]

Exercise 23-6

On January 1, 2017, the Hardin Company budget committee has reached agreement on the following data for the 6 months ending June 30, 2017.

Sales units: First quarter 5,700; second quarter 6,200; third quarter 7,200
Ending raw materials inventory: 40% of the next quarter’s production requirements
Ending finished goods inventory: 25% of the next quarter’s expected sales units
Third-quarter production: 7,670 units.

The ending raw materials and finished goods inventories at December 31, 2016, follow the same percentage relationships to production and sales that occur in 2017. 4 pounds of raw materials are required to make each unit of finished goods. Raw materials purchased are expected to cost $4 per pound.

Prepare a production budget by quarters for the 6-month period ended June 30, 2017.

HARDIN COMPANY
Production Budget

June 30, 2017
For the Quarter Ending June 30, 2017
For the Six Months Ending June 30, 2017
Quarter
1
2
Six Months

Total Materials Required
Direct Materials Per Unit
Expected Unit Sales
Total Required Units
Desired Ending Direct Materials
Beginning Finished Goods Unit
Desired Ending Finished Goods Unit
Beginning Direct Materials
Direct Materials Purchases
Required Production Units

Add
Less
:

Beginning Direct Materials
Expected Unit Sales
Total Materials Required
Desired Ending Finished Goods Unit
Required Production Units
Beginning Finished Goods Unit
Total Required Units
Desired Ending Direct Materials
Direct Materials Per Unit
Direct Materials Purchases

Beginning Direct Materials
Total Materials Required
Desired Ending Finished Goods Unit
Direct Materials Per Unit
Direct Materials Purchases
Expected Unit Sales
Required Production Units
Total Required Units
Beginning Finished Goods Unit
Desired Ending Direct Materials

Add
Less
:

Direct Materials Per Unit
Required Production Units
Desired Ending Finished Goods Unit
Direct Materials Purchases
Expected Unit Sales
Total Materials Required
Beginning Direct Materials
Total Required Units
Beginning Finished Goods Unit
Desired Ending Direct Materials

Total Required Units
Total Materials Required
Desired Ending Direct Materials
Required Production Units
Direct Materials Per Unit
Direct Materials Purchases
Expected Unit Sales
Desired Ending Finished Goods Unit
Beginning Finished Goods Unit
Beginning Direct Materials

LINK TO TEXT

Prepare a direct materials budget by quarters for the 6-month period ended June 30, 2017.

HARDIN COMPANY
Direct Materials Budget

For the Quarter Ending June 30, 2017
For the Six Months Ending June 30, 2017
June 30, 2017
Quarter
1
2
Six Months

Direct Labor Time Per Unit
Beginning Direct Materials
Units to be Produced
Total Direct Labor Cost
Cost Per Pound
Desired Ending Direct Materials
Total Materials Required
Direct Labor Cost Per Hour
Direct Materials Purchases
Direct Materials Per Unit
Total Required Direct Labor Hours
Total Cost of Direct Materials Purchases
Total Pounds Needed for Production

Desired Ending Direct Materials
Units to be Produced
Direct Materials Purchases
Total Materials Required
Cost Per Pound
Direct Materials Per Unit
Total Required Direct Labor Hours
Beginning Direct Materials
Direct Labor Time Per Unit
Total Cost of Direct Materials Purchases
Direct Labor Cost Per Hour
Total Direct Labor Cost
Total Pounds Needed for Production

Direct Materials Purchases
Direct Labor Cost Per Hour
Total Pounds Needed for Production
Cost Per Pound
Units to be Produced
Beginning Direct Materials
Direct Materials Per Unit
Direct Labor Time Per Unit
Total Direct Labor Cost
Total Cost of Direct Materials Purchases
Total Materials Required
Total Required Direct Labor Hours
Desired Ending Direct Materials

Add
Less
:

Beginning Direct Materials
Cost Per Pound
Total Direct Labor Cost
Direct Materials Purchases
Total Cost of Direct Materials Purchases
Direct Labor Cost Per Hour
Direct Materials Per Unit
Total Required Direct Labor Hours
Units to be Produced
Desired Ending Direct Materials
Total Materials Required
Total Pounds Needed for Production
Direct Labor Time Per Unit

Total Materials Required
Cost Per Pound
Total Pounds Needed for Production
Total Required Direct Labor Hours
Direct Labor Cost Per Hour
Direct Materials Purchases
Desired Ending Direct Materials
Direct Labor Time Per Unit
Direct Materials Per Unit
Units to be Produced
Beginning Direct Materials
Total Cost of Direct Materials Purchases
Total Direct Labor Cost

Add
Less
:

Direct Labor Time Per Unit
Units to be Produced
Total Materials Required
Direct Materials Purchases
Direct Materials Per Unit
Total Direct Labor Cost
Total Cost of Direct Materials Purchases
Total Pounds Needed for Production
Beginning Direct Materials
Total Required Direct Labor Hours
Cost Per Pound
Desired Ending Direct Materials
Direct Labor Cost Per Hour

Beginning Direct Materials
Total Pounds Needed for Production
Total Required Direct Labor Hours
Units to be Produced
Cost Per Pound
Total Materials Required
Desired Ending Direct Materials
Direct Labor Cost Per Hour
Direct Materials Purchases
Direct Materials Per Unit
Direct Labor Time Per Unit
Total Cost of Direct Materials Purchases
Total Direct Labor Cost

Beginning Direct Materials
Total Materials Required
Cost Per Pound
Direct Labor Time Per Unit
Direct Materials Purchases
Desired Ending Direct Materials
Direct Materials Per Unit
Direct Labor Cost Per Hour
Total Cost of Direct Materials Purchases
Total Direct Labor Cost
Total Pounds Needed for Production
Total Required Direct Labor Hours
Units to be Produced
$
$

Total Materials Required
Direct Materials Purchases
Direct Labor Cost Per Hour
Total Cost of Direct Materials Purchases
Desired Ending Direct Materials
Beginning Direct Materials
Total Direct Labor Cost
Direct Materials Per Unit
Total Pounds Needed for Production
Total Required Direct Labor Hours
Units to be Produced
Cost Per Pound
Direct Labor Time Per Unit
$
$
$

LINK TO TEXT

Question Attempts: Unlimited
SAVE FOR LATER
SUBMIT ANSWER

As part of an environmental studies class​ project, students measured the circumferences of a random sample of 50 blue spruce trees near Brainard​ Lake, Colorado. The sample mean circumference was 30.4 inches. The population standard deviation is known to be around 7.1 inches. Find a 99% confidence interval for the population mean circumference of all blue spruce trees near this lake.

​A) What type of confidence interval are you to​ find?

A.

​1-Sample Mean Interval using Z

B.

​1-Sample Mean Interval using T

C.

None of the Above

​B) Confidence​ Interval: (

nothing

​,

nothing

​)

​(round each interval limit to two decimal​ places)

​C) Interpret the interval in the SHOW YOUR WORK area.

1) Does the U.S. have a monopoly problem? Why/not? Support your response with research.

2) Listen to the Planet Money Indicator podcast "Google's Mobile Monopoly" (Links to an external site.) and identify the barriers to entry in the tech industry that enable Google to realize it's monopoly/near monopoly. (remember to use additional resources as well)

3) Provide a separate example of a monopoly/near monopoly (natural or not) and comment on the barriers to entry in that industry. Please be specific.

4) Read "Anti Trust Laws - A Brief History" (Links to an external site.) and explore the resources below to comment on the field of antitrust in today's business climate. Should companies like Amazon have so much power (Links to an external site.)?  

Cape Fear Marine Mini Case

Sarah Connor was recently hired by Cape Fear Marine Company to assist the company with its short-term financial planning and to evaluate the firm’s financial performance. Sarah graduated from college five years ago with a degree in finance and had been employed in the treasury department of a large firm in Raleigh, North Carolina since then.

Kyle Reese founded Cape Fear Marine Company 15 years ago. The company’s operations are located near Wilmington, North Carolina. The firm is structured as an LLC. Cape Fear Marine manufactures a diverse line of boats, ranging from low-end fishing boats to high-end luxury craft. The company and its products have received high reviews for safety and reliability, as well as awards for customer satisfaction.

The marine products/boating industry is fragmented, with a number of manufacturers. As with any industry, there are market leaders, but the diverse nature of the industry ensures that no manufacturer dominates the market. The competition in the market, as well as the product cost, ensures that attention to detail is a necessity.

To get Sarah started with her analysis, Kyle has provided the following financial data. Sarah has gathered the industry ratios for the boat manufacturing industry.

a.   Calculate all of the ratios listed in the industry table for Cape Fear Marine.

b.   Compare the performance of Cape Fear Marine with the industry as a whole. For each ratio, comment on why it might be viewed as a positive or negative relative to the industry.

Zachary Woodcraft Company manufactures “antique” wooden cabinets to house modern televisions. The Company began operations in January of last year. Sidney Myrick, the owner, asks for your assistance. He believes that he needs to better understand the cost of the cabinets for pricing purposes. You have collected the following data concerning actual production over the past year:

Required

1. To understand the department’s cost behavior, you decide to plot the points on graph paper and sketch a total cost line.

1. (1) Enter the number of units and their costs in increasing order.
   

2. Using the high-low method, compute the total cost equation for the preceding data.

1. (1) Compute the variable cost per unit.

2. (2) Compute total fixed costs.

3. (4) Calculate the total cost assuming 1,900 cabinets are made.
   

Using the high-low method, compute the total cost equation for the preceding data. Compute the variable cost per unit, total fixed costs, and total cost assuming 1,900 cabinets are made. (Round “variable cost per unit” answer to 4 decimal places.)

1)Given ATC,how would you determine total cost?

a)Graphically show and verbaly explain what the general pattern of and relationship between fixed cost,variable cost and total cost as output increase?

b)Graphically show and verbally explain what the general pattern of and relationship between average total cost,average variable cost and marginal cost as output increases?

The Inventory at July 1st and the cost charged to work in process department B during July for the Parker Corporation are as follows:

32,000 units, 3/4 completed...................................1,312,000

From Department A 174,000 units.........................1,566,000

Direct Labor............................................................5,848,000

Factory Overhead...................................................1,292,000

During July, all direct materials are transferred from Department A, the units in process at July 1st were completed, and of the 174,000 units entering the Department, all were completed except 36,000 units which were 2/3 completed. Inventories are costed by the FIFO method.

Use the 5 Steps to prepare a cost of production report:

1. Units to be accounted for: Beginning WIP + Transferred In = Total

2.Units to be accounted for: Beginning WIP + Started and Completed + Ending WIP = Total

3. Equivalent Units of Production & Cost per EUP

4.Cost to be accounted for: Beg. WIP + Materials + Direct Labor + Overhead = Total Cost to be accounted for

5. Cost accounted for: Total cost of beginning WIP + Total cost for started and completed + Total Cost for ending WIP = Total cost accounted for

An Excel spreadsheet using formulas and cell referencing is required for this assignment.

Careen owns a condominium near Hershey, PA that she rents out part of the year. This year, she incurs the following expenses in connection with her rental condo:

  
During the year, Careen rented the condo for 112 days, receiving $17,600 of gross income. She personally used the condo for 49 days. Assuming Careen uses the court method of allocating expenses to rental use of the property.

She files single and in addition to expenses listed above, she paid the following amounts:

Remember that for itemized deductions (from AGI) the deduction for state taxes is limited to $10,000.

Determine how much depreciation she is allowed to deduct. Then determine her net rental income (loss), her total amount of “for AGI” deductions, and her total amount of itemized deductions (from AGI). Include and fill in the following table within your Excel worksheet:

Alexa owns a condo near Cocoa Beach in Flordia. This year, she incurs the following expenses in connection with her condo:

Insurance $3,500

Mortage interest $10,800

Property Taxes $3,700

Repairs and maintance $1,150

Ulitites $2,900

Depreciation $22,000

During the year, Alexa rented out the condo for 132 days. Alexa's AGI from all sources other than the rental properrty is $200,000. Unless otherwise specifies, Alexa has no sources of passive income.

Assume that in addition to renting the condo for 132 days, Alexa uses the condo for 8 days of personal use. Also assume that Alexa receives $44,500 of gross rental receipts and her itemized deductions exceed the standard deduction before considering expenses associated with the condo. Answer the following questions:

A) What is the total amount of for AGi deductions relating to the condo that Alexa may deduct in the current year? Assume shes uses the IRS method of allocating expenses between rental and personal days.

Gross rental income

Expenses:

Insurace

Mortage Interest

Property Taxes

Repairs and Maintenance

Utilities

Depreciation

Total Expenses

Balance-net rental income

Total for AGI deductions

B) What is the total amount of for AGI deductions relating to the condo that Alexa may deduct in the current year? Assume she uses the IRS method of allocating expenses between rental and personal days.

National Corporation needs to set a target price for its newly designed product M14–M16. The following data relate to this new product.

These costs are based on a budgeted volume of 79,000 units produced and sold each year. National uses cost-plus pricing methods to set its target selling price. The markup percentage on total unit cost is 50%.

Compute the total variable cost per unit, total fixed cost per unit, and total cost per unit for M14–M16.

eTextbook and Media

Compute the desired ROI per unit for M14–M16.

eTextbook and Media

Compute the target selling price for M14–M16.

eTextbook and Media

Compute variable cost per unit, fixed cost per unit, and total cost per unit assuming that 59,250 M14–M16s are produced and sold during the year.