Appendix: Normal and Abnormal Spoilage in Process Costing, Changes in Output Measures, Multiple Departments

Grayson Company produces an industrial chemical used for cleaning and lubricating machinery. In the Mixing Department, liquid and dry chemicals are blended to form slurry. Output is measured in gallons. In the Baking Department, the slurry is subjected to high heat, and the residue appears in irregular lumps. Output is measured in pounds. In the Grinding Department, the irregular lumps are ground into a powder, and this powder is placed in 50-pound bags. Output is measured in bags produced. In April, the company reported the following data:

The Mixing Department transferred 50,000 gallons to the Baking Department, costing $250,000. Each gallon of slurry weighs two pounds.
The Baking Department transferred 100,000 pounds (irregular lumps) to the Grinding Department. At the beginning of the month, there were 5,000 gallons of slurry in process, 25 percent complete, costing $35,000 (transferred-in cost of $25,000 plus conversion cost of $10,000). No additional direct materials are added in the Baking Department. At the end of April, there was no ending work in process. Conversion costs for the month totaled $205,000. Normal loss during baking is 5 percent of good output. All transferred-in materials are lost, but since loss occurs uniformly throughout the process, only 50 percent of the conversion units are assumed to be lost.
The Grinding Department transferred 2,500 bags of chemicals to its finished goods warehouse. Beginning work in process for this department was 25,000 pounds, 40 percent complete with the following costs: transferred-in cost, $132,500; conversion cost, $15,000. Bags are used at the end of the process and cost $1.50 each. During bagging, normally one out of every 11 bags is torn and must be discarded. No powder is lost (the tearing occurs when the bag is being attached to a funnel). Conversion costs for the month's production are $172,500. There is no ending work in process.

Required:

1. Using FIFO, calculate the cost per bag of chemicals transferred to the finished goods warehouse. Round per-unit costs to the nearest cent. Round all other answers to the nearest unit or dollar, if required.

Baking Department (to obtain the cost of goods transferred out):

Units to account for:
  Beginning work in process _
  Units started _
  Total units to account for _
Units accounted for:
  Units transferred out_
  Normal spoilage_
  Abnormal spoilage_
  Total units accounted for_

Equivalent Units
Conversion Costs Transferred In

Total equivalent units __ __

Total unit cost $__

Cost of units transferred out:
Started and competed $__
Prior period costs $__
Costs to finish__
Normal spoilage__
Total $__

Grinding Department:

Total units accounted for_

Note: (For direct materials: 11 bags are used to get 10 good bags).

Unit cost of units started and completed:
Direct Materials Conversion Costs Transferred In   
Costs added $__ $__ $__
Total equivalent units __ __ __

Cost per equivalent unit $__ $__ $__ $__

Unit cost of units from beginning work in process:
Prior period costs $__
Costs to finish: __
Direct materials __
Conversion costs __

Total $__

Unit cost $__ per unit

2. Prepare the journal entry needed to remove abnormal spoilage from the Baking department.

____ __

____ __

What changes have you made in your nursing practice after caring for chronically ill clients and those who required palliative and end of life care?

Describe the areas in your practice where you believe you need more development.

In what ways can and will you advocate or perhaps lobby for chronically ill clients to ensure their dignity, safety, autonomy and rights?

What are your thoughts on the DSM-5 changes regarding the pervasive developmental disorders? More specifically, do you agree or disagree with the reclassification of Asperger's syndrome as level 1, high-functioning autism? Why/why not?

When it comes to autism, there are many myths. Answer one of the following questions and, in addition, cite from the Chapter 5 reading as well as the DSM-5 to support your responses:

Do you believe that those diagnosed with autism have special talents and abilities?

Do you believe that those diagnosed with autism have a lowered IQ or that they experience an intellectual disability?

Changes in Various Ratios Presented below is selected information for Turner Company:

2019 2018

Sales revenue $950,000 $850,000

Cost of goods sold 575,000 545,000

Interest expense 20,000 20,000

Income tax expense 27,000 30,000

Net income 65,000 55,000

Cash flow from operating activities 70,000 60,000

Capital expenditures 45,000 45,000

Accounts receivable (net), December 31 126,000 120,000

Inventory, December 31 196,000 160,000

Stockholders’ equity, December 31 450,000 400,000

Total assets, December 31 750,000 675,000

Required Calculate the following ratios for 2019. The 2018 results are given for comparative purposes. Round answers to one decimal place. Use 365 days in a year.

2018 2019  

1. Gross profit percentage 35.9% % blank

2. Return on assets 8.3% % blank

3. Return on sales 6.5% % blank

4. Return on common stockholders’ equity (no preferred stock was outstanding) 13.9% % blank

5. Accounts receivable turnover 8.0 blank

6. Average collection period 45.6 days blank days

7. Inventory turnover 3.6 blank

8. Times-interest-earned ratio 5.3 blank

9. Operating-cash-flow-to-capital-expenditures ratio 1.3 blank

Strickler Technology is considering changes in its working capital policies to improve its cash flow cycle. Strickler's sales last year were $2,555,000 (all on credit), and its net profit margin was 8%. Its inventory turnover was 4.5 times during the year, and its DSO was 44 days. Its annual cost of goods sold was $1,350,000. The firm had fixed assets totaling $420,000. Strickler's payables deferral period is 50 days. Assume 365 days in year for your calculations. Do not round intermediate calculations. Calculate Strickler's cash conversion cycle. Round your answer to two decimal places. days Assuming Strickler holds negligible amounts of cash and marketable securities,

Calculate its total assets turnover. Round your answer to two decimal places.

Calculate its ROA. Round your answer to two decimal places.

Suppose Strickler's managers believe the annual inventory turnover can be raised to 8 times without affecting sale or profit margins. What would Strickler's cash conversion cycle have been if the inventory turnover had been 8 for the year? Round your answer to two decimal places.

What would Strickler's total assets turnover have been if the inventory turnover had been 8 for the year? Round your answer to two decimal places.

What would Strickler's ROA have been if the inventory turnover had been 8 for the year? Round your answer to two decimal places.

Problem: Permanent and Timing Differences/Tax Rate Changes

Martin Inc. purchased machinery at the beginning of 20X0 for $120,000.  For financial reporting purposes, management used the straight-line method to depreciate the cost and sum of the years’ digits ($80,000 and $40,000) to depreciate the cost for tax purposes.  The life of the machinery was estimated to be two years and the salvage value was estimated at zero.  Revenues less expenses other than depreciation and tax expense equaled $600,000 for 20X0 and 20X1.  Martin pays income tax at the rate of 20% of taxable income.  Included in the income number for each year was $40,000 of tax-free municipal bond interest. (As with the previous problem, this one has a similar cascade effect. For partial credit LABEL and show the calculations.)

Required:

1. Compute the IRS taxable income and the financial reporting/GAAP taxable income (before tax) for the years 20X0 and 20X (6 pts.)

2.         Complete the following table based on your answer to requirement 1. (2 pts for each cell; 12 total)

3. Assume that the tax rate was changed by the federal government to 30% effective the beginning of 20X1.  Also assume the change was known in 20X0.  Compute the following amounts and give the  related journal entry for 20X1 (6 pts. Total):
   1. Deferred income taxes
   2. Income tax liability for 20X1 (also known as the current provision for income taxes)
   1. Income tax expense for 20X1

Extra Credit

4. Assume the same details as above except that the tax rate change was not known until 20X1. Compute the following amounts and give the related journal entry, for 20X1. (4 possible additional points)
   1. Deferred income taxes
   2. Income tax liability for 20X1
   3. Income tax expense for 20X1.

1. Discuss how attending childbirth/breastfeeding classes impacts a family’s readiness for the upcoming changes in family structure

2. Discuss the family stage of the family involved in a childbirth class.

3. How will attending this course impact your future nursing care?

1.Now state legislators want to make predictions about how changes in consumers’ budgets will impact their consumption behavior. If school supplies and salty snacks are both normal goods with school supplies on the x-axis of the graph and salty snacks on the y-axis, explain how a decrease in consumers’ budgets would impact the consumption of school supplies and salty snacks.

c)If the state legislature is considering giving people gift certificates for school supplies, what considerations about the impact of gift certificates on people’s utility should they understand in comparison to an equivalent cash gift?

What effect could the following changes, occurring independently, have on
(1) the break-even point, (2) the unit contribution margin, and (3) the expected total profit?

a. An increase in fixed costs.
b. A decrease in wage rates applicable to direct, strictly variable labor.
c. An increase in the selling price of the product.
d. An increase in production and sales volume.
e. An increase in building insurance rates.

You are caring for a 90 year old retired minister. What age-related changes might the nurse expect to find in his/her vision? How were these consistent with your interviewee? How might they affect activities of daily living for your interviewee? Support your answer with in-text citations from current articles.