A: The Bustillo Corporation is preparing its Manufacturing Overhead budget for the fourth quarter of the year. The budgeted variable manufacturing overhead is $4 per direct labor-hour; the budgeted fixed manufacturing overhead is $84,000 per month, of which $15,900 is factory depreciation. If the budgeted direct labor time for November is 7,900 hours, then the total budgeted manufacturing overhead for November is? $115,600 / $99,700 / $131,500 / $84,000

B: Bustillo Inc. cost formula for its vehicle operating cost is $2,920 per month plus $322 per snow-day. For the month of December, the company planned for activity of 16 snow-days, but the actual level of activity was 14 snow-days. The actual vehicle operating cost for the month was $8,350. The spending variance for vehicle operating cost in December would be closest to? $278 U / $278 F / $922 U / $922 F

C: Bustillo Inc. uses two measures of activity, flights and passengers, in the cost formulas in its budgets and performance reports. The cost formula for plane operating costs is $56,760 per month plus $2,626 per flight plus $9 per passenger. The company expected its activity in February to be 63 flights and 262 passengers, but the actual activity was 62 flights and 263 passengers. The actual cost for plane operating costs in February was $220,700. The plane operating costs in the planning budget for February would be closest to? $224,556 / $223,326 / $221,939 / $220,700

C2: A total of 6,850 kilograms of a raw material was purchased at a total cost of $21,920. The materials price variance was $1,370 favorable. The standard price per kilogram for the raw material must be? $0.20 / $3.00 / $3.20 / $3.40

D: Bustillo Corporation makes a product with the following standard costs:

In January the company produced 3,320 units using 13,280 pounds of the direct material and 2,776 direct labor-hours. During the month, the company purchased 16,900 pounds of the direct material at a cost of $14,040. The actual direct labor cost was $57,895 and the actual variable overhead cost was $25,260. The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The labor rate variance for January is? $401 F / $401 U / $2,119 U / $2,119 F

E: Last year, Bustillo's division had total sales of $13,420,000, net operating income of $1,261,480, and average operating assets of $2,684,000. The company's minimum required rate of return is 15%. The division's margin is closest to? 9.4% / 47.0% / 62.7% / 20.0%

Absorption and Variable Costing Income Statements for Two Months and Analysis

During the first month of operations ended July 31, Head Gear Inc. manufactured 23,000 hats, of which 21,400 were sold. Operating data for the month are summarized as follows:

During August, Head Gear Inc. manufactured 19,800 hats and sold 21,400 hats. Operating data for August are summarized as follows:

Required:

1a. Prepare income statement for July using the absorption costing concept.

1b. Prepare income statement for August using the absorption costing concept.

2a. Prepare income statement for July using the variable costing concept.

2b. Prepare income statement for August using the variable costing concept.

Use the classical model for determining the long-run outcome of the economy to answer the following question. Suppose a government in debt crisis (such as Greece) moves to reduce its budget deficit by reducing the annual funding for tertiary education and healthcare drastically.

(b) State and explain in words what happens to the real interest rate, national saving, investment, consumption, and output.

(c) Discuss the likely impact of such policy on the inequality of income between the educated and uneducated labour. Support your answer with graphical illustrations.

(d) Suppose the above policy causes a sudden emigration of workers with no education to neighbouring countries for easier access to education and health facilities. Assume TFP does not decrease following the government policy shock, as in part a (i), and following the labour migration. How would your answer to (b) and (c) change? (part a (i):i. First, by assuming that the total factor productivity (TFP) does not depend on the government spending on health and education.)

True or False

Indirect costs are usually included in the costs that are allocated to activity cost pools in an activity-based costing system

In the first-stage allocation in an ABC system, some costs may be allocated to a special cost pool that are not subsequently allocated to products or customers.

The activity variance for revenue is favorable if the revenue in the flexible budget exceeds the revenue in the static planning budget.

A favorable spending variance occurs when the cost in the flexible budget exceeds the amount of that actual cost (i.e. the corresponding cost in the actual results).

If the required rate of return is 15% and the internal rate of return of a potential investment 10%, the company should deem the investment acceptable.

When cash flows are uneven and vary from year to year, the net present value method is harder to calculate than the internal rate of return method.

In capital budgeting computations, discounted cash flow methods assume that all cash flows occur at the beginning of a period.

ABC CORP

BALANCE SHEET

December 31, 2010

Cash $ 100

Marketable Securities 0

Accounts Receivables 2,000

Inventory 140

Fixed Assets ( net ) 2,000

Total Assets

=====

Accounts Payable $ 2,380

Notes Payable 0

Retained earnings ?

Common Stock 1,400

Total of Both Liabilities & Equity =====

For the year ended 12/31/10 ABC CORP generated Sales of $12,000 and Net Income of $120. The net profit margin this year is considered normal by ABC CORP. Cost of Goods Sold was $8,400 in 2010. Cost of Goods Sold consistently averages seventy per cent of Sales, and will continue to do so in the future. Depreciation Expense was $500 in 2010. No Depreciation Expense was, or ever will, be included in Cost of Goods Sold. Fixed Operating Costs, excluding Depreciation Expense, were equal to $1,200 for 2010. These Fixed Operating Costs included all utilities, all insurance, all rent, all property taxes, and all labor charges. Fixed Operating Costs (other than depreciation expense) are paid for immediately, as they are incurred. Fixed Operating Costs were spread evenly throughout the year 2010. With regard to the size and timing of these costs, it is anticipated that the experience of 2010 will be repeated in 2011. Therefore, we anticipate cash payments associated with Fixed Operating Costs to equal $100 per month in 2011. Because of losses in recent years at ABC Corp and the loss carry forward provisions of the tax code there were no income taxes paid in 2010, and it is anticipated in 2011 that no income tax payments will be made.

Interest paid in 2010 was $40 and dividends paid in that same year were $60 Interest payments are made monthly and dividends are paid at the end of every quarter. The next dividend payment is scheduled for March 2011. The dividend payout ratio in 2010 is considered normal for ABC CORP. The annual interest rate for bank borrowing is six percent per year (one-half of one per cent per month). Interest paid in the current month is based on the previous month’s balance in Notes Payable.

The target cash balance for the end of any current month is equal to ten percent of next month’s sales.

Target ending inventory at the end of any current month is equal to twenty percent of estimated cost of goods sold for the next month. All purchases of inventory are paid for in the month following purchase. The entire balance of Accounts Payable, at any given point in time, represents the purchase of inventory which has not yet been paid for. One-half of all sales are collected in the month of sale, the remainder in the following Month. The sales forecast for the first four months of 2011 is

January $1,000

February 800

March 3,200

April 2,000

Sales for October, November and December of the year 2010 were $2,000 $2,000 and $4,000, respectively.

It is the policy of the company to repay bank borrowing as soon as possible; if money is not needed for this purpose, then investments of marketable securities are made. Marketable Securities should be liquidated to satisfy any subsequent need for cash flow before any new bank borrowing is done. The annual yield on marketable securities is three per cent (one-quarter of one percent per month). Interest payments to the firm are based on the previous month’s balance in Marketable Securities.

On the next two pages, you will find a partially completed Cash Budget. Some numbers are filled in for your convenience. For only the month of January 2011, you are to fill in missing amounts in this Cash Budget. When you answer to this requirement remember to write zero if you mean zero because a blank will not be interpreted as zero.

ABC CORP

BALANCE SHEET

December 31, 2010

                        Cash                                                            $   100

                        Marketable Securities                                          0

                        Accounts Receivables                                     2,000

                        Inventory                                                          140

                        Fixed Assets ( net )                                          2,000

                        Total Assets                                                    

                                                                                           =====

                        Accounts Payable                                             $ 2,380

                        Notes Payable                                                             0

                        Retained earnings                                                 ?

                        Common Stock                                                      1,400

                        Total of Both Liabilities & Equity                      =====

For the year ended 12/31/10 ABC CORP generated Sales of $12,000 and Net Income of $120. The net profit margin this year is considered normal by ABC CORP. Cost of Goods Sold was $8,400 in 2010. Cost of Goods Sold consistently averages seventy per cent of Sales, and will continue to do so in the future. Depreciation Expense was $500 in 2010. No Depreciation Expense was, or ever will, be included in Cost of Goods Sold. Fixed Operating Costs, excluding Depreciation Expense, were equal to $1,200 for 2010. These Fixed Operating Costs included all utilities, all insurance, all rent, all property taxes, and all labor charges. Fixed Operating Costs (other than depreciation expense) are paid for immediately, as they are incurred. Fixed Operating Costs were spread evenly throughout the year 2010. With regard to the size and timing of these costs, it is anticipated that the experience of 2010 will be repeated in 2011. Therefore, we anticipate cash payments associated with Fixed Operating Costs to equal $100 per month in 2011. Because of losses in recent years at ABC Corp and the loss carry forward provisions of the tax code there were no income taxes paid in 2010, and it is anticipated in 2011 that no income tax payments will be made.

Interest paid in 2010 was $40 and dividends paid in that same year were $60 Interest payments are made monthly and dividends are paid at the end of every quarter. The next dividend payment is scheduled for March 2011. The dividend payout ratio in 2010 is considered normal for ABC CORP. The annual interest rate for bank borrowing is six percent per year (one-half of one per cent per month). Interest paid in the current month is based on the previous month’s balance in Notes Payable.

The target cash balance for the end of any current month is equal to ten percent of next month’s sales.

Target ending inventory at the end of any current month is equal to twenty percent of estimated cost of goods sold for the next month. All purchases of inventory are paid for in the month following purchase. The entire balance of Accounts Payable, at any given point in time, represents the purchase of inventory which has not yet been paid for. One-half of all sales are collected in the month of sale, the remainder in the following Month. The sales forecast for the first four months of 2011 is

January                                                $1,000

February                                                   800

March                                                  3,200

April                                                     2,000

Sales for October, November and December of the year 2010 were $2,000 $2,000 and $4,000, respectively.

It is the policy of the company to repay bank borrowing as soon as possible; if money is not needed for this purpose, then investments of marketable securities are made. Marketable Securities should be liquidated to satisfy any subsequent need for cash flow before any new bank borrowing is done. The annual yield on marketable securities is three per cent (one-quarter of one percent per month). Interest payments to the firm are based on the previous month’s balance in Marketable Securities.

On the next two pages, you will find a partially completed Cash Budget. Some numbers are filled in for your convenience. For only the month of January 2011, you are to fill in missing amounts in this Cash Budget. When you answer to this requirement remember to write zero if you mean zero because a blank will not be interpreted as zero.

A new computer virus (AcctBGone) destroyed most of the company records at BackupsRntUs. The computer experts at the company could recover only a few fragments of the company’s factory ledger for March as follows.

Further investigation and reconstruction from other sources yielded the following additional information:

• The controller remembers clearly that actual manufacturing overhead costs are recorded at $18 per direct labor-hour. (The company assigns actual overhead to Work-in-Process Inventory.)
• The production superintendent’s cost sheets showed only one job in Work-in-Process Inventory on March 31. Materials of $15,600 had been added to the job, and 320 direct labor-hours had been expended at $36 per hour.
• The Accounts Payable are for direct materials purchases only, according to the accounts payable clerk. He clearly remembers that the balance in the account was $36,000 on March 1. An analysis of canceled checks (kept in the treasurer’s office) shows that payments of $251,300 were made to suppliers during the month.
• The payroll ledger shows that 5,000 direct labor-hours were recorded for the month. The employment department has verified that there are no variations in pay rates among employees (this infuriated Steve Fung, who believed that his services were underpaid).
• Records maintained in the finished goods warehouse indicate that the finished goods inventory totaled $108,800 on March 1.
• The cost of goods manufactured in March was $563,800.

Required:

Determine the following amounts:

a. Work-in-process inventory, March 31.

b. Direct materials purchased during March.

c. Actual manufacturing overhead incurred during March.

d. Cost of goods sold for March.

A new computer virus (AcctBGone) destroyed most of the company records at BackupsRntUs. The computer experts at the company could recover only a few fragments of the company’s factory ledger for March as follows:

Further investigation and reconstruction from other sources yielded the following additional information:

The controller remembers clearly that actual manufacturing overhead costs are recorded at $19 per direct labor-hour. (The company assigns actual overhead to Work-in-Process Inventory.)

The production superintendent’s cost sheets showed only one job in Work-in-Process Inventory on March 31. Materials of $15,700 had been added to the job, and 300 direct labor-hours had been expended at $34 per hour.

The Accounts Payable are for direct materials purchases only, according to the accounts payable clerk. He clearly remembers that the balance in the account was $35,600 on March 1. An analysis of canceled checks (kept in the treasurer’s office) shows that payments of $252,900 were made to suppliers during the month.

The payroll ledger shows that 5,400 direct labor-hours were recorded for the month. The employment department has verified that there are no variations in pay rates among employees (this infuriated Steve Fung, who believed that his services were underpaid).

Records maintained in the finished goods warehouse indicate that the finished goods inventory totaled $109,000 on March 1.

The cost of goods manufactured in March was $564,100.

Required:

Determine the following amounts:

a. Work-in-process inventory, March 31.

b. Direct materials purchased during March.

c. Actual manufacturing overhead incurred during March.

d. Cost of goods sold for March.

MS. LEE PRESENTS TO YOUR CLINIC FOR A NEW PATIENT EVALUATION. SHE IS A 75 YEAR-OLD WOMAN WITH AN HISTORY OF ATRIAL FIBRILLIATION, DIABETES, CAD AND GLAUCOMA. HER DAUGHTER COMES WITH HER TO THE FIRST APPOINTMENT AND TELLS YOU SHE WAS RECENTLY IN THE EMERGENCY DEPARTMENT AFTER STUMBLING AND FALLING ONTO HER LEFT SIDE. HER X-RAY DID NOT SHOW ANY FRACTURES AND SHE WAS DISCHARGED HOME. ON FURTHER QUESTIONING MS. LEE REPORTS THAT SHE FELL EARLY IN THE MORNING WHEN SHE WAS GETTING UP TO GO TO THE BATHROOM. SHE THINKS SHE TRIPPED ON THE EDGE OF THE RUG. SHE WAS ABLE TO GET UP ON HER OWN, BUT HAS HAD PAIN IN HER LEFT KNEE SINCE. SHE HAD BEEN FEELING LIKE HER USUAL SELF BEFORE THE FALL AND DENIES ANY RECENT FEVER, CHILLS, COUGH DYSPNEA,URINARY OR GI COMPLAINTS. SHE DID NOT HIT HER HEAD OR LOSE CONSCIOUSNESS. SHE DID NOT HAVE ANY CHEST PAIN, PALPITATATIONS OR DIZZINESS PRIOR TO THE FALL. SHE LIVES ALONE.HER DAUGHTER LIVES NEAR AND HELPS HER WITH HER MEDICATIONS. SHE TESTS HER BLOOD SUGER EACH MORNING AND IT HAS BEEN 120-200MG/DL. SHE OCCASIONALLY FEELS LIGHTHEADEDFIRST THING IN THE MORNING WHEN SHE GETS OOB, BUT SHE HAS NOT HAD ANY OF THOSE SYMPTOMS THROUGHOUT THE DAY. SHE DENIES ALCOLHOL USE.

PHYSICAL EXAM

BP 134/78 LYING, 126/72 STANDING

HR 78 IRREGULAR

TRACE EDEMA IN BOTH LOWER EXTREMITIES

BILATERAL KNEE CREPITUS, BUT FULL ROM

3/10 PAIN LEFT KNEE

DIFFICULTY GETTING OUT OF CHAIR 9NEEDS TO ROCK SEVERAL TIMES)

IT TAKES HER 15 SECONDS TO WALK 10 FEET AND SIT BACK DOWN

SHE SWAYS AND CANNOT HOLD HER POSTURE WITH ONE FOOT IN FRONT OF THE OTHER.

SHE TELLS YOU SHE WANTS TO EXERCISE BUT DOES NOT KNOW THE BEST WAY TO DO SO.

MEDCATIONS

ASPIRIN 81MG DAILY

GLUCOPHAGE 100MG TWICE DAILY

METOPROLOL 50 MG TWICE DAILY

ATORVASTIN 20MG DAILY

SITAGLIPTIN 50MG DAILY

DIPHENHTDRAMINE 25MG AS NEED AT NIGHT FOR SLEEP

QUESTIONS

1. LIST MS. LEE’S RISK FACTORS FOR FALLING
2. HOW DO YOU TEST GAIT?
3. WHAT IS A GOOD BALANCE TEST? DESCRIBE HOW IT IS PERFORMED.
4. DESCRIBE THE PROCEDURE FOR CHECKING ORTHOSTATIC BP.
5. WHY IS IT IMPORTANT TO CHECK ORTHOSTATIC BP IN THIS PATIENT.
6. HOW CAN YOU ASSESS WHETHER SHE IS READY TO HEAR YOUR ADVISE ABOUT FALL PREVENTION.
7. LIST 3 PRIORITY NURSING DX FOR MS. LEE