1) Donald rents out his vacation home for nine months and lives in his vacation home for the remainder of the year. His gross rental income for 2017 is $7,200. The expenses attributable to the vacation home for the entire year are as follows:

Real estate taxes $2,000

INterest on mortgage loan 4,000

Utilities 1,200

Repairs/maintenance 600

Depreciation 3,500

What amount would Donald report as net income or loss from the rental of the vacation home?

2) Wilson and Joan, both in their 30s, file a joint income tax return for 2017. Wilson's wages are $15,000 and Joan's wages are $23,000 for the year. Their total adjusted gross income is $38,000, and Joan is covered by a qualified pension plan at work but Wilson is not.

a) What is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?

Wilson $

Joan $

b) If Joan's wages are $82,000 for 2017, instead of $23,000, and thier adjusted gross income is $97,000, what is the maximum amount that Wilson and Joan may each deduct for contributions to thier individual retirement accounts?

Wilson $

Joan $

3) Hope srpings, a teacher, loaned Hugh Owens, a friend, $20,000 to invest in real estate. Hugh declared bankruptcy in 2017 and cannot repay the $20,000

a) What is the nature of Hope's loss? ( what does it called ?)

b) Assuming Hope has no other captial transactions, is there a limit on the amount she may deduct for 2017?

Explain

4) Dennis, the owner of Dennis Company, incurs the following expenses while away from home on a three-week business trip during 2017:

Air fare from Chicago to Boston $800

Hotel charges 2,200

Meal charges 880

Dry cleaning and laundry 100

Local transportation 55

Business entertainment 250

Business gift to Boston manager 55

in addition to the above expenses, Dennis incurred the following expenses for a weekend sightseeing trip to Washington D.C.:

Transportation to Washington DC $350

Hotel charges 225

Meal charges 105

Calcuate the amount Dennis may deduct for 2017 as travel expenses for the trip

Three Rivers Inc. provides cable TV and Internet service to the local community. The activities and activity costs of Three Rivers are identified as follows:

a. Identify the cost of quality classification for each activity and whether the activity is value-added or non-value-added.

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Correct

b. Prepare a cost of quality report. Assume that sales are $1,400,000. If required, round percentages to one decimal place.

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b. Classify each activity as either prevention, appraisal, internal failure or external failure. List the total costs of each of these four categories in a column called quality cost. In a separate column, determine the percent of each quality cost as compared to the total quality costs by dividing individual quality cost categories by the total quality cost. In another column, determine the percent of each quality cost classification as compared to total sales by dividing individual quality cost classes by the total sales amount. Total all columns. Remember that the Percent of total quality cost column should total to 100%.

Learning Objective 1 and Learning Objective 3.

c. Prepare a value-added/non-value-added analysis.

A company offers machine rental services for material cutting. Consider the following costs of the company over the relevant range of 4,000 to 10,000 hours of operating time for its cutting equipment

A. What is the estimated total cost per hour at a volume of 8,000 hours?

B. What are the estimated total fixed costs at a volume of 10,000 hours?

C. What is the estimated total fixed cost per hour at a volume 8,000 hours?

D. What is the primary advantage of the High-Low method over the cost estimations?

The table below depicts the cost and demand structure a natural monopoly faces.

a. Calculate total revenue, total profit, LR average cost, marginal cost, marginal revenue at each output level (complete the table).

b. If this firm is allowed to operate as a monopolist, what will be the quantity produced and the price charged by the firm? [Hint: identified the total profit at the point where MR=MC]

c. If regulators require the firm to practice marginal cost pricing (price cannot be higher than marginal cost). What is the firm’s profit (loss) under this regulatory framework? [Hint: identified the total profit at the point where price = marginal cost]

d. If regulators require the firm to practice average cost pricing, what is the firm’s profit under this regulatory framework? [Hint: identified the total profit at the point where price = average cost]

e. Based on your analysis, what should regulators due? (i.e., what practice should regulators allow? Let the firm operate as a monopolist? Require the firm to practice marginal cost pricing? Require the firm to practice average cost pricing?). Please explain. [Hint: See textbook, page 604 - 605]

Fast Co. produces its product through a single processing department. Direct materials are added at the start of production, and conversion costs are added evenly throughout the process. The company uses monthly reporting periods for its weighted-average process costing system. The Work in Process Inventory account has a balance of $100,300 as of October 1, which consists of $21,900 of direct materials and $78,400 of conversion costs.

During the month the company incurred the following costs:

During October, the company started 156,000 units and transferred 166,000 units to finished goods. At the end of the month, the work in process inventory consisted of 28,000 units that were 80% complete with respect to conversion costs.

Required:
1. Prepare the company’s process cost summary for October using the weighted-average method.
2. Prepare the journal entry dated October 31 to transfer the cost of the completed units to finished goods inventory.

Complete this question by entering your answers in the tabs below.

Required 1

Required 2

Prepare the company’s process cost summary for October using the weighted-average method. (Round "Cost per EUP" to 2 decimal places.)

Journal entry worksheet

Record the transfer of goods to finished goods inventory.

Note: Enter debits before credits.

1. We are analyzing 2 products – product Hamburgers(HB)and Double Deckers(DD)
   • Product HB requires 1 Patty (P) and 2 Buns (B)
   • Product Y requires 2 Patties (P) and 3 Buns B)
   • The standard cost for P is $1 per unit.
   • The standard cost for B is $0.50 per unit.
   • During this month, the company purchased 5,000 Ps for $4,950 (there was no beginning balance).
   • During this month, the company purchased 5,000 units of Bs for $2,600. (there was no beginning balance).
   • During the month the company produced 500 HBs and 1000 DDs.
   • During the month the company used 2520 units of Ps and 3975 units of Bs.
   • Payroll was $315, with 16 hours (this is actual - direct labor only).
   • Each burger requires 1/100 of an hour for Direct Labor
   • Labor standard cost is $20 per hour.

hint: for production of both X and Y

Questions 1-27: Find: Direct labor Total Variance (fav/unf), Patty - Use (Quantity) Variance, P - Price Variance (fav/unf), Buns-- Actual Cost (total), DL -- Flex Budget, Rate Variance (Labor Price), B- Flex Budget, P - Direct Material Total Variance (Fav/Unf), P - Flex Budget , DL Efficiency Variance (Labor Quantity), P - Direct Material Total Variance, P - Actual Cost (total) , Rate (Labor Price) Variance (fav/unf), B - Standard Cost (Total), DL - Efficiency (labor quantity) variance (fav/unf), B - Use variance (Fav/Unf), DL - Actual Cost (Total), B - Direct Material Total Variance, P - Use (Quantity) Variance (fav/unf), DL Total Variance, B - Use (Quantity) Variance, B - Direct Material Total Variance (fav/unf), B - Price Variance (fav/unf), B - Price Variance, P - Price Variance, P - Standard Cost (total), DL - Standard Cost (Total), Using Direct Labor Hours, what is the total allocation of overhead costs to HB using the "traditional" method?

2.Use the information given in Problem I.

Use standard cost information for all calculations except as noted below.

Questions 28-49: What is the Total Unit ABC Cost of HB?,Using Direct Labor Hours, what is the allocation rate using the "traditional" method?, Using Direct Labor Hours, what is the total unit cost of DD using the "traditional" method?, What is the Overhead Unit ABC Cost of DD?, What is the Direct Labor Cost per unit for HB (using standards), What is the Direct Material Cost per unit for HB (using standards), What is the ABC allocation of Frying Cost to HB?, What is the ABC allocation of Baking Cost to DD?, What is the Direct Material Cost per unit for DD (using standards), What is the Total Unit ABC Cost of DD?, What is the ABC allocation of Baking Cost to HB?, What is the ABC allocation Rate for Baking?, Using Direct Labor Hours, what is the total allocation of overhead costs to DD using the "traditional" method?, What is the ABC allocation Rate for Frying?, What is the Direct Labor Cost per unit for DD (using standards), What is the ABC allocation of Frying Cost to DD?, What is the Overhead Unit ABC Cost of HB?, Using Direct Labor Hours, what is the total unit cost of HB using the "traditional" method? (round to cents), Using Direct Labor Hours, what is the Over head unit cost of HB using the "traditional" method? (round to cents), Using Direct Labor Hours, what is the Over head unit cost of DD using the "traditional" method?

Kubin Company’s relevant range of production is 18,000 to 22,000 units. When it produces and sells 20,000 units, its average costs per unit are as follows:

Required:

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 20,000 units?

b. What is the total indirect manufacturing cost incurred to make 20,000 units?

2. Assume the cost object is the Manufacturing Department and that its total output is 20,000 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department?

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $50,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 20,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives?

b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

1. Assume the cost object is units of production:

a. What is the total direct manufacturing cost incurred to make 20,000 units? (Round per unit values to 2 decimal places.)

b. What is the total indirect manufacturing cost incurred to make 20,000 units? (Round per unit values to 2 decimal places.)

2. Assume the cost object is the Manufacturing Department and that its total output is 20,000 units.

a. How much total manufacturing cost is directly traceable to the Manufacturing Department? (Round per unit values to 2 decimal places.)

b. How much total manufacturing cost is an indirect cost that cannot be easily traced to the Manufacturing Department?

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3. Assume the cost object is the company’s various sales representatives. Furthermore, assume that the company spent $50,000 of its total fixed selling expense on advertising and the remainder of the total fixed selling expense comprised the fixed portion of the company's sales representatives’ compensation.

a. When the company sells 20,000 units, what is the total direct selling expense that can be readily traced to individual sales representatives? (Round per unit value to 2 decimal places.)

b. When the company sells 20,000 units, what is the total indirect selling expense that cannot be readily traced to individual sales representatives?

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