Krepps Corporation produces a single product. Last year, Krepps manufactured 27,540 units and sold 22,200 units. Production costs for the year were as follows:
Direct materials | $ | 214,812 | |
Direct labor | $ | 121,176 | |
Variable manufacturing overhead | $ | 239,598 | |
Fixed manufacturing overhead | $ | 302,940 | |
Sales totaled $1,098,900 for the year, variable selling and administrative expenses totaled $115,440, and fixed selling and administrative expenses totaled $176,256. There was no beginning inventory. Assume that direct labor is a variable cost.
Under variable costing, the company's net operating income for the year would be:
In: Accounting
The following data relate to direct materials costs for
February:
Materials cost per yard: standard, $1.90; actual, $2.05
Standard yards per unit: standard, 4.69 yards; actual, 5.05
yards
Units of production: 9,500
Calculate the direct materials price variance.
a.$6,683.25 favorable
b.$1,425.00 unfavorable
c.$7,196.25 favorable
d.$7,196.25 unfavorable
In: Accounting
Payroll may seem like an easy area to review however there are many items to review for this function. Please share your thoughts on auditing payroll and payroll accruals, etc. How would you approach this and what are specific areas/items you would want to verify?
In: Accounting
Menlo Company distributes a single product. The company’s sales and expenses for last month follow:
Total | Per Unit | |||||
Sales | $ | 616,000 | $ | 40 | ||
Variable expenses | 431,200 | 28 | ||||
Contribution margin | 184,800 | $ | 12 | |||
Fixed expenses | 154,800 | |||||
Net operating income | $ | 30,000 | ||||
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 $66,000?
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 $89,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?
In: Accounting
Lavage Rapide is a Canadian company that owns and operates a large automatic carwash facility near Montreal. The following table provides data concerning the company’s costs:
Fixed Cost per Month |
Cost per Car Washed |
||||
Cleaning supplies | $ | 0.80 | |||
Electricity | $ | 1,000 | $ | 0.07 | |
Maintenance | $ | 0.15 | |||
Wages and salaries | $ | 4,700 | $ | 0.30 | |
Depreciation | $ | 8,300 | |||
Rent | $ | 2,100 | |||
Administrative expenses | $ | 1,500 | $ | 0.03 | |
For example, electricity costs are $1,000 per month plus $0.07 per car washed. The company expects to wash 8,200 cars in August and to collect an average of $6.90 per car washed.
The actual operating results for August appear below.
Lavage Rapide Income Statement For the Month Ended August 31 |
||
Actual cars washed | 8,300 | |
Revenue | $ | 58,680 |
Expenses: | ||
Cleaning supplies | 7,060 | |
Electricity | 1,544 | |
Maintenance | 1,470 | |
Wages and salaries | 7,520 | |
Depreciation | 8,300 | |
Rent | 2,300 | |
Administrative expenses | 1,646 | |
Total expense | 29,840 | |
Net operating income | $ | 28,840 |
Required:
Complete the flexible budget performance report that shows the company’s activity variances and revenue and spending 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.) PLEASE SHOW WORK
In: Accounting
Hello. Please answer all my all questions.
Gallatin Carpet Cleaning is a small, family-owned business operating out of Bozeman, Montana. For its services, the company has always charged a flat fee per hundred square feet of carpet cleaned. The current fee is $23.95 per hundred square feet. However, there is some question about whether the company is actually making any money on jobs for some customers—particularly those located on remote ranches that require considerable travel time. The owner’s daughter, home for the summer from college, has suggested investigating this question using activity-based costing. After some discussion, she designed a simple system consisting of four activity cost pools. The activity cost pools and their activity measures appear below:
Activity Cost Pool |
Activity Measure |
Activity for the Year |
|
Cleaning carpets |
Square feet cleaned (00s) |
9,000 |
hundred square feet |
Travel to jobs |
Miles driven |
110,500 |
miles |
Job support |
Number of jobs |
2,100 |
jobs |
Other (organization-sustaining costs and idle capacity costs) |
None |
Not applicable |
|
The total cost of operating the company for the year is $351,000 which includes the following costs:
Wages |
$ |
145,000 |
Cleaning supplies |
26,000 |
|
Cleaning equipment depreciation |
11,000 |
|
Vehicle expenses |
33,000 |
|
Office expenses |
65,000 |
|
President’s compensation |
71,000 |
|
Total cost |
$ |
351,000 |
Resource consumption is distributed across the activities as follows:
Distribution of Resource Consumption Across Activities |
||||||||||
Cleaning Carpets |
Travel to Jobs |
Job Support |
Other |
Total |
||||||
Wages |
70 |
% |
15 |
% |
0 |
% |
15 |
% |
100 |
% |
Cleaning supplies |
100 |
% |
0 |
% |
0 |
% |
0 |
% |
100 |
% |
Cleaning equipment depreciation |
73 |
% |
0 |
% |
0 |
% |
27 |
% |
100 |
% |
Vehicle expenses |
0 |
% |
81 |
% |
0 |
% |
19 |
% |
100 |
% |
Office expenses |
0 |
% |
0 |
% |
60 |
% |
40 |
% |
100 |
% |
President’s compensation |
0 |
% |
0 |
% |
34 |
% |
66 |
% |
100 |
% |
Job support consists of receiving calls from potential customers at the home office, scheduling jobs, billing, resolving issues, and so on.
Required:
In: Accounting
Holden Company issued the following bonds: Issue date – January 1, 2015. Maturity date – January 1, 2020. Par value – $100,000.
Market interest rate at time of issue – 10% annually. Stated interest rate – 9%. Issue price – $96,149. Interest paid – 4.5% semiannually, first on July 1, 2015.
Assume Dec. 31 is the fiscal year-end.
a. Prepare the journal entry to record the issuance of the bonds on Jan. 1, 2015.
b. Prepare the journal entries to record the interest expenses on July 1, 2015, and Dec. 31, 2015.
c. Prepare the journal entry to record the interest payment on Jan. 1, 2016.
In: Accounting
DigitalWave startups had a maximum pie of the private equity and venture capital (PE/VC) funding last year. Discuss how arranging venture capital from the venture capitalist differs from Equity financing.
Plz answer in more than 500 words if possible.
In: Accounting
Munoz Manufacturing Corporation was started with the issuance of common stock for $70,000. It purchased $7,900 of raw materials and worked on three job orders during 2019 for which data follow. (Assume that all transactions are for cash unless otherwise indicated.)
Direct Raw Materials Used | Direct Labor | |||||||
Job 1 | $ | 1,200 | $ | 2,100 | ||||
Job 2 | 2,200 | 3,900 | ||||||
Job 3 | 3,400 | 2,100 | ||||||
Total | $ | 6,800 | $ | 8,100 | ||||
Factory overhead is applied using a predetermined overhead rate of $0.60 per direct labor dollar. Jobs 2 and 3 were completed during the period and Job 3 was sold for $11,160 cash. Munoz paid $400 for selling and administrative expenses. Actual factory overhead was $5,160.
Required
Record the preceding events in a horizontal statements model. The first event for 2019 has been recorded as an example.
Reconcile all subsidiary accounts with their respective control accounts.
Record the closing entry for over- or underapplied manufacturing overhead in the horizontal statements model, assuming that the amount is insignificant.
Prepare a schedule of cost of goods manufactured and sold, an income statement, and a balance sheet for 2019.
In: Accounting
34) During the current year, LaVone recognizes a $30,000 Sec. 1231 gain on sale of land and a $18,000 Sec. 1231 loss on the sale of land. Prior to this, LaVone's only Sec. 1231 item was a $14,000 loss six years ago. LaVone must report a
A) $12,000 net LTCG.
B) $12,000 ordinary income.
C) $14,000 ordinary income.
D) $10,000 ordinary income and $2,000 net LTCG.
35) Sec. 1231 property will generally have all the following characteristics except
A) real or depreciable property.
B) used in trade or business.
C) held for sale to customers.
D) held for more than one year.
36) During the current year, Hugo sells equipment for $150,000. The equipment cost $175,000 when placed in service two years ago, and $55,000 of depreciation deductions were allowed. The results of the sale are
A) LTCG of $30,000.
B) Sec. 1231 gain of $30,000.
C) Sec. 1245 ordinary income $30,000.
D) Sec. 1250 ordinary income of $30,000.
In: Accounting
The Polaris Company uses a job-order costing system. The following transactions occurred in October:
a.Raw materials purchased on account, $209,000.
b.Raw materials used in production, $192,000 ($153,000 direct materials and $38,400 indirect materials).
c.Accrued direct labor cost of $49,000 and indirect labor cost of $20,000
d.Depreciation recorded on factory equipment, $105,000.
e.Other manufacturing overhead costs accrued during October, $130,000.
f.The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,400 machine-hours were used in October.
g.Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
h.Jobs that had cost $449,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 32% above cost.
Required SHOW ALL WORK:
1.Prepare journal entries to record the transactions given above.
2.Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $36,000.
In: Accounting
25. In accounting for research and experimental expenditures incurred in 2018, all of the following alternatives are available with the exception of
A) expense R&E costs in the year in which a product or process becomes marketable.
B) expense R&E costs in the year paid or incurred.
C) defer and amortize R&E costs as a ratable deduction over a period of 60 months or more.
D) capitalize and write off R&E costs only when the research project is abandoned or is worthless.
26. Green Corporation purchases specialty software from a software development firm for use in its business as of January 1 of the current year at a cost of $90,000. No hardware was acquired. How much of the cost can Green deduct this year?
A) $30,000
B) $45,000
C) $60,000
D) $90,000
27. In calculating depletion of natural resources each period,
A) cost depletion must be used.
B) percentage depletion must be used.
C) the smaller of cost depletion or percentage depletion must be used.
D) the greater of cost depletion or percentage depletion must be used.
In: Accounting
Petro Motors Inc. (PMI) produces small gasoline-powered motors
for use in lawn mowers. The company has been growing steadily over
the past five years and is operating at full capacity. PMI recently
completed the addition of new plant and equipment at a cost of
$7,800,000, thereby increasing its manufacturing capacity to
100,000 motors annually. The addition to plant and equipment will
be depreciated on a straight-line basis over 10 years.
Sales of motors were 60,000 units prior to the completion of the
additional capacity. Cost records indicated that manufacturing
costs had totaled $60 per motor, of which $48 per motor was
considered to be variable manufacturing costs. PMI has used the
volume of activity at full capacity as the basis for applying fixed
manufacturing overhead. The normal selling price is $80 per motor,
and PMI pays a 5% commission on the sale of its motors.
LawnPro.com offered to purchase 35,000 motors at a price of $60 per
unit to test the viability of distributing lawn mower replacement
motors through its website. PMI would be expected to produce the
motors, store them in its warehouse, and ship individual motors to
LawnPro.com customers. As orders are placed directly through the
LawnPro.com website, they would be forwarded instantly to PMI. No
commissions will be paid on this special sales order, and freight
charges will be paid by the customer purchasing a motor.
A. Calculate the cost per motor, for cost accounting purposes, after completion of the additional plant capacity.
B. Should the offer from LawnPro.com be accepted?
C. If relevant cost analysis was not considered, is it likely that a correct special order analysis would have been made?
In: Accounting
The Company uses a single department production process.
Materials are added at the start of the production process and
labor and overhead are added as indicated. For January 2018, the
Company records have the following information:
UNITS:
Beginning
WIP:
10,000 units
100% complete for materials, 50% complete for labor; 3% complete for overhead
Units started in process 50,000 units
Units completed 49,000 units
Ending WIP: 11,000 units
100% complete for materials, 60% complete for labor; 20% complete for overhead
PRODUCTION COSTS:
Work in Process, Beginning of the Month:
Materials
$ 22,000
Labor
18,000
Overhead
11,000
51,000
Current Month Costs:
Materials
$ 320,000
Labor
180,160
Overhead
152,840
653,000
Total Costs:
$ 704,000
Prepare a Cost of Production Summary using the FiFO method (calculations for equivalent units of production, cost per equivalent unit of production, total cost for units completed and WIP, ending). Prepare your calculations for Materials, Labor, and Overhead separately. Prepare the appropriate journal entries at month end.
In: Accounting
1) On January 1, Year 1, Shaq Co. acquired 100% of the outstanding common stock of O’Neal Co. As part of the total consideration transferred, Shaq promised to the shareholders of O’Neal to issue on May 1, Year 2, additional 1,000 shares of common stock if the total consolidated net income for Year 1 is greater than $1Billion. The consolidated net income in Year 1 was $1.2 Billion.
The controller of Shaq Co. took the ACCY 410 class at the UIUC and remembers that this contingent consideration must be classified as equity (i.e., APIC) in the consolidated financial statements. However, the controller did not always come prepared to the class and does not remember whether this contingent consideration should be remeasured on 12/31/Year 1 or not.
Research and cite a specific paragraph in the Accounting Standard Codification that can help the controller to determine whether this contingent consideration should be remeasured at the year-end, or not. Unless specifically requested, your response should not cite implementation guidance and illustrations.
FASB ASC - - -
In: Accounting