Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the company’s estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums up his position in this way: “My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $2.80 to determine the bid price. Since our average cost is only $2.575 per square foot, that leaves enough cushion to take care of the additional costs of nonroutine work that shows up. Besides, it is difficult to know what is routine or not routine until you actually start tearing things apart.”
To shed light on this controversy, the company initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow:
| Activity Cost Pool | Activity Measure | Total Activity | |
| Removing asbestos | Thousands of square feet | 800 | thousand square feet |
| Estimating and job setup | Number of jobs | 400 | jobs |
| Working on nonroutine jobs | Number of nonroutine jobs | 100 | nonroutine jobs |
| Other (organization-sustaining costs and idle capacity costs) | None | ||
| Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup. | |||
| Costs for the Year | ||
| Wages and salaries | $ | 372,000 |
| Disposal fees | 775,000 | |
| Equipment depreciation | 96,000 | |
| On-site supplies | 58,000 | |
| Office expenses | 280,000 | |
| Licensing and insurance | 480,000 | |
| Total cost | $ | 2,061,000 |
| Distribution of Resource Consumption Across Activities | ||||||||||||||||
| Removing Asbestos | Estimating and Job Setup | Working on Nonroutine Jobs | Other | Total | ||||||||||||
| Wages and salaries | 60 | % | 10 | % | 20 | % | 10 | % | 100 | % | ||||||
| Disposal fees | 60 | % | 0 | % | 40 | % | 0 | % | 100 | % | ||||||
| Equipment depreciation | 50 | % | 10 | % | 15 | % | 25 | % | 100 | % | ||||||
| On-site supplies | 70 | % | 20 | % | 10 | % | 0 | % | 100 | % | ||||||
| Office expenses | 10 | % | 40 | % | 20 | % | 30 | % | 100 | % | ||||||
| Licensing and insurance | 25 | % | 0 | % | 60 | % | 15 | % | 100 | % | ||||||
Required:
1. Perform the first-stage allocation of costs to the activity cost pools.
2. Compute the activity rates for the activity cost pools.
3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system.
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
Perform the first-stage allocation of costs to the activity cost pools.
|
Compute the activity rates for the activity cost pools.
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Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system. (Round the "Average Cost per thousand square feet" to 2 decimal places.)
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
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|
In: Accounting
Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the company’s estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums up his position in this way: “My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $2.80 to determine the bid price. Since our average cost is only $2.315 per square foot, that leaves enough cushion to take care of the additional costs of nonroutine work that shows up. Besides, it is difficult to know what is routine or not routine until you actually start tearing things apart.”
To shed light on this controversy, the company initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow:
| Activity Cost Pool | Activity Measure | Total Activity | |
| Removing asbestos | Thousands of square feet | 800 | thousand square feet |
| Estimating and job setup | Number of jobs | 500 | jobs |
| Working on nonroutine jobs | Number of nonroutine jobs | 100 | nonroutine jobs |
| Other (organization-sustaining costs and idle capacity costs) | None | ||
| Note: The 100 nonroutine jobs are included in the total of 500 jobs. Both nonroutine jobs and routine jobs require estimating and setup. | |||
| Costs for the Year | ||
| Wages and salaries | $ | 360,000 |
| Disposal fees | 765,000 | |
| Equipment depreciation | 98,000 | |
| On-site supplies | 57,000 | |
| Office expenses | 270,000 | |
| Licensing and insurance | 470,000 | |
| Total cost | $ | 2,020,000 |
| Distribution of Resource Consumption Across Activities | ||||||||||||||||
| Removing Asbestos | Estimating and Job Setup | Working on Nonroutine Jobs | Other | Total | ||||||||||||
| Wages and salaries | 50 | % | 10 | % | 30 | % | 10 | % | 100 | % | ||||||
| Disposal fees | 70 | % | 0 | % | 30 | % | 0 | % | 100 | % | ||||||
| Equipment depreciation | 40 | % | 5 | % | 20 | % | 35 | % | 100 | % | ||||||
| On-site supplies | 60 | % | 30 | % | 10 | % | 0 | % | 100 | % | ||||||
| Office expenses | 15 | % | 35 | % | 20 | % | 30 | % | 100 | % | ||||||
| Licensing and insurance | 30 | % | 0 | % | 50 | % | 20 | % | 100 | % | ||||||
Required:
1. Perform the first-stage allocation of costs to the activity cost pools.
2. Compute the activity rates for the activity cost pools.
3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system.
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
Perform the first-stage allocation of costs to the activity cost pools.
|
Compute the activity rates for the activity cost pools.
|
|||||||||||||
Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system. (Round the "Average Cost per thousand square feet" to 2 decimal places.)
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
Show less
|
In: Accounting
Mercer Asbestos Removal Company removes potentially toxic asbestos insulation and related products from buildings. There has been a long-simmering dispute between the company’s estimator and the work supervisors. The on-site supervisors claim that the estimators do not adequately distinguish between routine work, such as removal of asbestos insulation around heating pipes in older homes, and nonroutine work, such as removing asbestos-contaminated ceiling plaster in industrial buildings. The on-site supervisors believe that nonroutine work is far more expensive than routine work and should bear higher customer charges. The estimator sums up his position in this way: “My job is to measure the area to be cleared of asbestos. As directed by top management, I simply multiply the square footage by $2.80 to determine the bid price. Since our average cost is only $2.58 per square foot, that leaves enough cushion to take care of the additional costs of nonroutine work that shows up. Besides, it is difficult to know what is routine or not routine until you actually start tearing things apart.” To shed light on this controversy, the company initiated an activity-based costing study of all of its costs. Data from the activity-based costing system follow:
| Activity Cost Pool | Activity Measure | Total Activity | |
| Removing asbestos | Thousands of square feet | 800 | thousand square feet |
| Estimating and job setup | Number of jobs | 400 | jobs |
| Working on nonroutine jobs | Number of nonroutine jobs | 100 | nonroutine jobs |
| Other (organization-sustaining costs and idle capacity costs) | None | ||
| Note: The 100 nonroutine jobs are included in the total of 400 jobs. Both nonroutine jobs and routine jobs require estimating and setup. | |||
| Costs for the Year | ||
| Wages and salaries | $ | 372,000 |
| Disposal fees | 775,000 | |
| Equipment depreciation | 96,000 | |
| On-site supplies | 58,000 | |
| Office expenses | 280,000 | |
| Licensing and insurance | 480,000 | |
| Total cost | $ | 2,061,000 |
| Distribution of Resource Consumption Across Activities | ||||||||||||||||
| Removing Asbestos | Estimating and Job Setup | Working on Nonroutine Jobs | Other | Total | ||||||||||||
| Wages and salaries | 60 | % | 10 | % | 20 | % | 10 | % | 100 | % | ||||||
| Disposal fees | 60 | % | 0 | % | 40 | % | 0 | % | 100 | % | ||||||
| Equipment depreciation | 50 | % | 10 | % | 15 | % | 25 | % | 100 | % | ||||||
| On-site supplies | 70 | % | 20 | % | 10 | % | 0 | % | 100 | % | ||||||
| Office expenses | 10 | % | 40 | % | 20 | % | 30 | % | 100 | % | ||||||
| Licensing and insurance | 25 | % | 0 | % | 60 | % | 15 | % | 100 | % | ||||||
Required:
1. Perform the first-stage allocation of costs to the activity cost pools.
2. Compute the activity rates for the activity cost pools.
3. Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system.
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
Req 3A to 3C
Perform the first-stage allocation of costs to the activity cost pools.
|
Compute the activity rates for the activity cost pools.
|
||||||||||||||
Using the activity rates you have computed, determine the total cost and the average cost per thousand square feet of each of the following jobs according to the activity-based costing system. (Round the "Average Cost per thousand square feet" to 2 decimal places.)
a. A routine 1,000-square-foot asbestos removal job.
b. A routine 2,000-square-foot asbestos removal job.
c. A nonroutine 2,000-square-foot asbestos removal job.
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|
In: Accounting
Recall the caravan analogy discussed in this week. Suppose the caravan travels 400 km, beginning in front of one tollbooth, passing through an intermediate tollbooth, and finishing just before the third tollbooth. Consider the following assumptions: Assumptions: • Ten cars in the caravan • A tollbooth services a car at a rate of one car every 9 seconds • A propagation speed of 100 km/hour • The distance between any of two adjacent toll booths is 200 km. • Whenever the first car of the caravan arrives at a tollbooth, it waits at the entrance until all the other cars have arrived and lined up behind it. Question: How long does it take until the caravan is lined up before the third toll booth (from the first tool booth like the caravan analogy slide)?
In: Accounting
An Italian company, New Century Corp, enters into a 2-year interest rate swap with Northern European Bank. The notional principle of the swap is €100 million. Payments will be made semiannually on the basis of 180/360 (180 days in the settlement period and 360 days per year). New Century will pay a fixed rate of 5% and receive floating rate Euribor plus 2%. The realization of the 180-day Euribor rates are as below: Current: 3% In 6 months: 2.8% In 12 months: 3.4% In 18 months: 3.7% A. Determine the initial exchange of cash that occurs at the start of the swap. B. Determine the semiannual payments for the first year (first half, second half) C. Determine the final exchange of cash that occurs at the end of the swap.
Please show full detail steps.
In: Accounting
If you were flying a model airplane on a wire so that it traveled in a circle around you, would you hear a Doppler shift in the sound from the airplane? Explain.
In Olympic sprint events, the sound of the starter gun is sent to individual speakers at each runner’s starting block rather than relying on the sound traveling through the air. Why?
Does the speed of sound waves through air depend on the frequency of the sound? Justify or illustrate your answer.
Explain in your own words what resonance is.
Draw a fifth harmonic standing wave on a string with fixed ends.
a. If the length of the string is 100 cm, what is the wavelength of the fifth harmonic? Of the first harmonic? Explain.
b. If the frequency of the fifth harmonic is 400 Hz, what is the frequency of the first harmonic? Explain.
In: Physics
You have just turned 22 received your degree and accepted your first job. You must decide how much to put in your retirement plan. The plan works as follows. Every dollar in the plan earns 6.5 percent per year. You may not make withdrawals until you retire at 65. After that you can withdrawal money as needed. You believe you will live to 100 and work until 65, and believe you need 95000 per year to be comfortable starting at the end of the first year of retirement and will end on your 100th birthday at the end of the year. You contribute the same amount to the plan at the end of every year you work. How much will you need to contribute each year to fund your retirement
In: Finance
Sarah Jones started a new business in January, 2012. Thefollowing are selected events that occurred in the businessduring the first year of operation. Please provide journalentries for these events (explanations are not necessary). 1. Sarah invested $65,000 to start the business, SaJon Inc.and received 100 shares of stock from the business. 2. Purchased inventory of $40,000 on account. 3. Signed a lease for two years for $24,000. The company paid $5,000 immediately; this was two month's rent in advance plus a security deposit. 4. Sold inventory, which cost $4,000, on account for $7,000 (recognize both the revenue and the expense). 5. Paid for the inventory purchased in 2). 6. Received payment for the amount billed in 4). 7. Paid $3,000 in salaries .8. Recognized the rent expense for the first month
In: Accounting
Tuscin Capital is a hedge fund with an initial investment capital of $100 million. In its first year, the fund earns a return of 30%. The fund charges a 2% management fee based on assets under management at the end of the year and a 20% incentive fee with a hurdle rate of 4% (applicable on the beginning capital position for the year). The ending values of the fund (before fees for the current year) for the first 3 years are given below: 2009 = $130 million 2010 = $110 million 2011 = $140 million Other information: A high water mark provision applies. The incentive fee is based on returns in excess of the hurdle rate and is calculated net of management fee. Investors’ effective return for 2011 is closest to:
Group of answer choices
10.35%
22.86%
25.39%
In: Finance
Tuscin Capital is a hedge fund with an initial investment capital of $100 million. In its first year, the fund earns a return of 30%. The fund charges a 2% management fee based on assets under management at the end of the year and a 20% incentive fee with a hurdle rate of 4% (applicable on the beginning capital position for the year). The ending values of the fund (before fees for the current year) for the first 3 years are given below:
Other information:
Investors’ effective return for 2011 is closest to:
Group of answer choices
10.35%
22.86%
25.39%
In: Finance