Effects of differing production levels on absorption costing income. Metrics to minimize inventory buildups. Effects of differing production levels on absorption costing income: Metrics to minimize inventory buildups. University Press produces textbooks for college courses. They recently hired a new editor, Leslie White, to handle production and sales of books for an introduction to accounting course. Leslie’s compensation depends on the gross margin associated with sales of this book. Leslie needs to decide how many copies of the book to produce. The following information is available for the fall semester 2010:

The fixed cost allocation rate is based on expected sales and is therefore equal to
$120,000/10,000 books = $12 per book
Leslie has decided to produce either 10,000, 12,000, or 16,000 books.
1. Calculate expected gross margin if Leslie produces 10,000, 12,000, or 16,000 hooks. (Make sure you include the production-volume variance as part of cost of goods sold)
2. Calculate ending inventory in units and in dollars for each production level.
3. Managers who are paid a bonus that is a function of gross margin may be inspired to produce product in excess of demand to maximize their own bonus. The chapter suggested metrics to discourage managers from producing products in excess of demand. Do you think the following metrics will accomplish this objective? Show your work.
a. Incorporate a charge of 10% of the cost of the ending inventory as an expense for evaluating the manager.
b. Include non-financial measures when evaluating management and rewarding performance.
In: Computer Science
Research Scenario: A researcher is attempting to determine the effects of sex and sleep deprivation on a reaction time task. Participants (5 men; 5 women) in an experiment are given a computerized search task. They search a computer screen of various characters and attempt to find a particular character on each trial. When they find the designated character, they press a button to stop a timer. Their reaction time (in ms) on each trial is recorded (note, so the lower the number, the faster the time). Male and female subjects participated in the study across three days, and completed the task after having 0, 4, or 8 hours of sleep. The reaction time data for the 10 subjects appear below. Using this table, enter the data into a new SPSS data file and run the appropriate test to assess whether sleep deprivation and/or sex affect performance on reaction time. Remember that between subjects variables such as “Sex” will be represented using a single column in SPSS. Within subjects variables such as sleep would be represented in multiple columns – one per level. Hint: for this data entry, you will end up for a total of four columns in SPSS.
Write an APA-style Results section based on your analysis
|
Men |
Women |
|
|
0 hours |
12 |
11 |
|
13 |
12 |
|
|
12 |
13 |
|
|
11 |
12 |
|
|
11 |
11 |
|
|
4 hours |
10 |
8 |
|
10 |
8 |
|
|
10 |
10 |
|
|
8 |
10 |
|
|
7 |
9 |
|
|
8 hours |
7 |
5 |
|
5 |
6 |
|
|
7 |
8 |
|
|
6 |
6 |
|
|
7 |
8 |
In: Statistics and Probability
Rubber stuff is medium-sized business which manufactures rubber mats for cars and for households. There are some 15 workers in the factory, including the office staff and a manager. The workers belong to various unions according to the type of work they do. The workers on the factory floor are employed under an enterprise agreement which their unions negotiated some 18 months previously.
In the press there have been some reports of dangerous fumes that
may be emitted from rubber products, particularly during the
production process before a final product is sealed in the factory.
There are scientific means of measuring any fumes or emissions from
rubber, though this requires extensive testing. Rubber stuff
management believes any testing will disrupt production and cause
the business to run behind on a valuable contract it is currently
completing. A request from the principle union for an inspection of
the workplace by a scientist and a union official from union
headquarters has been refused.
The union believes that the workers are now subject to a dangerous
work situation and should discontinue working until the matter is
resolved. The management believes that the union is calling for
unlawful industrial action and is breaching the relevant employment
contract. The management has promised to investigate the issue, but
not until the end of the current production contract.
Question:
Discuss the rights of both the business and the union to deal with this industrial issue. Explain whether the union has the right to call a strike, and outline the rights of the business to prevent such action.The IRAC method must be used in resolving this problem scenario. Also, reference must be made to relevant legislation and case laws.
In: Accounting
In April of 2015, the FASB issued an Exposure Draft related to financial reporting of not-for-profit organizations. As a result of feedback received from constituents, the FASB decided to divide the proposed update to not-for-profit financial reporting into two phases. Phase one was completed and resulted in Accounting Standard Update (ASU) 2016-14, Presentation of Financial Statements of Not-For-Profit Entities. Phase two considers whether a measure of operations should be required, and, if so, how it should be measured. At the FASB board meeting on May 29, 2013, the FASB tentatively decided to define an operating measure on the basis of two key dimensions: (1) whether resources are from or used to carry out the mission of the organization and (2) whether resources are available for use in the current period. As this textbook goes to press, the FASB has not yet begun to redeliberate phase two.
Required:
a. Research the current status of phase two of the FASB project. (Hint: The FASB website is www.fasb.org. However, you may wish to also search for other current articles about the project.) Write a summary of the project status to date. Has the FASB deliberated on phase two? If so, what is the status of those deliberations?
b. In addition to the operating measure component of phase two of the project, there were two other project objectives. Identify the objectives and discuss what, if any, proposals are being considered as part of these objectives.
c. After having performed this research, what is your opinion? Do you believe the proposed changes will, in fact, improve financial reporting? Explain the rationale for the position you take.
In: Accounting
Haply Inc. contracts with Barksdale LLC to have an engine repaired. After much negotiation, the parties agree that the engine will be repaired and reinstalled at Haply’s facilities in 5 days. Haply plans on losing $40,000 a day for each day the engine is not delivered after the five-day window (this is the cost for a replacement engine).
Haply tells Barksdale’s representatives that if the engine is not repaired on time that bad press will cause Haply to lose a client’s business totaling $3,000,000. Barksdale does not complete the contract until day 7.
It cost Haply $500 to secure the delivery of a replacement engine. The actual rental of the replacement engine cost $40,000 a day. And Haply lost the business of a client totaling $3,000,000. Haply sues Barksdale for incidental, consequential and compensatory damages. The court finds that there is a breach of contract. What are the consequential, incidental, and compensatory damages that Barksdale is liable for in this case? Be sure to define each of those terms.
The requirements below must be met for your paper to be accepted and graded:
Write between 500 – 750 words (approximately 2 – 3 pages) using Microsoft Word.
Attempt APA style, see example below.
Use font size 12 and 1” margins.
Include cover page and reference page.
At least 60% of your paper must be original content/writing.
No more than 40% of your content/information may come from references.
Use at least two references from outside the course material, preferably from EBSCOhost. Text book, lectures, and other materials in the course may be used, but are not counted toward the two reference requirement.
In: Accounting
| VIP luggage is one of the main product lines for Smith Corporation. Smith uses large molding machines to press a specially formulated chemical compound into metal molds corresponding to different suitcase sizes and shapes. The molded product is then trimmed, lined with fabric, and fitted with accessories such as locks and hinges before being packed and shipped. The following data pertain to the cost of setting up one of the molding machines and the setup cost for the machine is $80,000 per year. | ||||||||
| Product (Suitcase type) | # of setups per year | Hours per setup | # of units produced | |||||
| 24" Two-suiter | 5 | 8 | 300 | |||||
| 26" Three-suiter | 3 | 10 | 200 | |||||
| 30" Jumbo Wheeler | 2 | 15 | 100 | |||||
| Required: a) Suppose Smith Corporation allocates setup costs to products using the number of setups as the allocation basis. How much setup cost will be allocated to each unit of the three products Smith manufactures? b) Suppose Smith Corporation allocates setup costs using the total number of setup hours as the allocation basis. How much setup cost will be allocated to each unit of the three products? c) Suppose Smith allocates setup costs using the number of units produced. Calculate the setup cost allocated to each unit of the three products. d) Give a condition that would result in the cost allocation per unit in (a) and in (b) would be the same. No calculation required. e) Give a condition that would result in the cost allocation per unit in (a) and in (c) would be the same. No calculation required. |
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In: Accounting
During the classic period the court lifted the veil on a number of occasions - from the list below select the correct answers (you may choose more than one answer)
Group of answer choices
When groups of companies should be viewed as one single entity. (DHN Food Distributors)
Defendant set up a company to solicit customers he was prohibited from soliciting due to previous employment contract (Gilford Motor Co v Horne)
Setting up a company to avoid an estate contract (Jones v Lipman);
Setting up a company to force compulsory purchase of minority shareholdings (Re Bugle Press).
Dealing with the enemy (Daimler v Continential Tyre);
Lord Denning argued in DHN Food Distributors v Tower Hamlets that groups of companies should be viewed as one single entity.
Group of answer choices
True
False
The key question in the case of Adams v Cape Industries was ?
Group of answer choices
It is possible for a company to be held as a mere facade even though it was not originally set up as a sham.
The company was used for some impropriety unconnected to the corporate form.
If there was an existence of an agent-principal relationship.
Whether Cape, the parent company, had a presence in the US through it subsidiaries.
The three situations where the case of Adams v Cape limited veil lifting to are :-
1. Where the interpretation of a statute or document shows that
the group of companies is to be treated as one;
2. Where a company is being used as a sham or mere facade;
3. Where there is no agent-principal relationship
In: Accounting
Body builders consume large volumes of dietary supplements, especially products that combine creatine with whey proteins, a waste product of cheese making. In a study to assess the impact of creatine and whey on strength and muscle fiber characteristics, 28 highly trained body builders in their mid-20s were recruited for a 13-week dietary study.
The researchers divided the volunteers into four groups, giving each man the same caloric bonus per day: a flavored drink containing a gram of supplement per kilogram of body weight. One supplement contained just carbohydrates, another just whey powder, and the last two a mix of creatine with either carbohydrates or whey. The experiment was conducted as a double blind with neither the athletes nor the scientists knowing who received each supplement until the study was completed.
Throughout, the men performed supervised resistance training three times a week and all experienced strength gains. Below are the data for increases in beach press totals in kilograms for the 28 body builders.
|
Carbohydrate only |
Whey only |
Creatine & carbohydrate |
Creatine & whey |
|
3 |
5 |
7 |
11 |
|
5 |
3 |
8 |
9 |
|
2 |
5 |
10 |
15 |
|
5 |
4 |
7 |
9 |
|
1 |
7 |
5 |
12 |
|
4 |
4 |
4 |
10 |
|
8 |
5 |
9 |
5 |
(i): Test the hypothesis.
(ii): Analyze with one-way ANOVA to test the hypothesis that there is any significant differences in the heights among the three fertilizer treatments at both:
(a): 95% and 90% level of significance.
In: Statistics and Probability
| VIP luggage is one of the main product lines for Smith Corporation. Smith uses large molding machines to press a specially formulated chemical compound into metal molds corresponding to different suitcase sizes and shapes. The molded product is then trimmed, lined with fabric, and fitted with accessories such as locks and hinges before being packed and shipped. The following data pertain to the cost of setting up one of the molding machines and the setup cost for the machine is $140,000 per year. | ||||||||
| Product (Suitcase type) | # of setups per year | Hours per setup | # of units produced | |||||
| 24" Two-suiter | 15 | 5 | 400 | |||||
| 26" Three-suiter | 10 | 10 | 300 | |||||
| 30" Jumbo Wheeler | 5 | 15 | 100 | |||||
| Required: a) Suppose Smith Corporation allocates setup costs to products using the number of setups as the allocation basis. How much setup cost will be allocated to each unit of the three products Smith manufactures? ( b) Suppose Smith Corporation allocates setup costs using the total number of setup hours as the allocation basis. How much setup cost will be allocated to each unit of the three products? ( c) Suppose Smith allocates setup costs using the number of units produced. Calculate the setup cost allocated to each unit of the three products. d) Give a condition that would result in the cost allocation per unit in (a) and in (b) would be the same. No calculation required. e) Give a condition that would result in the cost allocation per unit in (a) and in (c) would be the same. No calculation required. |
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In: Accounting
A manufacturing company produces steel housings for electrical equipment. The main component part of the housing is a steel trough that is made out of a 14-gauge steel coil. It is produced using a 250-ton progressive punch press with a wipe-down operation that puts two 90-degree forms in the flat steel to make the trough. The distance from one side of the form to the other is critical because of weatherproofing in outdoor applications. The company requires that the width of the trough be between 8.31 inches and 8.61 inches.
The data below represents the widths of the troughs, in inches, for a sample of n = 49:
8.312 8.343 8.317 8.383 8.348 8.410 8.351 8.373 8.481 8.422
8.476 8.382 8.484 8.403 8.414 8.419 8.385 8.465 8.498 8.447
8.436 8.413 8.489 8.414 8.481 8.415 8.479 8.429 8.458 8.462
8.460 8.444 8.429 8.460 8.412 8.420 8.410 8.405 8.323 8.420
8.396 8.447 8.405 8.439 8.411 8.427 8.420 8.498 8.409
(a) At the 0.05 level of significance, is there evidence that the mean width of the troughs is different from 8.46 inches? Be sure to include the following in your answer:
i. List the null and alternate hypotheses
ii. Find the value of the test statistic
iii. List the decision rule.
iv. Conclude in a complete sentence and include why you decided as you did – referring to the decision rule.
(b) What assumption about the population distribution is needed in order to conduct the t test in (a)?
In: Statistics and Probability