Cicchetti Corporation uses customers served as its measure of activity. The following report compares the planning budget to the actual operating results for the month of December:

Prepare the company's flexible budget performance report for December. Select each variance as favorable (F), unfavorable (U) or "None".

MSI’s educational products are currently sold without any supplemental materials. The company is considering the inclusion of instructional materials such as an overhead slide presentation, potential test questions, and classroom bulletin board materials for teachers. A summary of the expected costs and revenues for MSI’s two options follows:

  
Required:
1. Based on the given data, Compute the increase or decrease in profit that would result if instructional materials were added to the CDs.



2. Should MSI add the instructional materials or sell the CDs without them?

  
3-a. Suppose that the higher price of the CDs with instructional materials is expected to reduce demand to 20,000 units. Complete the table given below based on Requirement 1 and 2 data.



3-b. Should MSI add the instructional materials or sell the CDs without them?

MSI is considering eliminating a product from its ToddleTown Tours collection. This collection is aimed at children one to three years of age and includes “tours” of a hypothetical town. Two products, The Pet Store Parade and The Grocery Getaway, have impressive sales. However, sales for the third CD in the collection, The Post Office Polka, have lagged the others. Several other CDs are planned for this collection, but none is ready for production.

MSI’s information related to the ToddleTown Tours collection follows:

      
*Allocated based on total sales dollars.

MSI has determined that elimination of the Post Office Polka (POP) program would not impact sales of the other two items. The remaining fixed overhead currently allocated to the POP product would be redistributed to the remaining two products.

Required:
1. Calculate the incremental effect on profit if the POP product is eliminated.



2. Should MSI drop the POP product?

3-a. Calculate the incremental effect on profit if the POP product is eliminated. Suppose that $1,200 of the common fixed costs could be avoided if the POP product line were eliminated.



3-b. Should MSI drop the POP product?

NO PHOTO OR HANDWRITING CLEAR SCHEDULE

YOU CAN PUT ANY FIGURE ITS ASSUMPTIONS

1. Akbar Company is producing two types of products i.e. Product A and Product B. You are required to show quantitative analysis of one constrained resource i.e. total available machine hours. The following is a contribution income format of the company.                                                                                                  

(use your own figures in the following table)

            Assume a figure for total available machine hours as a constrained resource.

            Determine the following:

1. What is the total contribution margin if only Product A is produced?
2. What is the total contribution margin if only Product B is produced?

Solution: The answers of all the students will differ.

2. Prepare a cash flow statement from the following information under indirect method.

(Assume your own figure)                                                                              

Solution: There will be different answers for all students.

3-You are required to allot the support department cost to operations department by taking any Saudi based operating company.

Solution: There will be different answers for all students.

Cintra is the Management Accountant of Fine pens Ltd. The company manufactures various types of pens ranging from cheap disposable units to expensive units which are intended to be reusable. Both ball point pens and fountain pens are produced. The current cost allocation system in use is Absorption costing.and Cintra is very comfortable with the use and application of this costing method.

Ram has recently joined the company in a senior capacity. Both Cintra and Ram were recently discussing the current costing method and another method, namely Activity based costing. Ram suggested a switch to Activity based costing as the method of cost allocation .

Required:

a) Briefly state why Ram may have suggested such a switch . Relate to the scenario described above.                                                                      

b) List and briefly describe 3 advantages of Activity based costing over Absorption costing.                                                                                        ( 3 marks)

Cesar's Bottlers bottles soft drinks in a factory that can operate one shift, two shifts, or three shifts per day. Each shift is eight hours long. The factory is closed on weekends. The sales price of $4 per case bottled and the variable cost of $2.90 per case remain constant regardless of volume. Cesar's Bottlers can increase volume by opening and staffing additional shifts. The company has the following three choices. Daily Volume Range (Number of Cases Bottled)   Total Fixed Costs per Day 1 Shift   0–2,000   $   1,950   2 Shifts   2,001–3,600       3,710   3 Shifts   3,601–5,000       5,090   Required:

a. Calculate the break-even point(s).

b-1. Calculate the profit (or loss) for each alternative, assuming Cesar’s Bottlers can sell all the units it can produce.

b-2. Should Cesar's Bottlers operate at one, two, or three shifts?

On January 1, 2017, Panther, Inc., issued securities with a total fair value of $557,000 for 100 percent of Stark Corporation's outstanding ownership shares. Stark has long supplied inventory to Panther. The companies expect to achieve synergies with production scheduling and product development with this combination.

Although Stark's book value at the acquisition date was $315,000, the fair value of its trademarks was assessed to be $55,000 more than their carrying amounts. Additionally, Stark's patented technology was undervalued in its accounting records by $187,000. The trademarks were considered to have indefinite lives, and the estimated remaining life of the patented technology was eight years.

In 2017, Stark sold Panther inventory costing $80,000 for $160,000. As of December 31, 2017, Panther had resold 62 percent of this inventory. In 2018, Panther bought from Stark $156,000 of inventory that had an original cost of $78,000. At the end of 2018, Panther held $42,200 (transfer price) of inventory acquired from Stark, all from its 2018 purchases.

During 2018, Panther sold Stark a parcel of land for $98,000 and recorded a gain of $17,600 on the sale. Stark still owes Panther $68,400 (current liability) related to the land sale.

At the end of 2018, Panther and Stark prepared the following statements in preparation for consolidation.

1. Show how Panther computed its $61,225 equity in Stark's earnings balance.

2. Prepare a 2018 consolidated worksheet for Panther and Stark.

Morrison Company uses a job-order costing system to assign manufacturing costs to jobs. Its balance sheet on January 1 is as follows:

During January the company completed the following transactions:

1. Purchased raw materials on account, $92,400.
2. Raw materials used in production, $99,000 ($81,200 was direct materials and $17,800 was indirect materials).
3. Paid $196,950 of salaries and wages in cash ($112,200 was direct labor, $39,150 was indirect labor, and $45,600 was related to employees responsible for selling and administration).
4. Various manufacturing overhead costs incurred (on account) to support production, $40,200.
5. Depreciation recorded on property, plant, and equipment, $70,000 (70% related to manufacturing equipment and 30% related to assets that support selling and administration).
6. Various selling expenses paid in cash, $35,600.
7. Prepaid insurance expired during the month, $2,000 (80% related to production, and 20% related to selling and administration).
8. Manufacturing overhead applied to production, $139,200.
9. Cost of goods manufactured, $303,000.
10. Cash sales to customers, $413,760.
11. Cost of goods sold (unadjusted), $298,400.
12. Cash payments to creditors, $62,400.
13. Underapplied or overapplied overhead  $?  .

Required:

1. Calculate the ending balances that would be reported on the company's balance sheet on January 31^st. (Hint: Be sure to calculate the underapplied or overapplied overhead and then account for its affect on the balance sheet.)

2. What is Morrison Company’s net operating income for the month of January?

Cost of Production Report: Average Cost Method

Sunrise Coffee Company roasts and packs coffee beans. The process begins in the Roasting Department. From the Roasting Department, the coffee beans are transferred to the Packing Department. The following is a partial work in process account of the Roasting Department at December 31:

Required:

Prepare a cost of production report, using the average cost method, and identify the missing amounts for Work in Process—Roasting Department. If required, round your cost per equivalent unit answer to two decimal places.

Thank you!!

Menlo Company distributes a single product. The company’s sales and expenses for last month follow:

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 $56,400?

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 $60,000 per month and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase?

Mickey, Mickayla, and Taylor are starting a new business (MMT). To get the business started, Mickey is contributing $230,000 for a 40 percent ownership interest, Mickayla is contributing a building with a value of $230,000 and a tax basis of $157,500 for a 40 percent ownership interest, and Taylor is contributing legal services for a 20 percent ownership interest. What amount of gain is each owner required to recognize under each of the following alternative situations? [Hint: Look at §351 and §721.] (Leave no answer blank. Enter zero if applicable.)

a. MMT is formed as a C corporation.

b. MMT is formed as an S corporation.

c. MMT is formed as an LLC.

NEEDS TO BE DONE IN EXCEL.

A price level adjusted mortage (PLAM) is made with the following terms:

Amount=$95,000

Initial interest rate= 4 percent

Term= 30 Years

Points= 6 percent

Payments to be reset at the beginning of each year.
Assuming inflation is expected to increase at the rate of 6 percent per year for the next five years:
a. Compute the payments at the beginning of each year (BOY)
b. what is the loan balance at the end of the fifth year?
c. what is the yield to the lender on such a mortgage?

If our business affairs are to be conducted in a godly manner, we could consider Luke 16:12: "And if you have not been trustworthy with someone else's property, who will give you property of your own?" Think about this verse and explain how this might be applied to the topic of adjusting entries

Neptune Company produces toys and other items for use in beach and resort areas. A small, inflatable toy has come onto the market that the company is anxious to produce and sell. The new toy will sell for $5.50 per unit. Enough capacity exists in the company’s plant to produce 20,000 units of the toy each month. Variable costs to manufacture and sell one unit would be $2.75, and fixed costs associated with the toy would total $70,000 per month.

The company’s Marketing Department predicts that demand for the new toy will exceed the 20,000 units that the company is able to produce. Additional manufacturing space can be rented from another company at a fixed cost of $5,000 per month. Variable costs in the rented facility would total $3.00 per unit, due to somewhat less efficient operations than in the main plant.

Required:

1. Compute the monthly break-even point for the new toy in units and in total dollar sales. Show all computations in good form.

2. How many units must be sold each month to make a monthly profit of $3,000?

3. If the sales manager receives a bonus of 5 cents for each unit sold in excess of the break-even point, how many units must be sold each month to earn a return of 4.9% on the monthly investment in fixed costs?

Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: “Wes, I’m not sure how to go about answering the questions that came up at the meeting with the president yesterday.”

"What's the problem?"

“The president wanted to know the break-even point for each of the company’s products, but I am having trouble figuring them out.”

“I’m sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow-up meeting at 9:00.”

Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below:

VelcroMetalNylon

Annual sales volume97,000213,000302,000

Unit selling price$1.50$1.90$1.40

Variable expense per unit$1.00$1.30$0.90

Total fixed expenses are $267,000 per year.

All three products are sold in highly competitive markets, so the company is unable to raise prices without losing an unacceptable numbers of customers.

The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories.

Required:

1. What is the company’s over-all break-even point in dollar sales?

2. Of the total fixed expenses of $267,000, $13,550 could be avoided if the Velcro product is dropped, $100,200 if the Metal product is dropped, and $97,000 if the Nylon product is dropped. The remaining fixed expenses of $56,250 consist of common fixed expenses such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.

a. What is the break-even point in unit sales for each product?

b. If the company sells exactly the break-even quantity of each product, what will be the overall profit of the company?