Appendix: Normal and Abnormal Spoilage in Process Costing

Novel Toys, Inc., manufactures plastic water guns. Each gun's left and right frames are produced in the Molding Department. The left and right frames are then transferred to the Assembly Department where the trigger mechanism is inserted and the halves are glued together. (The left and right halves together define the unit of output for the Molding Department.) In June, the Molding Department reported the following data:

In the Molding Department, all direct materials are added at the beginning of the process.

Beginning work in process consisted of 3,000 units, 20 percent complete with respect to direct labor and overhead. Costs in beginning inventory included direct materials, $450; and conversion costs, $138.

Costs added to production during the month were direct materials, $950; and conversion costs, $2,174.50.

Inspection takes place at the end of the process. Malformed units are discarded. All spoilage is considered abnormal.

During the month, 7,000 units were started, and 8,000 good units were transferred out to Finishing. All other units finished were malformed and discarded. There were 1,000 units that remained in ending work in process, 25 percent complete.

Required:

1. Prepare a physical flow schedule.

Feedback

1. The physical flow schedule traces the units in process regardless of their stage of completion.

2. Calculate equivalent units of production using the weighted average method.

3. Calculate the unit cost. Round your answer to the nearest cent.
$ per unit

4. What is the cost of goods transferred out?
$

What is the ending work in process? Round your answer to the nearest cent.
$

What is the loss due to spoilage?
$

Feedback

2. To calculate equivalent units, weighted average counts prior-period output in BWIP as belonging to the current period. All units are output in the current period.

3. The unit cost is obtained by dividing the sum of the costs in BWIP and the current-period costs by the weighted average equivalent output.

4. Costing out ending work in process is done by computing the cost of each input and then adding to obtain the total. The valuation of cost of goods transferred out is simplified as it is the total unit cost multiplied by the units completed.

5. Prepare the journal entry to remove spoilage from the Molding Department.

COVID-19

The recent outbreak of novel coronavirus (COVID-19) has introduced new challenges to the business environment. It is also having an impact on the global economy with tourism, aviation, education and hospitality the initially hardest hit industries. Almost all global supply-chains are affected at some level. Realistically, many sectors will be affected to different degrees, with many organizations implementing policies to limit employee travel and to prepare employees to work from home if necessary and if possible, to ensure the safety of their employees. The outbreak is moving quickly, and most countries are trying to respond quickly to contain the impact. However, the spread of the virus may continue through 2020 and impact the operations of many industries for months to come.

Question 1 - Word count: 800 words .

Critically analyze the required types of change to minimize the impact of the COVID 19 virus on the university? Then analyze which images of change management that could be adopted by the change agent to manage such situation?   

Read about WATSON, IBM's computer system that assimilates research on medical conditions, such as cancer, and helps doctors diagnose and treat patients.

https://www-03.ibm.com/press/us/en/pressrelease/43444.wss

A. Do you believe an intelligent computer system will replace human doctors and nurse practitioners in diagnosing and treating disease?

B. Why or why not?

C. What are the advantages and disadvantages of using a system like WATSON?

An engineer is designing a total hip implant. She intends to make the femoral stem out of titanium because it forms a good interface with bone. However, since titanium does not have optimum wear properties she intends to make the ball component out of stainless steel and attach it to the stem using a press fit. Should she be worried about corrosion? If so, what types of corrosion could take place?

3. What was the Fed’s announced monetary policy decision at the June 18-19, 2019 FOMC meeting? What rationale did the fed give for its decision? What hints did they give toward their outlook on the future? How did the financial markets receive their decision? You should be able to find the answer to all of these questions in one or two news reports following the meeting or in the press release issued by the fed.

Prepare "T" Accounts in ACCRUAL and CASH basis the Income statement, Statement of Retained Earnings and Balance Sheet, after reading the following information below.

Richard Brandt graduated from York University with his BAS although he spent more time in the gym than in the classrooms and libraries. His parents and grandparents were very proud and happy of this achievement. As a graduation gift, Richard's Grandparents gave him $20,000 to start his own business.

So, on September 1, 2015, Richard started a small business called "Ricky Rock Wrestling for Fun". "Ricky Rock" offers a party package designed for active kids, teen and adults that want to learn and practice wrestling activities for fun by learning how to perform headlocks, leg scissors and other tricks.

As a student, he learned and practiced Greco-Roman wrestling and built an impressive body. Now graduated from university he has decided to continue with his passion of wrestling but added a spin to make money. In one tournament in 2013 Richard meet Linda who was competing for a US university team and she mentioned that she was working on girls birthday parties focused on wrestling. In June 2015 Richard contacted Linda and told her about his idea and Linda shared with him all documentation she has prepared in these years including: brochure to be distributed to potential customers, personal cards, party themes, parties activities, schedules and agendas, etc. During August Richard has completed his business plan and was ready to launch 'Ricky Rock Wresting for Fun' in the GTA.

The following is a list of transactions that occurred during the first month of operations:

September 1st Opened a business bank account with the $20,000 received as a gift from the Grandparents $20,000.

September 1st Signed 12 month commercial insurance contract for any liability that might emerge from the activity, $600 per month for 1 year.

September 2nd Purchase in cash costumes of famous wrestlers to wear at parties. The costumes can last one full year $600.

September 3rd Paid in cash the set up of the web site. It expects to last the whole life of this business $2,000.

September 4th Collected the brochures and presentation cards to be used in promoting the business. One third is paid in cash while the rest will be paid on October 5th $450.

September 5th First event organized and delivered. Birthday party for a 5 years old boy. Received the payment in cash $1,000.

September 6th Second event organized and delivered as part of a series of activities organized by a charity to raise funds. One third is paid in cash while the rest will be paid by the Charity Organization on October 5th $3,000.

September 8th Labour day, no events, no work so Richard goes to the gym and does a double routine (the rest of the days he just does a simple routine of 2.5 hours).

September 12th Third event organized and delivered. Birthday party for a 7 years old boy. Parents promise to pay in a few days $1,000.

September 15th Pays first 2 months of insurance $1,200.

September 19th & 20th Fourth event organized and delivered. Provided one of the activities of a corporate team building extravaganza weekend. The contract signed says the payment will be effective in 30 days with a cheque $2,000.

September 23rd Paid the gym membership for September, October, November and December $2,000.

September 24th Telephone bill for $200 was received for the month of September, payment due October 5th $200.

September 26th Fifth event organized and delivered. Birthday party for a 4 years old boy. Received payment in cash $1,000.

September 26th One of the parents at the birthday party for a 4 years old boy hires him for his son's birthday party on October 10th. Received payment in cash $500.

September 27th Sixth event organized and delivered. Birthday party for a 6 years old boy. Received payment in cash $1,000.

September 29th Received the payment for the birthday party for the 7 years old boy of September 12th $1,000.

September 30th Richard pays to his parents a rent for using the car for business purposes and to go and come back from the gym $200.

September 30th Richard promised to pay on October 6th to his parents the extra charge that comes in the insurance premium of their cars for having him as an additional driver (male under 25) $800.

Additional information: September 30th Inventory of brochures and cards showed that two thirds of them are still available (not used) $300.

ACCRUAL accounting:

CASH accounting:

The purpose of this assignment is to research and review the annual report for a selected company.

Throughout the course you will be applying what you learn about the principles and practices of financial accounting by completing an ongoing project based upon a Fortune 500 company traded on the New York Stock Exchange (NYSE) or National Association of Securities Dealers Automated Quotations (NASDAQ). The project will include six assignments, each focusing on the analysis of financial information from various parts of the company's financial statements.

Using the topic materials, select a Fortune 500 company as the focus for your project. The company you select must sell a product and carry inventory on its balance sheet.

Access a copy of the company's annual report, known as a Form 10-K. This information can typically be located on the company website under "Investor Relations," or on the SEC website EDGAR. Read through the Form 10-K to become familiar with the company.

Conduct additional research to locate a recent press release or article related to the company's current or future financial performance. Read the press release/article and be prepared to discuss it in your assignment deliverable.  

For this assignment, provide a 500-750 words count company overview that addresses the following information related to the company you have selected.

1. Describe the company, including business sector, product(s) sold, competitors, and the geographic area where business is conducted.
2. Discuss cyclicality associated with the company's product sales and any other information relevant to the particular business or its industry.
3. Discuss whether the company is using generally accepted accounting principles (GAAP) or International Financial Reporting Standards (IFRS) as its standard for financial reporting, and explain how you can tell which method is being employed based upon your review of the Form 10-K.
4. Summarize the information from the press release/article and explain why this information is significant for the company. Focus on current and future financial implications and how the company's financial performance might be influenced.

In the competitive software development market, patent protection is imperative for new products. Electronic Solutions Incorporated (ESI), where you work, has spent millions of dollars and many years developing a new software platform. While ESI has been waiting for a patent to be granted, its revenues, profits, and stock prices have slipped to an all-time low because so much time, money, and energy have been devoted to the software development effort.

You, as director of public relations, have been called to a meeting with the company president and members of the executive team. They give you the bad news: The United States Patent and Trademark Office denied ESI's application for patent on the new software platform. The executives at ESI were counting on the new software to restore the company's prestige and save the company from financial ruin. In the meeting, you also learn that this patent was ESI's last hope to avoid bankruptcy. The company attorney explains that ESI might win an appealwith the Patent and Trademark Office, but winning an appeal is a "long shot at best."

After the meeting, Mr. Mateo, the president, asks you to stay. He reminds you that your job is to "make the best of a bad situation." He tells you to write a press release about the situation. He says, "You need to write a press release reassuring employees, shareholders, and the public that everything will be fine. Make sure you include the fact that we are planning an appeal and are confident that the patent will be issued when our appeal is heard. Your responsibility is to get the positive story out there so that ESI does not fall apart."

Questions for Discussion

1. Does Mr. Mateo have the right to ask you to create a misleading press release? Should you write a release according to Mr. Mateo's instructions? Do employees, shareholders, and the public have a right to know what is happening?

2. What are your options? What could you do to try to resolve the situation?

[ A- MCQ Questions ]

… 10 marks …

1/         Which of the following best describes the likelihood of a student becoming involved in a situation necessitating legal advice?

A) A student, or someone close to a student, sometimes becomes involved in such a situation.

B) A student, or someone close to the student, will always become involved in such a situation.

C) Because students are not business people, they never become involved in such situations.

D) Because students cannot be sophisticated, they will often become involved in such situations.

E) Legal advice is not available to students.

2/         Which of the following best describes the role of the lawyer?

A) The lawyer makes the legal decisions for the client.

B) The lawyer is simply one of the experts the businessperson consults.

C) The client must follow the lawyer's instructions, as long as they are lawful.

D) The client makes decisions regarding civil matters; the lawyer makes decisions regarding criminal matters.

E) The lawyer makes decisions regarding civil matters; the client makes decisions regarding criminal matters.

3/         Which of the following is true regarding the history of the legal system used in England?

A) Strained relations between the English and French kingdoms explain why England adopted Roman civil law as its system of justice.

B) Historically, kings and nobles worked together to establish a common system of justice.

C) The early Norman kings failed to establish a feudal system, which allowed Roman civil law to take hold in England.

D) England alternately used common law and civil law legal systems, depending on the strength of the reigning king.

E) During times when power was decentralized, local nobles would administer justice.

4/         There are many characteristics associated with the use of the court process that may be considered advantages and disadvantages when compared to alternate dispute resolution. Which of the following is a favourable characteristic one would associate with the litigation process?

A) A speedier method of obtaining resolution of a dispute

B) A less costly method of obtaining a resolution to a dispute

C) A method of dispute resolution where both parties are more likely to be satisfied with the outcome

D) Enforcement of the decision has direct mechanisms

E) Confidentiality is protected

5/         In January, a driver accidentally caused a snow plow to go off the road, crash into house, and enter the living room. No one was hurt, but the incident caused extensive damage to the house. If the driver of the snow plow was charged with the crime of driving while impaired, and convicted, which of the following would be true?

A) The owners of the house would have no civil action against the driver because no one was hurt.

B) The owners of the house could also proceed in a civil action against the driver for the tort of nuisance.

C) The owners of the house could also proceed in a civil action against the driver for the tort of negligence.

D) The owners of the house could not proceed in a civil action because the driver had already gone through a criminal action and he cannot be forced to go through two proceedings for the action.

E) The driver would be found liable in a civil action only if the prosecutor could prove he was guilty beyond a reasonable doubt.

6/         A seven-year-old boy followed his dog into Mr. Howe's backyard. He fell into a large hole dug by Mr. Howe in preparation for a tree that had been ordered. The boy broke his arm in the fall. At the hospital, the boy was treated by a doctor who had been employed there for four years. The doctor did not set the boy's arm because he made a mistake in reading the x-ray. Because the arm was not treated correctly, it healed improperly. When the boy kept complaining, his mother took him to their family doctor, who discovered the error. The boy had to have his arm rebroken so that it could be set properly. Based on these facts, which of the following is true?

A) The owner of the land owed no duty of care to the boy because the boy was a trespasser.

B) The case law that developed over hundreds of years on the duty of care owed by occupiers of land has priority over any subsequent legislation on the point.

C) The doctor owed a duty of care to the boy, but he only had to meet the standard of care expected of the average man.

D) The hospital, not the doctor, would be solely liable for any harm suffered due to the negligence.

E) In an action against the land owner, if the boy were found to be partially at fault for his injury, the court would apportion the award of damages as it apportioned the fault.

7/         2) Berman made a documentary on the life of musician Artie Shaw. Shaw's representative was cooperative and gave her permission to use certain songs if she received proper permission from the copyright holders. The cost of the film was funded by her own savings, a private investor, the Canada Council, the Ontario Arts Council, and deferred salaries and material costs. In March of 1987, the film won an Academy Award as the best feature documentary for 1986. In November of 1987, Shaw's lawyer contacted Berman's lawyer: "... This letter states that Artie Shaw has a 35% profit participation in the motion picture... ." Which of the following accurately sets out the legal position of the parties?

A) Shaw has a right to this share because the movie is about him.

B) The court will imply an agreement to this effect between the parties.

C) Shaw has no claim since there was no such agreement.

D) A public celebrity has the right to prevent this kind of exploitation if Berman refuses this demand.

E) The court will award Shaw a reasonable profit because it is fair.

8/         6) Which one of the following is enforceable?

A) Mr. Ho promised to give his needy friend Mr. Jahn $100.

B) Ms. Jones promised to pay an additional $100 to Mr. Wood if Wood finished the existing contract on time, according to the terms of the contract.

C) Mr. Baker was so sick of an old chair that, when Mr. Venson offered him $10 for it, he agreed (i.e., promised to sell it to him), although the market value of the chair was $80.

D) Ms. Goode promised to send $10 to Mr. Paul, who kindly came and warned her when he saw a tow truck approach her car.

E) An ad in the paper promises to pay $5 for the return of a lost ring, but the person who finds and returns the ring never saw the offer in the newspaper.

Answer: C

9/         When John bought a car from his father's old classmate, Joe, he was only seventeen years old. The price of the car was $5000. He paid $1000 down and was to pay the remaining $4000 over time. With these facts in mind, which of the following statements is true? (Read each statement separately.)

A) Even if the car is defective, John could not sue Joe.

B) If John has an accident and refuses to pay the balance, Joe could successfully sue John for breach of contract.

C) If John has an accident because of his negligent driving and he refuses to pay, Joe could successfully sue him in negligence to get around any difficulty in suing him in contract.

D) If the car is defective, John could sue Joe for breach even though Joe could not sue him.

E) If Joe didn't realize John was only 17 years old, he can enforce the contract against him no matter what his age.

10/       Randy, as his two older brothers before him, moved out of the house when he was quite young. When he was 17, he and his older brother, Ted, wanted to buy a condominium in Nelson. They both had jobs and the bank was willing to lend them money and take a mortgage on the condo. Which of the following is a correct statement about the law governing this situation?

A) These contracts would be binding on Randy only if he disclosed the fact that he was a minor to the other parties.

B) All contracts with infants are void.

C) The mortgage agreement would be binding on Randy as an adult if he continued to make payments after reaching the age of majority.

D) A mortgage granted by Randy to the bank is effective until a court orders otherwise.

E) All infants' contracts are enforceable as soon as they become adults.