2.
A. How do companies use benchmarking to make important decision?

B. Describe takt time as a tool to implement lean production efficinecy?

Three years ago, Vincent Chow completed his college degree. The economy was in a depressed

state at the time, and Vincent managed to get an offer of only $25,000 per year as a bookkeeper. In

addition to its relatively low pay, this job had limited advancement potential. Since Vincent was an

enterprising and ambitious young man, he instead started a business of his own. He was convinced

that because of changing lifestyles, a drive-through coffee establishment would be profitable. He

was able to obtain backing from his parents to open such an establishment close to the industrial

park area in town. Vincent named his business The Cappuccino Express and decided to sell only

two types of coffee: cappuccino and decaffeinated.

As Vincent had expected, The Cappuccino Express was very well received. Within three

years, Vincent had added another outlet north of town. He left the day-to-day management of each

site to a manager and turned his attention toward overseeing the entire enterprise. He also hired an

assistant to do the record keeping and other selected chores.

REQUIRED

a. Develop an organization chart for The Cappuccino Express.

b. What factors can be expected to have a major impact on the success of The Cappuccino

Express?

c. What major tasks must Vincent undertake in managing The Cappuccino Express?

d. What are the major costs of operating The Cappuccino Express?

e. Vincent would like to monitor the performance of each site manager. What measure(s) of

performance should he use?

f. If you suggested more than one measure, which of these should Vincent select if he could use

only one?

g. Suppose that last year, the original site had yielded total revenues of $146,000, total costs

of $122,000, and hence, a profit of $24,000. Vincent had judged this profit performance to

be satisfactory. For the coming year, Vincent expects that due to factors such as increased

name recognition and demographic changes, the total revenues will increase by 20 percent to

$175,200. What amount of profit should he expect from the site? Discuss the issues involved

in developing an estimate of profit.

Magnetic-Optical Corporation offers a variety of share-based compensation plans to employees. Under its restricted stock unit plan, the company on January 1, 2018, granted restricted stock units (RSUs) representing 5 million of its $1 par common shares to various division managers. The shares are subject to forfeiture if employment is terminated within three years. The common shares have a market price of $30.00 per share on the grant date. Management’s policy is to estimate forfeitures. Required: 1. Determine the total compensation cost pertaining to the RSUs. 2. & 3. Prepare the appropriate journal entries. 4. Suppose Magnetic-Optical expected a 10% forfeiture rate on the RSUs prior to vesting. Determine the total compensation cost.

1. A firm is assumed to use perpetual system which separately determined inventory under FIFO and LIFO and then compare the results.

i) In each space below, place the correct sign (< / > / =) for each comparison by assuming periods of rising prices.

a. FIFO supplies                      ____________ LIFO supplies

b. FIFO cost of sales              ____________ LIFO cost of sales

c. FIFO net profit                    ____________ LIFO net profit

d. FIFO taxable income        ____________ LIFO taxable income

ii) Why the use of LIFO is more preferable by a management compared to FIFO in period of rising prices?

(5)

(Total: 15 marks)

Carmen Company is a corporation that has issued both preferred and common stock. As of January 1, it had 50,000 shares of 2.75%, $100 par, preferred stock outstanding and 250,000 shares of $10 par common stock outstanding.

a. On January 31, the board of directors issues a requirement to purchase 5,000 shares of its common stock at market price. The shares are purchased at a market price of $22 per share.

Journalize the purchase utilizing the cost concept.

b. On March 15, Carmen declares a dividend on preferred stock of $2.75 per share. The date of record is March 25 and the date of payment is March 31.

Journalize these events. If no entry is required, select "No Entry Required" and leave the amount boxes blank.

c. On December 1, Carmen declares a cash dividend on common stock of $0.12 per share. The date of record is December 15 and the date of payment is December 21.

Journalize these events. If no entry is required, select "No Entry Required" and leave the amount boxes blank.

d. On December 27, the board orders that 2,500 shares of the treasury stock purchased in (a) be sold. The sale price is $25 per share.

Journalize this event. If an amount box does not require an entry, leave it blank.

1. Identify the situation below that will result in a favorable variance.

Multiple Choice

• Actual revenue is higher than budgeted revenue.

• Actual revenue is lower than budgeted revenue.

• Actual income is lower than expected income.

• Actual costs are higher than budgeted costs.

• Actual expenses are higher than budgeted expenses.

2 Hassock Corp. produces woven wall hangings. It takes 2 hours of direct labor to produce a single wall hanging. Hassock’s standard labor cost is $12 per hour. During August, Hassock produced 10,000 units and used 21,040 hours of direct labor at a total cost of $250,376. What is Hassock’s labor rate variance for August?

Multiple Choice

• $2,000 favorable.

• $2,104 unfavorable.

• $2,104 favorable.

• $4,160 favorable.

• $2,000 unfavorable.

A flexible budget may be prepared:

Multiple Choice

• Before the operating period only.

• After the operating period only.

• During the operating period only.

• At any time in the planning period.

• Only when the company encounters excessive costs.

Which department is often responsible for the direct materials price variance?

Multiple Choice

• The accounting department.

• The production department.

• The purchasing department.

• The finance department.

• The budgeting department.

Grant Co. uses the following standard to produce a single unit of its product: Variable overhead (2 hrs. per unit @ $4/hr.) Actual data for the month show total variable overhead costs of $190,000, and 23,000 units produced. The total variable overhead variance is:

Multiple Choice

• $6,000F.

• $6,000U.

• $78,000U.

• $78,000F.

• $0.

Using the information below, compute the manufacturing cycle time:

Multiple Choice

• 7.5 hours.

• 6.5 hours.

• 8.0 hours.

• 80.0 hours.

• 7.1 hours.

On August 3, Cinco Construction purchased special-purpose equipment at a cost of $7,377,200. The useful life of the equipment was estimated to be eight years, with an estimated residual value of $10,940.

a. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the straight-line depreciation method (half-year convention).

b. Compute the depreciation expense to be recognized each calendar year for financial reporting purposes under the 200 percent declining-balance method (half-year convention) with a switch to straight-line when it will maximize depreciation expense.

c. Which of these two depreciation methods (straight-line or double-declining-balance) results in the highest net income for financial reporting purposes during the first two years of the equipment’s use?

Corrigan Enterprises is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow.

Corrigan’s selling price is $64 per unit for the universal gismo, which is subject to a 5 percent sales commission. (In the following requirements, ignore income taxes.)

1. How many units must the company sell to break even if Model 6754 is selected? (Do not round intermediate calculations and round your final answer up to nearest whole number.)

2-a. Calculate the net income of the two systems if sales and production are expected to average 41,000 units per year.


2-b. Which of the two systems would be more profitable?

multiple choice

• Model No. 6754

• Model No. 4399

3. Assume Model 4399 requires the purchase of additional equipment that is not reflected in the preceding figures. The equipment will cost $450,000 and will be depreciated over a five-year life by the straight-line method. How many units must Corrigan sell to earn $974,000 of income if Model 4399 is selected? As in requirement 2, sales and production are expected to average 41,000 units per year. (Do not round intermediate calculations and round your final answer up to nearest whole number.)

4. Ignoring the information presented in part 3, at what volume level will the annual total cost of each system be equal? (Do not round intermediate calculations and round your final answer up to nearest whole number.)

1. Timothy Company employs standard costing. The standards and actual operating data for the month are as follows:
   

   Standards
   Direct materials	3.0 pounds per unit @ $4.50 per pound
   Direct labor	5.0 hours per unit @ $10.25 per hour
   Standard quantity allowed	10,500 pounds
   Standard hours allowed	17,500 hours

   Actual
   Direct materials purchased	11,000 pounds @ $4.25 per pound
   Direct materials used	10,700 pounds
   Direct labor	17,300 hours @ $10.20 per hour

   
   The labor efficiency variance is:

   	A.	none of these
   	B.	$2,040 F
   	C.	$2,040 UF
   	D.	$2,050 F
   	E.	$2050 UF

QUESTION 21

1. Timothy Company employs standard costing. The standards and actual operating data for the month are as follows:
   

   Standards
   Direct materials	3.0 pounds per unit @ $4.50 per pound
   Direct labor	5.0 hours per unit @ $10.25 per hour
   Standard quantity allowed	10,500 pounds
   Standard hours allowed	17,500 hours

   Actual
   Direct materials purchased	11,000 pounds @ $4.25 per pound
   Direct materials used	10,700 pounds
   Direct labor	17,300 hours @ $10.20 per hour

   
   The overall direct materials variance is:

   	A.	$500 UF
   	B.	$1,775 F
   	C.	$1,775 UF
   	D.	none of these
   	E.	$500 F

A wholly-owned subsidiary declares and pays a cash dividend. What effect does the dividend have on the consolidated balance sheet?

A. Increases cash and decreases retained earnings.

B. No effect on cash and decreases retained earnings.

C. Decreases cash and decreases retained earnings.

D. No effect on the consolidated balance sheet.

The chief accountant for Eliana City needed to make adjusting entries before preparing the city’s financial statements for calendar year 2019. She wrote a brief paragraph to guide her assistant in making the adjusting entries for the General Fund and then gave her assistant data regarding the accounts that might be affected by the adjustments. Use the following information to make the year-end adjusting journal entries, if needed. Identify the expenditure accounts at the object-of-expenditure level. 1. At December 31, the Property taxes receivable account showed a balance of $420,000, all of which was considered to be collectible. She estimated that $315,000 of that amount would be collected in the first 60 days of 2020. 2. The Health Department has a state grant that requires it to incur expenditures before the city can bill for the grant. The Department incurred $45,000 of expenditures under the grant during the last quarter of 2019 and sent a billing to the state, but the billing has not been recorded. 3. During the last week in December, Eliana’s employees earned $80,000. They will be paid with the first paycheck in 2020. 4. The city received an invoice for $15,000 from its Electricity Proprietary Fund for December electricity services. The invoice, which has not yet been entered in the records, will be paid in early February. 5. City employees are allowed to accumulate up to 30 days’ vacation leave and to get cash for unused leave when they are terminated or retire. The total liability to city employees for earned, but unused, vacation leave increased from $1,210,000 to $1,290,000 during 2019. Two employees retired during the last week of December and will be paid $22,000 for unused leave with their final paychecks in January. 6. Numerous claims have been filed against the city for incidents attributed to several of its departments. Discussions with city attorneys who have been handling the cases indicate that the city could ultimately pay out $1,850,000 in judgments or settlements, an increase of $100,000 over last year’s estimate. As of December 31, settlements amounting to $35,000 were reached with two claimants. They will be paid in January. 7. The city operates a Pension Trust Fund to pay employee benefits. The plan has assets sufficient to pay for 75 percent of its pension liabilities. The city actuary recommended that the city contribute $950,000 to the Trust Fund in 2019. However, the city council appropriated only $300,000. That amount was paid to the Trust Fund in October, and the council made no further appropriation for the year. 8. The city Health Department has a state grant that must be used for a specific purpose, but there are no requirements as to when the grant resources may be used. At December 31, 2019, the unspent balance of the grant was $54,000. NOTE: If no adjusting entry is required for a transaction, select No entry as your answers and leave the Debit and Credit answer blank (zero)

1) Which one of the following would most likely be allocated to products using ABC by McDonald's?

A) Cost of plastic gloves worn by the burger cooks

B) Cost of employees who chop lettuce

C) Cost of tomatoes added to burgers

D) Cost of cups for soft drinks

2) Fixed costs.....

A) increase per unit as total production decreases

B) increase in total as total production increases

C) decrease in total as total production decreases

D) decrease per unit as total production decreases

3) Variable costs...

A) remain constant per unit

B) will stay the same in total

C) increase per unit

D) decrease in total

Excel HW 4: Fox Lake Networking Template

Objective: Create a template to estimate the cost of networking Fox Lake Country Club.

Skills: IF, AND, OR, COUNT, COUNTA, and COUNTIF and Conditional formatting

For the past year, members at Fox Lake Country Club have been complaining about not being able to access the Internet or slow data transmission speeds while at the club. Given your knowledge of spreadsheets, Jeff Lewis, business manager at Fox Lake, has asked you to create an Excel template for estimating the cost of rewiring the club’s facilities. Jeff wants the worksheet to contain some basic input information and automatically calculate an estimated price, so that he can quickly estimate the cost of rewiring Fox Lake’s facilities. The variables to be considered are as follows:

• The dimensions of the building to be networked – length in linear feet
• The condition of existing network equipment, where 0 represents none, where 1 represents excellent, 2 represents reasonable but would consider upgrading, and 3 represents poor condition with immediate updates required.
• Whether or not the facility has existing network equipment (YES or NO)
• Speed of network required

Complete the following:

1. Open a new workbook and save it as “yourlastname”_CostOfNetwork.xlsx. Create a worksheet with the columns and data shown in the table below (see page 2 for the complete table with column headings). Also, include a meaningful title at the top of your worksheet. Ultimately, this worksheet will be used as a template to evaluate competing bids. List all other inputs that are needed for subsequent calculations below the following table.

Fill in the cost per building. Enter all formulas so they can be copied down the column. Remember, your formulas will need to work when new quantities are substituted into the data entry area. Hint: create input cells and reference those cells in your formulas.

2. To the right of the Speed of Network Required column, calculate the cost of new network equipment. Only the buildings with an Existing Equipment value of “No” will require networking equipment. The cost is $40.00 per foot. If no networking equipment is required, a value of $0 should be displayed. Title this column “Cost of New Cable.”

3. In an adjacent column, calculate the additional cost of networking equipment based on the following criteria:
   1. If the Condition of Network Equipment is 0 or 3, then computer equipment (e.g. router, backups, etc) are needed at a cost of $5.00 per foot.
   2. If the Condition of Network Equipment is 2, then computer equipment (e.g. new cables) are needed at a cost of $3.50 per foot.
   3. Otherwise, no new equipment is needed and a value of $0 should be displayed.
   4. Title this column “Additional Equipment Cost.”
4. In an adjacent column, calculate the cost adjustment for the Condition of the Network Equipment based on the following criteria:
   1. If the Speed of Network Required is equal to “1 Gbs” and the Condition of the Network Equipment is a 0, then the additional cost of networking is $4.50 per foot, otherwise there is no additional cost and a value of $0 should be displayed.
   2. Title this column “High-Speed Cost Adjustment.”
5. In an adjacent column, calculate the estimated cost to network each building by summing the values resulting from your previous cost calculations (steps 2-4 in the instructions). Title this column “Estimated Cost of Network before Discount.”
6. Insert a column to the immediate right of the column titled, “Speed of Network Required?.” Enter a formula that determines if (TRUE, FALSE) this is a high-priced facility. A high-priced facility is one that has an Estimated Cost of Network before Discount greater or equal to $6,000. Title this column “High Priced Facility?.”
7. Because larger jobs have certain economies of scale in setup and cleanup, a discount is given based on these estimated values to jobs based on their total size. To the right of “Estimated Cost of Network before Discount,” determine the total discounted price, of the job based on the following:
   1. If the Estimated Cost of Network before Discount is less than $6,000, then there is no discount.
   2. If the Estimated Cost of Network before Discount is at least $6,000 but less than $17,000, then a 7% discount will be given (Hint: multiply the discount % times the Estimated Cost of Network before Discount amount, which is Column J).
   3. If the Estimated Cost of Network before Discount is at least $17,000, then a 10% discount will be given (Hint: multiply the discount % times the Estimated Cost of Network before Discount amount, which is Column J).
   4. Title this column “Discount.”
8. To the right of Discount, calculate the total estimated cost of the network for each building. (Hint: you are subtracting the Discount from the Estimated Cost of Network before Discount). Title this column “Total Estimated Cost of Network.”
9. In the row below your calculations, insert a function that counts the number of facilities.
10. In the next row, insert a function that counts the number of facilities that received a discount.
11. To the right of these two functions enter the text: “Number of Facilities” and “Number of Facilities Receiving a Discount,” respectively.
12. Format your worksheet so that it is easy to read and the information is clearly identifiable.
13. Be sure to set up your worksheet to include data inputs, so that your results can be changed quickly when an input is altered. For example, if the discount percent changes from 5% to 7%, your results automatically adjust by this change.

Log into Blackboard and Click on Assessments/Lab Assignment 5: Fox Lake Networking. Use your completed spreadsheet to answer the following 10 questions:

1. How many buildings are considered "High Priced?"

2. What is the Cost of New Cable for the Dining Hall?

3. What is the Total Estimated Cost of Network for all buildings combined?

4. What is the total Discount given for all buildings combined?

5. Which building had the highest Additional Equipment Cost?

6. Which building received the largest discount?

7. How many buildings have a Total Estimated Cost of Network = $0.00?

8. Currently, the cost for not having Existing Equipment is $40. What does it need to be for the Total Estimated Cost of Network for all buildings combined to equal $45,000?

9. What would be the Total Estimated Cost of Network for all buildings combined if, in Step 2, the cost for not having network equipment is decreased to $35.00 per foot?

10. With the cost for not having Existing Equipment changed back to $40, what is the total Discount for all buildings combined if the discount % dropped from 10% to 8.5% for all buildings that had an Estimated Cost of Network before Discount >= $17000?

Edison Leasing leased high-tech electronic equipment to Manufacturers Southern on January 1, 2018. Edison purchased the equipment from International Machines at a cost of $139,107. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided.)

Prepare a lease amortization schedule and appropriate entries for Edison Leasing from the beginning of the lease through January 1, 2019. Edison’s fiscal year ends December 31.

1. 1/1/2018 Record the lease.

2. 1/1/2018 Record cash received

3. 4/1/2018 Record cash received.

4. 7/1/2018 Record cash received.

5. 10/1/2018 Record cash received.

6. 12/31/2018 Record interest receivable.

7. 1/1/2019 Record cash received.