Target Costing

Laser Impressions, Inc., manufactures color laser printers. Model J20 presently sells for $575 and has a total product cost of $460, as follows:

It is estimated that the competitive selling price for color laser printers of this type will drop to $550 next year. Laser Impressions has established a target cost to maintain its historical markup percentage on product cost. Engineers have provided the following cost reduction ideas:

1. Purchase a plastic printer cover with snap-on assembly, rather than with screws. This will reduce the amount of direct labor by 9 minutes per unit.
2. Add an inspection step that will add six minutes per unit of direct labor but reduce the materials cost by $12 per unit.
3. Decrease the cycle time of the injection molding machine from four minutes to three minutes per part. Thirty percent of the direct labor and 45% of the factory overhead are related to running injection molding machines.

The direct labor rate is $38 per hour.

a. Determine the target cost for Model J20 assuming that the historical markup on product cost and selling price is maintained. Round your final answer to two decimal places.
$

b. Determine the required cost reduction. Enter as a positive number. Round your final answer to two decimal places.
$

c. Evaluate the three engineering improvements together to determine if the required cost reduction (drift) can be achieved. Enter all amounts as positive numbers. Do not round interim calculations but round your final answers to two decimal places.

I understand only one question can be answered, but I will guarantee a thumbs up if you give the extra effort. I answered the first one.

The two is following this data, I believe variable cost is 1.10

Month                                    Cost                           Hours

January                               $4400                             3500

Feb                                     $8000                              7000

March                                 11000                              9500

the variable cost per unit is

A. $0.80

B. $1.07

C. $1.10

D. $2.00

The fixed cost element is:

A. $ 5.50

B. $6.55

C. $7150

D. $5600

If variable costs are 60% of sales and fixed costs are $612,000, the break even point in dollars is:

A. $367,200

B. $1,530,000

C. $244, 800

D. $1,020,000

8. Assume a company fixed costs are $25,200. Its unit sales price is $17,50, and its unit cost is $10.50. The break -even point is units is:

A. 3,600

B. 1,440

C. 3,360

D 2,400

Assume Beale Co. expects to sell 150 units next month. The unit sales price is $80, unit variable cost is $30, and the fixed costs per month are $5,000. The margin of safety is:

A.$12,000

B. $5,000

C. $4,000

D. $2,500

Quad mix co. sells the three products shown below. determine which product should be produced if there are only 1,000 machine hours available next month:

                                                      W         X       Y         z

Unit sales price                            $14       $16    $12     $8

Unit Variable cost                          9            8        6        2

Machine hours per unit                 2            4         3       2

A. W

B. X

C. Y

D. Z

The statement of cash flows is typically used to determine if a company can:

A. generate enough cash to acquire another company

B. Generate enough cash to pay cash dividends to stockholders

C. Generate enough Cash to pay an increase in employees wages

D. Generate enough cash to buy equipment

1. A potential investor in your airline wants to know how his investment would compare with the share market as a whole. To do this, what ratio would he use? a) Dividend cover b) Dividend per share on historical basis c) Price earnings ratio d) Asset test e) None of the above

2.Return on equity should be above whic of these? a) Variable mortgage rates b) Fixed Mortgage rates c) Bank interest on long term deposits d) Bank interest on short term deposits e) None of the above

3.What is operating revenue in terms of aviation business? a) All except interline sales b) Revenue from frequent flyer sales c) Sub-leasing terminal space d) Interline sales e) Duty free sales f) All of the above g) Revenue from passenger services

4.In financial terms a Discounted cash flow valuation is mainly concerned with: a) Both selling cheaply and capital budgeting b) Capital budgeting c) Revenue from fare discounting d) Selling cheaply

5.Shares in a company entitle the owners of the shares to a proportional share of the profits, which is paid as a dividend. The level of the dividend is determined by the directors, who may elect to pay some or all of the profits. In general, what should they pay as dividends? a) They should defer dividends until realising two consecutive profit announcements b) The percentage depends on the number of directors c) At least some of the profits- but they can retain profits against future risk d) All of the profits. Thats what shareholders demand e) None of the profits. They are perfectly entitled to retain all profits for the future

Topper company reported the following pre-tax financial income (loss for the years 2013-2017)

2013      70,000               30%       21,000

2014      45,000               30%       13,500

2015      -260,000             30%       0

2016      90                        35%       0

2017      215,000              35%       15,750

Topper company reported the following pre-tax financial income (loss for the years 2013-2017) 2013 70,000 2014 45,000 2015 -260,000 2016 90 2017 215,000 Pretax financial income (loss) and taxable income (loss) were the same for all years involved. The enacted tax rate was 30% for 2013 through 2015, and 35% for 2016 and thereafter. Assume the carryback provision is used first for net operating losses. Instructions: A. Prepare the journal entries for the years 2013 through 2017 to record income tax expense, income tax payable (refundable), and the tax effects of the loss carryback and loss carryforward, assuming that based on the weight of available evidence, it is more likely than not that 60 percent of the benefits of the loss carryforward will not be realized. B. Prepare the income tax section of the 2015 income statement beginning with the line “income (loss) before income taxes”.

QUESTION 2

1. Wilson Party Equipment Company manufactures the components needed in the production of its primary product, Computer Controlled Self-Tapping Beer Kegs (widely used at parties sponsored by college students). The per unit cost for the computer component is as follows:
   

   Direct materials	$40
   Direct labor	14
   Variable factory overhead	34
   Allocated facility level fixed overhead (1,000 unit annual volume)	25
   Total cost per unit	$113

   
   Assume that Wilson Party Equipment Company can buy 1,000 of the computer units from another producer for $100 each. The financial aspects of the situation suggest that Wilson Party Equipment Company should consider

   	a.	outsourcing the computer unit production as this would save $13,000 per year.
   	b.	outsourcing the computer unit production as this would save $12,000 per year.
   	c.	continuing to make the computer unit as this would save $13,000 per year.
   	d.	continuing to make the computer unit as this would save $12,000 per year

On January 1, 2018, Bishop Company issued 8% bonds dated January 1, 2018, with a face amount of $20.1 million. The bonds mature in 2027 (10 years). For bonds of similar risk and maturity, the market yield is 10%. Interest is paid semiannually on June 30 and December 31. (FV of $1, PV of $1, FVA of $1, PVA of $1, FVAD of $1 and PVAD of $1) (Use appropriate factor(s) from the tables provided. Round your intermediate calculations to the nearest whole dollar.)

Required:
1. Determine the price of the bonds at January 1, 2018.
2. Prepare the journal entry to record the bond issuance by Bishop on January 1, 2018.
3. Prepare the journal entry to record interest on June 30, 2018, using the effective interest method.
4. Prepare the journal entry to record interest on December 31, 2018, using the effective interest method

Briar Corp. is considering the purchase of a new piece of equipment. The cost savings from the equipment would result in an annual increase in cash flow of $208,000. The equipment will have an initial cost of $1,208,000 and have an 8 year life. The salvage value of the equipment is estimated to be $208,000. The hurdle rate is 6%. Ignore income taxes. (Future Value of $1, Present Value of $1, Future Value Annuity of $1, Present Value Annuity of $1.) (Use appropriate factor from the PV tables.)


a. What is the accounting rate of return? (Do not round intermediate calculations. Round your final answer to 2 decimal places.)



b. What is the payback period? (Round your answer to the nearest whole number.)

c. What is the net present value? (Round your answer to nearest dollar amount.)



d. What would the net present value be with a 14% hurdle rate? (Negative value should be indicated by a minus sign. Round your answer to nearest dollar amount.)



e. Based on the NPV calculations, in what range would the equipment’s internal rate of return fall? (Round your answer to 2 decimal places.)

why Act of parliament override common law in australia ?

A contract to purchase a car contains the following clause. if you are not completely satisfied with the car ,return it in good condition within 7 days and we will give you your money back. is this clause a condition precedent or a condition subsequent ? explain your answer

Mason Corporation began operations at the beginning of the current year. One of the company’s products, a refrigeration element, sells for $195 per unit. Information related to the current year’s activities follows.

Variable costs per unit:

Direct material $ 20

Direct labor 36

Manufacturing overhead 46

Annual fixed costs:

Manufacturing overhead $ 600,000

Selling and administrative 860,000

Production and sales activity:

Production (units) 24,000

Sales (units) 20,000 ________________________________________

Mason carries its finished goods inventory at the average unit cost of production and is subject to a 30 percent income tax rate. There was no work in process at year-end.

1. Determine the cost of the December 31 finished goods inventory.

2. Compute Mason’s net income for the current year ended December 31

. 3. If next year’s production decreases to 23,000 units and general cost behavior patterns do not change, what is the likely effect on:

a. The direct-labor cost of $36 per unit? • No change • Increase • Decrease

b. The fixed manufacturing overhead cost of $600,000? • No change • Increase • Decrease

c. The fixed selling and administrative cost of $860,000? • No change • Increase • Decrease

d. The average unit cost of production? • No change • Increase • Decreas

The following data were taken from the Adjusted Trial Balance columns of the end-of-period spreadsheet for April 30 for Abigail Trucking:

Required:

Prepare a classified balance sheet. Be sure to complete the statement heading. Refer to the lists of Accounts in the information given, Labels, and Amount Descriptions for the exact wording of the answer choices for text entries. Enter property, plant, and equipment in the order of land, building, and equipment. You will not need to enter colons (:) on the Balance Sheet. For any amount which is subtracted, use a minus sign.

Alternative Financing Plans

Frey Co. is considering the following alternative financing plans:

Income tax is estimated at 40% of income.

Determine the earnings per share on common stock, assuming that income before bond interest and income tax is $300,000.

Enter answers in dollars and cents, rounding to two decimal places.

Jeffery Company purchased 10% of the outstanding common stock (75,000 shares) of Another Company on January 1, 2020 for $750,000. The investment was not sufficient to give Jeffery Company the ability to significantly influence the operations of Another Company. On January 1, 2020, the fair value of the percentage of Another Company’s net assets purchased by Jeffery Company exceeded book value by $20,000. The difference was attributable to plant assets with remaining useful life of five years. During 2020, Another Company reported net income of $150,000 and paid dividends of $40,000. The fair value of Another Company’s common stock on December 31, 2020 was $15 per share.

The entry to record the purchase of the stock on January 1, 2020 would include?

The entry to record the dividends Jeffery Company received from Another Company would include? check figure; A credit to investment revenue for $4,000

As a result of the investment, Jeffery Company's income before income tax for the year ended December 31, 2020 would increase by? check figure;$379,000

The entry on December 31, 2020 to recognize changes in fair value would include? check figure: A credit to unrealized holding gain for $375,000

Jeffery Company would report an investment in Another Company on the balance sheet as of December 31, 2020 of?

Please explain in detail the answers I would appreciate the help thanks.

A manufacturer sells two types of products. Product 1 is sold at a price of $50 per unit and product 2 at a price of $60 per unit. Three units of raw material and 1.5 labor hours are needed to manufacturer one unit of product 1. Six units of raw material and 2 labor hours are need to manufacture one unit of product 2. The unit variable cost for product 1 is $30, and for product 2 is $20. A total of 15,000 units of raw material and 10,000 labor hours are available. If any product 1 is produced, a setup cost of $20,000 is incurred; if any product 2 is produced, a setup cost of $35,000 is incurred. Determine how to maximize the manufacturer’s profit.

a) What is the effective capacity for product 1 and product 2, respectively?

b) In the optimal solution, which product(s) will be manufactured? What is the optimal production quantity? What is the optimal profit?

Wagner Company developed the following standard costs for its product for 2011:

Direct Materials - 4 pounds at $4.50 per pound

Direct Labor - 2 hours at $10.50 per hour

Based on their flexible budget, budgeted Manufacturing Overhead costs are $80,000 of fixed costs plus variable costs of $4 per direct labor hour. Normal capacity is set at 20,000 units of product OR 40,000 DIRECT LABOR HOURS. (20,000 units x 2 labor hours per unit).

Actual costs for 2011 were as follows:

a. 19,000 units of product were actually produced

b. Direct labor costs were $362,700 for 37,200 direct labor hours actually worked.

c. Actual direct materials purchased and used during the yeear cost $361,900 for 77,000 pounds.

d. Total actual manufcaturing overhead costs were $227,000.

Compute the following yearly variances for Wagner company for 2011 and indicate whether the variance is favorable (F) or unfavorable (U):

1. Direct Materials Price Variance

2. Compute the Direct Materials Quantity Variance

3. Compute the total Direct Materials Variance.

4. Compute the Direct Labor Price Variance

5. Compute the Direct Labor Quantity Variance

6. Compute the total Direct Labor Variance

7. Compute the Variable Overhead Controllable Variance

8. Compute the Fixed Overhead Volume Variance

9. Compute the total Manufacturing Overhead Variance

10. Compute the total cost variance and indicate if favorable or unfavorable.