In 2019, Windsor Enterprises issued, at par, 60 $1,000, 8% bonds, each convertible into 100 shares of common stock. Windsor had revenues of $17,800 and expenses other than interest and taxes of $10,000 for 2020. (Assume that the tax rate is 20%.) Throughout 2020, 1,900 shares of common stock were outstanding; none of the bonds was converted or redeemed.

(a) Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share

$

(b) Assume the same facts as those assumed for part (a), except that the 60 bonds were issued on September 1, 2020 (rather than in 2019), and none have been converted or redeemed. Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share

$

(c) Assume the same facts as assumed for part (a), except that 20 of the 60 bonds were actually converted on July 1, 2020. Compute diluted earnings per share for 2020. (Round answer to 2 decimal places, e.g. $2.55.)

Earnings per share

$

a companys number of days to collect is higher than the length of credit period. Analyst might conclude

A. Customers dissatisfied with the product or service

b. company effictively managing its recievables.

C. company has begun estimating amount of uncollectibles using percentage of sales rather than aging the recievables

Estimated Income Statements, using Absorption and Variable Costing Prior to the first month of operations ending October 31 Marshall Inc. estimated the following operating results: Sales (19,200 x $68) $1,305,600 Manufacturing costs (19,200 units): Direct materials 787,200 Direct labor 186,240 Variable factory overhead 86,400 Fixed factory overhead 103,680 Fixed selling and administrative expenses 28,200 Variable selling and administrative expenses 34,100 The company is evaluating a proposal to manufacture 21,600 units instead of 19,200 units, thus creating an Inventory, October 31 of 2,400 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. 1. Prepare an estimated income statement, comparing operating results if 19,200 and 21,600 units are manufactured in the absorption costing format. If an amount box does not require an entry leave it blank or enter “0”. Marshall Inc. Absorption Costing Income Statement For the Month Ending October 31 19,200 Units Manufactured 21,600 Units Manufactured $ $ Cost of goods sold: $ $ $ $ $ $ Income from operations $ $ a. 2. Prepare an estimated income statement, comparing operating results if 19,200 and 21,600 units are manufactured in the variable costing format. If an amount box does not require an entry leave it blank or enter “0”. Marshall Inc. Variable Costing Income Statement For the Month Ending October 31 19,200 Units Manufactured 21,600 Units Manufactured $ $ Variable cost of goods sold: $ $ $ $ $ $ $ $ Fixed costs: $ $ Total fixed costs $ $ $ $ b. What is the reason for the difference in income from operations reported for the two levels of production by the absorption costing income statement? The increase in income from operations under absorption costing is caused by the allocation of overhead cost over a number of units. Thus, the cost of goods sold is . The difference can also be explained by the amount of overhead cost included in the inventory. Check My Work

Please explain bounded rationality using the Iranian Hostage Crisis.

“I know headquarters wants us to add that new product line,” said Fred Halloway, manager of Kirsi Products’ East Division. “But I want to see the numbers before I make a move. Our division’s return on investment (ROI) has led the company for three years, and I don’t want any letdown.”

Kirsi Products is a decentralized wholesaler with four autonomous divisions. The divisions are evaluated on the basis of ROI, with year-end bonuses given to divisional managers who have the highest ROI. Operating results for the company’s East Division for last year are given below:

Sales	$	27,000,000
Variable expenses		14,000,000
Contribution margin		13,000,000
Fixed expenses		10,759,000
Net operating income	$	2,241,000
Divisional operating assets	$	6,000,000

The company had an overall ROI of 18% last year (considering all divisions). The company’s East Division has an opportunity to add a new product line that would require an investment of $2,900,000. The cost and revenue characteristics of the new product line per year would be as follows:

Sales	$ 8,120,000
Variable expenses	65% of sales
Fixed expenses	$ 2,281,720

Required:
1.	Compute the East Division’s ROI for last year; also compute the ROI as it would appear if the new product line is added. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "%" sign in your response.)

	ROI
Present	%
New product line alone	%
Total	%

2.	If you were in Fred Halloway’s position, would you accept or reject the new product line?
	Accept Reject

3.	Why do you suppose headquarters is anxious for the East Division to add the new product line?
	Adding the new line would increase the company's overall ROI. Adding the new line would decrease the company's overall ROI.

4.	Suppose that the company’s minimum required rate of return on operating assets is 15% and that performance is evaluated using residual income.

a.	Compute the East Division’s residual income for last year; also compute the residual income as it would appear if the new product line is added. (Omit the "$" sign in your response.)

	Residual income
Present	$
New product line alone	$
Total	$

b.	Under these circumstances, if you were in Fred Halloway's position would you accept or reject the new product line?
	Accept Reject

What is a private-purpose trust fund? There are two types of assets that can be held by a private-purpose trust; what are the two types of assets and how do the asset types compare to governmental permanent fund assets?

Becton Labs, Inc., produces various chemical compounds for industrial use. One compound, called Fludex, is prepared using an elaborate distilling process. The company has developed standard costs for one unit of Fludex, as follows:

	Standard Quantity	Standard Price or Rate			Standard Cost
Direct materials	2.40 ounces	$	27.00	per ounce	$	64.80
Direct labor	0.60 hours	$	12.00	per hour		7.20
Variable manufacturing overhead	0.60 hours	$	3.50	per hour		2.10
					$	74.10

During November, the following activity was recorded relative to production of Fludex:

a. Materials purchased, 13,000 ounces at a cost of $330,200.

b. There was no beginning inventory of materials; however, at the end of the month, 2,850 ounces of material remained in ending inventory.

c. The company employs 20 lab technicians to work on the production of Fludex. During November, they worked an average of 160 hours at an average rate of $11.00 per hour.

d. Variable manufacturing overhead is assigned to Fludex on the basis of direct labor-hours. Variable manufacturing overhead costs during November totaled $6,000.

e. During November, 4,200 good units of Fludex were produced .

Required:

1. For direct materials:

a. Compute the price and quantity variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

b. The materials were purchased from a new supplier who is anxious to enter into a long-term purchase contract. Would you recommend that the company sign the contract?

	Yes
	No

2. For direct labor:

a. Compute the rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

b. In the past, the 20 technicians employed in the production of Fludex consisted of 7 senior technicians and 13 assistants. During November, the company experimented with fewer senior technicians and more assistants in order to save costs. Would you recommend that the new labor mix be continued?

	Yes
	No

3. Compute the variable overhead rate and efficiency variances. (Input all amounts as positive values. Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e, zero variance).)

Required information [The following information applies to the questions displayed below.] O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations: Variable costs per unit: Manufacturing: Direct materials $ 29 Direct labor $ 18 Variable manufacturing overhead $ 4 Variable selling and administrative $ 3 Fixed costs per year: Fixed manufacturing overhead $ 560,000 Fixed selling and administrative expenses $ 180,000 During its first year of operations, O’Brien produced 96,000 units and sold 77,000 units. During its second year of operations, it produced 82,000 units and sold 96,000 units. In its third year, O’Brien produced 87,000 units and sold 82,000 units. The selling price of the company’s product is $74 per unit. 2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first): a. Compute the unit product cost for Year 1, Year 2, and Year 3. b. Prepare an income statement for Year 1, Year 2, and Year 3.

• When does the lessee incorporate residual values when calculating the present value of the lease liability? What dollar amounts should they use?

Milano Pizza is a small neighborhood pizzeria that has a small area for in-store dining as well as offering take-out and free home delivery services. The pizzeria’s owner has determined that the shop has two major cost drivers—the number of pizzas sold and the number of deliveries made.

The pizzeria’s cost formulas appear below:

	Fixed Cost per Month			Cost per Pizza			Cost per Delivery
Pizza ingredients				$	4.20
Kitchen staff	$	6,090
Utilities	$	700		$	0.20
Delivery person							$	3.00
Delivery vehicle	$	720					$	1.20
Equipment depreciation	$	472
Rent	$	2,050
Miscellaneous	$	820		$	0.10

  

In November, the pizzeria budgeted for 1,830 pizzas at an average selling price of $16 per pizza and for 230 deliveries.

Data concerning the pizzeria’s actual results in November appear below:

  

	Actual Results
Pizzas		1,930
Deliveries		210
Revenue	$	31,520
Pizza ingredients	$	8,830
Kitchen staff	$	6,030
Utilities	$	930
Delivery person	$	630
Delivery vehicle	$	1,004
Equipment depreciation	$	472
Rent	$	2,050
Miscellaneous	$	844

Required:

1. Complete the flexible budget performance report that shows both revenue and spending variances and activity variances for the pizzeria for November. (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.)

Review Case 7-2 Portofino Company. Address the three questions at the end of the case. Summarize your findings in a 3-5-page paper. Be sure to properly cite your resources using APA style.

Portofino Company made purchases on account from three foreign suppliers on December 15, 2012, with payment made on January 15, 2013. Information related to these purchases is as follows:

Supplier	Location	Invoice Price
Beija Flor Ltda	Sao, Paulo, Brazil	65,000 Brazilian reals
Quetzala SA	Guatemala City, Guatemala	250,000 Guatemalan quetzals
Mariposa SA de CV	Guadalajara, Mexico	400,000 Mexican pesos

Portofino Company’s fiscal year ends December 31.

Required:

1. Use historical exchange rate information available on the Internet at www.oanda.com to find interbank exchange rates between the U.S. dollar and each foreign currency for the period December 15, 2012, to January 15, 2013.
2. Determine the foreign exchange gains and losses that Portofino would have recognized in net income in 2012 and 2013, and the overall foreign exchange gain or loss for each transaction. Determine for which transaction it would have been most important for Portofino to hedge its foreign exchange risk.
3. Portofino could have acquired a one-month call option on December 15, 2012, to hedge the foreign exchange risk associated with each of the three import purchases. In each case, the option would have had an exercise price equal to the spot rate at December 15, 2012, and would have cost $200. Determine for which hedges, if any, Portofino would have recognized a net gain on the foreign currency option.

The Clarks made quarterly Federal income tax payments of $2,400 on each of the following dates: April 17, 2017; June 15, 2017; September 15, 2017; and January 16, 2018. Last year’s Federal income tax return reflected an overpayment of $800, which the Clarks chose to apply to their 2017 income tax liability. The trustee of Andy’s retirement plan also withheld $6,500 of tax with respect to his retirement withdrawals for the year. Neither Andy nor Sarah holds any foreign financial accounts. Relevant Social Security numbers are noted below:

Name Social Security Number Birth Date

Andrew S. Clark 123-45-6785 09/15/1946

Sarah K. Clark 123-45-6786 12/03/1951

Gabrielle Sparks 123-45-6784 10/19/1984

Malone Sparks 123-45-6787 06/25/2011

Macie Sparks 123-45-6788 06/25/2011

Requiremnts: Make necessary assumptions for information not given in the problem but needed to complete the return. • The Clarks are employing the same tax return preparer who completed their tax return for the prior year. • The taxpayers have substantiation (e.g., records, receipts) to support all transactions for the year. • If a refund is due, the Clarks want it applied to next year’s tax liability. • The Clarks do not want to contribute to the Presidential Election Campaign Fund.

Packaging Solutions Corporation manufactures and sells a wide variety of packaging products. Performance reports are prepared monthly for each department. The planning budget and flexible budget for the Production Department are based on the following formulas, where q is the number of labor-hours worked in a month:

	Cost Formulas
Direct labor	$16.40q
Indirect labor	$4,200 + $1.60q
Utilities	$5,200 + $0.50q
Supplies	$1,300 + $0.20q
Equipment depreciation	$18,800 + $2.90q
Factory rent	$8,500
Property taxes	$2,900
Factory administration	$13,000 + $0.60q

The Production Department planned to work 4,100 labor-hours in March; however, it actually worked 3,900 labor-hours during the month. Its actual costs incurred in March are listed below:

	Actual Cost Incurred in March
Direct labor	$	65,560
Indirect labor	$	9,940
Utilities	$	7,640
Supplies	$	2,330
Equipment depreciation	$	30,110
Factory rent	$	8,900
Property taxes	$	2,900
Factory administration	$	14,690

Required:

1. Prepare the Production Department’s planning budget for the month.

2. Prepare the Production Department’s flexible budget for the month.

3. Prepare the Production Department’s flexible budget performance report for March, including both the spending and activity variances.

At the end of 2018, the management of XX Corp., a merchandising company, prepared the attached balance sheet. To prepare a master budget for January, February, and March of 2019, management gathers the following information.

1. XX Corp.'s single product is purchased for $33 per unit and resold for $60 per unit. The inventory level of on December 31, 2018 is 2,000 units. Management's desired level of ending inventory for 2019, is is 20% of the next month's expected sales (in units). Expected sales are: January, 6,000 units; February, 9,000 units; March, 12,000 units; and April, 10,000 units. check figure: Total Budgeted Sales Revenue for Quarter = $1,620,000; total budgeted purchases for Quarter = $891,000

2. Cash sales and credit sales represent 30% and 70%, respectively, of total sales. Of the credit sales, 60% is collected in the first month after the month of sale and 40% in the second month after the month of sale. For the $500,000 accounts receivable balance at December 31, 2018, $255,000 is collected in January 2019 and the remaining $245,000 is collected in February 2019.
3. All merchandise purchases are made on account. Merchandise purchases are paid for as follows: 40% in the first month after the month of purchase and 60% in the second month after the month of purchase. For the $347,000 accounts payable balance at December 31, 2018, $138,000 is paid in January 2019 and the remaining $208,200 is paid in February 2019.
4. Sales commissions equal to 20% of sales revenue are paid each month. Sales salaries (excluding commissions) are $960,000 per year.
5. General and administrative salaries are $480,000 per year. Maintenance expense equals $3,000 per month and is paid in cash. Depreciation expense is $67,500 for the year.

6. XX Corp. has a working arrangement with its bank to obtain additional loans as needed. The borrowing can only be done in increments of $1,000. The interest rate is 12% per year, and interest is paid at each month-end based on the beginning balance. Partial or full payments on these loans can be made on the last day of the month. Eso has agreed to maintain a minimum ending cash balance of $45,000 in each month. The tax payable on the balance sheet is due March 13, 2019.

Required budgets you must complete:

1. Monthly sales budgets (showing both budgeted unit sales and dollar sales).

XX Corp.
Balance Sheet
December 31, 2018
Assets
Cash	$                                     45,000
A/R	500,000
Inventory	170,000
Total Current Assets		715,000
Equipment	540,000
less: Accum Depr	67,500
Equipment, net		472,500
Total Assets		$                                          1,187,500
Liabilities & Equity
A/P	347,000
Bank loan payable	20,000
Taxes payable	102,000
Total Liabilities		469,000
Common Stock	472,500
Retained Earnings	246,000
Total Stockholder's equity		718,500
Total Liabilities and Equity		$                                          1,187,500

You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company’s costing system and “do what you can to help us get better control of our manufacturing overhead costs.” You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control.

After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March:

	Cost Formula	Actual Cost in March
Utilities	$16,700 plus $0.20 per machine-hour	$	23,100
Maintenance	$38,100 plus $1.30 per machine-hour	$	61,800
Supplies	$0.60 per machine-hour	$	13,600
Indirect labor	$94,500 plus $1.60 per machine-hour	$	132,200
Depreciation	$68,200	$	69,900

During March, the company worked 21,000 machine-hours and produced 15,000 units. The company had originally planned to work 23,000 machine-hours during March.

Required:

1. Calculate the activity variances for March.

2. Calculate the spending variances for March.