Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.
| On Company |
Off Company |
|||
| Materials inventory, December 1 | $58,870 | $80,060 | ||
| Materials inventory, December 31 | (a) | 90,470 | ||
| Materials purchased | 149,530 | (a) | ||
| Cost of direct materials used in production | 157,770 | (b) | ||
| Direct labor | 221,940 | 180,140 | ||
| Factory overhead | 68,880 | 89,670 | ||
| Total manufacturing costs incurred in December | (b) | 517,990 | ||
| Total manufacturing costs | 561,620 | 710,930 | ||
| Work in process inventory, December 1 | 113,030 | 192,940 | ||
| Work in process inventory, December 31 | 95,370 | (c) | ||
| Cost of goods manufactured | (c) | 513,180 | ||
| Finished goods inventory, December 1 | 99,490 | 89,670 | ||
| Finished goods inventory, December 31 | 104,200 | (d) | ||
| Sales | 867,740 | 800,600 | ||
| Cost of goods sold | (d) | 517,990 | ||
| Gross profit | (e) | (e) | ||
| Operating expenses | 113,030 | (f) | ||
| Net income | (f) | 177,730 | ||
Required:
1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.
| Letter | On Company | Off Company |
| a. | $ | $ |
| b. | $ | $ |
| c. | $ | $ |
| d. | $ | $ |
| e. | $ | $ |
| f. | $ | $ |
2. Prepare On Company's statement of cost of goods manufactured for December.
| On Company | |||
| Statement of Cost of Goods Manufactured | |||
| For the Month Ended December 31 | |||
| $ | |||
| Direct materials: | |||
| $ | |||
| $ | |||
| $ | |||
| Total manufacturing costs incurred during December | |||
| Total manufacturing costs | $ | ||
| $ | |||
3. Prepare On Company's income statement for December.
| On Company | ||
| Income Statement | ||
| For the Month Ended December 31 | ||
| $ | ||
| Cost of goods sold: | ||
| $ | ||
| $ | ||
| $ | ||
| $ | ||
In: Accounting
Vernon Company produces two products. Budgeted annual income
statements for the two products are provided here:
| Power | Lite | Total | ||||||||||||||||||||||
| Budgeted | Per | Budgeted | Budgeted | Per | Budgeted | Budgeted | Budgeted | |||||||||||||||||
| Number | Unit | Amount | Number | Unit | Amount | Number | Amount | |||||||||||||||||
| Sales | 270 | @ | $ | 690 | = | $ | 186,300 | 630 | @ | $ | 580 | = | $ | 365,400 | 900 | $ | 551,700 | |||||||
| Variable cost | 270 | @ | 420 | = | (113,400 | ) | 630 | @ | 350 | = | (220,500 | ) | 900 | (333,900 | ) | |||||||||
| Contribution margin | 270 | @ | 270 | = | 72,900 | 630 | @ | 230 | = | 144,900 | 900 | 217,800 | ||||||||||||
| Fixed cost | (12,000 | ) | (133,200 | ) | (145,200 | ) | ||||||||||||||||||
| Net income | $ | 60,900 | $ | 11,700 | $ | 72,600 | ||||||||||||||||||
Required:
Based on budgeted sales, determine the relative sales mix between the two products.
Determine the weighted-average contribution margin per unit.
Calculate the break-even point in total number of units.
Determine the number of units of each product Vernon must sell to break even.
Verify the break-even point by preparing an income statement for each product as well as an income statement for the combined products.
Determine the margin of safety based on the combined sales of the two products.
In: Accounting
1. So just like with last week what is the flow,
order, of doing things in recording accounting related
transactions/entries.
Where do we start and then go from there.....
2.From above describe the pieces, if you say
General Ledger, well what is that?
In: Accounting
Selected sales and operating data for three divisions of different structural engineering firms are given as follows:
| Division A | Division B | Division C | |||||||
| Sales | $ | 12,440,000 | $ | 35,550,000 | $ | 25,550,000 | |||
| Average operating assets | $ | 3,110,000 | $ | 7,110,000 | $ | 5,110,000 | |||
| Net operating income | $ | 547,360 | $ | 639,900 | $ | 740,950 | |||
| Minimum required rate of return | 10.00 | % | 10.50 | % | 14.50 | % | |||
Required:
1. Compute the return on investment (ROI) for each division using the formula stated in terms of margin and turnover.
2. Compute the residual income (loss) for each division.
3. Assume that each division is presented with an investment opportunity that would yield a 11% rate of return.
a. If performance is being measured by ROI, which division or divisions will probably accept or reject the opportunity?
b. If performance is being measured by residual income, which division or divisions will probably accept or reject the opportunity?
In: Accounting
where are the t-accounts charts? that literally the first part to this problem.
The general ledger of Red Storm Cleaners at January 1, 2018, includes the following account balances:
| Accounts | Debits | Credits | ||||
| Cash | $ | 14,000 | ||||
| Accounts Receivable | 6,800 | |||||
| Supplies | 2,800 | |||||
| Equipment | 16,000 | |||||
| Accumulated Depreciation | $ | 5,400 | ||||
| Salaries Payable | 7,900 | |||||
| Common Stock | 19,000 | |||||
| Retained Earnings | 7,300 | |||||
| Totals | $ | 39,600 | $ | 39,600 | ||
The following is a summary of the transactions for the year:
1. Enter the unadjusted balances from the trial balance and post the adjusting entries to the T-accounts, and post the closing entries to the T-accounts.
In: Accounting
Required information
The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4]
[The following information applies to the questions displayed below.]
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 11,000 | $ | 15,600 | $ | 26,600 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 1.80 | $ | 2.60 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 17,000 | $ | 10,000 | ||
| Direct labor cost | $ | 24,200 | $ | 9,100 | ||
| Actual machine-hours used: | ||||||
| Molding | 2,100 | 1,200 | ||||
| Fabrication | 1,000 | 1,300 | ||||
| Total | 3,100 | 2,500 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
Foundational 2-8
8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
9. What were the company’s predetermined overhead rates in the Molding Department and the Fabrication Department? (Round your answers to 2 decimal places.)
10. How much manufacturing overhead was applied from the Molding Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
11. How much manufacturing overhead was applied from the Fabrication Department to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
12. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations.)
13. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
14. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
15. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
In: Accounting
What are some ways that a restaurant chain or other small business can offset the increase in payroll and subsequent decrease in profit as the result of a minimum wage hike? Please explain in discussion format.
In: Accounting
The Foundational 15 [LO2-1, LO2-2, LO2-3, LO2-4]
[The following information applies to the questions displayed below.]
Sweeten Company had no jobs in progress at the beginning of March and no beginning inventories. The company has two manufacturing departments--Molding and Fabrication. It started, completed, and sold only two jobs during March—Job P and Job Q. The following additional information is available for the company as a whole and for Jobs P and Q (all data and questions relate to the month of March):
| Molding | Fabrication | Total | |||||||
| Estimated total machine-hours used | 2,500 | 1,500 | 4,000 | ||||||
| Estimated total fixed manufacturing overhead | $ | 11,000 | $ | 15,600 | $ | 26,600 | |||
| Estimated variable manufacturing overhead per machine-hour | $ | 1.80 | $ | 2.60 | |||||
| Job P | Job Q | |||||
| Direct materials | $ | 17,000 | $ | 10,000 | ||
| Direct labor cost | $ | 24,200 | $ | 9,100 | ||
| Actual machine-hours used: | ||||||
| Molding | 2,100 | 1,200 | ||||
| Fabrication | 1,000 | 1,300 | ||||
| Total | 3,100 | 2,500 | ||||
Sweeten Company had no underapplied or overapplied manufacturing overhead costs during the month.
Required:
For questions 1-8, assume that Sweeten Company uses a plantwide predetermined overhead rate with machine-hours as the allocation base. For questions 9-15, assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both departments.
1. What was the company’s plantwide predetermined overhead rate? (Round your answer to 2 decimal places.)
2. How much manufacturing overhead was applied to Job P and how much was applied to Job Q? (Do not round intermediate calculations.)
3. What was the total manufacturing cost assigned to Job P? (Do not round intermediate calculations.)
4. If Job P included 20 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
5. What was the total manufacturing cost assigned to Job Q? (Do not round intermediate calculations.)
6. If Job Q included 30 units, what was its unit product cost? (Do not round intermediate calculations. Round your final answer to nearest whole dollar.)
7. Assume that Sweeten Company used cost-plus pricing (and a markup percentage of 80% of total manufacturing cost) to establish selling prices for all of its jobs. What selling price would the company have established for Jobs P and Q? What are the selling prices for both jobs when stated on a per unit basis assuming 20 units were produced for Job P and 30 units were produced for Job Q? (Do not round intermediate calculations. Round your final answers to nearest whole dollar.)
8. What was Sweeten Company’s cost of goods sold for March? (Do not round intermediate calculations.)
In: Accounting
Alsup Consulting sometimes performs services for which it
receives payment at the conclusion of the engagement, up to six
months after services commence. Alsup recognizes service revenue
for financial reporting purposes when the services are performed.
For tax purposes, revenue is reported when fees are collected.
Service revenue, collections, and pretax accounting income for
2017–2020 are as follows:
| Service Revenue | Collections | Pretax Accounting Income |
|||||||
| 2017 | $ | 687,000 | $ | 662,000 | $ | 230,000 | |||
| 2018 | 790,000 | 795,000 | 295,000 | ||||||
| 2019 | 755,000 | 725,000 | 265,000 | ||||||
| 2020 | 740,000 | 760,000 | 245,000 | ||||||
There are no differences between accounting income and taxable
income other than the temporary difference described above. The
enacted tax rate for each year is 40%.
(Hint: You may find it helpful to prepare a schedule that shows the
balances in service revenue receivable at December 31,
2017–2020.)
Required:
1. Prepare the appropriate journal entry to record
Alsup's 2018 income taxes, Alsup’s 2019 income taxes and Alsup’s
2020 income taxes. (If no entry is required for a
transaction/event, select "No journal entry required" in the first
account field. Enter your answers in thousands.)
In: Accounting
•I am assigned a project from my CPA firm. I have to go into a new building and try to find as many pieces of furniture and fixtures from the building as I can. So for example, a door, a drop ceiling, a window, a drinking fountain. I will do this so I can use 7 year depreciation instead of 39 year depreciation. If I find $1,000,000 of things I can argue are fixtures instead of buildings, the client will give me and my CPA firm $50,000 cash bonus.
•I am worried that this might be a violation of ethics. Write a 1-2 page single spaced email to your supervisor about your concerns.
•Find one thing wrong about this in Circular 230, Statement on Tax Standards and AICPA Code of Professional Conduct. They must be different – not all contingent fees, for example. Quote and state the violation within each.
Assume you complete the tax return. Find one possible violation with Code Section 6694 or the related Treasury regulations
In: Accounting
•I am assigned a project from my CPA firm. I have to go into a new building and try to find as many pieces of furniture and fixtures from the building as I can. So for example, a door, a drop ceiling, a window, a drinking fountain. I will do this so I can use 7 year depreciation instead of 39 year depreciation. If I find $1,000,000 of things I can argue are fixtures instead of buildings, the client will give me and my CPA firm $50,000 cash bonus.
•I am worried that this might be a violation of ethics. Write a 1-2 page single spaced email to your supervisor about your concerns.
•Find one thing wrong about this in Circular 230, Statement on Tax Standards and AICPA Code of Professional Conduct. They must be different – not all contingent fees, for example. Quote and state the violation within each.
Assume you complete the tax return. Find one possible violation with Code Section 6694 or the related Treasury regulations
•I am assigned a project from my CPA firm. I have to go into a new building and try to find as many pieces of furniture and fixtures from the building as I can. So for example, a door, a drop ceiling, a window, a drinking fountain. I will do this so I can use 7 year depreciation instead of 39 year depreciation. If I find $1,000,000 of things I can argue are fixtures instead of buildings, the client will give me and my CPA firm $50,000 cash bonus.
•I am worried that this might be a violation of ethics. Write a 1-2 page single spaced email to your supervisor about your concerns.
•Find one thing wrong about this in Circular 230, Statement on Tax Standards and AICPA Code of Professional Conduct. They must be different – not all contingent fees, for example. Quote and state the violation within each.
Assume you complete the tax return. Find one possible violation with Code Section 6694 or the related Treasury regulations
In: Accounting
Hazelnut Corp. manufactures lawn ornaments. It currently has two product lines, the basic and the luxury. Hazelnut has a total of $169,007 in overhead.
The company has identified the following information about its
overhead activity cost pools and the two product lines:
| Activity Cost Pools | Cost Driver | Cost Assigned to Pool |
Quantity/Amount Consumed by Basic |
Quantity/Amount Consumed by Luxury |
|||
| Materials handling | Number of moves | $ | 4,032 | 25 moves | 47 moves | ||
| Quality control | Number of inspections | $ | 33,375 | 200 inspections | 175 inspections | ||
| Machine maintenance | Number of machine hours | $ | 131,600 | 5,700 machine hours | 3,700 machine hours | ||
Required:
1. Suppose Hazelnut used a traditional costing system with
machine hours as the cost driver. Determine the amount of overhead
assigned to each product line. (Do not round intermediate
calculations and round your final answers to the nearest whole
dollar amount.)
2. Calculate the activity rates for each cost pool
in Hazelnut’s ABC system.
3. Calculate the amount of overhead that Hazelnut
will assign to the basic line if it uses an ABC system.
4. Determine the amount of overhead Hazelnut will
assign to the luxury line if it uses an ABC system.
5. Compare the results for a traditional system
with that of an ABC system. Which do you think is more
accurate?
| Traditional System | |
| ABC System |
In: Accounting
Required information
[The following information applies to the questions
displayed below.]
During April, the production department of a process manufacturing
system completed a number of units of a product and transferred
them to finished goods. Of these transferred units, 82,000 were in
process in the production department at the beginning of April and
328,000 were started and completed in April. April's beginning
inventory units were 70% complete with respect to materials and 30%
complete with respect to conversion. At the end of April, 104,000
additional units were in process in the production department and
were 85% complete with respect to materials and 35% complete with
respect to conversion.
The production department had $1,512,630 of direct materials and
$991,230 of conversion costs charged to it during April. Also, its
beginning inventory of $242,340 consists of $206,850 of direct
materials cost and $35,490 of conversion costs.
1&2. Using the weighted-average method,
compute the direct materials cost and the conversion cost per
equivalent unit and assign April's costs to the department’s
output.
In: Accounting
Assume the company requires a 10% rate of return on its investments. Compute the net present value of each potential investment. (PV of $1, FV of $1, PVA of $1, and FVA of $1) (Use appropriate factor(s) from the tables provided.)
A new operating system for an existing machine is expected to cost $680,000 and have a useful life of six years. The system yields an incremental after-tax income of $155,000 each year after deducting its straight-line depreciation. The predicted salvage value of the system is $26,000. (Round your answers to the nearest whole dollar.)
|
||||||||||||||||||||||||||||||||||||||||
A machine costs $530,000, has a $24,200 salvage value, is expected to last eight years, and will generate an after-tax income of $76,000 per year after straight-line depreciation. (Round your answers to the nearest whole dollar.)
|
||||||||||||||||||||||||||||||||||||||||
In: Accounting
AirQual Test Corporation provides on-site air quality testing services. The company has provided the following cost formulas and actual results for the month of February:
| Fixed Component per Month |
Variable Component per Job |
Actual Total for February |
|||||||
| Revenue | $ | 277 | $ | 36,030 | |||||
| Technician wages | $ | 8,500 | $ | 8,350 | |||||
| Mobile lab operating expenses | $ | 4,700 | $ | 31 | $ | 8,880 | |||
| Office expenses | $ | 2,700 | $ | 3 | $ | 2,970 | |||
| Advertising expenses | $ | 1,560 | $ | 1,630 | |||||
| Insurance | $ | 2,860 | $ | 2,860 | |||||
| Miscellaneous expenses | $ | 950 | $ | 1 | $ | 395 | |||
The company uses the number of jobs as its measure of activity. For example, mobile lab operating expenses should be $4,700 plus $31 per job, and the actual mobile lab operating expenses for February were $8,880. The company expected to work 140 jobs in February, but actually worked 144 jobs.
Required:
Prepare a flexible budget performance report showing AirQual Test Corporation’s revenue and spending variances and activity variances for February. (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.)
In: Accounting