Exercise 22-10 Chubbs Inc.’s manufacturing overhead budget for the first quarter of 2017 contained the following data. Variable Costs Fixed Costs Indirect materials $11,300 Supervisory salaries $37,000 Indirect labor 10,800 Depreciation 6,000 Utilities 7,200 Property taxes and insurance 7,400 Maintenance 5,900 Maintenance 5,000 Actual variable costs were indirect materials $14,600, indirect labor $9,400, utilities $9,600, and maintenance $5,100. Actual fixed costs equaled budgeted costs except for property taxes and insurance, which were $8,700. The actual activity level equaled the budgeted level. All costs are considered controllable by the production department manager except for depreciation, and property taxes and insurance. (a) Prepare a manufacturing overhead flexible budget report for the first quarter. (List variable costs before fixed costs.) CHUBBS INC. Manufacturing Overhead Flexible Budget Report For the Quarter Ended March 31, 2017 Difference Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ (b) Prepare a responsibility report for the first quarter. CHUBBS INC. Manufacturing Overhead Responsibility Report For the Quarter Ended March 31, 2017 Difference Controllable Costs Budget Actual Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ Click if you would like to Show Work for this question:

A newly organized manufacturing business plans to manufacture and sell 50,000 units per year of a new product. Direct materials cost Rs. 47 per unit while direct labor cost is Rs. 32. Manufacturing overheads has two parts: variable part is Rs. 4 per unit while fixed costs are Rs. 340,000 per year. Selling expenses are Re.1 per unit while administrative expenses are Rs. 200,000 for a year.

1. What should the company establish as the selling price per unit if it sets a target of earning an operating income of Rs. 260,000 by producing and selling 50,000 units during the first year of operations?
2. At the unit price computed in part a, how many units must the company produce and sell to break even? Calculate breakeven point in currency value too.
3. What will be the margin of safety (in units and currency) if the company produces and sells 50,000 units at the sales price computed in part a)?
4. Compute operating income at 50,000 units.
5. Due to heavy competition, the marketing manager thinks that the selling price must not be more than Rs. 94, in order to maintain sales of 50,000 units. Can the company survive by making profits at this price? Show calculations to justify your answer.

Ron Abrams, VP Operations for Wilson Bros. has come wandering into your office muttering under his breath (clearly exasperated) after reading the financial statements for one of the plants in Western Europe. After composing himself somewhat he says, "How can a Canadian finance executive sign off on these statements? They look nothing like any statement I’ve seen in Canada before! I know we paid a translator to present these in English, but I cannot make heads or tails of these. Are we profitable there or not?" Knowing what you have read about financial statements briefly describe if these financial statements could be correct, and if so why? Provide constructive feedback to at least two other students’ postings.

managerial accounting

1. Which of the following is NOT true about Managerial Accounting Reports?

a. They are prepared periodically, or at any time management needs information.

b. They can be prepared for the whole business entity, or for just a segment of the business entity (i.e., division, product, project, or territory).

c. They are submitted to the Securities & Exchange Commission according to a required schedule.

d. They are not prepared according to Generally Accepted Accounting Principles.

2. Which of the following is NOT a type of manufacturing-related inventory found on the company's Balance Sheet?

a. Finished Goods

b. Work-in-Process

c. Production Supplies

d. Raw Materials

3. Which of the following is NOT a Period Cost?

a. Advertising Expense

b. Depreciation Expense on Office Equipment

c. Office Supplies Expense

d. Salesmen's Commission Expense

e. Depreciation Expense on Factory Equipment

4. Identify the following costs as Prime, Conversion, or Both:

Wood to make a dining room table

Wages of the assembly line workers

Depreciation Expense on the factory equipment

5. Place the following phases of the Managerial Process in their correct order:

Planning, Decision making, Controlling, Improving, Directing

6. Compete the following statements with the available terms: Improving, Planning, Work in Process, Strategic, Product Costs, Operational, Cost of Goods Sold, Directing, or Period Cost.

The Income Statement of a manufacturer would include a line item for ______________.

Short-term plans are called ________ Plans.

Long-Term plans are called __________ Plans.

Feedback is often used to _______ operations.

__________ is used by management to develop the company's goals.

______________ consist of the three elements of manufacturing cost: direct materials, direct labor, and factory overhead.

____________ are generally classified into two categories: selling and administrative.

The Balance Sheet of a manufacturer would include a line item for _____________.

___________ is the process by which managers, given their assigned level of responsibilities, run the day-to-day operations of the company.

Prepare journal entries to record the following merchandising transactions of Mitchell's, which uses the perpetual inventory system and the gross method. (Hint: It will help to identify each receivable and payable; for example, record the purchase on July 1 in Accounts Payable—Taylor.)

prepare the general journal

roblem 22-2A (Part Level Submission) Zelmer Company manufactures tablecloths. Sales have grown rapidly over the past 2 years. As a result, the president has installed a budgetary control system for 2017. The following data were used in developing the master manufacturing overhead budget for the Ironing Department, which is based on an activity index of direct labor hours. Variable costs Rate per Direct Labor Hour Annual Fixed Costs Indirect labor $0.43 Supervision $41,040 Indirect materials 0.51 Depreciation 16,080 Factory utilities 0.30 Insurance 13,800 Factory repairs 0.20 Rent 29,520 The master overhead budget was prepared on the expectation that 478,700 direct labor hours will be worked during the year. In June, 38,800 direct labor hours were worked. At that level of activity, actual costs were as shown below. Variable—per direct labor hour: indirect labor $0.47, indirect materials $0.49, factory utilities $0.32, and factory repairs $0.25. Fixed: same as budgeted. Collapse question part (a) & (b) (a) Prepare a monthly manufacturing overhead flexible budget for the year ending December 31, 2017, assuming production levels range from 39,600 to 53,700 direct labor hours. Use increments of 4,700 direct labor hours. (List variable costs before fixed costs.) ZELMER COMPANY Monthly Manufacturing Overhead Flexible Budget Ironing Department For the Year 2017 $ $ $ $ $ $ $ $ (b) Prepare a budget report for June comparing actual results with budget data based on the flexible budget. (List variable costs before fixed costs.) ZELMER COMPANY Ironing Department Manufacturing Overhead Flexible Budget Report For the Month Ended June 30, 2017 Difference Budget Actual Costs Favorable Unfavorable Neither Favorable nor Unfavorable $ $ $ $ $ $ Click if you would like to Show Work for this question: Open Show Work

Thornton Manufacturing Company uses two departments to make its products. Department I is a cutting department that is machine intensive and uses very few employees. Machines cut and form parts and then place the finished parts on a conveyor belt that carries them to Department II, where they are assembled into finished goods. The assembly department is labor intensive and requires many workers to assemble parts into finished goods. The company’s manufacturing facility incurs two significant overhead costs: employee fringe benefits and utility costs. The annual costs of fringe benefits are $312,000 and utility costs are $240,000. The typical consumption patterns for the two departments are as follows:

The supervisor of each department receives a bonus based on how well the department controls costs. The company’s current policy requires using a single allocation base (machine hours or labor hours) to allocate the total overhead cost of $552,000.

Required

1. Assume that you are the supervisor of Department I. Choose the allocation base that would minimize your department’s share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected.

2. Assume that you are the supervisor of Department II. Choose the allocation base that would minimize your department’s share of the total overhead cost. Calculate the amount of overhead that would be allocated to both departments using the base that you selected.

3. Assume that you are the plant manager and have the authority to change the company’s overhead allocation policy. Formulate an overhead allocation policy that would be fair to the supervisors of both Department I and Department II. Compute the overhead allocations for each department using your policy.

Explain the four sources of auditor liability.

See Exhibit 12-4 for opening account balances. Record the following financial transactions for Simonsen Village for the fiscal year ending December 31, 2018. Show the impact of the transactions on the fundamental equation of accounting (optional: show journal entries—see Appendix 12-A). Assume that the modified accrual basis is used.

1. Simonsen Village has employees who earned $400,000 for the year. At the end of the year, the salaries payable balance was $10,000. Note that $200,000 of wages related to general government, $140,000 was for education, and $60,000 was for the public works, safety, and sanitation department.

2. Inventory was ordered by Simonsen Village. The entire order was received. The bill for the inventory purchase was $10,000. By the end of the fiscal year, it had used $6,000 of the inventory, but no payment had been made. The purchases method is used. Each of the three departments had used $2,000 of inventory. The remaining inventory was all earmarked for education.

3. Simonsen Village’s major source of funds is real estate taxes. Total tax bills issued were for $300,000. Total collections were the $20,000 from the previous year’s ending balance in taxes receivable and $260,000 of this year’s taxes. Eighty percent of the outstanding balance at year-end is expected to be collected early in the next fiscal year.

4. Simonsen Village is entitled to receive unrestricted grants from the state. During the year, grants in the amount of $100,000 were made. The total collections on grants were just $20,000. This $20,000 consisted of $10,000 that the state owed for the previous year and $10,000 for the current year’s grant. The state will be paying the balance owed to Simonsen Village within 30 days after the year ends.

5. During the year, Simonsen Village was legally required to transfer $60,000 to its debt service fund. A total of $70,000 of cash was paid to the debt service fund. In years when the full required transfer is not made, the debt service fund has a receivable (Due From General Fund). If more than the required amount is paid, the debt service fund’s receivable declines.

6. Simonsen Village acquired a new fire truck early in the year for $200,000. The fire truck is expected to last 10 years and has no salvage value. It was financed by a long-term note for the full amount. Simonsen Village has a capital projects fund.

7. The interest and principal due on Simonsen Village’s debt during the year and paid from the debt service fund were $8,000 and $30,000, respectively. The interest covers all long-term borrowing by Simonsen Village. The principal relates to the fire truck purchased during the year.

         General fund                            Debt fund                        Capital projects

Cash $300,000

Real estate taxes $20,000

state grants receivable $10,000

due from gen fund                                                      $16,000

salaries payable    $90,000

due to debt service $16,000

fund balance/unrestricted net assests $224,000       $20,000

If a company has asset classes that include short-term and long-term investments, what criteria should they employ to determine if an asset is reported as a cash equivalent or an investment on their classified balance sheet? Use examples to illustrate your position and be sure to cite GAAP to support your claims.

1) Companies prepare four primary financial statements. What are those financial statements, and what information is typically conveyed by each?

2) What are the two essential characteristics of an assets?

Record the following transactions of Lisa’s Fashion Boutique in a general journal. Lisa's Fashion Boutique operates in a state with 8% sales tax. (Round your intermediate calculations and final answers to 2 decimal places): DATE TRANSACTIONS 2019 Feb. 2 Sold merchandise for cash totaling $3,400 to customers using bank credit cards. Record the 10 percent discount on credit card sales at time of sale. 15 Sold merchandise totaling $2,100 to customers using American Express. 20 Received amount due from American Express, less their 11 percent discount, for sales made by customers using American Express on February 15

In the early part of 2018, the partners of Hugh, Jacobs, and Thomas sought assistance from a local accountant. They had begun a new business in 2017 but had never used an accountant’s services.

Hugh and Jacobs began the partnership by contributing $70,000 and $20,000 in cash, respectively. Hugh was to work occasionally at the business, and Jacobs was to be employed full-time. They decided that year-end profits and losses should be assigned as follows:

• Each partner was to be allocated 10 percent interest computed on the beginning capital balances for the period.
• A compensation allowance of $5,000 was to go to Hugh with a $15,000 amount assigned to Jacobs.
• Any remaining income would be split on a 4:6 basis to Hugh and Jacobs, respectively.

In 2017, revenues totaled $95,000, and expenses were $75,000 (not including the partners’ compensation allowance). Hugh withdrew cash of $5,000 during the year, and Jacobs took out $10,000. In addition, the business paid $5,500 for repairs made to Hugh’s home and charged it to repair expense.

On January 1, 2018, the partnership sold a 30 percent interest to Thomas for $70,000 cash. This money was contributed to the business with the bonus method used for accounting purposes.

1. What journal entries should the partnership have recorded on December 31, 2017?

2. What journal entry should the partnership have recorded on January 1, 2018?