ABC, Inc produces 2 products, Prime(P) and Secondo(S), from a single input. Further processing of product Prime(P) results in a by-product (BP). A summary of production and sales for the year follows:

• In the joint production process, 510,000 pounds of raw material was processed, spending $520,000.

• 60% of the joint process output was transferred to Division I to produce Prime, and 40 % of the joint process output was transferred to Division II to produce Secondo

• Further processing in Division I resulted in 70% of the input pounds becoming Prime and 30% of the input pounds becoming By-Product BP. The separate processing cost for Prime in Division I was 649,026.

• Total packaging costs for Prime were $122,094. After Division I processing and packaging, product Prime is salable at $8.00 per pound.

• Each pound of By-Product BP can be sold for $0.25 after incurring a total selling cost of $5,000. The company accounts for By-Product BP using the NRV method and showing the NRV to reduce the cost of goods sold of the joint products.

• In division II, Secondo was further processed at a separate cost of $387,600. A completed pound of Secondo sells for $4.70

• Selling (marketing) costs for Prime and Secondo are $0.80 per pound and $0.15 per pound.

Required:

a) Allocate the joint cost to products Prime and Secondo, using NRV at split-off.

b) There were no beginning Work-in-Process and Finished Goods inventories. Determine the gross margin for ABC, Inc. assuming that

• 80 percent of Prime and 90 percent of Secondo produced were sold.

• All By-Product BP that was produced during the year were sold.

• Joint cost was allocated using the physical measurements.  

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,716. It also incurred average direct labor costs of $14 per hour for the 4,003 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,073, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows.

Required:

a. Compute the materials price and quantity variances.

b. Compute the labor rate and efficiency variances.

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $21,005. It also incurred average direct labor costs of $13 per hour for the 4,007 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,271, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows. Direct materials standard price $ 1.30 per gallon Standard quantity allowed per case 3.25 gallons Direct labor standard rate $ 16 per hour Standard hours allowed per case 0.75 direct labor hours Fixed overhead budgeted $ 2,600 per month Normal level of production 5,200 cases per month Variable overhead application rate $ 1.50 per case Fixed overhead application rate ($2,600 ÷ 5,200 cases) 0.50 per case Total overhead application rate $ 2.00 per case Required:

a. Compute the materials price and quantity variances.

b. Compute the labor rate and efficiency variances.

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,134. It also incurred average direct labor costs of $15 per hour for the 3,927 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,069, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows.

Required:

a. Compute the materials price and quantity variances.

b. Compute the labor rate and efficiency variances.

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,359. It also incurred average direct labor costs of $14 per hour for the 4,031 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,019, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows.

Required:

a. Compute the materials price and quantity variances.

b. Compute the labor rate and efficiency variances.

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Slick Corporation is a small producer of synthetic motor oil. During May, the company produced 5,000 cases of lubricant. Each case contains 12 quarts of synthetic oil. To achieve this level of production, Slick purchased and used 16,500 gallons of direct materials at a cost of $20,208. It also incurred average direct labor costs of $15 per hour for the 4,074 hours worked in May by its production personnel. Manufacturing overhead for the month totaled $9,284, of which $2,200 was considered fixed. Slick's standard cost information for each case of synthetic motor oil is as follows.

Required:

a. Compute the materials price and quantity variances.

b. Compute the labor rate and efficiency variances.

c. Compute the manufacturing overhead spending and volume variances.

d. Prepare the journal entries to:

1. Charge materials (at standard) to Work in Process.

2. Charge direct labor (at standard) to Work in Process.

3. Charge manufacturing overhead (at standard) to Work in Process.

4. Transfer the cost of the 5,000 cases of synthetic motor oil produced in May to Finished Goods.

5. Close any over- or underapplied overhead to cost of goods sold.

Summarize the article:

Why Fashion Stores Shouldn't Join Amazon's Data Behemoth

Providing Amazon with more customer data will only make the e-commerce giant an even stronger opponent. Instead, fashion companies should embrace the current wave of consolidation.

Amazon has conquered the world, one consumer category at a time. Now, it seems the final frontier is the fashion category where the e-commerce giant is yet to prove victorious. But do smaller fashion companies stand a chance against the mean, lean shopping machine if they go at it alone? It seems unlikely.

This is why there’s a wave of consolidation washing over the fashion world currently. Just recently Michael Kors acquired Versace and Chanel bought swimwear brand Orlebar Brown.

One of the main driving reasons behind these mergers and acquisitions is a clear need to gang up against Amazon. Even though the companies might not express this directly, all of them should be painfully aware of the world’s second most valuable company breathing down their necks.

While many major brands have already surrendered to Amazon’s allure of supreme online traffic, brands and fashion stores should resist joining forces with the data monster that is ultimately set out to consume them.

There’s no questioning the allure of Amazon and there’s probably no company in the world better at selling and distributing goods online. For the same reason, having their products sold on Amazon will help fashion companies reach a few extra percentages of sales within the next quarter. But what does the end game look like?

With each data set, Amazon will get more acquainted with a new target group and perhaps in time, finally understand this wildly different shopping behavior. After all, the fashion shopper is much more of a browser than a searcher – a trouble for Amazon which is almost entirely built on customers searching and finding. Shopping for a phone charger comes down to a few variables that are easily laid out in data: Price and brand. Fashion shopping is a lot more complicated. Mainly because the shopper often needs to browse through dozens of pictures before becoming aware of his or her preference as to shape and color.

At first glance, this behavior makes the fashion shopping seem mostly random, something humans is still far better at making sense of than algorithms. But in the end, even the more delicate details of online fashion shopping can be broken down into delicate data if Amazon gets enough samples from fashion companies joining their ranks.

This will only help the Amazon data monster grow stronger and by time, absorb all the smaller fashion companies, one data set a time. And it has been reported that Amazon directly uses the data against Marketplace sellers by selling the most popular products through its service. Conversely, when fashion companies join Amazon, they lose access to their customer data and will only gain access through substantial payments.

Instead, fashion companies should consider standing their ground and consider the path of consolidation. The path towards victory over online giants seems impassable by the small players since scale in production and distribution is paramount for profitability. But through consolidation, fashion companies might just be able to create the scale needed while at the same keeping access to their data.

.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 11 20 units at $70 per unitPurchase on February 14 100 units at $85 per unitSale on August 21 120 units

What would be the company's ending merchandise inventory in dollars on December 31 if the company used perpetual, last in, first out (LIFO) method?

$9,900

$8,500

$8,400

$7,000

2.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 11 20 units at $70 per unitPurchase on February 14 100 units at $85 per unitSale on August 21 120 units

What would be the company's cost of goods sold in dollars on December 31 if the company used perpetual, last in, first out (LIFO) method?

$9,900

$8,500

$8,400

$7,000

3.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 1

120 units at $70 per unit

Purchase on February 14

100 units at $85 per unit

Sale on August 21

150 units

What would be the company's ending merchandise inventory in dollars on December 31 if the company used perpetual, first in, first out (FIFO) method?

$4,900

$5,950

$10,950

$12,000

4.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 1

100 units at $75 per unit

Purchase on February 14

100 units at $80 per unit

Sale on August 21

150 units

What would be the company's cost of goods sold in dollars on December 31 if the company used perpetual, first in, first out (FIFO) method?

$4,000

$3,750

$11,500

$11,750

5.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 1

120 units at $70 per unit

Purchase on February 14

100 units at $85 per unit

Sale on August 21

150 units

What would be the company's ending merchandise inventory in dollars on December 31 if the company used perpetual, weighted average (WA) costing method?

$4,900

$12,000

$11,523

$5,377

6.Our company had the following balances and transactions during the current year related to merchandise inventory.

Beginning merchandise inventory on January 1

100 units at $75 per unit

Purchase on February 14

100 units at $80 per unit

Sale on August 21

150 units

What would be the company's cost of goods sold in dollars on December 31 if the company used perpetual, weighted average (WA) costing method?

$4,000

$3,750

$11,625

$11,750

Note: In case you are not familiar with Boston Beer Company, here is their business description: The Boston Beer Company, Inc. and certain subsidiaries (the “Company”) are engaged in the business of selling alcohol beverages throughout the United States and in selected international markets, under the trade names “The Boston Beer Company,” “Twisted Tea Brewing Company,” “Angry Orchard Cider Company,” “Hard Seltzer Beverage Company,” Traveler Beer Co.®, the Angel City Brewing Company®, the Concrete Beach Brewery® and the Coney Island® Brewing Company. This is Boston Beer’s income statement. It is similar to Exhibit 2-14 on page 35 of our text. THE BOSTON BEER COMPANY, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (in thousands, except per share data) Year Ended December 30, December 31, December 26, 2017 2016 (53 weeks) 2015 Revenue $ 921,736 $ 968,994 $ 1,024,040 Less excise taxes 58,744 62,548 64,106 Net revenue 862,992 906,446 959,934 Cost of goods sold 413,091 446,776 458,317 Gross profit 449,901 459,670 501,617 Operating expenses: Advertising, promotional and selling expenses 258,649 244,213 273,629 General and administrative expenses 73,126 78,033 71,556 Impairment (gain on sale) of assets, net 2,451 (235) 258 Total operating expenses 334,226 322,011 345,443 Operating income 115,675 137,659 156,174 Other income (expense), net: Interest income 549 168 56 Other expense, net (82) (706) (1,220) Total other income (expense), net 467 (538) (1,164) Income before provision for income tax 116,142 137,121 155,010 Provision for income taxes 17,093 49,772 56,596 Net income $ 99,049 $ 87,349 $ 98,414 This is the inventory footnote from Boston Beer’s audited financial statement: Inventories and Provision for Excess or Expired Inventory Inventories consist of raw materials, work in process and finished goods. Raw materials, which principally consist of hops, malt, apple juice, other brewing materials and packaging, are stated at the lower of cost (first-in, first-out basis) or net realizable value. The Company’s goal is to maintain on-hand a supply of approximately two years for essential hop varieties, in order to limit the risk of an unexpected reduction in supply. Inventories are generally classified as current assets. The Company classifies hops inventory in excess of two years of forecasted usage in other long-term assets. The cost elements of work in process and finished goods inventory consist of raw materials, direct labor and manufacturing overhead. Packaging design costs are expensed as incurred. The Company enters into multi-year purchase commitments in order to secure adequate supply of ingredients and packaging, to brew and package its products. Inventory on hand and under purchase commitments totaled approximately $170.3 million at December 30, 2017. The provisions for excess or expired inventory are based on management’s estimates of forecasted usage of inventories on hand and under contract. Forecasting usage involves significant judgments regarding future demand for the Company’s various existing products and products under development as well as the potency and shelf-life of various ingredients. A significant change in the timing or level of demand for certain products as compared to forecasted amounts may result in recording additional provisions for excess or expired inventory in the future. Provisions for excess inventory are included in cost of goods sold and have historically been adequate to provide for losses on its inventory. Provision for excess or expired inventory included in cost of goods sold was $5.8 million, $4.5 million, and $4.0 million in fiscal years 2017, 2016, and 2015, respectively. Inventories consisted of the following: December 30, 2017 December 31, 2016 (in thousands) Current inventory: Raw materials $ 33,086 $ 35,314 Work in process 6,826 8,131 Finished goods 10,739 9,054 Total current inventory 50,651 52,499 Long term inventory 9,905 6,316 Total inventory $ 60,556 $ 58,815.

Questions

1. The Boston Beer inventory footnote lists the three classifications of inventory that we studied: Raw Materials, Work in Process and Finished Goods. List the five items that are included in Raw Materials inventory for Boston Beer. (5 points)

A.

B.

C.

D.

E.

2. In your own words, describe what would be included in work-in-process for Boston Beer. (5 points)

3. In your own words, describe what would be included in finished goods for Boston Beer (5 points)

4. Inventory is typically shown as a current asset on the balance sheet. Boston Beer includes some of its inventory in long-term assets. Why? (6 points)

5. In Chapter 2 we learned about three types of businesses. Based upon what you have learned, is Boston Beer a Service, Merchandising, or Manufacturing firm? Explain, using two complete sentences that make sense. (5 points)

6. The schedule below looks similar to Exhibit 2-13 on page 35 of our text. The computation is described at the bottom of page 34. Using the information from footnote for the inventory balances (use “total inventory” amounts), and the income statement for the amount of cost of goods sold, compute the amount of Cost of goods manufactured. The inventory balance for December 31, 2016 will be the beginning balances and the inventory balance for December 31, 2017 will be the ending balance. (12 points)

7. The schedule below is similar to Exhibit 2-12 on page 34 of our text (starting with the first yellowed line). Using the cost of goods manufactured amount you computed in #2 and the inventory balances for work in process from Boston Beer’s footnote, compute Total manufacturing costs for the year. (12 points)

Thank you!

The Australian economy is "weak",with households weighed down by slow wages growth and higher taxes,the OECD has declared in a report that backs lower interest rates,calls for more government spending and paves the way for unconventional monetary policies.In its six-monthly review of the global economy,the Paris-based think tank has sharply downgraded its expectations for Australia while raising serious concerns about the level of debt being carried by households.

The Morrison government this week announced $3.8 billion of infrastructure projects would be pulled forward or given additional funding over the next four years. The decision followed calls from the Reserve Bank of Australia (RBA),which has sliced official interest rates to a record low 0.75 per cent,for a lift in public spending plus productivity-enhancing structural reforms.

But economists have warned the new spending will equate to less than 0.1 per cent of gross domestic product (GDP),arguing much more needs to be done to get the economy growing fast enough to bring down the national unemployment rate.

The Organisation for Economic Co-operation and Development (OECD),which noted the global economy was now growing at its slowest rate since the global financial crisis,said it expected Australian GDP to expand by 2.3 per cent this year and next,well short of the federalgovernment's forecast.

It also expects private consumption,which accounts for about 60 per cent of total economic activity,to barely grow faster than inflation over the next two years.In March,the OECD was expecting unemployment to start edging down. It has now lifted its forecasts,tipping unemployment to average 5.3 per cent in 2020.Economic activity has been weak," the OECD said about Australia. "Private consumption spending has been sluggish,weighed down by slow wage growth and an increase in taxes paid by households."

While the government has argued its recent tax cuts will help households offset slow wages growth,the OECD and other organisations such as the RBA have noted overall tax levels are increasing as the budget returns to surplus.

Research this week from National Australia Bank found Australian household debt was now at a record high of 202 per cent of annual income.The OECD said high household indebtedness could "exacerbate" any economic shock that hit Australia.

It said with the RBA likely to cut interest rates further,which in turn could feed into a lift in house prices,lending standards might have to be tightened to protect households.

"High household indebtedness means that the authorities should stand ready to tighten macro- prudential policy settings if lower interest rates fuel house price inflation through a sharp pick- up in credit," the OECD found.While expecting further rate cuts,the organisation said the Morrison government should "loosen fiscal policy" to help get the economy growing faster.

"Fiscal policy is expected to provide little support to economic growth,in accordance with the federal government's commitment to future budget surpluses," it said. "A more expansionary fiscal stance may be warranted given that the economy is growing well below its potential and the relatively low public debt burden.

"At the same time,growth-enhancing tax reforms should be prioritised. These include shifting the tax mix away from direct taxes and inefficient taxes like real estate stamp duty to the GST and land taxation."Treasurer Josh Frydenberg said the nation's economic fundamentals remained sound,with the country now in its 29th consecutive year of growth.

He said there were "headwinds",particularly due to trade policy tensions that have hit confidence and business investment globally since May,but "the government's focus on productivity-enhancing reform will ensure our economy remains resilient".

"The international challenges are a stark reminder of why we must stick to our economic plan which has delivered lower taxes so you can keep more of what you earn,more infrastructure to boost productivity and which will return the budget back to surplus so we can meet the challenges that lie ahead," he said.

Question：Consider the statement,“In March,the OECD was expecting unemployment to start edging down. It has now lifted its forecasts,tipping unemployment to average 5.3 per cent in 2020.”If the unemployment rate increases,what are the costs to an economy? How does it compare with the natural rate of unemployment? （word limit: 200-300)