Scholastic Brass Corporation manufactures brass musical instruments for use by high school students.
The company uses a normal costing system, in which manufacturing overhead is applied on the basis of
direct-labor hours. The company’s budget for the current year included the following predictions.
■ Problem 3–57
Comprehensive Job-Order
Costing Problem
(LO 3-2, 3-4, 3-5, 3-6)
1. Predetermined overhead
rate: $21 per direct-labor hour
4. Total actual overhead:
$33,900
7. Income (loss): $(1,625)
Budgeted total manufacturing overhead ........................................................................................................... $426,300
Budgeted total direct-labor hours (based on practical capacity) ...................................................................... 20,300
Chapter 3 Product Costing and Cost Accumulation in a Batch Production Environment 129
During March, the firm worked on the following two production jobs:
Job number T81, consisting of 76 trombones
Job number C40, consisting of 110 cornets
The events of March are described as follows:
a. One thousand square feet of rolled brass sheet metal were purchased on account for $5,000.
b. Four hundred pounds of brass tubing were purchased on account for $4,000.
c. The following requisitions were submitted on March 5:
Direct labor: Job number T81, 800 hours at $20 per hour
Direct labor: Job number C40, 900 hours at $20 per hour
Indirect labor: General factory cleanup, $4,000
Indirect labor: Factory supervisory salaries, $9,000
Requisition number 112: 250 square feet of brass sheet metal at $5 per square foot (for job number T81)
Requisition number 113: 1,000 pounds of brass tubing, at $10 per pound (for job number C40)
Requisition number 114: 10 gallons of valve lubricant, at $10 per gallon
All brass used in production is treated as direct material. Valve lubricant is an indirect material.
d. An analysis of labor time cards revealed the following labor usage for March.
e. Depreciation of the factory building and equipment during March amounted to $12,000.
f. Rent paid in cash for warehouse space used during March was $1,200.
g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were
received, but the bills were not paid in March.
h. March property taxes on the factory were paid in cash, $2,400.
i. The insurance cost covering factory operations for the month of March was $3,100. The insurance
policy had been prepaid.
j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during
March amounted to $8,000.
k. Depreciation on administrative office equipment and space amounted to $4,000.
l. Other selling and administrative expenses paid in cash during March amounted to $1,000.
m. Job number T81 was completed on March 20.
n. Half of the trombones in job number T81 were sold on account during March for $700 each.
The March 1 balances in selected accounts are as follows:
Cash .................................................................................................................................................................... $ 10,000
Accounts Receivable .......................................................................................................................................... 21,000
Prepaid Insurance .............................................................................................................................................. 5,000
Raw-Material Inventory ...................................................................................................................................... 149,000
Manufacturing Supplies Inventory ..................................................................................................................... 500
Work-in-Process Inventory ................................................................................................................................. 91,000
Finished-Goods Inventory .................................................................................................................................. 220,000
Accumulated Depreciation: Buildings and Equipment ..................................................................................... 102,000
Accounts Payable ............................................................................................................................................... 13,000
Wages Payable ................................................................................................................................................... 8,000

Please Can you Answer Question number 3 ( T Account Only)

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

Q1. Jesse James graduated from high school in Wawanesa and decided to start his own business doing small building and repair jobs. Jesse knew that incorporating a business had many benefits so he set up a corporation with the help of a lawyer. The business was incorporated on July 1, 2019. Jesse had saved $20,000 which he transferred from his personal account into the bank account for Jesse James Home Improvements Ltd. (JJHI) and received shares in return. He then purchased a used Toyota Tundra for $14,000 and tools for $2,500 cash. Shortly, after opening the business Jesse realized there was a large demand for these types of services so he hired an assistant. At the end of the calendar year, Jesse realized that there would be income tax owing on his earnings. With the help of his friend (you) the following information was collected for the six months ending December 31, 2019:  Deposits for building and repair services into the bank account totalled $48,000  The following cheques had been written: o Wages to his assistant $16,000 o Payroll taxes $600 o Rent $2,500 o Manitoba Hydro $350 o Repairs and maintenance on the Toyota Tundra $1,900 o Gas $800 o Rogers Wireless for cell phone service $626 o Advertising $500 o Supplies purchased and used on jobs $850 Uncollected invoices to customers for jobs completed amounted to $4,500. The $500 December rent has not yet been paid. Jesse estimates that the depreciation on truck and tools to be $1,000 and $250 respectively. The average income tax rate for income from his business is 25%. Required: Note: I would suggest preparing the journal entries first in order to help you complete these required. 1. Prepare a statement of earnings for Jesse James Home Improvements Ltd. for the six months ending December 2019. 2. Prepare a statement of financial position for Jesse James Home Improvements Ltd. as of at December 31, 2019. 2 3. Jesse has asked you for advice as to how he can use the information on these two statements to decide whether he should apply for a bank loan to expand his business. What would you tell him?

The executive education (EE) unit at the Business School of Central State University offers both open-enrollment (anyone can sign up) and custom (designed for a specific client) executive education programs. CSU has just received an inquiry from a prospective client about its prices for leadership seminars. The prospective client wants bids for three alternative activity levels: (1) one seminar with 20 participants, (2) four seminars with 20 participants each (80 participants total), or (3) eight seminars with 140 participants in total. EE’s cost analyst has provided the following differential cost estimates:

In addition to the preceding differential costs, EE allocates fixed costs to jobs on a direct-labor-cost basis, at a rate of 80 percent of direct labor costs (excluding setup costs). For example, if direct labor costs are $100, EE would also charge the job $80 for fixed costs. EE charges clients for its costs plus 20 percent. For the purpose of charging customers, costs equal the setup costs plus materials costs plus differential labor costs plus allocated fixed costs. EE has enough excess capacity to handle this job with ease.

Required:

a. Assume EE's bid equals the total cost, including fixed costs allocated to the job, plus the 20 percent markup on cost. What should EE bid for each of the three levels of activity?

b. Compute the differential cost (including setup costs) and the contribution to profit for each of the three levels of activity. Note that fixed costs are not differential costs.

c. Assume the prospective client gives three options. It is willing to accept either of EE's bids for the one-seminar or four-seminar activity levels, but the prospective client will pay only 90 percent of the bid price for the eight-seminar package. EE's director responds, "We can't make money in this business by shaving our bids! Let's take the four-seminar option because we make the most profit on it."

c-1. What would be the contribution to profit for each of the three options?

c-2. Do you agree with the EE's director?

Complete Stop Driving School charges $500 per student to prepare and administer written and driving tests. Variable costs of $150 per student include​ trainers' wages, study​ materials, and gasoline. Annual fixed costs of $140,000 include the training facility and fleet of cars.

Requirement 1. For each of the following independent​ situations, calculate the contribution margin per unit and the breakeven point in​ units:

Begin by showing the formula for contribution margin per unit and then enter the amounts to calculate the contribution margin per unit for each situation. ​(Abbreviation used: CM​ = contribution​ margin.)

Now select the labels to show the formula for breakeven point in units and then enter the amounts to calculate the breakeven point in units for each situation. ​(Complete all answer boxes. Abbreviation​ used: CM​ = contribution​ margin.)

Requirement 2. Compare the impact of changes in the sales​ price, variable​ costs, and fixed costs on the contribution margin per unit and the breakeven point in units.

​First, compare the impact of changes in the sales​ price, variable​ costs, and fixed costs on the contribution margin per unit.

The contribution margin

▼

decreases

does not change

increases

when the sales price decreases. The contribution margin

▼

decreases

does not change

increases

when variable costs decrease. The contribution margin

▼

decreases

does not change

increases

when the fixed costs decrease.

​Now, compare the impact of changes in the sales​ price, variable​ costs, and fixed costs on the breakeven point in units.

The breakeven point

▼

decreases

does not change

increases

when the sales price decreases. The breakeven point

▼

decreases

does not change

increases

when the variable costs decrease. The breakeven point

▼

decreases

does not change

increases

when fixed costs decrease.

Choose from any list or enter any number in the input fields and then continue to the next question.

Scholastic Brass Corporation manufactures brass musical instruments for use by high school students. The company uses a normal costing system, in which manufacturing overhead is applied on the basis of direct-labor hours. The company’s budget for the current year included the following predictions.

Budgeted total manufacturing overhead ..........................................................................................................$426,300

Budgeted total direct-labor hours (based on practical capacity) .....................................................................20,300

During March, the firm worked on the following two production jobs: Job number T81, consisting of 76 trombones Job number C40, consisting of 110 cornetsThe events of March are described as follows:

a. One thousand square feet of rolled brass sheet metal were purchased on account for $5,000.

b. Four hundred pounds of brass tubing were purchased on account for $4,000.

c. The following requisitions were submitted on March 5: Direct labor: Job number T81, 800 hours at $20 per hour Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor: General factory cleanup, $4,000 Indirect labor: Factory supervisory salaries, $9,000 Requisition number 112: 250 square feet of brass sheet metal at $5 per square foot (for job number T81) Requisition number 113: 1,000 pounds of brass tubing, at $10 per pound (for job number C40) Requisition number 114: 10 gallons of valve lubricant, at $10 per gallonAll brass used in production is treated as direct material. Valve lubricant is an indirect material.

d. An analysis of labor time cards revealed the following labor usage for March.

Direct labor: Job number T81, 800 hours at $20 per hour

Direct labor: Job number C40, 900 hours at $20 per hour Indirect labor:

General factory cleanup, $4,000 Indirect labor:

Factory supervisory salaries, $9,000

e. Depreciation of the factory building and equipment during March amounted to $12,000.

f. Rent paid in cash for warehouse space used during March was $1,200.

g. Utility costs incurred during March amounted to $2,100. The invoices for these costs were received, but the bills were not paid in March.

h. March property taxes on the factory were paid in cash, $2,400.

i. The insurance cost covering factory operations for the month of March was $3,100. The insurance policy had been prepaid.

j. The costs of salaries and fringe benefits for sales and administrative personnel paid in cash during March amounted to $8,000.

k. Depreciation on administrative office equipment and space amounted to $4,000.

l. Other selling and administrative expenses paid in cash during March amounted to $1,000.

m. Job number T81 was completed on March 20.

n. Half of the trombones in job number T81 were sold on account during March for $700 each.

The March 1 balances in selected accounts are as follows:

Cash ...................................................................................................................................................................$?? 10,000

Accounts Receivable .........................................................................................................................................21,000

Prepaid Insurance .............................................................................................................................................5,000

Raw-Material Inventory .....................................................................................................................................149,000

Manufacturing Supplies Inventory ....................................................................................................................500

Work-in-Process Inventory ................................................................................................................................91,000

Finished-Goods Inventory .................................................................................................................................220,000

Accumulated Depreciation: Buildings and Equipment .....................................................................................102,000

Accounts Payable ..............................................................................................................................................13,000

Wages Payable ..................................................................................................................................................8,000

Required:

1. Calculate the company’s predetermined overhead rate for the year.

2. Prepare journal entries to record the events of March.

3. Set up T-accounts, and post the journal entries made in requirement (2).

4. Calculate the overapplied or underapplied overhead for March. Prepare a journal entry to close this balance into Cost of Goods Sold.

5. Prepare a schedule of cost of goods manufactured for March.

6. Prepare a schedule of cost of goods sold for March.

7. Prepare an income statement for March.

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2018, is found on the trial balance tab. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31 follow.

1. An analysis of WTI’s insurance policies shows that $2,400 of coverage has expired.
2. An inventory count shows that teaching supplies costing $2,800 are available at year-end.
3. Annual depreciation on the equipment is $13,200.
4. Annual depreciation on the professional library is $7,200.
5. On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,500, and the client paid the first five months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited.
6. On October 15, WTI agreed to teach a four-month class (beginning immediately) for an executive with payment due at the end of the class. At December 31, $7,500 of the tuition has been earned by WTI.
7. WTI’s two employees are paid weekly. As of the end of the year, two days’ salaries have accrued at the rate of $100 per day for each employee.
8. The balance in the Prepaid Rent account represents rent for December.

General Journal tab - For transactions a-h, review the unadjusted balance and prepare the adjusting entry necessary to correctly report the revenue earned or the expense incurred. After adjusting the accounts, review the financial statements for accuracy.

General Ledger tab - Each journal entry is posted automatically to the general ledger. Use the drop-down button to view the unadjusted or adjusted balances.

Trial Balance tab - You may view either the unadjusted or adjusted trial balance by choosing from the dropdown box below. Your choice will determine the reported values on the financial statement tabs.

Income Statement tab - Use the drop-downs to select the accounts properly included on the income statement. The unadjusted or adjusted balances will appear for each account, based on your selection.

Statement of Retained earnings tab - The unadjusted or adjusted balances will appear for each account, based on your selection.

Balance Sheet tab - Use the drop-downs to select the accounts properly included on the balance sheet. The unadjusted or adjusted balances will appear for each account, based on your selection.

Impact on Income tab - For each adjustment, indicate the income statement and balance sheet account affected, and the impact on net income. If an adjustment caused net income to decrease, enter the amount as a negative value. Net income before adjustments can be found on the income statement tab. (Hint: Select unadjusted on the dropdown.)

A researcher wants to determine whether high school students who attend an SAT preparation course score significantly different on the SAT than students who do not attend the preparation course. For those who do not attend the course, the population mean is 1050 (μ = 1050). The 16 students who attend the preparation course average 1150 on the SAT, with a sample standard deviationof 300. On the basis of these data, can the researcher conclude that the preparation course has a significant difference on SAT scores? Set alpha equal to .05.Q78:The appropriate statistical procedure for this example would be aA.z-testB.t-testQ79:Is this a one-tailed or a two-tailed test?A.one-tailedB.two-tailed

11Q80:The most appropriate null hypothesis (in words) would beA.There is no statistical difference in SAT scores when comparing students who took theSAT prep course with the general population of students who did not take the SAT prep course.B.There is a statistical difference in SAT scores when comparing students who took the SAT prep course with the general population of students who did not take theSAT prep course.C.The students who took the SAT prep course did not score significantly higher on the SAT when compared to the general population of students who did not take the SAT prep course.D.The students who took the SAT prep course did score significantly higher on the SAT when compared to the general population of students who did not take the SAT prep course.Q81:The most appropriate null hypothesis (in symbols) would beA.μSATprep= 1050B.μSATprep= 1150C.μSATprep1050D.μSATprep1050Q82:Set up the criteria for making a decision. That is, find the critical value using an alpha = .05. (Make sure you are sign specific: + ; -; or ) (Use your tables)Summarize the data into the appropriate test statistic.Steps:Q83:What is the numeric value ofyour standard error?Q84:What is the z-value or t-value you obtained (your test statistic)?Q85:Based on your results (and comparing your Q84 and Q82 answers) would youA.reject the null hypothesisB.fail to reject the null hypothesisQ86:The best conclusion for this example would beA.There is no statistical difference in SAT scores when comparing students who took the SAT prep course with the general population of students who did not take the SAT prep course.B.There is a statistical difference in SAT scores when comparing students who took the SAT prep course with the general population of students who did not take the SAT prep course.C.The students who took the SAT prep course did not score significantly higher on the SAT when compared to the generalpopulation of students who did not take the SAT prep course.D.The students who took the SAT prep course did score significantly higher on the SAT when compared to the general population of students who did not take the SAT prep course.

12Q87:Based on your evaluation of the null in Q85 and your conclusion is Q86, as a researcher you would be more concerned with aA.Type I statistical errorB.Type II statistical errorCalculate the 99%confidence interval.Steps:Q88:The mean you will use for this calculation isA.1050B.1150Q89:What is the new critical value you will use for this calculation?Q90:As you know, two values will be required to complete the following equation:__________ __________Q91:Which of the following is a more accurate interpretation of the confidence interval you just computed?A.We are 99% confident that the scores fall in the interval _____ to _____.B.We are 99% confident that the average score on the SAT by the students who took the prep course falls in the interval _____ to _____.C.We are 99% confident that the example above has correct values.D.We are 99% confident that the differencein SAT scores between the students who took the prep course and the students who did not falls in the interval _____ to ____

Wells Technical Institute (WTI), a school owned by Tristana Wells, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2017, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items athrough h that require adjusting entries on December 31, 2017, follow.
  
Additional Information Items

An analysis of WTI's insurance policies shows that $4,129 of coverage has expired.

An inventory count shows that teaching supplies costing $3,578 are available at year-end 2017.

Annual depreciation on the equipment is $16,515.

Annual depreciation on the professional library is $8,258.

On November 1, WTI agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,900, and the client paid the first five months' fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2018.

On October 15, WTI agreed to teach a four-month class (beginning immediately) for an individual for $5,220 tuition per month payable at the end of the class. The class started on October 15, but no payment has yet been received. (WTI's accruals are applied to the nearest half-month; for example, October recognizes one-half month accrual.)

WTI's two employees are paid weekly. As of the end of the year, two days' salaries have accrued at the rate of $100 per day for each employee.

The balance in the Prepaid Rent account represents rent for December.

Problem 3-3A Part 1

Required:
1. Prepare the necessary adjusting journal entries for items a through h. Assume that adjusting entries are made only at year-end.

Consider the case of a high school graduate considering his career options. He can take up a life of crime that will pay him a salary of $100,000 if he is not caught. However, there is a 10% chance that we will be caught, and go to prison where he will earn $200 in the prison laundry. He can also work in a non-criminal job for a guaranteed $65,000. His utility over money is U(M) = √M, and he does not lose utility from going to prison other than the low earnings.
a) What is his expected income if he chooses a life of crime?
b) What is his expected utility if he chooses a life of crime?
c) Which career do we expect him to choose?
d) Suppose the local government is considering two programs of equal cost. One would increase police funding which would raise the apprehension rate to 25%, and another would fund a job-placement program that would increase the salary of the non-criminal job to $75,000. Which one of these would reduce crime more?