Froya Fabrikker A/S of Bergen, Norway, is a small company that manufactures specialty heavy equipment for use in North Sea oil fields. The company uses a job-order costing system that applies manufacturing overhead cost to jobs on the basis of direct labor-hours. Its predetermined overhead rate was based on a cost formula that estimated $370,500 of manufacturing overhead for an estimated allocation base of 950 direct labor-hours. The following transactions took place during the year:

1. Raw materials purchased on account, $270,000.
2. Raw materials used in production (all direct materials), $255,000.
3. Utility bills incurred on account, $73,000 (90% related to factory operations, and the remainder related to selling and administrative activities).
4. Accrued salary and wage costs:

5. Maintenance costs incurred on account in the factory, $68,000
6. Advertising costs incurred on account, $150,000.
7. Depreciation was recorded for the year, $86,000 (75% related to factory equipment, and the remainder related to selling and administrative equipment).
8. Rental cost incurred on account, $111,000 (80% related to factory facilities, and the remainder related to selling and administrative facilities).
9. Manufacturing overhead cost was applied to jobs, $ ? .
10. Cost of goods manufactured for the year, $910,000.
11. Sales for the year (all on account) totaled $1,900,000. These goods cost $940,000according to their job cost sheets.

The balances in the inventory accounts at the beginning of the year were:

Required:

1. Prepare journal entries to record the preceding transactions.

2. Post your entries to T-accounts. (Don’t forget to enter the beginning inventory balances above.)

3. Prepare a schedule of cost of goods manufactured.

4A. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4B. Prepare a schedule of cost of goods sold.

5. Prepare an income statement for the year.

The following information is available for Robstown Corporation for 20Y8:

Amount Descriptions

Statement of Cost of Goods Manufactured

a. Prepare the 20Y8 statement of cost of goods manufactured. Be sure to complete the statement heading. Refer to the list of Labels and Amount Descriptions provided for the exact wording of the answer choices for text entries. For those boxes in which you must enter subtracted or negative numbers use a minus sign.

Income Statement

b. Prepare the 20Y8 income statement. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

More and more adults are considering commuting to work by bicycle rather than car, but few bicycles currently on the market have been designed with the commuter's needs in mind.

Imagine that you are a marketing executive for a bicycle manufacturer who wants to enter this potentially expanding market with a new lightweight, easy-to-store bike with safety features that combines the speed of a road bike and the sturdiness of a mountain bike. You have moved through most of the stages of new product development, including formulating a national marketing strategy and working through a series of prototypes.

You have decided to test market the bike and marketing program in one or two urban areas with large commuting populations before you begin manufacturing, promoting, and distributing the bike on a national scale.

In an essay, explain the possible advantages and disadvantages of this decision. Describe the information that you would hope to gather through test marketing and explain how having this information would make a national launch more successful.

To ensure immediate feedback, please submit a response between 100 and 1000 words. Essay length alone will not necessarily result in a high or low score.

Discuss proactive and defensive marketing in context to the company position in the hypothetical market structure (that is leader/challenger/follower/nicher). Which approach do you think a company should take based on its market share.    

Make-or-Buy Decision

Fremont Computer Company has been purchasing carrying cases for its portable computers at a purchase price of $57 per unit. The company, which is currently operating below full capacity, charges factory overhead to production at the rate of 43% of direct labor cost. The unit costs to produce comparable carrying cases are expected to be as follows:

If Fremont Computer Company manufactures the carrying cases, fixed factory overhead costs will not increase and variable factory overhead costs associated with the cases are expected to be 14% of the direct labor costs.

a. Prepare a differential analysis dated September 30 to determine whether the company should make (Alternative 1) or buy (Alternative 2) the carrying case. If required, round your answers to two decimal places. If an amount is zero, enter "0". Use a minus sign to indicate a loss.

The following costs were incurred for the single product produced during the first year of operations for the Fairfax Manufacturing Company:

During the year, the company produced 35,000 units and sold 25,000 units. The selling price of the company’s product is $46 per unit.

Required:   

1. Assume that the company uses absorption costing:

a. Compute the unit product cost.

b. Prepare an income statement for the year.

2. Assume that the company uses variable costing:   

a. Compute the unit product cost.

b. Prepare an income statement for the year.

Royal Corp’s financial information (in millions, except for Dividends) for Problems 2 and 3:

                                                         2019                2018
Accounts Payable                                           $  7,000           $  6,780

Accounts Receivable                                          5,000               4,685

Additional Paid-in Capital                                  4,000               4,000

Cash                                                                    8,577               5,654

Common Stock                                                   3,107               3,107           

Cost of Goods Sold                                           48,464             47,594

Depreciation                                                       1,315               1,244           

Dividends per share                                              1.53                 1.28

Goodwill                                                           18,051             19,121

Interest Expense                                                 1,200               1,100

Inventory                                                            8,871               8,101

Long-Term Debt                                                     ?                      ?  

Net Property, Plant & Equipment                    26,500             25,311

Notes Payable                                                     4,200               3,770

Research & Development Expense                    1,847               1,747

Retained Earnings                                                   ?                23,045           

Revenue                                                            61,200             59,000

Selling General & Admin Expense                    3,200               3,024

Shares Outstanding                                             1,170               1,280

Treasury Stock                                                   (6,500)           (4,200)

Tax Rate = 30%

Note that a reduction in Goodwill would be similar to Depreciation Expense in a firm’s Operating Cash Flow.

2. See the last page for the financial information of Royal Corporation.

2 A. Construct Income Statements for 2018 and 2019
                                                2019                          2018

2B. Construct Balance Sheets for 2018 and 2019
                                      Assets                                               Liabilities and Owners’ Equity

                             2019              2018                                                             2019                2018


2C. Construct a 2019 Statement of Cash Flows (Goodwill reduction is a noncash expense)

Crimson Tide Company uses a job-order costing system. At Crimson Tide, overhead costs are applied to jobs on the basis of machine-hours.

For the current year, Crimson Tide estimated that its machines would work for a total of 26,000 machine-hours. Tide also estimated for the current year that it would incur $124,800 in manufacturing overhead cost.

The following transactions occurred during the year:

a. Raw materials requisitioned for use in production, $300,000 (80% direct and 20% indirect).

b. The following costs were incurred for employee services:

c. Total insurance costs were $21,000 Note: Of the total insurance cost, 90% relates to factory operations, and 10% relates to selling and administrative activities.

d. In the factory only, heat, power, and water costs incurred in the factory totalled $60,000.

e. Total depreciation recorded for the year was  $71,000 Note: Of the total depreciation recorded 85% relates to factory operations, and 15% relates to selling and administrative activities.

f. Advertising costs incurred was $61,000.

g. According to their job cost sheets, goods that cost $491,000 to manufacture were transferred to the finished goods warehouse.

h. Sales for the year totaled $722,000. The total cost to manufacture these goods according to their job cost sheets was $486,000.

i. The company actually used 51,000 machine-hours during the year.

Required:

1. Determine the underapplied or overapplied overhead for the year. (Round predetermined overhead rate to 2 decimal places.).

2. Prepare an income statement for the year. (Hint: No calculations are required to determine the cost of goods sold before any adjustment for underapplied or overapplied overhead.) (Round predetermined overhead rate to 2 decimal places.)

Laelia Ltd sells airplanes for $20,000 each. These airplanes are designed for individual use and can transport customers up to 200 kilometres in one go. Laelia Ltd can also provide custom-designed hangars for its customers’ airplanes at Dawson Creek, Queensland for $2,500 per year. These hangars can only cater to airplanes sold by Laelia Ltd due to regulations. Laelia Ltd sells these items either separately or as a package.

On 1 October 2020 Laelia Ltd enters into a contract to sell an airplane and one year of hangar facilities to Peter Do for $20,500. Cash payment is required at this date, after which legal title to the airplane passes to Peter Do and the hangar services commence. Peter Do is free to fly the airplane anywhere and he is not bound by any restriction. Please ignore effects of GST.

REQUIRED:

(a) Explain how Laelia Ltd would account for the revenue associated with this transaction with Peter Do in accordance with the requirements of AASB 15 ‘Revenue from Contracts

Step 1 – Identify the contract

Step 2 – Identify the performance obligation(s)

Step 3 – Identify the transaction price

Step 4 – Allocate the transaction price

Step 5 – Recognise the revenue as performance obligation(s) is(are) satisfied

Budget Question:  

Gutierrez Company, a publicly held corporation, operates a regional chain of large drugstores. Each drugstore is operated by a general manager and a controller. The general manager is responsible for the day-to-day operations of the store, while the controller is responsible for the budget and other financial tasks. The general manager, Tracie Kappan, has been at Gutierrez Company for several years. Employee turnover is high at Gutierrez Company, just as it is in the retail industry in general. Kappan just hired a new controller, Min Yang.

Yang was asked to prepare the master budget. Each retail location prepares its master budget once a year and then submits that budget to company headquarters for approval. Once approved by headquarters, the master budget is used to evaluate the store’s performance. These performance evaluations directly affect the managers’ bonuses and whether additional company funds are invested in that location.

When Yang was almost done preparing the budget, Kappan instructed him to increase the amounts budgeted for labor and supplies by 20%. When asked why, Kappan responded that this budgetary cushion gives store management flexibility in running the store. For example, because company headquarters tightly controls operating funds and capital improvement funds, any extra money budgeted for labor and supplies can be used to replace store furnishings or to pay bonuses to help to retain good employees. She explains that the chance of getting extra funds from company headquarters is not good; this “cushion” is usually the only opportunity to replace store décor or to pay bonuses to key employees. Kappan also needs extra funds occasionally to make “under the table” payments to employees as incentives to work extra hours or to keep them from leaving for a higher-paying job.

Yang feels conflicted. He is eager to please Kappan, and he is wondering what he should do in this situation.

1. Who are the stakeholders in the scenario?

2. Who is responsible for the situation Min Yang is in? The Company or the General Manager? Why do you think that?

3. What would do if you were Min Yang?

In the context of single touch payroll, why is it important that clients transition their business to a cloud accounting system ?

What does it mean to borrow money on a discount basis? This has to do with borrowing money from a bank on a discount basis. This is not related to bond issues/sales. (See chapter 7, page 238, "Interest Calculation Method").

Be cautious: borrowing on a discount basis has to do with going to a lender (banker) for a loan. Be sure not to confuse borrowing on a discount bases with the bond discount discussed later in chapter 7.

Diane Buswell is preparing the 2019 budget for one of Current Designs' kayaks. Extensive meetings with members of the sales department and executive team have resulted in the following unit sales projections for 2019.

Current Designs' policy is to have finished goods ending inventory in a quarter equal to 20% of the next quarter's anticipated sales. Preliminary sales projections for 2020 are 1,100 units for the first quarter and 1,500 units for the second quarter. Ending inventory of finished goods at December 31, 2018, will be 200 kayaks.

Production of each kayak requires 54 pounds of polyethylene powder and a finishing kit (rope, seat, hardware, etc.). Company policy is that the ending inventory of polyethylene powder should be 25% of the amount needed for production in the next quarter. Assume that the ending inventory of polyethylene powder on December 31, 2018, is 19,400 pounds. The finishing kits can be assembled as they are needed. As a result, Current Designs does not maintain a significant inventory of the finishing kits.

The polyethylene powder used in these kayaks costs $1.50 per pound, and the finishing kits cost $170 each. Production of a single kayak requires 2 hours of time by more experienced, type I employees and 3 hours of finishing time by type II employees. The type I employees are paid $15 per hour, and the type II employees are paid $12 per hour.

Selling and administrative expenses for this line are expected to be $45 per unit sold plus $7,500 per quarter. Manufacturing overhead is assigned at 150% of labor costs.

Instructions

First - prepare the following:

1. production budget
2. direct materials budget
3. direct labor budget
4. manufacturing overhead budget
5. selling and administrative budget for this product line by quarter and in total for 2019.

Second – Determine a selling price that is reasonable for these kayaks, then based upon the sales projections, prepare the following:

1. Sales Budget
2. Budgeted Income Statement

* note: i need it step by step please

The St. Lucia Blood Bank, a private charity partly supported by government grants, is located on the Caribbean island of St. Lucia. The blood bank has just finished its operations for September, which was a very busy month due to a powerful hurricane that hit neighboring islands causing many injuries. The hurricane largely bypassed St. Lucia, but residents of St. Lucia willingly donated their blood to help people on other islands. As a consequence, the blood bank collected and processed over 20% more blood than had been originally planned for the month.

A report prepared by a government official comparing actual costs to budgeted costs for the blood bank appears below. Continued support from the government depends on the blood bank’s ability to demonstrate control over its costs.

The managing director of the blood bank was very unhappy with this report, claiming that his costs were higher than expected due to the emergency on the neighboring islands. He also pointed out that the additional costs had been fully covered by payments from grateful recipients on the other islands. The government official who prepared the report countered that all of the figures had been submitted by the blood bank to the government; he was just pointing out that actual costs were a lot higher than promised in the budget.

The following cost formulas were used to construct the planning budget:

  
Required:

1.Complete the flexible budget performance report for September. (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.)