The total factory overhead for Diva-nation is budgeted for the year at $169,465, divided into four activities: cutting, $18,130; sewing, $34,121; setup, $87,055; and inspection, $30,159. Diva-nation manufactures two types of men’s pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows:

Each product is budgeted for 20,000 units of production for the year.

Marvel Parts, Inc., manufactures auto accessories. One of the company’s products is a set of seat covers that can be adjusted to fit nearly any small car. The company has a standard cost system in use for all of its products. According to the standards that have been set for the seat covers, the factory should work 1,065 hours each month to produce 2,130 sets of covers. The standard costs associated with this level of production are:

During August, the factory worked only 1,050 direct labor-hours and produced 2,700 sets of covers. The following actual costs were recorded during the month:

At standard, each set of covers should require 2.0 yards of material. All of the materials purchased during the month were used in production.

Required:

1. Compute the materials price and quantity variances for August.

2. Compute the labor rate and efficiency variances for August.

3. Compute the variable overhead rate and efficiency variances for August.

(Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)

QUESTIONS TO ANSWER:

1. Materials Price Variance

Materials Quantity Variance

2. Labor Rate Variance

Labor Efficiency Variance

3. Variable Overhead Rate Variance

Variable Overhead Efficiency Variance

Computer Gaming Industries has just started business as a computer-based gaming company. Knowing that small computer businesses rarely remain in business longer than five years, Computer Gaming depreciates all its assets for five years. The assets include a building, integrated circuit shaper, and vehicles. Is this ethical? What impact will its action have on the net income? What, if any, is the correct action?

Way Cool produces two different models of air conditioners. The company produces the mechanical systems in its components department. The mechanical systems are combined with the housing assembly in its finishing department. The activities, costs, and drivers associated with these two manufacturing processes and the production support process follow.

   
Additional production information concerning its two product lines follows.

  
Required:
1. Using ABC, compute the overhead cost per unit for each product line.
2. Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $190 for Model 145 and $116 for Model 212.
3. If the market price for Model 145 is $821.61 and the market price for Model 212 is $498.56, determine the profit or loss per unit for each model.

Using ABC, compute the overhead cost per unit for each product line. (Round your final answers to 2 decimal places.)

Required 1:

Required 2:

Determine the total cost per unit for each product line if the direct labor and direct materials costs per unit are $190 for Model 145 and $116 for Model 212. (Round your final answers to 2 decimal places.)

Required 3:

If the market price for Model 145 is $821.61 and the market price for Model 212 is $498.56, determine the profit or loss per unit for each model. (Round your final answers to 2 decimal places.)

Profit Center Responsibility Reporting

XSport Sporting Goods Co. operates two divisions—the Winter Sports Division and the Summer Sports Division. The following income and expense accounts were provided from the trial balance as of December 31, 20Y9, the end of the fiscal year, after all adjustments, including those for inventories, were recorded and posted:

The bases to be used in allocating expenses, together with other essential information, are as follows:

1. Advertising expense—incurred at headquarters, charged back to divisions on the basis of usage: Winter Sports Division, $508,000; Summer Sports Division, $574,000.
2. Transportation expense—charged back to divisions at a charge rate of $15 per bill of lading: Winter Sports Division, 14,200 bills of lading; Summer Sports Division, 15,600 bills of lading.
3. Accounts receivable collection expense—incurred at headquarters, charged back to divisions at a charge rate of $8 per invoice: Winter Sports Division, 13,200 sales invoices; Summer Sports Division, 15,400 sales invoices.
4. Warehouse expense—charged back to divisions on the basis of floor space used in storing division products: Winter Sports Division, 120,000 square feet; Summer Sports Division, 160,000 square feet.

Prepare a divisional income statement with two column headings: Winter Sports Division and Summer Sports Division. Do not round your interim calculations.

Provide supporting schedules for determining service department charges. If required, round per unit amounts to two decimal places and final answers to the nearest dollar.

Summarize the case- "Tesco: From Troubles to Turnaround". Explain what other companies should learn from Tesco's mistakes?

The balance sheet shows your assets, liabilities, and equity of the business and is a key financial statement to analyze. If a business had cash of $200,000, accounts receivable of $500,000, a loan payable of $1,000,000, and equity of -$300,000, then what would this indicate about the business? What would be your overall thoughts on the health of this company and how could you improve its financial health? Would you want to invest in this company? Lead this company? Why or why not?

The net income of Thomas & Sons, a landscaping company, decreased sharply during 2018. The owner of the company, Jerry Thomas, anticipates the need for a bank loan in 2019. Late in 2018, Jerry instructs the company’s accountant to record $2,000 service revenue for landscape services for the McGrath family, even though the services will not be performed until January 2019. Jerry also tells the accountant not to make the following December 31, 2018 adjusting entries: Salaries owed to employees $900 Prepaid insurance that has expired $400

Requirements:

1) Calculate the total dollar amount of the affect on net income for the three suggested actions. Be detailed in your response so that we can follow how you calculated the total and why the amounts included in your total impact net income.

2) Of the four financial statements, which are impacted by the suggestions and where in the statement? Be specific and provide sufficient detail to suport your answer.

Required information

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

Comparative financial statements for Weaver Company follow:

During this year, Weaver sold some equipment for $19 that had cost $31 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $12 that had cost $6 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $40 of its own stock. This year Weaver did not retire any bonds.

1. Using the indirect method, determine the net cash provided by/used in operating activities for this year. (List any deduction in cash and cash outflows as negative amounts.)

2. Using the information in (1) above, along with an analysis of the remaining balance sheet accounts, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.)

A company is evaluating two independent projects for capital investment purposes. If the company has only $85 million to invest, and its required return is 10 percent by how much the company’s value will increase?

All values are in millions.

LaTanya Corporation is planning to issue bonds with a face value of $101,000 and a coupon rate of 6 percent. The bonds mature in seven years. Interest is paid annually on December 31. All of the bonds will be sold on January 1 of this year. (FV of $1, PV of $1, FVA of $1, and PVA of $1) (Use the appropriate factor(s) from the tables provided. Round your final answer to whole dollars.) Required: Compute the issue (sale) price on January 1 of this year for each of the following independent cases: a. Case A: Market interest rate (annual): 6 percent. b. Case B: Market interest rate (annual): 4 percent c. Case C: Market interest rate (annual): 7 percent.

Assess the key ratios for profitability, liquidity, and solvency used by financial analysts to evaluate the financial performance of Target. How do you indicate one (1) ratio from each of the three (3) categories (profitability, liquidity, and solvency) that you believe to be most indicative of future performance. How do I use actual ratios for Target?

Cardinal Company is considering a five-year project that would require a $2,945,000 investment in equipment with a useful life of five years and no salvage value. The company’s discount rate is 18%. The project would provide net operating income in each of five years as follows:

___________________________________________

6. What is the project’s internal rate of return? (Round your answer to nearest whole percent.)

7. What is the project’s payback period? (Round your answer to 2 decimal places.)

8. What is the project’s simple rate of return for each of the five years? (Round your answer to 2 decimal places.)

13. Assume a postaudit showed that all estimates (including total sales) were exactly correct except for the variable expense ratio, which actually turned out to be 45%. What was the project’s actual net present value? (Negative amount should be indicated by a minus sign. Round discount factor(s) to 3 decimal places, intermediate calculations and final answer to the nearest whole dollar amount.)

Prepare the journal entries for these transactions.

1) Dur Company purchased equipment on January 2, 2013, for $112,000. The equipment had an estimated useful life of 5 years with an estimated salvage value of $12,000. Dur uses straight-line depreciation on all assets. On January 2, 2017, Dur exchanged this equipment plus $12,000 in cash for newer equipment. The old equipment has a fair value of $50,000. (Assume that the exchange has commercial substance.)

2) Same transaction except (The exchange lacks commercial substance).

3) Cheng Company traded a used truck for a new truck. The used truck cost $30,000 and has accumulated depreciation of $27,000. The new truck is worth $37,000. Cheng also made a cash payment of $36,000. Prepare Cheng's entry to record the exchange. (The exchange lacks commercial substance.)

4) Slaton Corporation traded a used truck for a new truck. The used truck cost $20,000 and has accumulated depreciation of $17,000. The new truck is worth $35,000. Slaton also made a cash payment of $33,000. Prepare Slaton's entry to record the exchange. (The exchange lacks commercial substance.)

a. The initial cost of the extraction equipment is $2,500,000. In addition to this cost, the equipment will require a large concrete foundation at a cost of $300,000. The vendor has quoted an additional cost of $200,000 to install and test the equipment. These costs are all considered part of the cost of acquiring the equipment.

b.The useful life of the equipment is 10 years with no salvage value at the end of this period. However, for tax purposes, the equipment will be classified as 7year property and use the following MACRS depreciation allowances (half year convention) for computing tax depreciation deductions:

Percentage Of Original Year Cost

1 . . . . . . . . . . 14.3%

2 . . . . . 24.5

3 . . . . . . . . . . 17.5

4 . . . . . . . . . . 12.5

5 . . . . . . . . . . 8.9

6 . . . . . . . . . .8.9

7 . . . . . . . . . . 8.9

8 . . . . . . . . . .4.5

100.0%

c. Using the new equipment, 250 pounds of platinum can be extracted annually for the next 10 years from the previously inaccessible area of the mine.

d.The cost to extract and separate platinum from the ore is $4,000 per pound of platinum. After separation, the platinum must undergo further processing and testing that costs $1900 per pound of platinum. These are all out of pocket, variable costs.

e.Two skilled technicians will be hired to operate the new equipment. The total salary and fringe benefit expense for these two employees will be $200,000 annually over the 10 years.

f.Periodic maintenance on the equipment is expected to cost $175,000 per year.

g.The project requires an investment in additional working capital of $300,000. This working capital would be released for use elsewhere at the conclusion of the project in 10 years.

h.Environmental and safety regulations require that the mine be extensively restored and toxic substances be safely disposed at the conclusion of the project. The cost of environmental remediation work is expected to be $4,500,000

i.The current market price of platinum is 12,800 per pound

j.The tax rate is 21% and it uses an 18% after tax discount rate (minimum required rate of return)

Question:

2.