Cycle Wholesaling sold merchandise on account, with terms n/60, to Sarah’s Cycles on February 1 for $950 (cost of goods sold of $575). On February 9, Sarah’s Cycles returned to Cycle Wholesaling one-quarter of the merchandise from February 1 (cost of goods returned was $150). Cycle Wholesaling uses a perpetual inventory system, and it allows returns only within 15 days of initial sale.

Required:

1. 1. to 3. Prepare the journal entry to record the sales, Goods returned on February 9 and Cash collected on March 2.

2. 4. Calculate the gross profit percentage for the sale to Sarah’s Cycles.

Monitoring of Receivables. The Russ Fogler company, a small manufacturer of cordless telephones, began operations on January 1. Its credit sales for the first 6 months of operations were as follows:

Month              Credit Sales

January             $ 50,000

February           100,000

March               120,000

April                 105,000

May                 140,000

June                 160,000

Throughout this entire period, the firm’s credit customers maintained a constant payments pattern; 20% paid in the month of sale, 30% paid in the first month following the sale, and 50% paid in the second month following the sale.

What was Fogler’s receivables balance at the end of March and at the end of June? (You must show calculations to receive full credit.)

Assume 90 days per calendar quarter. What were the ADS and DSO for the first and second quarter? You must show calculations to receive full credit.

Construct an aging schedule as of June 30. Use account ages of 0-30, 31-60, and 61-90 days. You must show calculations to receive full credit.

Construct the uncollected balances schedule for the second quarter as of June 30. You must show calculations to receive full credit.

2. [Macroeconomics: The Big Picture – Measuring Production, Income, and the Spending of Nations] Charles has a new small business that makes and sells amigurumi—crocheted stuffed animals. Charles already has crochet tools such as needles and a yarn ball winder, but needs to rent studio and retail space, as well as purchase project-specific supplies. These are his revenues and costs for his first week of operating.

Revenue = $5,000

Costs:

Rental Fee For Studio Space = $800

Rental Fee For Retail Space/Equipment = $1,000

Yarn = $900

Stuffing = $200

Wages = $1,200

a) Calculate the value added by this firm. (Hint: what are the intermediate goods?)

b) Show that value added equals capital income plus the labor income paid by the amigurumi firm. (Hint: what comprises capital income?)

c) Suppose that there is a sudden increased interest in amigurumi. This causes two things. First, the firm’s revenue rises from $5,000 to $6,500. Second, there is an increased demand for yarn. The firm must now pay $1000, instead of $900. Please repeat (a) and (b) with these new values.

How can there be more than one efficient distribution of goods? Which distribution of goods is "most efficient”?

Overhead Application, Overhead Variances, Journal Entries

Plimpton Company produces countertop ovens. Plimpton uses a standard costing system. The standard costing system relies on direct labor hours to assign overhead costs to production. The direct labor standard indicates that two direct labor hours should be used for every oven produced. The normal production volume is 100,000 units. The budgeted overhead for the coming year is as follows:

Plimpton applies overhead on the basis of direct labor hours.

During the year, Plimpton produced 97,000 units, worked 196,000 direct labor hours, and incurred actual fixed overhead costs of $770,400 and actual variable overhead costs of $437,580.

Required:

1. Calculate the standard fixed overhead rate and the standard variable overhead rate. Round your answers to the nearest cent. Use rounded answers in the subsequent computations.

2. Compute the applied fixed overhead and the applied variable overhead. Use the application rates from part (1) in your calculations.

What is the total fixed overhead variance?
$  Unfavorable

What is the total variable overhead variance?
$  Unfavorable

3. Break down the total fixed overhead variance into a spending variance and a volume variance.

4. Compute the variable overhead spending and efficiency variances.

5. Now assume that Plimpton’s cost accounting system reveals only the total actual overhead. In this case, a three-variance analysis can be performed. Using the relationships between a three- and four-variance analysis, indicate the values for the three overhead variances.

Feedback

6. Prepare journal entries (1) to apply overhead to production, (2) to record the actual overhead costs incurred, (3) to record the variable and fixed overhead variances, and (4) to close the variance accounts at the end of the year. Assume variances are closed to Cost of Goods Sold. If an amount box does not require an entry, leave it blank or enter "0".

How would reported income differ if LIFO rather than FIFO were used when purchase prices are rising? When purchase prices are falling? How would the balance sheet accounts be affected if LIFO rather than FIFO were used when purchase prices are rising? When purchase prices are falling?

Kindly, do not hand write, use excel or word document, please let the work be original

Capacity Planning Homework Assignment—To be Submitted

The Baltimore Manufacturing Company’s management forecasts demand for each quarter as follows:

Assume that Arundel, Inc. started the First Quarter with 20 workers and 2000 units in inventory. The company wishes to finish the year with an inventory of 5000 units on hand. The average pay per worker is $9,000 per quarter, including benefits. Production per worker is 100 units per quarter. If necessary, overtime can be used up to 20% during the two peak demand quarters. Overtime time work, if used, is paid at 150% of regular pay. It costs $900 to hire a new worker and $1,200 to lay off a worker. Inventory carrying cost averages $10 per unit per month.  

(A) Using the table below, determine the total cost of using Level strategy.

.

(B) Using the table below, determine the cost of using the Chase strategy.

(C) Which strategy do you recommend and why?

For Bonus Points

(D) Management is considering using a mixed strategy. Suppose level strategy plus 10% overtime is used for the two high demand seasons, how many workers will be needed. (You don’t need to compute the total costs in this case. Simply determine the number of workers that will be need.

Mandatory spending is spending that:

A) includes all federal government spending.

B) supports programs that do not get determined annually but instead are set in law.

C) includes all state and local government spending.

D) is appropriated by Congress annually.

Suppose that the Federal Reserve has a 2% target on inflation. If actual inflation is 1%, then the Fed will want the new real interest rate to be:

A) lower than the neutral interest rate.

B) higher than the neutral interest rate.

C) equal to the neutral interest rate.

D) equal to the inflation rate.

If the output gap is positive, then the Federal Reserve will use its floor framework to _____ the federal funds rate, influence short- and long-term interest rates _____, and _____ total spending in the economy.

A) raise; upward; increase

B) lower; downward; increase

C) lower; downward; decrease

D) raise; upward; decrease

In a sample of 100 Oklahoma public schools, it was found that Oklahoma spends 8,097 dollars per pupil per year, with a standard deviation of 220 dollars. The population average of three surrounding states (Arkansas, Kansas, and Missouri) is 10,039 dollars. (these numbers are accurate – taken from most recent available data for 2016 https://ballotpedia.org/Public_education_in_Oklahoma.). Is per pupil spending for all Oklahoma schools less than the surrounding state population average? If you had to voice your concerns to your elected representative about per pupil spending in Oklahoma public schools, what would you tell them?