Questions
Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other....

Musich Corporation has an activity-based costing system with three activity cost pools--Machining, Setting Up, and Other. The company's overhead costs, which consist of equipment depreciation and indirect labor, have been allocated to the cost pools already and are provided in the table below.

Activity Cost Pools

Machining

Setting Up

Other

Total

Equipment depreciation

$

9400

$

48,700

$

23,800

$

81,900

Indirect labor

4500

2900

4100

11,500

Total

$

13,900

$

51,600

$

27,900

$

93,400

                                       

Costs in the Machining cost pool are assigned to products based on machine-hours (MHs) and costs in the Setting Up cost pool are assigned to products based on the number of batches. Costs in the Other cost pool are not assigned to products. Data concerning the two products and the company's costs appear below:

MHs

Batches

Product Z3

6000

750

Product T1

6200

1350

Total

12,200

2100

Product Z3 Product T1

Sales (total)

$

230,800

$

255,500

Direct materials (total)

$

84,000

$

97,600

Direct labor (total)

$

110,000

$

105,200

Required:

Calculate the following:

Machining Activity Rate

$
Setting up Activity Rate

$

Amount of OH applied to product Z3 (round to the nearest dollar)

$
Amount of OH applied to product T1 (round to the nearest dollar)

$

Product Margin – Z3 (round to the nearest dollar)

$
Product Margin – T1 (round to the nearest dollar)

$

In: Accounting

The ____ basis of accounting is not a generally accepted method of determining profit for a...

The ____ basis of accounting is not a generally accepted method of determining profit for a businesses that have significant credit transactions.

In: Accounting

What is the nominal rate of interest compounded monthly at which payments of $200 made at...

What is the nominal rate of interest compounded monthly at which payments of $200 made at the end of every three months accumulate to $9200 in eight years?


Show the financial calculator (BA II Plus) steps with values so I can see how to do the question as they need just the financial calculations for the midterm (and timeline if needed).

In: Accounting

Reynolds Corporation's comparative balance sheets are presented below. Reynolds CORPORATION Balance Sheets December 31 2018 2017...

Reynolds Corporation's comparative balance sheets are presented below.

Reynolds CORPORATION

Balance Sheets

December 31

2018

2017

Cash

$ 10,000

$ 9,000

Accounts receivable

35,000

30,000

Inventory

25,500

20,000

Land

15,000

15,000

Building

90,000

90,000

Accumulated depreciation

(27,000)

(25,000)

     Total

$148,500

$139,000

Accounts payable

$ 50,000

$ 45,000

Common stock

65,000

60,000

Retained earnings

33,500

34,000

     Total

$148,500

$139,000

Reynolds' 2018 income statement included net credit sales of $200,000, cost of goods sold of $120,000, and net income of $30,000.

Instructions:
Compute the following ratios for 2018. (a) Current ratio. (b) Acid-test ratio. (c) Receivables turnover. (d) Profit margin. (e)Return on assets. (Round ratios to 2 decimal places and percentages to 1 decimal place.)

In: Accounting

Douglas Toys is a manufacturer that uses the weighted-average process costing method to account for costs...

Douglas Toys is a manufacturer that uses the weighted-average process costing method to account for costs of production. It produces a plastic toy in three separate departments: Molding, Assembling, and Finishing. The following information was obtained for the Assembling Department for the month of September.

     Work in process on September 1 had 114,000 units made up of the following:
Amount Degree of Completion
  Prior department costs transferred in from the Molding Department $ 163,020 100 %
  Costs added by the Assembling Department
      Direct materials $ 108,300 100 %
      Direct labor 40,688 60 %
      Manufacturing overhead 28,374 50 %
$ 177,362
  Work in process, September 1 $ 340,382
     During September, 514,000 units were transferred in from the Molding Department at a cost of $735,020. The Assembling Department added the following costs:
  Direct materials $ 467,970
  Direct labor 213,022
  Manufacturing overhead 138,996
  Total costs added $ 819,988
Assembling finished 414,000 units and transferred them to the Finishing Department.

     At September 30, 214,000 units were still in work-in-process inventory. The degree of completion of work-in-process inventory at September 30 was as follows:

  Direct materials 90 %
  Direct labor 70
  Manufacturing overhead 30
Required:
Prepare a production cost report using the weighted-average method. (Round "cost per equivalent unit" to 2 decimal places.)

In: Accounting

Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These...

Big Inc. is considering Two Projects X and Y, whose cash flows are shown below. These projects are mutually exclusive, equally risky, and not repeatable. The CEO believes the IRR is the best selection criterion, while the CFO advocates other methods.

WACC:

8.00%

Year

0

1

2

3

4

CFx

−$1,100

$450

$500

$100

$100

CFy

−$2,750

$625

$725

$800

$1,400

  1. What are the MIRR’s? Discuss the importance of the MIRR method over IRR.
  1. If these projects are mutually exclusive which should be selected and why? If they are in depended which project(s) should be selected and why?
  1. Discuss your results of the methods used above and make a recommendation on the projects to the CEO using the different methods?

In: Accounting

You are an experienced audit manager at Samway Baker Fitzgerald (SBF), an accounting firm with offices...

You are an experienced audit manager at Samway Baker Fitzgerald (SBF), an accounting firm with offices in Orange, Wagga Wagga, Tamworth, Port Macquarie and Albury in NSW, Toowoomba in Queensland and Ballarat in Victoria. In the next 18 months, you hope to be promoted to partner at the Orange office. Although a medium-sized firm by national standards, SBF includes Australia’s largest regionally-based auditing practice. Most of SBF’s audit clients are in the mining, manufacturing and agriculture industries. For various reasons all of those industries are currently under pressure: mining from a downturn in commodity prices, manufacturing from fierce overseas competition, and agriculture from a devastating drought that continues to grip Eastern Australia. It is a cold Thursday evening in July 2019 and you are meeting with your audit team to finalise the 30 June 2019 year-end audit for Far Faraway Pastoral Limited (FFA), a major agricultural company based in Orange, listed on the Australian Stock Exchange (ASX), and one of SBF’s largest clients by fee revenue. During the meeting, three of your audit seniors each bring a potential issue to your attention. Samantha Gabrielle was responsible for reviewing FFA’s corporate governance arrangements and reports that ‘at 30 June 2019 the board of FFA comprises: CEO Bruce Blanch, the CFO Alexandra Rose and three non-executive directors: Kevin Oliver (a former executive at Macquarie Bank who has an 11 percent shareholding in FFA and is Chair of the Board), Matthew James (a retired farmer who was a major supplier to FFA), and Jacqueline Grace (an Orange-based orthopaedic surgeon).’ Steve Barker was responsible for reviewing the revenue cycle and argues that ‘an ASIC report on their recent review of the financial statements of some major agricultural companies now means that FFA’s method for recognising revenues on its sale of cattle is very questionable’. In the 30 June 2019 financial year just ended, cattle sales constituted nearly 50% of all revenue recorded by FFA. Steve reports that he has already discussed the matter with the senior partner on the FFA audit, Skye Martin, who said that the method has been used for 10 years and that no adjustments to the 30 June 2019 financial statements were to be made. Steve reports that he then told Skye Martin he accepted her decision but wanted to include a dissenting statement in the audit working papers. She refused to permit such a statement in the working papers but offered to write a letter to you as the FFA audit manager acknowledging full responsibility for the 30 June 2019 audit. Steve alleges that as he left his meeting with Skye Martin, she made some negative comments about your chances of being promoted to partner in the near future. Kate Hammond was responsible for reviewing the operations of an FFA subsidiary based in Western Australia (WA), called TRC, that sells rural and farm supplies. You are aware that whilst TRC is the market leader in WA and has a strong balance sheet, it was making losses for the past two years. During the previous financial year ended 30 June 2018, TRC significantly upgraded its accounting information system to more effectively manage inventory sales. TRC hired a well-regarded IT consultant to undertake the upgrade which was completed on 31 March 2018. As SBF did not have offices in WA, you organised an independent expert based in Perth to review and evaluate the accounting information system. The independent expert concluded that the system appeared reliable and that the changeover was correctly carried out. At 30 June 2018 year-end, this new system had been in place for 3 months, and TRC management reported that they were happy with the way it was operating. In early 2019, given drought pressures on its core business in Eastern Australia, FFA accepted an offer from WA-based agricultural company McCarran Pastoral, who already owned 15% of TRC, to sell their remaining 85% interest to them. The agreed sale price was $45.8m, equivalent to FFA’s 85% share of TRC’s net assets. The sale was finalised on 15 April 2019, but half the sale price is not due to be paid until 15 August 2019, after the 30 June 2019 audit of FFA has been completed. Kate reports that significant errors in the changeover of the accounting information system back in March 2018 have only just been discovered in July 2019, more than 15 months later. The errors resulted in the inventory at TRC stores being misstated by $16.6m and net assets by the same amount. As a result McCarran Pastoral is planning to withhold most of its remaining settlement payment to FFA, and FFA is planning to sue SBF for negligence for its loss of that payment. Required: Question 1 (4%) Based on the information she has provided, advise Samantha Gabrielle on which, if any, ASX Corporate Governance Principles and Recommendations FFA may have breached and what action, if any, FFA would need to take in response. Question 2 (5%) What should you do in response to the information provided by Steve Barker? With reference to the Code of Ethics for Professional Accountants, use the following American Accounting Association (AAA) Model template to guide your answer: American Accounting Association Model Decision-making process 1. Determine the facts The facts are ... 2. Define the ethical issues 3. Identify the major principles, rules, and values 4. Specify the alternatives 5. Compare values and alternatives 6. Assess the consequences 7. Make your decision Question 3 (6%) With reference to case law and the auditing standards, prepare a report to the managing partner of SBF that indicates whether or not: • SBF failed to exercise ‘due care’ in the audit of TRC; • FFA is guilty of contributory negligence; • SBF owes a duty of care to McCarran Pastoral.

In: Accounting

ABC Corporation owns 75 percent of XYZ Company's voting shares. During 20X8, ABC produced 50,000 chairs...

ABC Corporation owns 75 percent of XYZ Company's voting shares. During 20X8, ABC produced 50,000 chairs at a cost of $79 each and sold 35,000 chairs to XYZ for $90 each. XYZ sold 18,000 of the chairs to unaffiliated companies for $117 each prior to December 31, 20X8, and sold the remainder in early 20X9 to unaffiliated companies for $130 each. Both companies use perpetual inventory systems. 10. Required information Based on the information given above, what amount of cost of goods sold did ABC record in 20X8? $2,765,000 $1,620,000 $1,422,000 $2,963,000 11. Required information Based on the information given above, what amount of cost of goods sold did XYZ record in 20X8? $2,765,000 $1,620,000 $1,422,000 $2,963,000 12. Required information Based on the information given above, what amount of cost of goods sold must be reported in the consolidated income statement for 20X8? $2,765,000 $1,620,000 $1,422,000 $2,963,000 13. Required information Based on the information given above, what amount of cost of goods sold must be eliminated from the consolidated income statement for 20X8? $2,765,000 $1,620,000 $1,422,000 $2,963,000 14. Required information Based on the information given above, what amount of cost of goods sold must be eliminated from the consolidated income statement for 20X9? $187,000 $221,000 $1,422,000 $2,963,000

In: Accounting

7. Explain how a sales order, a production order, a materials requisition form, and a labor...

7. Explain how a sales order, a production order, a materials requisition form, and a labor time ticket are involved in producing and costing products.

8. Why do companies use predetermined overhead rates rather than actual manufacturing overhead costs to apply overhead to jobs?

9. If a company fully allocates all of its overhead costs to jobs, does this guarantee that a profit will be earned for the period?

10. Provide two reasons why overhead might be under-applied in a given year.

In: Accounting

Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at...

Davis Stores sells clothing in 15 stores located around the southwestern United States. The managers at Davis are considering expanding by opening new stores and are interested in estimating costs in potential new locations. They believe that costs are driven in large part by store volume measured by revenue. During a discussion, one of the managers suggests that number of employees might be better at explaining cost than store revenues. As a result of that suggestion, managers collected the following information from last year’s operations (revenues and costs in thousands of dollars):

Store Costs Employees Revenues
101 $ 4,214 39 $ 4,100
102 2,894 29 2,227
103 5,181 47 5,738
104 3,998 38 3,982
105 3,676 33 2,914
106 3,319 38 4,023
107 5,029 54 6,894
108 2,374 26 1,779
109 4,688 44 5,416
110 2,959 35 3,228
111 4,179 37 3,886
112 3,200 41 4,690
113 2,556 35 3,552
114 4,655 42 4,817
115 2,986 28 2,124

b. Use the results of your high-low analysis to estimate the cost for a store with 30 employees. (Do not round your intermediate calculation. Enter your answers in thousands of dollars.)

Find the Store cost $

In: Accounting

discuss the four approaches that are widely used to express the cost of employee benefits and...

discuss the four approaches that are widely used to express the cost of employee benefits and service

In: Accounting

You are planning for a very early retirement. You would like to retire at age 40...

You are planning for a very early retirement. You would like to retire at age 40 and have enough money saved to be able to draw $ 220,000 per year for the next 40 years​ (based on family​history, you think​ you'll live to age 80​). You plan to save for retirement by making 15 equal annual installments​ (from age 25 to age​ 40) into a fairly risky investment fund that you expect will earn 12% per year. You will leave the money in this fund until it is completely depleted when you are 80 years old.

1. How much money must you accumulate by​ retirement?

​(Hint​:Find the present value of the $ 220,000 withdrawals.)

Calculate the present value to find out how much money must be accumulated by retirement. ​(Round your answer to the nearest whole​ dollar.)

The present value is $

.

2. How does this amount compare to the total amount you will draw out of the investment during​ retirement? How can these numbers be so​ different?

Over the course of your retirement you will be withdrawing $

. However, by age 40 you only need to have invested

These numbers are different​ because:

A.You need to have far more accumulated than what you will withdraw because you will withdraw a large portion of the investment every yearlong dash the balance remains invested where it continues to earn 12% interest.

B. You need to have the same accumulated as you will withdraw because you will not earn further interest on your investment when you reach retirement.

C.You need to have far less accumulated than what you will withdraw because you only withdraw a portion of the investment every yearlong dashthe balance remains invested where it continues to earn 12​% interest.

D.None of the above.

3. How much must you pay into the investment each year for the first fifteen ​years?​(Hint​: Your answer from Requirement 1 becomes the future value of this​ annuity.) ​(Round your answer to the nearest whole​ dollar.)

You must pay $

into the investment each year for the first fifteen years.

4. How does the total​ out-of-pocket savings compare to the​ investment's value at the end of the fifteen-year savings period and the withdrawals you will make during​ retirement?​ (Use the investment rounded to the nearest whole number that you calculated​ above, then round your final answer to the nearest whole​ dollar.)

The total out-of-pocket savings amounts to $

. This is far

than the investment's worth at the end

of fifteen years and remarkably

than the amount of money you will eventually withdraw from the investment.

In: Accounting

Miller Company’s contribution format income statement for the most recent month is shown below: Total Per...

Miller Company’s contribution format income statement for the most recent month is shown below:

Total Per Unit
Sales (32,000 units) $ 160,000 $ 5.00
Variable expenses 64,000 2.00
Contribution margin 96,000 $ 3.00
Fixed expenses 43,000
Net operating income $ 53,000

Required:

(Consider each case independently):

1. What is the revised net operating income if unit sales increase by 10%?

2. What is the revised net operating income if the selling price decreases by $1.20 per unit and the number of units sold increases by 18%?

3. What is the revised net operating income if the selling price increases by $1.20 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 4%?

4. What is the revised net operating income if the selling price per unit increases by 10%, variable expenses increase by 10 cents per unit, and the number of units sold decreases by 11%?

1. Net operating income
2. Net operating income
3. Net operating income
4. Net operating income

In: Accounting

Part V (10 marks) Part A In September 2017, the budget committee of Fidelity Company assembled...

Part V Part A In September 2017, the budget committee of Fidelity Company assembled the following data: 1. Expected Sales October $400,000 November 420,000 December 450,000 2. Cost of goods sold is expected to be 45% of sales. 3. Purchases for October are $180,900. 4. Desired ending merchandise inventory is 10% of the next month's cost of goods sold. Required: Prepare the budgeted income statement for October through gross profit on sales, including a cost of goods sold schedule

In: Accounting

Water Planet is considering purchasing a water park in Miami, Florida​, for $ 2,100,000. The new...

Water Planet is considering purchasing a water park in Miami, Florida​, for $ 2,100,000. The new facility will generate annual net cash inflows of $ 535,000 for eight years. Engineers estimate that the facility will remain useful for eight years and have no residual value. The company uses​ straight-line depreciation. Its owners want payback in less than five years and an ARR of 10​% or more. Management uses a 12% hurdle rate on investments of this nature.

.

Requirement 1. Compute the payback​ period, the​ ARR, the​ NPV, and the approximate IRR of this investment.​ (If you use the tables to compute the​ IRR, answer with the closest interest rate shown in the​ tables.) ​(Round the payback period to one decimal​ place.)

The payback period is

years.

​(Round the percentage to the nearest tenth​ percent.)

The ARR (accounting rate of return) is

%.

​(Round your answer to the nearest whole​ dollar.)

Net present value $

The IRR​ (internal rate of​ return) is between

.

Requirement 2. Recommend whether the company should invest in this project.

In: Accounting