1. Single Plantwide Rate and Activity-Based Costing

   Whirlpool Corporation conducted an activity-based costing study of its Evansville, Indiana, plant in order to identify its most profitable products. Assume that we select three representative refrigerators (out of 333): one low-, one medium-, and one high-volume refrigerator. Additionally, we assume the following activity-base information for each of the three refrigerators:

   Three Representative Refrigerators	Number of Machine Hours		Number of Setups		Number of Sales Orders		Number of Units
   Refrigerator—Low Volume	120		21		63		600
   Refrigerator—Medium Volume	310		20		140		1,550
   Refrigerator—High Volume	960		14		210		4,800

   Prior to conducting the study, the factory overhead allocation was based on a single machine hour rate. The machine hour rate was $600 per hour. After conducting the activity-based costing study, assume that three activities were used to allocate the factory overhead. The new activity rate information is assumed to be as follows:

   	Machining Activity		Setup Activity		Sales Order Processing Activity
   Activity rate	$580		$900		$200

   a. Complete the following table, using the single machine hour rate to determine the per-unit factory overhead for each refrigerator (Column A) and the three activity-based rates to determine the activity-based factory overhead per unit (Column B). Finally, compute the percent change in per-unit allocation from the single to activity-based rate methods (Column C).

   If required, round all per unit answers to the nearest cent. Round percents to one decimal place. For column C, use the minus sign to indicate a negative or decrease.

   	Column A	Column B	Column C
   Product Volume Class	Single Rate Overhead Allocation Per Unit	ABC Overhead Allocation Per Unit	Percent Change in Allocation
   Low	$	$	%
   Medium	$	$	%
   High	$	$	%

   
   b. Why is the traditional overhead rate per machine hour greater under the single rate method than under the activity-based method?

   The machine hour rate is greater under the single rate method than under the activity-based method because 100% of the factory overhead is is allocated by machine hours under the single rate method. However, only a portion of the factory overhead is allocated under the machine rate method using activity-based costing. The remaining factory overhead is allocated using the . Thus, the numerator for for determining the machine hour rate under activity-based costing must be less than the numerator under the single machine hour rate method.

   c. Interpret Column C in your table from part (A).

   Column C indicates that under activity-based costing the low-volume product has a per-unit cost than calculated under the single rate method. In contrast, under activity-based costing the high-volume product has a per-unit cost than calculated under the single rate method. This result will occur when there are activities that occur in proportions different from their volumes. In this case, volume products have setups and sales orders occurring in higher proportions of total setups and sales orders than their proportion of machine hours to total machine hours. The opposite is the case for the volume product. Thus, the lower-volume products are produced and ordered in batch sizes compared to the higher-volume product. This implies that Whirlpool may wish to simplify its product line by eliminating some of the volume products or by attempting to reduce the overall cost of setup and sales order processing activities.

he president of the retailer Prime Products has just approached the company’s bank with a request for a $49,000, 90-day loan. The purpose of the loan is to assist the company in acquiring inventories. Because the company has had some difficulty in paying off its loans in the past, the loan officer has asked for a cash budget to help determine whether the loan should be made. The following data are available for the months April through June, during which the loan will be used:

1. On April 1, the start of the loan period, the cash balance will be $38,500. Accounts receivable on April 1 will total $148,400, of which $127,200 will be collected during April and $16,960 will be collected during May. The remainder will be uncollectible.

2. Past experience shows that 30% of a month’s sales are collected in the month of sale, 60% in the month following sale, and 8% in the second month following sale. The other 2% is bad debts that are never collected. Budgeted sales and expenses for the three-month period follow:

3. Merchandise purchases are paid in full during the month following purchase. Accounts payable for merchandise purchases during March, which will be paid in April, total $186,000.

4. In preparing the cash budget, assume that the $49,000 loan will be made in April and repaid in June. Interest on the loan will total $840.

Required:

1. Calculate the expected cash collections for April, May, and June, and for the three months in total.

2. Prepare a cash budget, by month and in total, for the three-month period.

Connolly Enterprises manufactures tires for the Formula 1 motor racing circuit. For August 2017 ​, it budgeted to manufacture and sell 3 comma 100 tires at a variable cost of $ 73 per tire and total fixed costs of $ 53 comma 500 . The budgeted selling price was $ 116 per tire. Actual results in August 2017 were 3 comma 000 tires manufactured and sold at a selling price of $ 119 per tire. The actual total variable costs were $ 240 comma 000 ​, and the actual total fixed costs were $ 50 comma 500 . Read the requirements LOADING... . Requirement 1. Prepare a performance report that uses a flexible budget and a static budget. Begin with the actual​ results, then complete the flexible budget columns and the static budget columns. Label each variance as favorable or unfavorable.​ (For variances with a​ $0 balance, make sure to enter​ "0" in the appropriate field. If the variance is​ zero, do not select a​ label.) Actual Results Units sold Revenues Variable costs Contribution margin Fixed costs Operating income Flexible-Budget Flexible Variances Budget Sales-Volume Static Variances Budget Requirement 2. Comment on the results in requirement 1. The total static-budget variance in operating income is $ There is a(n) total flexible-budget variance and a(n) sales-volume variance. The sales-volume variance arises solely because actual units manufactured and sold were than the budgeted 3,100 units. The flexible-budget variance in operating income is due primarily to the in unit variable costs. Choose from any list or enter any number in the input fields and then continue to the next question.

Nittany Company uses a periodic inventory system. At the end of the annual accounting period, December 31 of the current year, the accounting records provided the following information for product 1: Units Unit Cost Inventory, December 31, prior year 1,870 $ 5 For the current year: Purchase, March 21 5,050 7 Purchase, August 1 2,830 8 Inventory, December 31, current year 4,070 Required: Compute ending inventory and cost of goods sold for the current year under FIFO, LIFO, and average cost inventory costing methods. (Round "Average cost per unit" to 2 decimal places and final answers to nearest whole dollar amount.)

Huxley (60) and Elise (45) started the process on adopting Elwood (15) on May 1, 2020. On July 6, 2020, Huxley took a $5,000 distribution from his 401(k). On September 24, 2020, Elise took a $5,000 distribution from her IRA. What is the tax treatment of each distribution?

Huxley's distribution is taxable and not subject to the early distribution penalty. Elise's distribution is taxable and subject to the early distribution penalty.

Huxley's distribution is not taxable or subject to the early distribution penalty. Elise's distribution is taxable and subject to the early distribution penalty.

Huxley's distribution is taxable and not subject to the early distribution penalty. Elise's distribution is taxable and not subject to the early distribution penalty.

Huxley's distribution is taxable and subject to the early distribution penalty. Elise's distribution is taxable and not subject to the early distribution penalty.

Pecan Theater Inc. owns and operates movie theaters throughout Florida and Ga. Pecan Theater has declared the following annual dividends over a six-year period ending December 31 of each year, the outstanding stock of the company was composed of 30,000 shares of cumulative, 4% preferred stock, $100 par, and 100,000 shares of common stock, $25 par.

1. Determine the total dividends and the per share dividends declared on each class of stock for each of the six years. There were no dividends in arrears at the beginning of Year 1. Summarize the data in tabular form. If required, round your answers to two decimal places. If the amount is zero, please enter "0".
Year.    Total Dividends. Preferred/Common
1.           48,000                 total? per share?
2.           144,000
3.           288,000
4.           276,000
5.           336,000
6.           420,000
2. Determine the average annual dividend per share for each class of stock for the six-year period. If required, round your answers to two decimal places.
Average annual dividend for preferred_____ per share
Average annual dividend for common_____per share
3. Assuming a market price per share of $253 for the preferred stock and $31 for the common stock, determine the average annual percentage return on initial shareholders' investment, based on the average annual dividend per share for preferred stock and for common stock.
Preferred stock______%
Common stock______%

Twenty metrics of liquidity, Solvency, and Profitability

The comparative financial statements of Automotive Solutions Inc. are as follows. The market price of Automotive Solutions Inc. common stock was $56 on December 31, 20Y8.

Instructions:

Determine the following measures for 20Y8. Round ratio values to one decimal place and dollar amounts to the nearest cent. For number of days' sales in receivables and number of days' sales in inventory, round intermediate calculations to the nearest whole dollar and final amounts to one decimal place. Assume there are 365 days in the year.

4

Woodsman Company sells a product for $220 per unit. The variable cost is $120 per unit, and fixed costs are $520,000.

Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $202,800.

Jaynes Inc. acquired all of Aaron Co.'s common stock on January I, 2017, by issuing 11,000 shares of SI par value common stock. Jaynes' shares had a $17 per share fair value. On that date, Aaron reported a net book value of S120,000. However, its equipment (with a five-year remaining life) was undervalued by $6,000 in the company's accounting records. Any excess of consideration transferred over fair value of assets and liabilities is assigned to an unrecorded patent to be amortized over ten years. The following figures came from the individual accounting records of these two companies as of December 31, 2017Aaton Co.276,000 144,000 Jaynes Inc S 720,000 528,000 Not given 00,000 Revenues Expenses Investment income Dividends paid 60,000 The following figures came from the individual accounting records of these two companies as of December 31, 2018 Aaron Co 336.000 180,000 Jaynes Inc Revenues Expenses Investment income Dividends paid Equipment Retained carnings, 12/31 18 balance 840,000 552,000 Not given 110,000 600,000 50,000 360,000 960.000 216000

A.What was the total for consolidated patents as of December 31, 2018?

B. What was consolidated equipment as of December 31, 2018?

C.What balance would Jaynes' Investment in Aaron Co. account have shown on December 31, 2018, when the equity method was applied for this acquisition?

D. What was consolidated net income for the year ended December 31, 2018?

Please provide solutions and answers

1)

Managers trace _____ to service departments. Managers allocate ______ to service departments.

A) producing department costs; service department costs.

B) producing department costs; producing department costs.

C) direct costs; indirect costs.

D) direct costs; producing department costs.

2)

The allocation of fixed costs in service departments to user departments is based on _______.

A) actual capacity used in last period.

B) budgeted capacity available to user.

C) actual usage by user department.

D) actual usage by service development.

3)

When allocating fixed costs from service departments to production departments, managers should use ______ instead of _____.

A) capacity used; capacity available

B) capacity available; budgeted capacity

C) capacity used; budgeted capacity

D) capacity available; capacity used

4)

By-products differ from joint products because by- products have _____.

A) no joint costs before the split-off point

B) joint costs before the split-off point

C) significant sales value when compared to other products at the split-off point

D) insignificant sales value when compared to other products at the split-off point

Your office has the option of leasing a copy machine for 60 months or just purchasing one outright. You decide to make a cost comparison of the two options. The total costs for leasing a copy machine for 60 months is $100 per month plus 5 cents per copy. The total cost for purchasing the same machine is $2000 plus 7 cents per copy to cover maintenance and supplies.

Display a graph of the two equations showing the ‘break-even point’ using the Intersect function where the costs are the same for leasing or purchasing as well as a detailed explanation of this “break-even point” and be sure to state how many copies from each option are needed.

A.(i) Moment Inc. provides the following data for June 2016 when 15,000 Units are manufactured: Standard Material Cost (Per Unit) 8.50 kg @ $ 7.50/kg Actual Material Cost (Per Unit) 6.75 kg @ $ 13.5/kg Standard Labor cost (Per Unit) 5.5 hrs @ $ 15/hr Actual Labor cost (Per Unit) 6.5 hrs @ $ 12.2/hr Calculate: Direct Material Price Variance Direct Material Quantity/Usage Variance Total Material Cost Variance Direct Labor Rate Variance Direct Labor Efficiency Variance Total Labor Cost Variance (ii) Calculate Variable Overhead Spending Variance if actual labor hours used are 260,standard variable overhead rate is $10.40 per direct labor hour and actual variable overhead rate is $9.30 per direct labor hour. Also specify whether the variance is favorable or unfavorable.   (iii) Calculate the variable overhead efficiency variance using the following figures: Number of Units Produced 620 Standard Direct Labor Hours Per Unit 0.2 Actual Direct Labor Hours Used 260 Standard Variable Overhead Rate $10.40

B. “Managers of most organizations continually plan for the future, and after the plan is implemented, managers assess whether they achieved their goals. What are the two functions that enable management to go through the process of continually planning and evaluating?

HomeSuites is a chain of all-suite, extended-stay hotel properties. The chain has 12 properties with an average of 200 rooms in each property. In year 1, the occupancy rate (the number of rooms filled divided by the number of rooms available) was 75 percent, based on a 365-day year. The average room rate was $218 for a night. The basic unit of operation is the “night,” which is one room occupied for one night.

The operating income for year 1 is as follows.

In year 1, the average fixed labor cost was $419,000 per property. The remaining labor cost was variable with respect to the number of nights. Food and beverage cost and miscellaneous cost are all variable with respect to the number of nights. Utilities and depreciation are fixed for each property. The remaining costs (management, marketing, and other costs) are fixed for the firm.

At the beginning of year 2, HomeSuites will open three new properties with no change in the average number of rooms per property. The occupancy rate is expected to remain at 75 percent. Management has made the following additional assumptions for year 2.

• The average room rate will increase by 8 percent.
• Food and beverage revenues per night are expected to decline by 15 percent with no change in the cost.
• The labor cost (both the fixed per property and variable portion) is not expected to change.
• The miscellaneous cost for the room is expected to increase by 20 percent, with no change in the miscellaneous revenues per room.
• Utilities and depreciation costs (per property) are forecast to remain unchanged.
• Management costs will increase by 6 percent, and marketing costs will increase by 8 percent.
• Other costs are not expected to change.

Required:

Prepare a budgeted income statement for year 2. (Round your per unit average cost calculations to 2 decimal places.)

Jarvene Corporation uses the FIFO method in its process costing system. The following data are for the most recent month of operations in one of the company’s processing departments:

The cost of beginning inventory according to the company’s costing system was $7,875 of which $4,849 was for materials and the remainder was for conversion cost. The costs added during the month amounted to $180,742. The costs per equivalent unit for the month were:

Required:

1. Compute the total cost per equivalent unit for the month.

2. Compute the equivalent units of material and conversion in the ending inventory.

3. Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4. Compute the number of units started and completed during the month.

5. Compute the cost of ending work in process inventory for materials, conversion, and in total for the month.

6. Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month.

1)

Compute the total cost per equivalent unit for the month. (Round your answer to 2 decimal places.)

2)

Compute the equivalent units of material and conversion in the ending inventory.

3)

Compute the equivalent units of material and conversion that were required to complete the beginning inventory.

4)

Compute the number of units started and completed during the month.

5)

Compute the cost of ending work in process inventory for materials, conversion, and in total for the month. (Round your intermediate calculations to 2 decimal places.)

6)

Compute the cost of the units transferred to the next department for materials, conversion, and in total for the month. (Round your intermediate calculations to 2 decimal places.)