Questions
Fama’s Llamas has a weighted average cost of capital of 9.3 percent. The company’s cost of...

Fama’s Llamas has a weighted average cost of capital of 9.3 percent. The company’s cost of equity is 12.9 percent, and its cost of debt is 7.5 percent. The tax rate is 23 percent. What is the company’s debt-equity ratio? (Do not round intermediate calculations and round your answer to 4 decimal places, e.g., 32.1616.)

In: Finance

COST OF CAPITAL ASSIGNMENT STEPHANIE’S CAJUN FOODS, INC NEEDS TO DETERMINE THEIR COST OF CAPITAL FOR...

COST OF CAPITAL ASSIGNMENT

STEPHANIE’S CAJUN FOODS, INC NEEDS TO DETERMINE THEIR COST OF CAPITAL FOR CAPITAL BUDGETING PURPOSES. THEY HAVE ASSEMBLED THE FOLLOWING INFORMATION:

MARKET PRICE OF OUTSTANDING BONDS                                                                        95

COUPON RATE – SEMI-ANNUAL PAYMENTS                                                              11.0%

MATURITY VALUE                                                                                                            $ 1,000

YEARS TO MATURITY                                                                                                             25

FLOTATION COSTS                                                                                                                  2%

CORPORATE TAX RATE                                                                                                        21%

MARKET PRICE OF OUTSTANDING PREFERRED                                                       $      50

PAR VALUE                                                                                                                         $      25

DIVIDEND (PERCENTAGE OF PAR)                                                                                   10%

FLOTATION COSTS                                                                                                                  1%

MARKET PRICE OF COMMON STOCK                                                                      $           60

CURRENT STOCK DIVIDEND                                                                                     $        7.50

GROWTH RATE                                                                                                                      4.0%

FLOTATION COSTS                                                                                                               5.0%

TARGET CAPITAL STRUCTURE

            BONDS                                  10.00%

            PREFERRED STOCK           20.00%

            COMMON STOCK               30.00%

            RETAINED EARNINGS      40.00%

           

THE CURRENT CAPITAL STRUCTURE, BASED ON BOOK VALUES, APPEARS AS FOLLOWS:

            BONDS                                                                                  $ 20,000,000

            PREFERRED STOCK                                                                1,000,000

            COMMON STOCK (PAR $10)                                                30,000,000

            RETAINED EARNINGS                                                         80,000,000

CALCULATE:         

A)   THE COMPONENT COSTS OF CAPITAL

  1. THE WEIGHTED AVERAGE COST OF CAPITAL AT BOOK VALUE WEIGHTS
  2. THE WEIGHTED AVERAGE COST OF CAPITAL AT MARKET VALUE WEIGHTS
  3. THE WEIGHTED AVERAGE COST OF CAPITAL AT TARGET VALUE WEIGHTS

In: Finance

1. Samsung TV sells for £299. The material cost is given as £55, labor cost as...

1. Samsung TV sells for £299. The material cost is given as £55, labor cost as £20, and variable overhead as £25 per unit. Fixed production overhead for the year is £1.2million.

i. calculate the break even level of sale for Both Volume and Revenue.

ii. calculate the break even
Revenue using the C/S ratio

iii. if the budgeted sales revenue is £2.99million, calculate the margin of safety in units and as a percentage

iv. produce a break even chart using the above information

iv. how many Samsung TVs must be sold in order to achieve a profit of £500,000?

In: Operations Management

I need to Prepare entries for a job order, cost system, and cost of goods manufactured...

I need to Prepare entries for a job order, cost system, and cost of goods manufactured schedule, but my numbers aren't matching up. Please answer both parts of the question.

Case Inc. is a construction company specializing in custom patios. The patios are constructed of concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017, the general ledger for Case Inc. contains the following data.

P15-3A Prepare entries for a job order cost system and cost of goods manufactured schedule
Case Inc. is a construction company specializing in custom patios. The patios are constructed of
concrete, brick, fiberglass, and lumber, depending upon customer preference. On June 1, 2017,  
the general ledger for Case Inc. contains the following data.
Raw Materials Inventory $4,200 Manufacturing Overhead Applied $32,640
Work in Process Inventory $5,540 Manufacturing Overhead Incurred $31,650
Subsidiary data for Work in Process Inventory on June 1 are as follows.
Job Cost Sheets
Customer Job
Cost Element Rodgers Stevens Linton
Direct materials $600 $800 $900
Direct labor             320                  540                 580
Manufacturing overhead             400                  675                 725
$1,320 $2,015 $2,205
    During June, raw materials purchased on account were $4,900, and all wages were paid. Additional
overhead costs consisted of depreciation on equipment $900 and miscellaneous costs of $400 incurred
on account.
    A summary of materials requisition slips and time tickets for June show the following.
Customer Job Materials Requisition slips Time tickets
Rodgers $         800 $850
Koss          2,000 800
Stevens             500 360
Linton          1,300 1,200
Rodgers             300 390
         4,900 3,600
General use          1,500 1,200
$      6,400 $4,800
    Overhead was charged to jobs at the same rate of $1.25 per dollar of direct labor cost. The patios for
customers Rodgers, Stevens, and Linton were completed during June and sold for a total of $18,900.
Each customer paid in full.
Instructions
(a) Journalize the June transactions: (1) for purchase of raw materials, factory labor costs incurred,
and manufacturing overhead costs incurred; (2) assignment of direct materials, labor, and overhead to
production; and (3) completion of jobs and sale of goods.
(b) Post the entries to Work in Process Inventory.
(c ) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
(d) Prepare a cost of goods manufactured schedule for June.
NOTE: Enter a number in cells requesting a value; enter either a number or a formula in cells with a "?" .
(a)(1) Journalize the June transactions for purchase of raw materials, factory labor costs incurred,
and manufacturing overhead costs incurred
Raw Malerials Inventory
Accounts Payable
Factory Labor
Cash
Manufacturing Overhead
Accumulated Depreciation- Equipment
Accounts Payable
(a)(2) Journalize the June transactions for assignment of direct materials, labor, and overhead to production
Work in Pricess Inventory
Manufacturing Overhead
Raw Malerials Inventory
Work in Pricess Inventory
Manufacturing Overhead
Factory Labor
Work in Pricess Inventory
Manufacturing Overhead
(a)(3) Journalize the June transactions for completion of jobs and sale of goods.
Finished Goods Inventory
Work in Process Inventory
Cash
Sales
Cost of Goods Sold
Finished Goods Inventory
(b) Post the entries to Work in Process Inventory.
Work in Process Inventory
6/1 Balance June Completed work
Direct Materials
Direct labor
Overhead applied
6/30 Balance
(c ) Reconcile the balance in Work in Process Inventory with the costs of unfinished jobs.
6/30 balance in Work in Process Inventory
Unfinished Job (Koss)
     Direct materials
     Direct labor
     Manufacturing overhead
(d) Prepare a cost of goods manufactured schedule for June.
CASE INC.
Cost of Goods Manufactured Schedule
For the Month Ended June 30, 2017
Work in process, June 1
Direct materials used
Direct labor
Manufacturing overhead applied
     Total manufacturing costs
Total cost of work in process
Less: Work in process, June 30
    Cost of goods manufactured
After you have completed P15-3A, consider the following additional question.
1. Assume that indirect labor and raw materials purchases changed to $1,400 and $6,800 respectively.
Also assume that overhead is applied at the rate of $1.50 per dollar of direct labor. The three
completed jobs were sold for $22,000 cash. Revise the journal entries to reflect these changes.

In: Accounting

Cost of Trade Credit Calculate the nominal annual cost of trade credit under each of the...

Cost of Trade Credit

Calculate the nominal annual cost of trade credit under each of the following terms. Assume a 365-day year. Do not round intermediate calculations. Round your answers to two decimal places.

  1. 1/15, net 30.

      %

  2. 2/10, net 60.

      %

  3. 3/10, net 55.

      %

  4. 2/10, net 55.

      %

  5. 2/15, net 35.

      %

In: Finance

1. Which of the following costs is considered an indirect cost to its given cost object?...

1. Which of the following costs is considered an indirect cost to its given cost object?
a. New plumbing system for a house
b. An operation for a family pet
c. Rent in a yearly budget
d. Wax glaze for an apple
e. Cleaning services for an office

2. Toshiba adds completed transformers to their televisions during assembly. The transformers would be considered what types of cost?
a. Variable cost and product cost
b. Fixed cost and product cost
c. Fixed cost and period cost
d. Mixed cost and product cost
e. Variable cost and period cost

3. What value would be debited to the left side of the finished goods inventory T-Account?
a. Manufacturing Overhead
b. Cost of Goods Manufactured
c. Cost of Goods Sold
d. Materials Used in Production
e. Indirect Materials

4. Which of the following describes how costs behave when production activity decreases within the relevant range?
a. Variable cost per unit increases and total fixed costs remain constant
b. Fixed cost per unit increases and total variable cost decreases
c. Total cost increases and fixed cost per unit remains constant
d. Fixed cost per unit decreases and variable cost per unit remains constant
e. Total cost decreases and variable cost per unit increases

5. Quixotic Industries is considering a transition in their factory from manufacturing A-types (which they currently manufacture) to B-types, which they have not previously manufactured. What costs should be considered?
a. Lab tests conducted prior to manufacturing A-types
b. Salary to factory foreperson, who would oversee either type of production
c. Factory changes to accommodate production of B-types
d. Selling expenses for remaining A-types
e. None of the above

6. Direct Labor is considered which type(s) of cost (circle/write all that apply)?
a. Period
b. Product
c. Prime
d. Conversion
e. Non-Inventorial












7. A mixed cost, when graphed for activity, would generally have which of the following traits?
a. Straight line starting at 0
b. Curved line starting at 0
c. Straight line starting above 0
d. Curved line starting above 0
e. None of the above

8. Activity-based costing would make the most sense to use in which of the following circumstances?
a. The company makes multiple lines of products requiring different processes, and applies MOH differently in different processing departments.
b. The company makes one product and assigns MOH differently to different departments.
c. The company makes multiple products, and uses a plantwide applied MOH
d. The company makes one product and uses a plantwide MOH
e. None of the above

9. Which of the following calculations would NOT equal Contribution Margin? (FE = total Fixed Expenses, VE = total Variable Expenses, CMR= Contribution Margin Ratio)
a. Profit + FE
b. CMR x Sales
c. Breakeven Sales - FE
d. Sales - VE
e. Sales x CM per unit/Sales price per unit

10. Which one of the following could be used (by itself) to determine what percent of sales is not variable expenses?
a. Degree of Operating Leverage
b. Breakeven Sales
c. Margin of safety %
d. Contribution margin/Unit
e. None of the above








11. Goliath Incorporated applies manufacturing overhead on the basis of direct labor hours. At the beginning of 2017, the cost accountant estimated the following information for the year:

Total direct labor hours 2,000
Total direct labor cost $80,600
Total direct materials cost $150,750
Total machine hours 7,100
Total manufacturing overhead cost $50,200

At the end of 2017, the cost accountant noted that actual direct labor hours incurred was 2,300, total direct labor cost was $87,200 and actual manufacturing overhead incurred was $60,800 during the year. Was manufacturing overhead under-applied or over-applied and by how much?


PdOR = 50,200 (est MOH)/ 2000 (DLH base) = $25.10/DLH

Actual hours x PdOR = 2,300 x 25.10 = 57,730 Applied Overhead

60,800 MOH incurred – 57,730 Applied Overhead = 3,070 Underapplied

Use the following information for Questions 12-14:
Futility Utility Co. applies manufacturing overhead to jobs on the basis of direct labor cost. At the beginning of the month, the estimated manufacturing overhead was $45,000 and the estimated direct labor cost was $36,000. During March, the following transactions were recorded by the company:

Raw materials:
Purchased $41,000
Used (80% direct materials) $45,000
Labor:
Direct labor hours worked 3,500
Direct labor cost incurred $38,500
Indirect labor cost incurred $9,500
Manufacturing overhead costs incurred (total) $47,000
Inventories:
Raw materials, 3/1 $12,000
Work in process, 3/1 $14,500
Work in process 3/31 $16,000
Finished Goods 3/31 $6,000

12. Compute the predetermined overhead rate for the month of March (make sure to label the units).

Est MOH/Est DL$ = 45,000/36,000 = $1.25 per DL$








13. Cost of Goods Manufactured for the month was:
Work in Process   
BB 14,500

DM 36,000
DL 38,500
MOH 48,125

COGM 121,125
EB 16,000
DM = 80% (45,000) = 36,000 DL = 38,500 (given) MOH = PdOR x DL$ 1.25 x 38,500 = 48,125

14. The actual manufacturing overhead incurred included $__________ not related to indirect labor or indirect materials.

47,000 total MOH incurred
-9,000 Indirect materials (20% of 45,000)
-9,500 Indirect labor (given)

$28,500 remaining MOH


1. Which of the following costs is considered an indirect cost to its given cost object?
a. New plumbing system for a house
b. An operation for a family pet
c. Rent in a yearly budget
d. Wax glaze for an apple
e. Cleaning services for an office

2. Toshiba adds completed transformers to their televisions during assembly. The transformers would be considered what types of cost?
a. Variable cost and product cost
b. Fixed cost and product cost
c. Fixed cost and period cost
d. Mixed cost and product cost
e. Variable cost and period cost

3. What value would be debited to the left side of the finished goods inventory T-Account?
a. Manufacturing Overhead
b. Cost of Goods Manufactured
c. Cost of Goods Sold
d. Materials Used in Production
e. Indirect Materials

4. Which of the following describes how costs behave when production activity decreases within the relevant range?
a. Variable cost per unit increases and total fixed costs remain constant
b. Fixed cost per unit increases and total variable cost decreases
c. Total cost increases and fixed cost per unit remains constant
d. Fixed cost per unit decreases and variable cost per unit remains constant
e. Total cost decreases and variable cost per unit increases

5. Quixotic Industries is considering a transition in their factory from manufacturing A-types (which they currently manufacture) to B-types, which they have not previously manufactured. What costs should be considered?
a. Lab tests conducted prior to manufacturing A-types
b. Salary to factory foreperson, who would oversee either type of production
c. Factory changes to accommodate production of B-types
d. Selling expenses for remaining A-types
e. None of the above

6. Direct Labor is considered which type(s) of cost (circle/write all that apply)?
a. Period
b. Product
c. Prime
d. Conversion
e. Non-Inventorial












7. A mixed cost, when graphed for activity, would generally have which of the following traits?
a. Straight line starting at 0
b. Curved line starting at 0
c. Straight line starting above 0
d. Curved line starting above 0
e. None of the above

8. Activity-based costing would make the most sense to use in which of the following circumstances?
a. The company makes multiple lines of products requiring different processes, and applies MOH differently in different processing departments.
b. The company makes one product and assigns MOH differently to different departments.
c. The company makes multiple products, and uses a plantwide applied MOH
d. The company makes one product and uses a plantwide MOH
e. None of the above

9. Which of the following calculations would NOT equal Contribution Margin? (FE = total Fixed Expenses, VE = total Variable Expenses, CMR= Contribution Margin Ratio)
a. Profit + FE
b. CMR x Sales
c. Breakeven Sales - FE
d. Sales - VE
e. Sales x CM per unit/Sales price per unit

10. Which one of the following could be used (by itself) to determine what percent of sales is not variable expenses?
a. Degree of Operating Leverage
b. Breakeven Sales
c. Margin of safety %
d. Contribution margin/Unit
e. None of the above








11. Goliath Incorporated applies manufacturing overhead on the basis of direct labor hours. At the beginning of 2017, the cost accountant estimated the following information for the year:

Total direct labor hours 2,000
Total direct labor cost $80,600
Total direct materials cost $150,750
Total machine hours 7,100
Total manufacturing overhead cost $50,200

At the end of 2017, the cost accountant noted that actual direct labor hours incurred was 2,300, total direct labor cost was $87,200 and actual manufacturing overhead incurred was $60,800 during the year. Was manufacturing overhead under-applied or over-applied and by how much?


PdOR = 50,200 (est MOH)/ 2000 (DLH base) = $25.10/DLH

Actual hours x PdOR = 2,300 x 25.10 = 57,730 Applied Overhead

60,800 MOH incurred – 57,730 Applied Overhead = 3,070 Underapplied

Use the following information for Questions 12-14:
Futility Utility Co. applies manufacturing overhead to jobs on the basis of direct labor cost. At the beginning of the month, the estimated manufacturing overhead was $45,000 and the estimated direct labor cost was $36,000. During March, the following transactions were recorded by the company:

Raw materials:
Purchased $41,000
Used (80% direct materials) $45,000
Labor:
Direct labor hours worked 3,500
Direct labor cost incurred $38,500
Indirect labor cost incurred $9,500
Manufacturing overhead costs incurred (total) $47,000
Inventories:
Raw materials, 3/1 $12,000
Work in process, 3/1 $14,500
Work in process 3/31 $16,000
Finished Goods 3/31 $6,000

12. Compute the predetermined overhead rate for the month of March (make sure to label the units).

Est MOH/Est DL$ = 45,000/36,000 = $1.25 per DL$








13. Cost of Goods Manufactured for the month was:
Work in Process   
BB 14,500

DM 36,000
DL 38,500
MOH 48,125

COGM 121,125
EB 16,000
DM = 80% (45,000) = 36,000 DL = 38,500 (given) MOH = PdOR x DL$ 1.25 x 38,500 = 48,125

14. The actual manufacturing overhead incurred included $__________ not related to indirect labor or indirect materials.

47,000 total MOH incurred
-9,000 Indirect materials (20% of 45,000)
-9,500 Indirect labor (given)

$28,500 remaining MOH

In: Accounting

Discuss the basic components of a simple cost system. Define an ABC cost system. What are...

Discuss the basic components of a simple cost system. Define an ABC cost system. What are the advantages of an ABC system versus a simple cost system? Are there disadvantages to an ABC system?

In: Accounting

Statement of Cost of Goods Manufactured for a Manufacturing Company Cost data for Disksan Manufacturing Company...

Statement of Cost of Goods Manufactured for a Manufacturing Company

Cost data for Disksan Manufacturing Company for the month ended January 31 are as follows:

Inventories January 1 January 31
Materials $153,250 $134,860
Work in process 101,150 89,010
Finished goods 78,160 91,700
Direct labor $275,850
Materials purchased during January 294,240
Factory overhead incurred during January:
Indirect labor 29,420
Machinery depreciation 17,780
Heat, light, and power 6,130
Supplies 4,900
Property taxes 4,290
Miscellaneous costs 7,970

a. Prepare a cost of goods manufactured statement for January.

Disksan Manufacturing Company
Statement of Cost of Goods Manufactured
For the Month Ended January 31
$
Direct materials:
$
$
$
Factory overhead:
$
Total factory overhead
Total manufacturing costs incurred during January
Total manufacturing costs $
Cost of goods manufactured $

b. Determine the cost of goods sold for January.
$

In: Accounting

Prepare an income statement. You may include a schedule of Cost of Goods Manufactured and Cost...

Prepare an income statement. You may include a schedule of Cost of Goods Manufactured and Cost of Goods Sold as separate schedule or as part of the Income Statement.

Chaos Manufacturing had the following financial information for the year ended December 31 2018:

Inventory Balances:                Beginning                    Ending

Work in Progress                    $ 90,000                      $ 80,000

Finished Goods                       $ 77,000                      $ 67,000

Raw Materials                         $ 10,000                      $ 30,000

During the year, the budgeted and actual costs were as follows:

Note

      Actual

Raw Materials

1

     290,000

Labour

2

     518,000

Depreciation Factory Equipment

        72,000

Depreciation Office Equipment

        24,000

Building Rent

3

      100,000

Maintenance – Factory Equipment

         40,000

Utilities – Electrical

4

     180,000

Utilities - Gas

5

        90,000

Utilities - Telecom

6

        22,000

Sales Commissions

        30,000

Advertising

      20,000

Shipping

7

        16,000

Total

1,402,000

Sales for the year were $1,500,000

Note 1 – Raw material

90% of raw materials are traced directly to specific jobs, and the remaining 10% of raw materials are used throughout the production process and not traced. $290,000 in materials was purchased in the year.

Note 2 – Labour

Direct Labour $270,000 + Factory Salaries $85,000 + Head Office Salaries $163,000 = $518,000

Note 3 – Building Rent

The building is shared between the factory and the administrative office. 68% of the building is related to the factory, and the remaining 32% is related to the administrative office.

Note 4 – Utilities Electrical

90% of these costs are related to the factory, and 10% of these costs are related to the administrative office.

Note 5 – Utilities - Gas

All of the Gas is used to heat production equipment.

Note 6 – Utilities - Telecom

All of the Telecom costs are for sales people.

Note 7 – Shipping

All of the shipping costs are to ship finished goods to customers.

In: Accounting

Which market imperfections lead a cost of outside capital? How do the availability and cost of...

Which market imperfections lead a cost of outside capital? How do the availability and cost of outside capital affect payout (dividend) policy?

In: Finance