20.An examination of the capital cost allowance schedule for 2020 provided the following opening balances for the undepreciated capital cost for each class of EASI's assets:

The following additional information was found in the 2020 fixed asset schedules working paper files.

A. The building which cost $997,426 in 1992 was sold for $150,000. It was the only building in Class 1 at the time of its sale. A new building was purchased (non used) in April 2020 for $750,000. Also, in February 2020 a lot adjacent to the new building, was purchased for $100,000 for use as a parking lot by employees and visitors. This lot was paved at a cost of $25,000. A fence was erected around an outside storage area near the new building at a cost of $40,000.

B New office furniture was purchased for $20,000. This purchase replaced old assets which were sold for $5,000. None of the old assets was sold for more than capital cost.

C Three small trucks purchased in 2015 for $12,000 each were traded in for three new trucks. Each new truck was priced at $15,000, but this was reduced by a trade-in credit of $2,500 for each old truck.

D. Some small tools were sold for a total of $7,000. All of these tools were sold at a price less than their capital cost.

E. Leasehold improvements had been made to a leased warehouse at a cost of $225,000 in October 2018. The remaining length of the lease in that year was six years with two successive renewal options of three years each. Further leasehold improvements were made to this warehouse in 2020 at a cost of $21,000.

F.During 2020, an unlimited life franchise was purchased for $48,000.

G.Accounting gains and losses on the above asset sales netted to nil.

Required:

Based on the foregoing information, Compute the income from business for tax purposes for Eldridge Asset Sales Inc. for its 2020 fiscal year.

1. Your answer should incude the following six column

2. Follow the sequence of information given above 1 to 20.
3. Show all calculations whether or not they seem relevant to the final answer.
4. Provde CCA calculation

State your assumptions if any information is not adequate for your calculation

A firm uses two inputs in production: capital and labour. In the short run, the firm cannot adjust the amount of capital it is using, but it can adjust the size of its workforce. What happens to the firm’s average-total-cost curve, the average-variable-cost curve, and the marginal-cost curve when the cost of renting capital increases?

The average-total-cost curve (shifts up/shifts down/do not change) .

The average-variable-cost curve   (shifts up/shifts down/do not change)  .

The marginal-cost curve  (shifts up/shifts down/do not change)   .

What happens to the firm’s average-total-cost curve, the average-variable-cost curve, and the marginal-cost curve when the cost of hiring labour increases?

The average-total-cost curve  (shifts up/shifts down/do not change)   .

The average-variable-cost curve  (shifts up/shifts down/do not change)  .

The marginal-cost curve  (shifts up/shifts down/do not change)   .

Relevant Range and High-Low Method
The following selected data relate to the major cost categories experienced by Shaw Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear:

Relevant Range and High-Low Method The following selected data relate to the major cost categories experienced by Shaw Company at varying levels of operating volumes. Assuming that all operating volumes are within the relevant range, calculate the appropriate costs in each column in which blanks appear: Total Cost (@ 3,000 Units) Total Cost (@ 4,000 units) Variable Cost per Unit Total Fixed Cost Total Cost (@ 5,000 units) Direct labor (variable) $57,000 $76,000 $Answer $Answer $Answer Factory supervision (semi-variable) 50,000 65,000 $Answer $Answer $Answer Factory depreciation (fixed) 27,000 27,000 $Answer $Answer $Answer

The following partially completed process cost summary describes the July production activities of Ashad Company. Its production output is sent to its warehouse for shipping. All direct materials are added to products when processing begins. Beginning work in process inventory is 20% complete with respect to conversion.

It is​ April, and Hans Anderson is planting his barley crop near​ Plunkett, Saskatchewan. He is concerned about losing his farm if his operations result in a loss at the end of the season. He expects to harvest 3 comma 000 tonnes of barley and sell it in October. Futures contracts are available for October delivery with a futures price of $ 200 per tonne. Options with strike price of $ 200 per tonne are also​ available; puts cost $ 16 and calls cost $ 20. a. Describe how Hans can fully hedge using futures contracts. b. Given the strategy in ​(a​), what will be the total net amount received by Hans​ (for all 3 comma 000 ​tonnes) if the price of barley in October is as​ follows: i . $ 150 per​ tonne; ii. $ 200 per​ tonne; iii. $ 250 per tonne c. Describe how Hans can fully hedge using options. d. Given the strategy in ​(c​), what will be the total net amount received by Hans​ (for all​ 3,000 tonnes) if the price of barley in October is as​ follows: i. $ 150 per​ tonne; ii. $ 200 per​ tonne; iii. $ 250 per tonne e. Hans has asked for your advice regarding hedging. Discuss how the each of the following individually will influence your advice. i. Hans does not expect to have much cash available between May and September. ii. Hans thinks there is a 25​% chance his crop will be destroyed by hail before he has a chance to harvest it. iii.​ Hans's farming business will go bankrupt if his net revenues in October do not cover his costs. He estimates his costs will be $ 570 comma 000. If his business goes​ bankrupt, Hans's bank will foreclose and take his house and farm. iv.​ Hans's farming business will go bankrupt if his net revenues in October do not cover his costs. He estimates his costs will be $ 800 comma 000. If his business goes​ bankrupt, Hans's bank will foreclose and take his house and farm.

Mohave Corp. is considering eliminating a product from its Sand Trap line of beach umbrellas. This collection is aimed at people who spend time on the beach or have an outdoor patio near the beach. Two products, the Indigo and Verde umbrellas, have impressive sales. However, sales for the Azul model have been dismal.       

Mohave’s information related to the Sand Trap line is shown below.       

*Allocated based on total sales revenue

     
Mohave has determined that eliminating the Azul model would cause sales of the Indigo and Verde models to increase by 10 percent and 15 percent, respectively. Variable costs for these two models would increase proportionately. Although the direct fixed costs could be eliminated, the common fixed costs are unavoidable. The common fixed costs would be redistributed to the remaining two products.     

Required:
1-a. Complete the table given below, if Mohave Corp drops the Azul line. (Do not round intermediate calculations. Round Common Fixed Costs to the nearest whole dollar.)

  

1-b. Will Mohave’s net operating income increase or decrease if the Azul model is eliminated? By how much?

   

2. Should Mohave drop the Azul model?

     

3-a. Complete the table given below assuming that Mohave had no direct fixed overhead in its production information and the entire $51,000 of fixed cost was common fixed cost.

  

3-b. Should it the drop Azul model?

  

3-c. What is the increase or decrease in the net operating income of Mohave?

A business incurs the following costs: • Labor: $125/unit • Materials: $40/unit • Rent: $450,000/month

Assume the firm produces 2 million units per month.

The total variable cost, per month, is _______ million.

The total fixed cost, per month, is ______ million.

The total cost is ________ million.

Tanghang Industries production budget from the 2^nd quarter of 2018, projected the following amounts of units to be produced:

April 1,100 units

May     1,250 units

June     1,300 units

Each unit requires 2 parts of component A and 3 parts of component B. Component A cost is $1.15 per unit and component B cost is $.85 per unit.

Calculate the Direct Material budgeted cost for May 2018

Calculate the Direct Material budgeted cost for the quarter April - June 2018

The raw materials inventory policy is 0 ending inventory, 0 beginning inventory. How much inventory of component A is required in April 2018?

Each unit requires the following labor:

2 hours in the processing department

1 hour in the assembly department

Processing department labor rate is $5/hour

Assembly department labor rate is $7/hour

Using the information from the production budget of Tangshang Industries

Calculate Total Direct Labor Cost in the processing department for the quarter April – June 2018.

Calculate Total Direct Labor Cost for June 2018.

Calculate Total Direct Labor Cost for the quarter April – June 2018.

Variable Factory overhead is $.60 per unit

Fixed Factory overhead is $1,000 monthly

Using the information from the production budget of Tangshang Industries

Calculate total variable overhead cost for May 2018

Calculate total variable overhead cost for the quarter April - June 2018

Calculate total overhead cost for the quarter April - June 2018

Calculate total product cost for the quarter April - June 2018

Calculate total product cost per unit for the quarter April - June 2018

If the sale price is $34.00, what will be the Gross Profit per unit?

If the sale price is $34.00 for the units produced during the quarter, what will be the Total Gross Profit?

Leno Manufacturing Company prepared the following factory overhead cost budget for the Press Department for October of the current year, during which it expected to require 18,000 hours of productive capacity in the department:

Assuming that the estimated costs for November are the same as for October, prepare a flexible factory overhead cost budget for the Press Department for November for 16,000, 18,000, and 20,000 hours of production. Round your interim computations to the nearest cent, if required. Enter all amounts as positive numbers.