Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $26 | |
| Direct labor | $18 | |
| Variable manufacturing overhead | $6 | |
| Variable selling and administrative | $3 | |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 390,000 |
| Fixed selling and administrative expenses | $ | 150,000 |
|
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company’s product is $62 per unit. |
Required:
| 1. | Compute the company’s break-even point in units sold. |
| 2. | Assume the company uses variable costing: |
| a. |
Compute the unit product cost for year 1, year 2, and year 3. |
| b. |
Prepare an income statement for year 1, year 2, and year 3. |
| 3. | Assume the company uses absorption costing: |
| a. |
Compute the unit product cost for year 1, year 2, and year 3. (Round your intermediate and final answers to 2 decimal places.) |
| b. |
Prepare an income statement for year 1, year 2, and year 3. (Round your intermediate calculations to 2 decimal places.) |
In: Accounting
1.
a. Dividends Per Share
Seacrest Company has 15,000 shares of cumulative preferred 3% stock, $150 par and 50,000 shares of $5 par common stock. The following amounts were distributed as dividends:
| Year 1 | $135,000 |
| Year 2 | 54,000 |
| Year 3 | 202,500 |
Determine the dividends per share for preferred and common stock for each year. Round all answers to two decimal places. If an answer is zero, enter '0'.
| Year 1 | Year 2 | Year 3 | |
| Preferred stock (Dividends per share) | $ | $ | $ |
| Common stock (Dividends per share) | $ | $ | $ |
b. Dividends Per Share
Imaging Inc., a developer of radiology equipment, has stock outstanding as follows: 21,000 shares of cumulative preferred 1% stock, $110 par, and 70,000 shares of $20 par common. During its first four years of operations, the following amounts were distributed as dividends: first year, $15,540; second year, $40,660; third year, $75,040; fourth year, $142,100.
Compute the dividends per share on each class of stock for each of the four years. Round all answers to two decimal places. If no dividends are paid in a given year, enter "0".
| 1st Year | 2nd Year | 3rd Year | 4th Year | |
| Preferred stock (dividend per share) | $ | $ | $ | $ |
| Common stock (dividend per share) | $ | $ | $ | $ |
In: Accounting
The U.S. multinational manufacturing firm, Greenwich Industries, is debating whether to invest in a 2-year project in Japan. The project’s expected cash flows consist of an initial investment of ¥1 million with cash inflows of ¥ 400,000 in Year 1 and ¥ 800,000 in Year 2. The risk-adjusted cost of capital for this project is 11%. The current exchange rate is 115 yen per dollar.
Risk-free interest rates in the United States and Japan are:
U.S. government bond rates:
• 1-year bond 2.4%
• 2-year bond 3.0%
Japan government bond rates:
• 1-year bond 0.15%
• 2-year bond 0.35%
Which of the following answers is CORRECT about the expected future exchange rates 1 year from now and 2 years from now?
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117.58 dollar per yen for one year rate and 121.15 dollar per yen for two year rate |
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0.008891 dollar per yen for one year rate and 0.009161 dollar per yen for two year rate |
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0.008891 yen per dollar for one year rate and 0.009161 yen per dollar for two year rate |
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117.58 yen per dollar for one year rate and 121.15 yen per dollar for two year rate |
Refer to Greenwich Industries in question 19. If Greenwich undertakes the project, what is the net present value of the project in U.S. dollars?
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$ 432.7 |
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$ 454.5 |
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$ 456.5 |
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$ 462.5 |
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$ 470.5 |
In: Finance
Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 21 |
| Direct labor | $ | 13 |
| Variable manufacturing overhead | $ | 4 |
| Variable selling and administrative | $ | 2 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 330,000 |
| Fixed selling and administrative expenses | $ | 150,000 |
During its first year of operations, Haas produced 40,000 units and sold 40,000 units. During its second year of operations, it produced 55,000 units and sold 30,000 units. In its third year, Haas produced 20,000 units and sold 45,000 units. The selling price of the company’s product is $52 per unit.
Required:
1. Compute the company’s break-even point in unit sales.
2. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1, Year 2, and Year 3 and Prepare an income statement for Year 1, Year 2, and Year 3.
3. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1, Year 2, and Year 3 (Round your intermediate calculations and final answers to 2 decimal places.) and Prepare an income statement for Year 1, Year 2, and Year 3.
In: Accounting
O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 28 |
| Direct labor | $ | 15 |
| Variable manufacturing overhead | $ | 4 |
| Variable selling and administrative | $ | 3 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 570,000 |
| Fixed selling and administrative expenses | $ | 110,000 |
During its first year of operations, O’Brien produced 91,000 units and sold 71,000 units. During its second year of operations, it produced 76,000 units and sold 91,000 units. In its third year, O’Brien produced 88,000 units and sold 83,000 units. The selling price of the company’s product is $79 per unit.
4. Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first):
a. Compute the unit product cost for Year 1, Year 2, and Year 3.
b. Prepare an income statement for Year 1, Year 2, and Year 3.
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In: Accounting
Haas Company manufactures and sells one product. The following information pertains to each of the company�s first three years of operations:
|
Variable costs per unit: |
||
|
Manufacturing: |
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Direct materials |
$30 |
|
|
Direct labor |
$22 |
|
|
Variable manufacturing overhead |
$6 |
|
|
Variable selling and administrative |
$2 |
|
|
Fixed costs per year: |
||
|
Fixed manufacturing overhead |
$ |
540,000 |
|
Fixed selling and administrative expenses |
$ |
240,000 |
During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company�s product is $73 per unit.
|
1. |
Compute the company�s break-even point in units sold. |
|
2. |
Assume the company uses variable costing |
|
a. |
Compute the unit product cost for year 1, year 2, and year 3. |
|
. |
Prepare an income statement for year 1, year 2, and year 3.
|
In: Accounting
Walsh Company manufactures and sells one product. The following information pertains to each of the company’s first two years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 28 |
| Direct labor | $ | 11 |
| Variable manufacturing overhead | $ | 4 |
| Variable selling and administrative | $ | 3 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 240,000 |
| Fixed selling and administrative expenses | $ | 80,000 |
During its first year of operations, Walsh produced 50,000 units and sold 40,000 units. During its second year of operations, it produced 40,000 units and sold 50,000 units. The selling price of the company’s product is $84 per unit.
Required:
1. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
2. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1 and Year 2.
b. Prepare an income statement for Year 1 and Year 2.
3. Reconcile the difference between variable costing and absorption costing net operating income in Year 1.
Assume the company uses variable costing. Prepare an income statement for Year 1 and Year 2.
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In: Accounting
Problem 6-18 Variable and Absorption Costing Unit Product Costs and Income Statements [LO6-1, LO6-2]
Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable costs per unit: | ||
| Manufacturing: | ||
| Direct materials | $ | 20 |
| Direct labor | $ | 12 |
| Variable manufacturing overhead | $ | 3 |
| Variable selling and administrative | $ | 1 |
| Fixed costs per year: | ||
| Fixed manufacturing overhead | $ | 390,000 |
| Fixed selling and administrative expenses | $ | 210,000 |
During its first year of operations, Haas produced 50,000 units and sold 50,000 units. During its second year of operations, it produced 65,000 units and sold 40,000 units. In its third year, Haas produced 30,000 units and sold 55,000 units. The selling price of the company’s product is $48 per unit.
Required:
1. Compute the company’s break-even point in unit sales.
2. Assume the company uses variable costing:
a. Compute the unit product cost for Year 1, Year 2, and Year 3.
b. Prepare an income statement for Year 1, Year 2, and Year 3.
3. Assume the company uses absorption costing:
a. Compute the unit product cost for Year 1, Year 2, and Year 3.
b. Prepare an income statement for Year 1, Year 2, and Year 3.
In: Accounting
Haas Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
| Variable Cost per unit: | ||
| Manufacturing | ||
| Direct Materials | 21 | |
| Direct Labor | 13 | |
| Variable Manufacturing Overhead | 8 | |
| Variable Selling and administrative | 1 | |
| Fixed cost per year: | ||
| Fixed Manufacturing overhead: | $600,000 | |
| Fixed Selling and administrative expenses |
$240,000 During its first year of operations, Haas produced 60,000 units and sold 60,000 units. During its second year of operations, it produced 75,000 units and sold 50,000 units. In its third year, Haas produced 40,000 units and sold 65,000 units. The selling price of the company’s product is $57 per unit. |
|
| 1. |
Compute the company’s break-even point in units sold.
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In: Accounting
O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
|
Variable costs per unit: |
|
|
Manufacturing: |
|
|
Direct materials |
$29 |
|
Direct labor |
$16 |
|
Variable manufacturing overhead |
$6 |
|
Variable selling and administrative |
$2 |
|
Fixed costs per year: |
|
|
Fixed manufacturing overhead |
$580,000 |
|
Fixed selling and administrative expenses |
$180,000 |
During its first year of operations, O’Brien produced 98,000 units and sold 76,000 units. During its second year of operations, it produced 76,000 units and sold 93,000 units. In its third year, O’Brien produced 86,000 units and sold 81,000 units. The selling price of the company’s product is $78 per unit.
2. Assume the company uses variable costing and a LIFO inventory flow assumption (LIFO means last-in first-out. In other words, it assumes that the newest units in inventory are sold first):
Compute the unit product cost for Year 1, Year 2, and Year 3.
|
b. Prepare an income statement for Year 1, Year 2, and Year 3.
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In: Accounting