Preble Company manufactures one product. Its variable manufacturing overhead is applied to production based on direct labor-hours and its standard cost card per unit is as follows:

The company also established the following cost formulas for its selling expenses:

The planning budget for March was based on producing and selling 19,000 units. However, during March the company actually produced and sold 24,000 units and incurred the following costs:

1. Purchased 160,000 pounds of raw materials at a cost of $7.20 per pound. All of this material was used in production.

2. Direct-laborers worked 60,000 hours at a rate of $15.00 per hour.

3. Total variable manufacturing overhead for the month was $336,600.

4. Total advertising, sales salaries and commissions, and shipping expenses were $260,000, $480,000, and $165,000, respectively.

1. What raw materials cost would be included in the company’s flexible budget for March?

2. What is the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

3. What is the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

4. If Preble had purchased 175,000 pounds of materials at $7.20 per pound and used 160,000 pounds in production, what would be the materials quantity variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

5. If Preble had purchased 175,000 pounds of materials at $7.20 per pound and used 160,000 pounds in production, what would be the materials price variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

7. What is the direct labor efficiency variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

8. What is the direct labor rate variance for March? (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance.). Input the amount as a positive value.)

he following information is available for Sage Hill, Inc. for the year 2017.

Common shares outstanding for 2017 total 23,000 (000 omitted).

Prepare an income statement for Sage Hill Inc. for the year 2017 using the multiple-step form. (Round earnings per share to 2 decimal places, e.g. 1.48.)

The year has passed and Ron has become used to being able to come to you with more and more complex finance and accounting questions about this Ukrainian Division. He has come into your office in the middle of November of the following year. Your projects are going quite well as he has a new task for you. He’s been reviewing the operations of the Ukrainian plant and has some questions about the Income Statement. The plant appears to be much more profitable than the other bottling plants within the company and he’s wondering about implementing some of the practices that he has seen there into Canadian Bottling sites. He has provided you with the Income Statement that the Canadian finance team has provided him and wants some key pieces of information from you.

An executive summary of their financial position has been provided by the Ukrainian Management team; all of this information appears to be useful to them but, only some is relevant to you. Highlights of the financial figures are as follows:

Required:

1. Identify all the expenses above as being either Fixed or Variable. For expenses labeled Shipping, Amortization and Electricity, explain why you chose either fixed or variable.
2. Using your cost behaviour breakdown, calculate the Contribution Margin for each unit produced.
3. What would be the number of units necessary to produce for a breakeven scenario? (5Marks)
4. Management has recently discovered that they are now able to lower their labour costs from 67,000 to 55,000 within the year with all other costs remaining the same. What is the Contribution Margin now?
5. Calculate the Gross Profit Margin and Net Profit Margin Ratios. (4 Marks

J&J, Inc., manufactures two products that it sells to the same market. Excerpted below are its budgeted and actual operating results for the year just completed:

Industry volume was estimated to be 1,425,000 units at the time the budget was prepared. Actual industry volume for the period was 1,720,000 units. J&J measures variances using contribution margin. The market share variance is: (Round percentage answers to nearest whole percent and other values to 2 decimal places.)

Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information:

• Each T-shirt is expected to sell for $17.
• The purchasing manager buys the T-shirts for $7 each.
• The company needs to have enough T-shirts on hand at the end of each quarter to fill 27 percent of the next quarter’s sales demand.
• Selling and administrative expenses are budgeted at $84,000 per quarter plus 14 percent of total sales revenue.

Required:
1.Determine budgeted sales revenue for each quarter.



2. Determine budgeted cost of merchandise purchased for each quarter.



3. Determine budgeted cost of good sold for each quarter.



4. Determine selling and administrative expenses for each quarter.



5. Complete the budgeted income statement for each quarter.

TufStuff, Inc., sells a wide range of drums, bins, boxes, and other containers that are used in the chemical industry. One of the company’s products is a heavy-duty corrosion-resistant metal drum, called the WVD drum, used to store toxic wastes. Production is constrained by the capacity of an automated welding machine that is used to make precision welds. A total of 2,140 hours of welding time is available annually on the machine. Because each drum requires 0.4 hours of welding machine time, annual production is limited to 5,175 drums. At present, the welding machine is used exclusively to make the WVD drums. The accounting department has provided the following financial data concerning the WVD drums:

Management believes 6,275 WVD drums could be sold each year if the company had sufficient manufacturing capacity. As an alternative to adding another welding machine, management has considered buying additional drums from an outside supplier. Harcor Industries, Inc., a supplier of quality products, would be able to provide up to 4,175 WVD-type drums per year at a price of $159 per drum, which TufStuff would resell to its customers at its normal selling price after appropriate relabeling.

Megan Flores, TufStuff’s production manager, has suggested that the company could make better use of the welding machine by manufacturing bike frames, which would require only 0.5 hours of welding machine time per frame and yet sell for far more than the drums. Megan believes that TufStuff could sell up to 1,740 bike frames per year to bike manufacturers at a price of $274 each. The accounting department has provided the following data concerning the proposed new product:

The bike frames could be produced with existing equipment and personnel. Manufacturing overhead is allocated to products on the basis of direct labor-hours. Most of the manufacturing overhead consists of fixed common costs such as rent on the factory building, but some of it is variable. The variable manufacturing overhead has been estimated at $1.35 per WVD drum and $1.90 per bike frame. The variable manufacturing overhead cost would not be incurred on drums acquired from the outside supplier.

Selling and administrative expenses are allocated to products on the basis of revenues. Almost all of the selling and administrative expenses are fixed common costs, but it has been estimated that variable selling and administrative expenses amount to $.75 per WVD drum whether made or purchased and would be $2.00 per bike frame.

All of the company’s employees—direct and indirect—are paid for full 40.00-hour work weeks and the company has a policy of laying off workers only in major recessions.

As soon as your analysis was shown to the top management team at TufStuff, several managers got into an argument concerning how direct labor costs should be treated when making this decision. One manager argued that direct labor is always treated as a variable cost in textbooks and in practice and has always been considered a variable cost at TufStuff. After all, “direct” means you can directly trace the cost to products. “If direct labor is not a variable cost, what is?” Another manager argued just as strenuously that direct labor should be considered a fixed cost at TufStuff. No one had been laid off in over a decade, and for all practical purposes, everyone at the plant is on a monthly salary. Everyone classified as direct labor works a regular 40.00-hour workweek and overtime has not been necessary since the company adopted Lean Production techniques. Whether the welding machine is used to make drums or frames, the total payroll would be exactly the same. There is enough slack, in the form of idle time, to accommodate any increase in total direct labor time that the bike frames would require.

Required:

1. Would you be comfortable relying on the financial data provided by the accounting department for making decisions related to the WVD drums and bike frames?

2. Compute the contribution margin per unit. [assume direct labor is a fixed cost]

3. Compute the contribution margin per welding hour. [assume direct labor is a fixed cost]

4. Assuming direct labor is a fixed cost:

a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured.

b. What is the increase (decrease) in net operating income that would result from this plan over current operations?

5. Compute the contribution margin per unit. [assume direct labor is a variable cost]

6. Compute the contribution margin per welding hour. [assume direct labor is a variable cost]

7. Assuming direct labor is a variable cost:

a. Determine the number of WVD drums (if any) that should be purchased and the number of WVD drums and/or bike frames (if any) that should be manufactured. [Assume direct labor is a variable cost]

b. What is the increase (decrease) in net operating income that would result from this plan over current operations?

12. How might you communicate and promote key features of the plan to others?

During 2017, the following transactions were recorded by the Port Hudson Community Hospital, a private sector not-for-profit institution.

1. Gross charges for patient services, all charged to Patient Accounts Receivable, amounted to $1,830,000. Contractual adjustments with third-party payers amounted to $490,000.
2. Charity services, not included in transaction 1, would amount to $72,000, had billings been made all gross amounts.
3. Other revenues, received in cash, were parking lot, $23,000; cafeteria, $39,500; gift shop, $6,500.
4. Cash gifts for cancer research amounted to $28,550 for the year. During the year, $55,400 was expended for cancer research technicians’ salaries (debt Operating Expense-Salaries and Benefits).
5. Mortgage bond payments amounted to $54,800 for principal and $31,600 for interest. Assume unrestricted resources are used.
6. During the year, the hospital received, in cash, unrestricted contributions of $46,200 and unrestricted income of $38,750 from endowment investments. (It is the hospital’s practice to treat unrestricted gifts as nonoperating income).
7. New equipment, costing $158,000, was acquired using donor-restricted cash that was on hand at the beginning of the year. Port Hudson’s policy is to record all equipment in the unrestricted net asset class.
8. An old piece of lab equipment that originally cost $80,000 and had and undepreciated cost of $16,000 was sold for $10,000 cash.
9. At the end of 2017, pledges received in the amount of $135,000 were intended to be paid and used for unrestricted purposes in 2018.
10. Cash contributions were received as follows: temporarily restricted for purposes other than plant, $43,750; temporarily restricted for plant acquisition, $136,000.
11. Bills totaling $225,300 were received for the following items:

12. Depreciation of plant and equipment amounted to $189,000.
13. Cash payments on vouchers payable amounted to $176,100. Another $806,900 was expended on wages and benefits. Cash collections of patient accounts receivable amounted to $1,186,000.
14. Closing entries were prepared.

Required:

1. Record the transactions in the general journal of the Port Hudson Community Hospital.
2. Prepare a Statement of Operations for the Port Hudson Community Hospital for the year ended December 31, 2017.

Solve for the missing information designated by “?” in the following table. (Use 365 days in a year. Round the inventory turnover ratio to one decimal place before computing days to sell. Round days to sell to one decimal place.)

1. What should you do when identifying and discussing future computing needs?

Income Statements under Absorption and Variable Costing Shawnee Motors Inc. assembles and sells MP3 players. The company began operations on August 1 and operated at 100% of capacity during the first month. The following data summarize the results for August: Sales (12,500 units) $1,875,000 Production costs (16,000 units): Direct materials $888,000 Direct labor 425,600 Variable factory overhead 212,800 Fixed factory overhead 142,400 1,668,800 Selling and administrative expenses: Variable selling and administrative expenses $258,700 Fixed selling and administrative expenses 100,100 358,800 If required, round interim per-unit calculations to the nearest cent. a. Prepare an income statement according to the absorption costing concept. Shawnee Motors Inc. Absorption Costing Income Statement For the Month Ended August 31 Sales $ 1,875,000 Cost of goods sold 1,303,750 Gross profit $ 571,250 Selling and administrative expenses 358,800 Income from operations $ 212,450 b. Prepare an income statement according to the variable costing concept. Shawnee Motors Inc. Variable Costing Income Statement For the Month Ended August 31 Sales $ 1,875,000 Variable cost of goods sold Manufacturing margin $ Variable selling and administrative expenses 258,700 Contribution margin $ Fixed costs: Fixed factory overhead $ 142,400 Fixed selling and administrative expenses 100,100 Total fixed costs 242,500 Income from operations $ c. What is the reason for the difference in the amount of income from operations reported in (a) and (b)? Under the absorption costing method, the fixed manufacturing cost included in the cost of goods sold is matched with the revenues. Under variable costing , all of the fixed manufacturing cost is deducted in the period in which it is incurred, regardless of the amount of inventory change. Thus, when inventory increases, the absorption costing income statement will have a higher income from operations than will the variable costing income statement

7. On July 1, 2018, Mason & Beech Services issued $31,000 of 10% bonds that mature in five years. They were issued at par. The bonds pay semiannual interest payments on June 30 and December 31 of each year. On December 31, 2018, what is the total amount paid to bondholders? On January 1, 2019, First Street Sales issued $18,000 in bonds for $16,700. These are six−year bonds with a stated interest rate of 12% that pay semiannual interest. First Street Sales uses the straight−line method to amortize the Bond Discount. Immediately after the issue of the bonds, the ledger balances appeared as follows:  Bonds Payable 18,000 Discount on Bonds Payable 1,300 After the first interest payment on June 30, 2019, what is the balance of Discount on Bonds Payable? (Round any intermediate calculations to two decimal places, and your final answer to the nearest dollar.)

A. debit of $1,408

B. credit of $108

C. debit of $1,192

D. debit of $1,300

10. The Technology Company issues $506,000 of 10%, 10−year bonds at 108 on March 31, 2018. The bonds pay interest on March 31 and September 30. Assume that the company uses the straight−line method for amortization. Calculate the net balance that will be reported for the bonds on the September 30, 2018 balance sheet. (Round your intermediate answers to the nearest dollar.)

a. $506,000

b. $546,480

c. $544,456

d. $548, 504

16. Treasury stock ________.

A. decreases the number of shares issued

B. increases the number of shares outstanding

C. increases the number of shares issued

D. decreases the number of shares outstanding

1)If the equity subtracted from the net income is 7,179. what is the price earnings ratio.

2) How to calculate balance sheet equation in percentage terms

3) How to find the % of change in sales,net income and market capitalization

10. Google Corporation owns 85% of the single class of Yahoo Corporation stock. Yahoo Corporation owns 35% of Twitter Corporation. Google Corporation also owns 50% of Twitter Corporation, and Twitter Corporation owns 75% of Facebook Corporation.

A) Google, Twitter, Yahoo, and Facebook Corporations are an affiliated group.

B) Google, Twitter, and Facebook Corporations are an affiliated group.

C) Google, Twitter, and Yahoo Corporations are an affiliated group.

D) None of the above are correct.

Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The plant has been experiencing problems as shown by its June contribution format income statement below: Flexible Budget Actual Sales (8,000 pools) $ 240,000 $ 240,000 Variable expenses: Variable cost of goods sold* 94,000 112,470 Variable selling expenses 10,000 10,000 Total variable expenses 104,000 122,470 Contribution margin 136,000 117,530 Fixed expenses: Manufacturing overhead 55,000 55,000 Selling and administrative 70,000 70,000 Total fixed expenses 125,000 125,000 Net operating income (loss) $ 11,000 $ (7,470 ) *Contains direct materials, direct labor, and variable manufacturing overhead. Janet Dunn, who has just been appointed general manager of the Westwood Plant, has been given instructions to “get things under control.” Upon reviewing the plant’s income statement, Ms. Dunn has concluded that the major problem lies in the variable cost of goods sold. She has been provided with the following standard cost per swimming pool: Standard Quantity or Hours Standard Price or Rate Standard Cost Direct materials 3.5 pounds $ 2.50 per pound $ 8.75 Direct labor 0.4 hours $ 6.50 per hour 2.60 Variable manufacturing overhead 0.2 hours* $ 2.00 per hour 0.40 Total standard cost per unit $ 11.75 *Based on machine-hours. During June, the plant produced 8,000 pools and incurred the following costs: Purchased 33,000 pounds of materials at a cost of $2.95 per pound. Used 27,800 pounds of materials in production. (Finished goods and work in process inventories are insignificant and can be ignored.) Worked 3,800 direct labor-hours at a cost of $6.20 per hour. Incurred variable manufacturing overhead cost totaling $4,560 for the month. A total of 1,900 machine-hours was recorded. It is the company’s policy to close all variances to cost of goods sold on a monthly basis. Required: 1. Compute the following variances for June: a. Materials price and quantity variances. b. Labor rate and efficiency variances. c. Variable overhead rate and efficiency variances. 2. Summarize the variances that you computed in (1) above by showing the net overall favorable or unfavorable variance for the month.