Differential Analysis for a Discontinued Product

The condensed product-line income statement for Rhinebeck Company for the month of October is as follows:

Fixed costs are 14% of the cost of goods sold and 35% of the selling and administrative expenses. Rhinebeck Company assumes that fixed costs would not be materially affected if the Gloves line were discontinued.

a. Prepare a differential analysis dated October 31 to determine if Mufflers should be continued (Alternative 1) or discontinued (Alternative 2). If an amount is zero, enter "0". If required, use a minus sign to indicate a loss.

b. Should the Mufflers line be retained?

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

1. Raw materials purchased on account, $210,000.
2. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).
3. Accrued direct labor cost of $48,000 and indirect labor cost of $21,000.
4. Depreciation recorded on factory equipment, $106,000.
5. Other manufacturing overhead costs accrued during October, $129,000.
6. The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine-hour. A total of 76,400 machine-hours were used in October.
7. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
8. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 32% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

1. Raw materials purchased on account, $211,000.
2. Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).
3. Accrued direct labor cost of $50,000 and indirect labor cost of $20,000.
4. Depreciation recorded on factory equipment, $106,000.
5. Other manufacturing overhead costs accrued during October, $129,000.
6. The company applies manufacturing overhead cost to production using a predetermined rate of $8 per machine-hour. A total of 76,300 machine-hours were used in October.
7. Jobs costing $512,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
8. Jobs that had cost $451,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 34% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.

Marshall Department Stores has budgeted sales revenues as follows:

     Credit sales        July     $250,000

                         August   190,000

                         September 150,000

                         October 140,000

In the past, 69% of the credit sales were collected in the month of sale, 21% were collected in the first month following the sale and 10% in the second month following the sale. Purchases of inventory are all on credit and 28% is paid in the month of purchase and 72% in the month following purchase. Budgeted inventory purchases are:

                  July            $200,000  

                  August          100,000

                  September        125,000

                  October          150,000

     Other cash disbursements budgeted: (a) selling and administrative

     expenses of $20,000 each month, (b) dividends of $45,000 will be

     paid in September, and (c) purchase of a used van in October for $60,000

     cash.

     The company wishes to maintain a minimum cash balance of $50,000 at

     the end of each month. Borrowed money is repaid in months when there is an

     excess cash balance. The beginning cash balance on September 1 was $50,000.

    If money is borrowed, ignore interest

     INSTRUCTIONS

     (a) Prepare separate schedules for (1) expected collections from customers

         and (2)expected payments for purchases of inventory. SHOW ALL

         CALCULATIONS.

     (b) Prepare a cash budget for the months of September and October.

Show all calculations

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

1. Raw materials purchased on account, $210,000.
2. Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).
3. Accrued direct labor cost of $48,000 and indirect labor cost of $22,000.
4. Depreciation recorded on factory equipment, $105,000.
5. Other manufacturing overhead costs accrued during October, $129,000.
6. The company applies manufacturing overhead cost to production using a predetermined rate of $9 per machine-hour. A total of 76,400 machine-hours were used in October.
7. Jobs costing $513,000 according to their job cost sheets were completed during October and transferred to Finished Goods.
8. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 26% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $37,000.

The Polaris Company uses a job-order costing system. The following transactions occurred in October: Raw materials purchased on account, $209,000. Raw materials used in production, $192,000 ($153,600 direct materials and $38,400 indirect materials). Accrued direct labor cost of $50,000 and indirect labor cost of $21,000. Depreciation recorded on factory equipment, $105,000. Other manufacturing overhead costs accrued during October, $129,000. The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine-hour. A total of 76,000 machine-hours were used in October. Jobs costing $514,000 according to their job cost sheets were completed during October and transferred to Finished Goods. Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 30% above cost. Required: 1. Prepare journal entries to record the transactions given above. 2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $34,000.

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

Raw materials purchased on account, $209,000.

Raw materials used in production, $191,000 ($152,800 direct materials and $38,200 indirect materials).

Accrued direct labor cost of $50,000 and indirect labor cost of $20,000.

Depreciation recorded on factory equipment, $104,000.

Other manufacturing overhead costs accrued during October, $131,000.

The company applies manufacturing overhead cost to production using a predetermined rate of $6 per machine-hour. A total of 76,000 machine-hours were used in October.

Jobs costing $510,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

Jobs that had cost $452,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 26% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.

The Rolling Department of Kraus Steel Company had 5,300 tons in beginning work in process inventory (30% complete) on October 1. During October, 87,500 tons were completed. The ending work in process inventory on October 31 was 4,400 tons (60% complete).

What are the total equivalent units for direct materials for October if materials are added at the beginning of the process?

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,296,900, divided into four activities: fabrication, $680,000; assembly, $248,000; setup, $198,900; and inspection, $170,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:

Each product is budgeted for 3,000 units of production for the year.

a. Determine the activity rates for each activity.

b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

a.Raw materials purchased on account, $209,000.

b.Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).

c.Accrued direct labor cost of $50,000 and indirect labor cost of $20,000.

d.Depreciation recorded on factory equipment, $105,000.

e.Other manufacturing overhead costs accrued during October, $129,000.

f.The company applies manufacturing overhead cost to production using a predetermined rate of $5 per machine-hour. A total of 76,500 machine-hours were used in October.

g.Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

h.Jobs that had cost $448,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 36% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.

The Polaris Company uses a job-order costing system. The following transactions occurred in October:

Raw materials purchased on account, $210,000.

Raw materials used in production, $188,000 ($150,400 direct materials and $37,600 indirect materials).

Accrued direct labor cost of $48,000 and indirect labor cost of $21,000.

Depreciation recorded on factory equipment, $104,000.

Other manufacturing overhead costs accrued during October, $130,000.

The company applies manufacturing overhead cost to production using a predetermined rate of $7 per machine-hour. A total of 76,400 machine-hours were used in October.

Jobs costing $511,000 according to their job cost sheets were completed during October and transferred to Finished Goods.

Jobs that had cost $450,000 to complete according to their job cost sheets were shipped to customers during the month. These jobs were sold on account at 40% above cost.

Required:

1. Prepare journal entries to record the transactions given above.

2. Prepare T-accounts for Manufacturing Overhead and Work in Process. Post the relevant transactions from above to each account. Compute the ending balance in each account, assuming that Work in Process has a beginning balance of $35,000.