The first budget is to be for the second quarter of the current year (April, May and June). To assist in developing the budget figures, the divisional controller has accumulated the following information.
Sales: Sales through the first three months of the current year were 30,000 units. Actual sales in units for January, February, and March, and planned sales in units over the next five months, are given below:
January (actual) 6,000
February (actual) 10,000
March (actual) 14,000
April (planned) 20,000
May (planned) 34,000
June (planned) 51,000
July (planned) 45,000
August (planned) 30,000
In total, the East Division expects to produce and sell 250,000 units during the current year.
Direct Material: Two different materials are used in production of the component. Data regarding these materials are given below:
Material 208:
Materials per Finished Component: 4 pounds
Cost per pound: $5.00
Inventory at March 13: 46,000 pounds
Material 311:
Materials per Finished Component: 9 feet
Cost per foot: $2.00
Inventory at March 31: 69,000 feet
Material No. 208 is sometimes in short supply. Therefore, the East Division requires that enough of the material be on hand at the end of each month to provide for 50% of the following month’s production needs. Material No. 311 is easier to get, so only one-third of the following month’s production needs must be on hand at the end of each month.
Direct Labor: The East Division has three department through which the components must past before they are completed. Information relating to direct labor in these departments is given below:
Department: Shaping
Direct Labor Hours per Finished Component: .25
Cost per Direct Labor Hour: $18.00
Department: Assembly
Direct Labor Hours per Finished Component: .70
Cost per Direct Labor Hour: $16.00
Department: Finishing
Direct Labor Hours per Finished Component: .10
Cost per Direct Labor Hour: $20.00
Direct labor is adjusted to the workload each month.
Manufacturing Overhead: East Division manufactured 32,000 components during the first three months of the current year. The actual variable overhead costs incurred during this three-month period are shown below. Each Division’s controller believes that the variable overhead costs incurred during the last nine months of the year will be at the same rate per component as experienced during the first three months.
Utilities $57,000
Indirect Labor $31,000
Supplies $16,000
Other $8,000
Total variable overhead $112,000
The East Division has planned fixed manufacturing overhead costs for the entire year as follows:
Supervision $872,000
Property Taxes $143,000
Depreciation $2,910,000
Insurance $631,000
Other $72,000
Total fixed manufacturing
Overhead $4,628,000
Finished Goods Inventory: The desired monthly ending inventory of completed components is 20% of the next month’s estimated sales. The East Division has 4,000 units in the finished goods inventory on March 31.
Selling and Administrative Expenses: Selling and Administrative Expenses are budgeted at $400,000 per month plus 1% of total credit sales for the month.
I NEED MANUFACTURING OVERHEAD BUDGET
CASH BUDGET SALES BUDGET S CHEDULE OF EXPECTED CASH COLLECTIONS
In: Accounting
The first budget is to be for the second quarter of the current year (April, May and June). To assist in developing the budget figures, the divisional controller has accumulated the following information.
Sales: Sales through the first three months of the current year were 30,000 units. Actual sales in units for January, February, and March, and planned sales in units over the next five months, are given below:
January (actual) 6,000
February (actual) 10,000
March (actual) 14,000
April (planned) 20,000
May (planned) 34,000
June (planned) 51,000
July (planned) 45,000
August (planned) 30,000
In total, the East Division expects to produce and sell 250,000 units during the current year.
Direct Material: Two different materials are used in production of the component. Data regarding these materials are given below:
Material 208:
Materials per Finished Component: 4 pounds
Cost per pound: $5.00
Inventory at March 13: 46,000 pounds
Material 311:
Materials per Finished Component: 9 feet
Cost per foot: $2.00
Inventory at March 31: 69,000 feet
Material No. 208 is sometimes in short supply. Therefore, the East Division requires that enough of the material be on hand at the end of each month to provide for 50% of the following month’s production needs. Material No. 311 is easier to get, so only one-third of the following month’s production needs must be on hand at the end of each month.
Direct Labor: The East Division has three department through which the components must past before they are completed. Information relating to direct labor in these departments is given below:
Department: Shaping
Direct Labor Hours per Finished Component: .25
Cost per Direct Labor Hour: $18.00
Department: Assembly
Direct Labor Hours per Finished Component: .70
Cost per Direct Labor Hour: $16.00
Department: Finishing
Direct Labor Hours per Finished Component: .10
Cost per Direct Labor Hour: $20.00
Direct labor is adjusted to the workload each month.
Manufacturing Overhead: East Division manufactured 32,000 components during the first three months of the current year. The actual variable overhead costs incurred during this three-month period are shown below. Each Division’s controller believes that the variable overhead costs incurred during the last nine months of the year will be at the same rate per component as experienced during the first three months.
Utilities $57,000
Indirect Labor $31,000
Supplies $16,000
Other $8,000
Total variable overhead $112,000
The East Division has planned fixed manufacturing overhead costs for the entire year as follows:
Supervision $872,000
Property Taxes $143,000
Depreciation $2,910,000
Insurance $631,000
Other $72,000
Total fixed manufacturing
Overhead $4,628,000
Finished Goods Inventory: The desired monthly ending inventory of completed components is 20% of the next month’s estimated sales. The East Division has 4,000 units in the finished goods inventory on March 31.
Selling and Administrative Expenses: Selling and Administrative Expenses are budgeted at $400,000 per month plus 1% of total credit sales for the month.
I NEED MANUFACTURING OVERHEAD BUDGET
CASH BUDGET SALES BUDGET S CHEDULE OF EXPECTED CASH COLLECTIONS
In: Accounting
Since the SUTA rates changes are made at the end of each year and there is much discussion about changes to the FUTA rate, the available 2017 rates were used for FUTA and SUTA.
Note: For this textbook edition the rate 0.6% was used for the FUTA tax rate for employers.
Example 5-5
Sutcliffe Company had taxable wages totaling $87,500 in 2018. During the year, the company paid some of its state contributions after the January 31, 2019, cutoff. The penalty for tardiness is shown in the following calculation of the firm's net FUTA tax for 2018:
| Amount of gross FUTA tax ($87,500 × 6.0%) | $5,250.00 | ||||||
| State taxable wages | $87,500 | ||||||
| Sutcliffe's SUTA tax rate | × 5.4% | ||||||
| Sutcliffe's SUTA tax | $ 4,725 | ||||||
| Breakdown of Sutcliffe's SUTA tax payments: | |||||||
| Before 1/31/19—$3,000 × 100% credit | (3,000.00) | ||||||
| After 1/31/19—$1,725 × 90% credit | (1,552.50) | ||||||
| Amount of net FUTA tax | $ 697.50 | ||||||
| If the company had made timely payments of its state contributions, the amount of its net FUTA tax would have been reduced to $525, for a savings of $172.50, as follows: | |||||||
| Amount of gross FUTA tax ($87,500 × 6.0%) | $5,250.00 | ||||||
| Total taxable wages | $87,500 | ||||||
| Credit against tax | × 5.4% | ||||||
| Total credit | 4,725.00 | ||||||
| Amount of net FUTA tax ($87,500 × 0.6%) | $ 525.00 | ||||||
| $697.50 − $525.00 = $172.50 savings | |||||||
Example 5-6
Yeldon Company has a $70,000 federal and state taxable payroll and has earned a reduced state tax rate of 4 percent. If none of its state tax payments are timely, the FUTA tax calculation is as follows:
| Gross FUTA tax ($70,000 × 0.060) | $4,200 | ||
| Less 90% credit for state taxes paid late ($70,000 × 0.04 × 90%) | $2,520 | ||
| Less additional credit for state tax if rate were 5.4% [$70,000 × (0.054 − 0.04)] | 980 | ||
| Total credit | 3,500 | ||
| Net FUTA tax | $ 700 |
If Yeldon Company had made its SUTA payments before the due date of Form 940, the credit for the payments (4%) and the additional credit (1.4%) would have provided a total credit of $3,780 and a FUTA tax savings of $280.
Peroni Company paid wages of $164,500 this year. Of this amount, $126,900 was taxable for net FUTA and SUTA purposes. The state's contribution tax rate is 3.1% for Peroni Company. Due to cash flow problems, the company did not make any SUTA payments until after the Form 940 filing date. Compute the following; round your answers to the nearest cent.
a.
Amount of credit the company would receive against the FUTA tax for
its SUTA contributions
$________
b.
Amount that Peroni Company would pay to the federal government for
its FUTA tax
$________
c.
Amount that the company lost because of its late payments
$________
In: Accounting
At the end of the year, a company has the following accounts receivable and estimates of uncollectible accounts:
1. Accounts not yet due = $76,000: Estimated uncollectible = 7%
2. Accounts 1-30 days past due =$39,000' estimated uncollectible = 25%
3. accounts more than 30 days past due = $7,000; estimated uncollectible = 45%
Record the year-end adjustment for uncollectible accounts, assuming the current balance of the Allowance for Uncollectible accounts is (1,800 (debit)
Record the bad debt expense
In: Accounting
At the end of the year, a company offered to buy 4,860 units of a product from X Company for $12.00 each instead of the company's regular price of $19.00 each. The following income statement is for the 60,200 units of the product that X Company has already made and sold to its regular customers:
| Sales | $1,143,800 | |
| Cost of goods sold | 471,968 | |
| Gross margin | $671,832 | |
| Selling and administrative costs | 144,480 | |
| Profit | $527,352 | |
For the year, variable cost of goods sold were $353,374, and
variable selling and administrative costs were $65,016. The special
order product has some unique features that will require additional
material costs of $0.85 per unit and the rental of special
equipment for $3,000.
4. Profit on the special order would be
5. The marketing manager thinks that if X Company accepts the
special order, regular customers will be lost unless the selling
price for them is reduced by $0.14. The effect of reducing the
selling price will be to decrease firm profits by
In: Accounting
At the end of the year, a company offered to buy 4,510 units of a product from X Company for $11.00 each instead of the company's regular price of $18.00 each. The following income statement is for the 61,100 units of the product that X Company has already made and sold to its regular customers:
| Sales | $1,099,800 | |
| Cost of goods sold | 543,790 | |
| Gross margin | $556,010 | |
| Selling and administrative costs | 167,414 | |
| Profit | $388,596 | |
For the year, fixed cost of goods sold were $120,367, and fixed
selling and administrative costs were $76,375. The special order
product has some unique features that will require additional
material costs of $0.70 per unit and the rental of special
equipment for $5,000.
4. Profit on the special order would be
5. The marketing manager thinks that if X Company accepts the
special order, regular customers will be lost unless the selling
price for them is reduced by $0.16. The effect of reducing the
selling price will be to decrease firm profits by
In: Accounting
Discussion of the legislation that established the federal minimum wage, the year that it was established, and the major reasons for establishing the legislation.
In: Economics
The size of the raccoon population at a national park last year was 180. This year, the population is 189. If the population increases exponentially, find the population of raccoons in 4 years. Use P = P0ekt where P0 represent the initial population. Round to the nearest whole number.
In: Math
preparation of adjusting entries at the end of the financial year is required:
| a. |
To ensure that cash inflows and cash outflows are accurately measured |
|
| b. |
To correct errors made during the year in the accounts |
|
| c. |
To provide for the correct recognition of income and expenses for the period |
|
| d. |
To achieve accurate reporting of all expenses paid at balance date |
|
| e. |
To eliminate the need for closing entries to be made in the accounts |
preparing the financial statements of a business, which of the following statements concerning the Equity figure found in the Balance Sheet is correct?
| a. |
It is decreased by any Drawings made by the owners |
|
| b. |
It is the amount owed by the entity to both outside and internal parties |
|
| c. |
It is the owners claim to the Liabilities of the entity after deducting Assets |
|
| d. |
It is fixed at the amount initially contributed when the business was formed |
|
| e. |
It is increased by a Net Loss during the financial period |
preparing the accounts, at the end of the financial year management forgot to include an item of Dividend Income earned during the period. This will result in an:
| a. |
Overstatement of liabilities and an understatement of net profit and equity |
|
| b. |
Understatement of assets and an overstatement of net profit and equity |
|
| c. |
Understatement of assets, net profit, and equity |
|
| d. |
Overstatement of assets, net profit, and equity |
|
| e. |
Overstatement of equity, and understatement of liabilities |
Van Gough Pty Ltd borrows $222 000 cash from Ozzie Bank Ltd in 2010 and intends to pay it back in 2020.
How would the transaction have originally been recorded in the books of Van Gough Pty Ltd back in 2010, when the loan was taken out.
| a. |
Debit - Accounts Payable $222 000; Credit - Cash at Bank $222 000 |
|
| b. |
Debit - Cash at Bank $222 000; Credit - Accounts Receivable $222 000 |
|
| c. |
Debit - Bank Loan $222 000; Credit - Cash at Bank $222 000 |
|
| d. |
Debit - Bank Loan $222 000; Credit - Capital $222 000 |
|
| e. |
Debit - Cash at Bank $222 000; Credit - Bank Loan $222 000 |
following is not an enhancing Qualitative Characteristic:
| a. |
Verifiability |
|
| b. |
Materiality |
|
| c. |
Timeliness |
|
| d. |
Understandability |
|
| e. |
Comparability |
following is not an important consideration in developing an accounting system:
| a. |
Eliminating all fraud |
|
| b. |
Compatibility |
|
| c. |
Internal Control |
|
| d. |
Flexibility |
|
| e. |
Costs incurred and benefits provided |
following statements concerning accrual accounting is correct?
| a. |
Net profit is the excess of cash inflows from income over cash outflows for expenses |
|
| b. |
Expenses should be recognised in the period in which they are paid |
|
| c. |
For most businesses the cash approach gives a better measure of economic performance than does the accrual approach |
|
| d. |
Net profit is the excess of income earned over expenses incurred during the financial period |
|
| e. |
Revenue is recognised in the period in which it is received in cash |
Closing the accounts refers to which of the following:
| a. |
Writing off all accounts in the balance sheet so there are zero balances |
|
| b. |
Establishing a zero balance in the cash at bank account |
|
| c. |
Establishing zero balances in all ledger accounts |
|
| d. |
Transferring income and expense account balances to the profit and loss summary account, which is then closed off to the equity account |
|
| e. |
All of the above |
publishers of ‘Guide to the Stock Market’, a magazine published monthly, received $396 in advance, including $36 GST on 1 March, 2019 for a whole one year’s subscription (12 issues) beginning with the March issue. On receipt of the subscription which entry will the company make in their books?
| a. |
Debit - Cash $396; Credit - Subscriptions Revenue $396 |
|
| b. |
Debit - Cash $396; Credit - GST Collections $36, Credit -Unearned Subscriptions (Liability) $360 |
|
| c. |
Debit - Cash $396; Credit - GST Collections $36, Credit - Subscriptions Received in Advance (Asset) $360 |
|
| d. |
Debit - Cash $360; Credit - Subscriptions Revenue $360 |
|
| e. |
None of the above |
In: Accounting
An 87 year old female is admitted to the hospital with a diagnosis of a hip fracture secondary to a fall in her home. What clinical manifestations would you expect to see when assessing this patient?
What would be three nursing management
considerations for this patient pre-operatively?
What would be three nursing management considerations post-surgical
repair?
What would your neurovascular assessment of the lower extremity
include?
Are there any positioning considerations, if so what are they?
In: Nursing