The Twisty Tie Dye Co. produces a single product; a plush poncho made of Italian cashmere. The company has provided the following data for its most recent year of operations.

       The unit cost, under both absorption costing and variable costing, would be

The Petty Co. is considering the following three investment projects.

Use the following information to answer the question:

Regarding the Net Present Value, which statement is true?

Use the following information to answer the question:

Regarding the Profitability Index (PI), which statement is true?

The Pearl Jam Corporation has two divisions: the Eddie Division and the Vedder Division. The Eddie Division has sales of $230,000, variable expenses of $131,100, and traceable fixed expenses of $63,300. The Vedder Division has sales of $540,000, variable expenses of $307,800, and traceable fixed expenses of $120,700. The total amount of common fixed expenses not traceable to the individual divisions is $119,200.

The company’s net operating income is:

Required information

[The following information applies to the questions displayed below.]

Megamart, a retailer of consumer goods, provides the following information on two of its departments (each considered an investment center).

1. Compute return on investment for each department. Using return on investment, which department is most efficient at using assets to generate returns for the company?
2. Assume a target income level of 12% of average invested assets. Compute residual income for each department. Which department generated the most residual income for the company?
3. Assume the electronics department is presented with a new investment opportunity that will yield a 15% return on investment. Should the new investment opportunity be accepted?

Applying and Analyzing Inventory Costing Methods
At the beginning of the current period, Chen carried 1,000 units of its product with a unit cost of $32. A summary of purchases during the current period follows.

UnitsUnit CostCostBeginning Inventory1,000$32$32,000Purchase #11,8003461,200Purchase #28003830,400Purchase #31,2004149,200

During the current period, Chen sold 2,800 units.

(a) Assume that Chen uses the first-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance. Use the financial statement effects template to record cost of goods sold for the period.
Ending inventory balance $Answer

Cost of goods sold              $Answer

Use negative signs with answers, when appropriate.

(b) Assume that Chen uses the last-in, first-out method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance  $Answer

Cost of goods sold              $Answer

(c) Assume that Chen uses the average cost method. Compute both cost of good sold for the current period and the ending inventory balance.
Ending inventory balance $Answer

Cost of goods sold              $Answer

Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2020). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Average hourly billing rates are auditing $85, tax $94, and consulting $105.

Prepare the service revenue (sales) budget for 2020 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2020). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.

Average hourly billing rates are auditing $81, tax $93, and consulting $102.

Prepare the service revenue (sales) budget for 2020 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

5-24 Preparing a cash payments budget (LO 4)

Dakota Williams is one of Texas’s premiere party planners. She purchases a variety of supplies, such as plastic tableware, stemware, and decorations, throughout the year. Dakota has prepared the following purchases budget for the coming year.

Historically, Dakota has paid for 40% of her purchases in the quarter of purchase and 60% in the quarter following purchase. On December 31 of this year Dakota had a $250,000 accounts payable balance.

Required

Prepare Dakota’s cash payments budget for the coming year.

Thome and Crede, CPAs, are preparing their service revenue (sales) budget for the coming year (2017). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below. Department Quarter 1 Quarter 2 Quarter 3 Quarter 4 Auditing 2,450 1,840 2,330 2,710 Tax 3,130 2,650 2,300 2,800 Consulting 1,640 1,640 1,640 1,640 Average hourly billing rates are auditing $84, tax $94, and consulting $105. Prepare the service revenue (sales) budget for 2017 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.

The Production Department of Hruska Corporation has submitted the following forecast of units to be produced by quarter for the upcoming fiscal year:

Each unit requires 0.25 direct labor-hours and direct laborers are paid $15.00 per hour.

In addition, the variable manufacturing overhead rate is $1.80 per direct labor-hour. The fixed manufacturing overhead is $97,000 per quarter. The only noncash element of manufacturing overhead is depreciation, which is $37,000 per quarter.

Required:

1. Prepare the company’s direct labor budget for the upcoming fiscal year, assuming that the direct labor workforce is adjusted each quarter to match the number of hours required to produce the forecasted number of units produced. (Round "Direct labor time per unit (hours)" and "Direct labor cost per hour" answers to 2 decimal places.)

2. Prepare the company’s manufacturing overhead budget.

PA8-6 Preparing Operating Budgets for a Merchandising Firm [LO 8-5, 8-3a, f, g, h] Red Canyon T-shirt Company operates a chain of T-shirt shops in the southwestern United States. The sales manager has provided a sales forecast for the coming year, along with the following information: Quarter 1 Quarter 2 Quarter 3 Quarter 4 Budgeted Unit Sales 34,000 54,000 27,000 54,000 Each T-shirt is expected to sell for $18. The purchasing manager buys the T-shirts for $7 each. The company needs to have enough T-shirts on hand at the end of each quarter to fill 28 percent of the next quarter’s sales demand. Selling and administrative expenses are budgeted at $68,000 per quarter plus 14 percent of total sales revenue. Required: 1. Determine budgeted sales revenue for each quarter. 2. Determine budgeted cost of merchandise purchased for each quarter.