Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $12.75 per direct labor-hour was based on a cost formula that estimated $510,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

1. Raw materials were purchased on account, $654,000.
2. Raw materials use in production, $618,800. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $460,000; indirect labor, $150,000; selling and administrative salaries, $270,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $417,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $360,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,539,250 to manufacture according to their job cost sheets were completed during the year.
8. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,549,250 to manufacture according to their job cost sheets.

Required :

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

Andretti Company has a single product called a Dak. The company normally produces and sells 83,000 Daks each year at a selling price of $60 per unit. The company’s unit costs at this level of activity are given below:

Direct materials $ 9.50

Direct labor 9.00

Variable manufacturing overhead 2.30

Fixed manufacturing overhead 9.00 ($747,000 total)

Variable selling expenses 2.70

Fixed selling expenses 3.50 ($290,500 total)

Total cost per unit $ 36.00

1-a. Assume that Andretti Company has sufficient capacity to produce 103,750 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 25% above the present 83,000 units each year if it were willing to increase the fixed selling expenses by $100,000. What is the financial advantage (disadvantage) of investing an additional $100,000 in fixed selling expenses?

1-b. Would the additional investment be justified?

4. Due to a strike in its supplier’s plant, Andretti Company is unable to purchase more material for the production of Daks. The strike is expected to last for two months. Andretti Company has enough material on hand to operate at 25% of normal levels for the two-month period. As an alternative, Andretti could close its plant down entirely for the two months. If the plant were closed, fixed manufacturing overhead costs would continue at 35% of their normal level during the two-month period and the fixed selling expenses would be reduced by 20% during the two-month period.

b. How much total fixed cost will the company avoid if it closes the plant for two months?

c. What is the financial advantage (disadvantage) of closing the plant for the two-month period?

The following information is available for the employees of Webber Packing Company for the first week of January Year 1: Kayla earns $27 per hour and 1½ times her regular rate for hours over 40 per week. Kayla worked 51 hours the first week in January. Kayla’s federal income tax withholding is equal to 12 percent of her gross pay. Webber pays medical insurance of $75 per week for Kayla and contributes $50 per week to a retirement plan for her. Paula earns a weekly salary of $1,350. Paula’s federal income tax withholding is 18 percent of her gross pay. Webber pays medical insurance of $110 per week for Paula and contributes $135 per week to a retirement plan for her. Vacation pay is accrued at the rate of 2 hours per week (based on the regular pay rate) for Kayla and $95 per week for Paula. Assume the Social Security tax rate is 6.0 percent on the first $110,000 of salaries and the Medicare tax rate is 1.5 percent of total salaries. The state unemployment tax rate is 5.4 percent and the federal unemployment tax rate is 0.6 percent of the first $7,000 of salary for each employee.

c. Prepare the journal entry to record the payment of the payroll for the week.

The correct accounts are as follows:

Salaries Expense

Fica Tax: SS Payable

Fica Tax: Med Payable

Cash

I can't figure out the correct amounts

d. Prepare the journal entry to record the payroll tax expense and fringe benefit expense for Webber Packing Company for the week.

.

1. ffect of Transactions on A company's ability to pay its current liabilities.Current Position Analysis

   Data pertaining to the current position of Lucroy Industries Inc. follow:

   Cash	$417,500
   Marketable securities	190,000
   Accounts and notes receivable (net)	340,000
   Inventories	750,000
   Prepaid expenses	48,000
   Accounts payable	190,000
   Notes payable (short-term)	240,000
   Accrued expenses	315,000

   Required:

   1. Compute (a) the The excess of the current assets of a business over its current liabilities.working capital, (b) the A financial ratio that is computed by dividing current assets by current liabilities.current ratio, and (c) the A financial ratio that measures the ability to pay current liabilities with quick assets (cash, temporary investments, accounts receivable), computed as quick assets divided by current liabilities.quick ratio. Round ratios to one decimal place.

   a. Working capital	$
   b. Current ratio
   c. Quick ratio

   2. Compute the working capital, the current ratio, and the quick ratio after each of the following transactions and record the results in the appropriate columns. Consider each transaction separately and assume that only that transaction affects the data given. Round ratios to one decimal place.

   Transaction	Working Capital		Current Ratio		Quick Ratio
   a. Sold marketable securities at no gain or loss, $70,000.	$
   b. Paid accounts payable, $105,000.	$
   c. Purchased goods on account, $130,000.	$
   d. Paid notes payable, $110,000.	$
   e. Declared a cash dividend, $160,000.	$
   f. Declared a common stock dividend on common stock, $30,000.	$
   g. Borrowed cash from bank on a long-term note, $220,000.	$
   h. Received cash on account, $125,000.	$
   i. Issued additional shares of stock for cash, $565,000.	$
   j. Paid cash for prepaid expenses, $12,000.	$

Esperado Furnishings are retailers who purchase and sell household furnishings, including table lamps. The business uses a perpetual inventory system and adjusts cost of goods sold for any shortage or excess inventory. The business began the last quarter of 2018 with merchandise inventory of 10 pairs of “Italia” table lamps at a total cost of $168,200.

The following transactions, relating to the “Italia” brand were completed during the quarter:

All purchases were on account and received on the dates stated. Required:

1. Prepare a perpetual inventory record for Esperado Furnishings, using the first in, first out (FIFO) method to determine the value of ending inventory at December 31, 2018, and the total amount to be assigned to cost of goods sold for the period.

2. Given that selling, distribution and administrative costs for the quarter were $23,445, $10,250 and$75,435 respectively, prepare an income statement for Esperado Furnishings for the period, to determine the net profit for the quarter, assuming the perpetual inventory system.

3. You are told that 8 pairs of lamps sold on November 27, 2018 were on account. State the journal entries necessary to record the transactions on November 12 and November 27, assuming the business uses a:

- Perpetual inventory system

- Periodic inventory system

4. Assuming that Esperado sold 86 pairs of “Italia” brand of lamps during the quarter; determine the value of ending inventory and cost of goods sold assuming the business used the periodic system and the LIFO method?

A firm's bonds have a maturity of 8 years with a $1,000 face value, have an 11% semiannual coupon, are callable in 4 years at $1,142, and currently sell at a price of $1,261.56.

1. What is their nominal yield to maturity? Round your answer to two decimal places.
   
   %
   
2. What is their nominal yield to call? Round your answer to two decimal places.
   
   %
   
3. What return should investors expect to earn on these bonds?
   
   1. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   2. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   3. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
   5. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.
   
   -Select-IIIIIIIVV

Costs per Equivalent Unit

Georgia Products Inc. completed and transferred 89,000 particle board units of production from the Pressing Department. There was no beginning inventory in process in the department. The ending in-process inventory was 2,400 units, which were 3⁄5 complete as to conversion cost. All materials are added at the beginning of the process. Direct materials cost incurred was $219,360, direct labor cost incurred was $28,100, and factory overhead applied was $12,598.

Determine the following for the Pressing Department. Round "cost per equivalent unit" answers to the nearest cent.

Kaufman Enterprises has bonds outstanding with a $1,000 face value and 10 years left until maturity. They have an 12% annual coupon payment, and their current price is $1,180. The bonds may be called in 5 years at 109% of face value (Call price = $1,090).

1. What is the yield to maturity? Round your answer to two decimal places.
   %
   
2. What is the yield to call if they are called in 5 years? Round your answer to two decimal places.
   %
   
3. Which yield might investors expect to earn on these bonds? Why?
   
   1. Investors would not expect the bonds to be called and to earn the YTM because the YTM is less than the YTC.
   2. Investors would expect the bonds to be called and to earn the YTC because the YTC is less than the YTM.
   3. Investors would expect the bonds to be called and to earn the YTC because the YTM is less than the YTC.
   4. Investors would expect the bonds to be called and to earn the YTC because the YTC is greater than the YTM.
   5. Investors would not expect the bonds to be called and to earn the YTM because the YTM is greater than the YTC.
   
   -Select I-V
   
4. The bond's indenture indicates that the call provision gives the firm the right to call the bonds at the end of each year beginning in Year 5. In Year 5, the bonds may be called at 109% of face value; but in each of the next 4 years, the call percentage will decline by 1%. Thus, in Year 6, they may be called at 108% of face value; in Year 7, they may be called at 107% of face value; and so forth. If the yield curve is horizontal and interest rates remain at their current level, when is the latest that investors might expect the firm to call the bonds?
   
   In Year (5,6,7,8,9)?

Bonadio Electrical Supplies distributes electrical components to the construction industry. The company began as a local supplier 15 yrs ago and has grown rapidly to become a major competitor in the North central U.S. As the business grew and variety of components to be stocked expanded, Bonadio acquired a computer and implemented an inventory control system. Other applications such as accounts receivable, account payable, payroll, and sale analysis were gradually computerized as each function expanded. Because of its operational importance, the inventory system has been upgraded to an online system, while all the other applications are operating in batch mode. Over the years, the company has developed or acquired more than 100 application programs and maintains hundreds of files. Bonadio faces stiff competition from local suppliers throughout its marketing area. At a management meeting, the sales manager complained about the difficulty obtaining immediate, current information to respond to customer inquiries. Other managers states that they also had difficulty obtaining timely data from the system. As the result, the controller engaged a consulting firm to explore the situation. The consultant recommended installing a database management system (DBSM), and the company complied, employing Jack Gibbons as the database administrator.

At a recent management meeting, Gibbons presented an overview of the DBMS. Gibbons explained that the databases approach assumes an organizational, data oriented viewpoint as it recognizes that a centralized database represents a vital resource. Instead of being assigned to applications, information is more appropriately used and managed for the entire organization. The operating system physically moves data to and from disk storage, while the DBMS is the software program that controls the data definition library that specifies the data structures and characteristics. As the result. both the roles of the application programs and query software and the tasks of the application programers and users are simplified. Under the database approach, the data are available to all users within security guidelines.

a. Explain the basic difference between a file-oriented system and database management system.

b. Describe at least 3 advantages and at least 3 disadvantages of the database management system.

c. Describe the duties and responsibilities of Jack Gibbons, the database administrator. (CMA Adapted)

Back in Boston, Steve has been busy creating and managing his new company, Teton Mountaineering (TM), which is based out of a small town in Wyoming. In the process of doing so, TM has acquired various types of assets. Below is a list of assets acquired during 2016: Exhibit 10-8 (Use MACRS Table 1, Table 2, Table 3, Table 4 and Table 5.) (Round intermediate calculations and final answer to the nearest whole dollar amount.)

* Not considered a luxury automobile, thus not subject to the luxury automobile limitations.

During 2016, TM had huge success (and had no §179 limitations) and Steve acquired more assets the next year to increase its production capacity. These are the assets acquired during 2017:

^†Used 100% for business purposes.

TM generated taxable income in 2017 of $732,500 for purposes of computing the §179 expense.

a. Compute the maximum 2016 depreciation deductions including §179 expense (ignoring bonus depreciation).

b. Compute the maximum 2017 depreciation deductions including §179 expense (ignoring bonus depreciation).

c. Compute the maximum 2017 depreciation deductions including §179 expense, but now assume that Steve would like to take bonus depreciation on the 2017 assets.

d. Ignoring part c, now assume that during 2017, Steve decides to buy a competitor’s assets for a purchase price of $350,000. Compute the maximum 2017 cost recovery including §179 expense (ignoring bonus depreciation). Steve purchased the following assets for the lump-sum purchase price.

Question 4

1. Explain the difference between financial accounting and management accounting.

Ensure your explanation clearly explains the purpose of management accounting.

2. Car Services Ltd produces custom tow bars and bull bars for utes and cars. Each customer’s order is treated as a separate job so costs can be tracked for each customer.

Tasks

Briefly explain the following:

1. The meaning of the term cost object. Identify the cost object that would be used by Car Services Ltd when recording costs.
2. The difference between a direct cost and an indirect cost. Identify examples of both direct costs and indirect costs for the cost object.

3. Salmon Ltd provides you with the following information on the costs of testing the water quality of their wastewater.

Task

Using the high low method, calculate the fixed cost per month and the variable cost per test.

d) King Ltd uses a job costing system. The company’s budget for the year included a budgeted total manufacturing overhead cost of $1,800,000 and budgeted total direct labour hours of 60,000 hours. Manufacturing overhead cost is applied to jobs based on direct labour-hours worked. During December, King Ltd started and completed one manufacturing job (Job 571). The events of December are:

Tasks

1. Calculate the total cost of Job 571.
2. Determine the amount by which the manufacturing overhead cost is overapplied or underapplied for December.

Maple Trump Winery requested that you determine whether the company's ability to pay its current liabilities and long-term debts improved or deteriorated during 2018.

To answer this question, compute the following ratios for 2018 and 2017 :

(a) current ratio, (b) quick ratio, (c) debt ratio, and (d) interest coverage ratio. Round all ratios to two decimal places. Summarize the results of your analysis.

To answer this​ question, compute the following ratios for 2018 and 2017​:

​(a) current​ ratio, (b) quick​ ratio, (c) debt​ ratio, and​ (d) interest-coverage ratio. Round all ratios to two decimal places. ​(Abbreviations used: Avg​ = Average, EBIT​ = Earnings before interest and​ taxes, LT​ = Long-term, and ST​ = Short-term.)

Begin with a. current ratio.

Select the formula and then enter the amounts to calculate the current ratios.

Presented below are changes in all the account balances of Wildhorse Furniture Co. during the current year, except for retained earnings.

Compute the net income for the current year, assuming that there were no entries in the Retained Earnings account except for net income and a dividend declaration of $28,270 which was paid in the current year.

Describe the different approaches and analysis on global taxation