What are cost drivers? How do cost drivers relate to cost pools? What are some cost pools? Name two or three different cost drivers for each of these cost pools.

What are value-added processes? How do you determine if a process adds value? How does identifying value-added processes help a company run more efficiently and effectively?

Weston Products manufactures an industrial cleaning compound that goes through three processing departments—Grinding, Mixing, and Cooking. All raw materials are introduced at the start of work in the Grinding Department. The Work in Process T-account for the Grinding Department for May is given below:

The May 1 work in process inventory consisted of 44,000 pounds with $64,680 in materials cost and $23,320 in conversion cost. The May 1 work in process inventory was 100% complete with respect to materials and 30% complete with respect to conversion. During May, 355,000 pounds were started into production. The May 31 inventory consisted of 123,000 pounds that were 100% complete with respect to materials and 60% complete with respect to conversion. The company uses the weighted-average method in its process costing system.

Required:

1. Compute the Grinding Department's equivalent units of production for materials and conversion in May.

2. Compute the Grinding Department's costs per equivalent unit for materials and conversion for May.

3. Compute the Grinding Department's cost of ending work in process inventory for materials, conversion, and in total for May.

4. Compute the Grinding Department's cost of units transferred out to the Mixing Department for materials, conversion, and in total for May.

Menlo Company distributes a single product. The company’s sales and expenses for last month follow: Total Per Unit Sales $ 608,000 $ 40 Variable expenses 425,600 28 Contribution margin 182,400 $ 12 Fixed expenses 151,200 Net operating income $ 31,200 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? 2. Without resorting to computations, what is the total contribution margin at the break-even point? 3-a. How many units would have to be sold each month to attain a target profit of $75,600? 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. 5. What is the company’s CM ratio? If sales increase by $83,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Highlands Company uses the weighted-average method in its process costing system. It processes wood pulp for various manufacturers of paper products. Data relating to tons of pulp processed during June are provided below:  

Required:  

1. Compute the number of tons of pulp completed and transferred out during June.

2. Compute the equivalent units of production for materials and for labor and overhead for June.

Harry and Sons’ Law Offices opened on January 1,2018. During the first year of business the company had the following transactions.

January 2: The owners Invested 300,000 (the par value of the stock) into the business and acquired 30,000 shares of common stock in return.

January 15: Harry and Sons’ bought an office building in the amount of $85,000. The company took out a long-term note from the bank to finance the purchase.

February 12: Harry and Son’ billed clients for $85,000 of services performed.

March 1: Harry and Sons’ took out a two-year insurance policy, which it paid cash for in the amount of $18,000.

March 10: harry collected $30,000 from clients toward the outstanding accounts receivable balance.

May 13: Harry received cash payments totaling $270,000 for legal services-$55,000 was for services previously billed to customers on February 12 and the remainder was for services provided in May not yet recorded.

June 10: Harry purchased office supplies in the amount of $25,000, all on credit.

July 15: Harry paid wages of $24,000 in cash to office staff workers.

August 8: Harry paid off the $25000 balance owed to a supplier for the purchase made June 10.

September 3:Harry and Sons’ purchased $5,000 of office supplies in cash.

September 20: The company paid $14,000 cash for utilities.

October 1: Harry and Sons’ paid wages in the amount of $22,000 to office workers.

December 1: Harry and Sons’ received cash payments from clients in the amount of $310,000 for services to be performed in the upcoming months.

December 31: Harry declared and paid a $18,000 dividend.

*Additional Information

• Of the cash payments received from customers on December 1, half of these services were performed in December and half relates to future services to be rendered in the following year.   

• Ten months of the insurance policy expired by the end of the year.

• Depreciation for the full year should be recorded on the building purchased. the building has a 20-year life and no residual value. Depreciation will be recorded on a straight-line bases.

• A total of $12,000 of office supplies remains on hand at the end of the year.

• Interest Expense in the amount of $4,250 should be accrued on the note payable.

• Wages in the amount of $48,000 must be accrued at year end to be paid in January.

Harry’s Unadjusted Trial Balance at December 31,2018 is as follows.

Unadjusted Trial Balance

At December 31,2018

Account Debit Credit

Cash $784,000

Office Supplies 30,000

Prepaid Insurance 18,000

Building 85,000

Unearned Service Revenue $310,000

Notes Payable 85,000

Common Stock 300,000

Dividends 18,000

Service Revenue 300,000

Wage Expense 46,000

Utilites Expense 14,000

Total: $995,000 $995,000

Requirements

A) Journalize and post adjusting journal entries for Harry and Sons’.

B) Post the adjusting Journal entries to the T-accounts to obtain the adjusted balances.

C) Prepare a Single-Step Income Statement, Statement of Shareholders Equity, and a Balance Sheet.

1) Determine the price of a $1 million bond issue under each of the following independent assumptions:

2) Prepare journal entries to record the issuance for each of the following the above independent assumptions

3) Only for Assumption 1 and 2, prepare an amortization schedule that determines interest at the effective rate.

For each of the following inventory errors occurring in 2018, determine the effect of the error on 2018's cost of goods sold, net income, and retained earnings using understated (U), overstated (O), or no effect (NE). Assume that the error is not discovered until 2019 and that a periodic inventory system is used. Ignore income taxes.

Goddard Company has used the FIFO method of inventory valuation since it began operations in 2015. Goddard decided to change to the average cost method for determining inventory costs at the beginning of 2018. The following schedule shows year-end inventory balances under the FIFO and average cost methods:

Required:
1. Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the average cost method.
2. How much higher or lower would cost of goods sold be in the 2017 revised income statement?

• Required 1

Ignoring income taxes, prepare the 2018 journal entry to adjust the accounts to reflect the average cost method. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)

Journal entry worksheet

• Record the adjustment necessary to reflect the average cost method.

Note: Enter debits before credits.

• Required 2

How much higher or lower would cost of goods sold be in the 2017 revised income statement?

What is activity based costing vs lean costing?

In 2018, Rashaun (62 years old) retired and planned on immediately receiving distributions (making withdrawals) from his traditional IRA account. The balance of his IRA account is $210,000 (before reducing it for withdrawals/distributions described below). Over the years, Rashaun has contributed $57,790 to the IRA. Of his $57,790 contributions, $41,790 was nondeductible and $16,000 was deductible. Assume Rashaun did not make any contributions to the account during 2018. (Do not round intermediate calculations. Round your final answers to the nearest whole dollar amount.)

a. If Rashaun currently withdraws $20,000 from the IRA, how much tax will he be required to pay on the withdrawal if his marginal tax rate is 24 percent?

b. If Rashaun currently withdraws $70,000 from the IRA, how much tax will he be required to pay on the withdrawal if his marginal tax rate is 28 percent?

Current Attempt in Progress

Condensed balance sheet and income statement data for Riverbed Corporation are presented here.

Additional information:

Compute the following ratios for 2021 and 2022.

20) 20. George, a high-bracket taxpayer, wishes to shift some of his own taxable income from corporate bonds he owns to his 25-year-old daughter, Debra, so that Debra rather than George is taxed on the interest. One alternative is to make a gift of the interest, and the other is to make a gift of the bonds themselves. Evaluate the pros and cons of each alternative.

The audit senior on the audit of Frankel Factors is preparing the audit plan for the year ended June 30, 2023. The following notes relate to the payroll application system that went live on January 1, 2023:

1. The new payroll application is more complex than the old system, but its reporting function provides more detail. For example, the new application calculates leave, pension, payroll tax, and employee benefit expenses, as well as the corresponding accruals.
2. Due to the brief time available to implement the new system, the previous application ceased operation on December 31, 2022, and the new application went live on January 1, 2023, without running parallel with the previous application. Staff training and testing of the new application was limited.
3. Access to the master files is restricted to the payroll supervisor and her assistant. Access to transaction files is restricted to payroll staff who are responsible for the processing of bi-weekly and monthly pay.
Prior to the introduction of the new payroll application system, the payroll master file and transaction files were kept in a separate database from the general ledger application. At the end of each month, the IT staff imported transaction data from the database into the general ledger. Management decided to upgrade the existing accounting system due to the frequent problems encountered by IT staff when importing data into the general ledger.

Payroll controls
1. a.Analysis: Based on the information above, explain two concerns about the payroll application's integration with the general ledger application.
2. b.Analysis: Describe (don't just list) one IT application control to ensure the accuracy of the salaries and wages expenses transaction.
3. c.Analysis: Describe (don't just list) one IT application control to ensure the occurrence of the salaries and wages expenses transaction.
4. d. Evaluation: design and describe in details appropriate tests of controls you would use to satisfy yourself about the effectiveness of these internal controls.

Lodi Company is authorized to issue 100,000 shares of no-par, $6 stated-value common stock and 10,000 shares of 9%, $100 par preferred stock. It enters into the following transactions on December 31:

Required:

Chart of Accounts

General Journal

Prepare journal entries to record the transactions on December 31. Memorandum entry is not recorded. Additional Instruction

PAGE 1PAGE 2

GENERAL JOURNAL

Record items 1 and 2 on page 1 and items 3-5 on page 2

Flora's Gifts reported the following current-month data for its only product. The company uses a periodic inventory system, and its ending inventory consists of 90 units—65 units from the January 6 purchase and 25 units from the January 25 purchase. Jan. 1 Beginning inventory 210 units @ $4.50 = $ 945.00 Jan. 6 Purchase 385 units @ $4.30 = 1,655.50 Jan. 17 Purchase 615 units @ $3.80 = 2,337.00 Jan. 25 Purchase 37 units @ $3.50 = 129.50 Totals 1,247 units $ 5,067.00 Determine the cost assigned to ending inventory and to cost of goods sold for the following.