt. The bookstore incurs an ordering cost of $100 per order, and the annual holding cost is 18% of the purchase cost of a T-shirt. The store manager estimates that the demand for T-shirts for the upcoming year will be 1,800 shirts. The store operates 50 weeks per year, five days per week.

The vendor is willing to offer quantity discounts to the bookstore according to the following schedule:

a. Determine the optimal order quantity and the total annual inventory cost.

4.

Vertical Analysis of Income Statement

For 20Y2, Tri-Comic Company initiated a sales promotion campaign that included the expenditure of an additional $23,000 for advertising. At the end of the year, Lumi Neer, the president, is presented with the following condensed comparative income statement:

Required:

1. Prepare a comparative income statement for the two-year period, presenting an analysis of each item in relationship to sales for each of the years. Enter percentages as whole numbers. Enter all amounts as positive numbers.

2. The vertical analysis indicates that the costs other than selling expenses (cost of goods sold and administrative expenses)   as a percentage of sales. As a result, net income as a percentage of sales  . The sales promotion campaign appears to have been  . While selling expenses as a percent of sales   slightly, the   cost was more than made up for by   sales.

3. On the basis of the following data taken from the Adjusted Trial Balance columns of the work sheet for the year ended March 31 for Boles Athletic Company, journalize the four closing entries.

4. Merchandise with a list price of $7,500 is purchased on account, terms FOB shipping point, 1/10, n/30. The

   seller prepaid transportation costs of $300. Prior to payment, $2,000 of the merchandise is returned. The

   correct amount is paid within the discount period.

Record the foregoing transactions of the buyer in the sequence indicated below.

Selected information from the adjusted trial balance of Warmers Inc. as of December 31, 2019, follows:

1. Insurance Expense: in proportion to the total of the furniture and fixtures (the gross assets before depreciation) and the ending inventory in the departments. These totals are as follows:

2. Rent Expense and Utilities Expense: on the basis of floor space occupied, as follows:

3. Office Salaries Expense, Other Office Expenses, and Depreciation Expense—Office Equipment: on the basis of the gross sales in each department.

4. Uncollectible Accounts Expense: on the basis of net sales in each department.

5. Depreciation Expense—Furniture and Fixtures: in proportion to cost of furniture and fixtures in each department. These costs are as follows.

Prepare a departmental income statement for the year ended December 31, 2019. The bases for allocating indirect expenses are given above.

Sheffield Inc. was authorized to issue 100000 £10 par value ordinary shares. As of December 31, 2020, the company had issued 54000 shares at an average price of £22 per share. During 2020, the company felt that the shares were undervalued so it purchased 9800 treasury shares at £16 per share. When the share price rebounded later in the year, the company sold 4200 of the treasury shares for £24 per share. Retained earnings was £1666000 at December 31, 2020.

Total equity at December 31, 2020 is

£2697200.

£2994000.

£2764400.

£2798000.

Comprehensive Master (Operating) Budget

Bee Gee Distributors, a wholesale company, is considering whether to open a new distribution center near Bowling Green, Ohio. The center would open January 1, 2020. The economic outlook is reasonable, but extensive advance planning is required if such a commitment is to be made. As a part of the planning process, The Board of Directors requires a Master (i.e. Operating) Budgetfor the center’s first quarter of operations(i.e. January, February & March of 2020).  In order to prepare anybudget, management must make reasonable assumptions about expected sales, inventory levels and cash flows.  

SALES BUDGET: “What is the Profit Plan?”

        ** It all starts with a sales forecast **

a.     January sales are estimated to be $400,000 of which $100,000 (25%) will be cash and $300,000 will be on credit.  Management expects the above sales pattern to continue with an overall grow rate of 10% per month.  Prepare a sales budget.

b.     The company expects to collect 100% of the accounts receivable in the month following the month of the sale.  Prepare a schedule of expected cash receipts.

c.     Use the information developed above in requirements a and bto determine the amount of accounts receivable on the March 31 pro forma balance sheet and the amount of sales on the first quarter pro forma income statement.

_____________________________________________________________________

PURCHASES BUDGET: “What are our total needs, less what do we have”?

d.     Cost of goods sold will be 60% of sales.  Company policy is to budget an ending inventory balance equal to 25% of the next month’s projected cost of goods sold.  Prepare an inventory purchases budget.

Note: For March analysis needs, Aprilcost of goods sold is expected to be $314,000.

e.     All inventory purchases are on account.  The company pays 70% of accounts payable in the month of purchase. It pays the remaining 30% in the following month.  Prepare a schedule of expected cash payments for inventory purchases.

f.     Use the information developed above in requirements d and eto determine the amount of cost of goods sold on the first quarter pro forma income statement and the amounts of ending inventory and accounts payable on the March 31 pro forma balance sheet.

ADMINISTRATIVE & SALES EXPENSE BUDGET:

g.     Budgeted monthly selling and administrative expenses are:

         *The capital expenditures budget shows that Bee Gee must purchase $100,000 of equipment on January 1 to establish the new center.  Since the equipment supplier allows a thirty-day trial period, assume Bee Gee will pay for the equipment in January (i.e. by 1/31).  Using Straight-line depreciation, the equipment is expected to have a 10-year useful life and a $10,000 salvage value.  

            SELLING AND ADMINISTRATIVE EXPENSE BUDGET:

h.     Sales commissions and utilities are paid in the month after the month in which they are incurred.  All other expenses are paid in the month in which they are incurred.  Prepare a schedule of cash payments for selling and administrative expenses.

Please do E,F,G,H

Kubin Company’s relevant range of production is 21,000 to 25,000 units. When it produces and sells 23,000 units, its average costs per unit are as follows:

Required:

1. For financial accounting purposes, what is the total amount of product costs incurred to make 23,000 units?

2. For financial accounting purposes, what is the total amount of period costs incurred to sell 23,000 units?

3. For financial accounting purposes, what is the total amount of product costs incurred to make 25,000 units?

4. For financial accounting purposes, what is the total amount of period costs incurred to sell 21,000 units?

Preparing a Direct Materials Purchases Budget

Tulum Inc. makes a Mexican chocolate mix sold in 4-pound boxes. Planned production in units for the first 3 months of the coming year is:

Each box requires 4.2 pounds of chocolate mix and one box. Company policy requires that ending inventories of raw materials for each month be 10% of the next month’s production needs. That policy was met for the ending inventory of December in the prior year. The cost of 1 pound of chocolate mix is $1.50. The cost of one box is $0.10.

Required:

1. Calculate the ending inventory of chocolate mix in pounds for December of the prior year and for January and February. What is the beginning inventory of chocolate mix for January?

2. Prepare a direct materials purchases budget for chocolate mix for the months of January and February.

3. Calculate the ending inventory of boxes for December of the prior year and for January and February. Round your answers to the nearest whole unit.

4. Prepare a direct materials purchases budget for boxes for the months of January and February.

Paulis Kennel uses tenant-days as its measure of activity; an animal housed in the kennel for one day is counted as one tenant-day. During February, the kennel budgeted for 2,500 tenant-days, but its actual level of activity was 2,480 tenant-days. The kennel has provided the following data concerning the formulas used in its budgeting and its actual results for February:

Data used in budgeting:

Actual results for February:

The activity variance for net operating income in February would be closest to:

Garrison 16e Rechecks 2018-06-07

Multiple Choice

• $236 U

• $264 F

• $236 F

• $264 U

Preparation of a complete master budget

The management of Zigby Manufacturing prepared the following estimated balance sheet for March, 2015:

To prepare a master budget for April, May, and June of 2015, management gathers the following information:

• Sales for March total 20,500 units. Forecasted sales in units are as follows: April, 20,500; May, 19,500; June, 20,000; and July, 20,500. Sales of 240,000 units are forecasted for the entire year. The product's selling price is $23.85 per unit and its total product cost is $19.85 per unit

• Company policy calls for a given month's ending raw materials inventory to equal 50% of the next month's materials requirements. The March 31 raw materials inventory is 4,925 units, which complies with the policy. The expected June 30 ending raw materials inventory is 4,000 units. Raw materials cost $20 per unit. Each finished unit requires 0.50 units of raw materials.

• Company policy calls for a given month's ending finished goods inventory to equal 80% of the next month's expected unit sales. The March 31 finished goods inventory is 16,400 units, which complies with the policy.

• Each finished unit requires 0.50 hours of direct labor at a rate of $15 per hour.

• Overhead is allocated based on direct labor hours. The predetermined variable overhead rate is $2.70 per direct labor hour. Depreciation of $20,000 per month is treated as fixed factory overhead.

• Sales representatives' commissions are 8% of sales and are paid in the month of the sales. The sales manager's monthly salary is $3,000.

• Monthly general and administrative expenses include $12,000 administrative salaries and 0.9% monthly interest on the long-term note payable.

• The company expects 30% of sales to be for cash and the remaining 70% on credit. Receivables are collected in full in the month following the sale (none is collected in the month of the sale).

• All raw materials purchases are on credit, and no payables arise from any other transactions. One month's raw materials purchases are fully paid in the next month.

• The minimum ending cash balance for all months is $40,000. If necessary, the company borrows enough cash using a short-term note to reach the minimum. Short-term notes require an interest payment of 1% at each month-end (before any repayment). If the ending cash balance exceeds the minimum, the excess will be applied to repaying the short-term notes payable balance.

• Dividends of $10,000 are to be declared and paid in May.

• No cash payments for income taxes are to be made during the second calendar quarter. Income tax will be assessed at 35% in the quarter and paid in the third calendar quarter.

• Equipment purchases of $130,000 are budgeted for the last day of June.

Required

Prepare the following budgets and other financial information as required. All budgets and other financial information should be prepared for the second calendar quarter, except as otherwise noted below. Round calculations up to the nearest whole dollar, except for the amount of cash sales, which should be rounded down to the nearest whole dollar.

1. General and administrative expense budget.
2. Cash budget.

Check  

(2) Units to produce: April, 19,700; May, 19,900

(3) Cost of raw materials purchases, April, $198,000

(5) Total overhead cost, May, $46,865

(8) Ending cash balance: April, $83,346; May, $124,295

(10) Budgeted total assets, June 30: $1,299,440

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years: Date Purchased Shares Basis 7/10/2008 500 $ 20,000 4/20/2009 400 18,320 1/29/2010 600 20,160 11/02/2012 350 13,720 If Dahlia sells 1,100 shares of Microsoft for $66,000 on December 20, 2018, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.)

a. She uses the FIFO method.

Dahlia is in the 32 percent tax rate bracket and has purchased the following shares of Microsoft common stock over the years:

If Dahlia sells 1,100 shares of Microsoft for $66,000 on December 20, 2018, what is her capital gain or loss in each of the following assumptions? (Do not round intermediate calculations.)

b. She uses the specific identification method and she wants to minimize her current year capital gain.

List the four health care funding methods used in Canada. State the health care funding method used in your jurisdiction and describe the payroll implication, if any.