A company started providing a one-year warranty on one of their products. There were a

total of 2,100 of these products sold during 20x5. The company estimates that the cost of

warranty repairs will be as follows:

Amount Probability

$0 50%

40,000 15%

80,000 15%

105,000 12%

225,000 8%

Total warranty costs incurred during the year amounted to $13,200 and were charged to

cost of goods sold.

Required – Prepare the adjusting journal entries required at December 31, 20x5.

Round Answers to 2 decimal places.

Suppose that there is natural monopoly that faces a demand curve Q=100-P with total cost function C(Q)=400+15Q.

The profit maximizing quantity for the natural monopolist, in the absence of any regulation is ______ units.

The profit maximizing price that will set by the monopolist is $______

The average total cost per unit at the profit maximizing level of output is $______

The profit for the natural monopolist, given they set the profit maximizing price and level of output, is $________

your answer. A fully labeled graph is a welcome addition to any answer (if applicable), though it is not necessary.                                                                                                       

A) In the short-run, average variable cost converges to average total cost as output increases.

B) The tragedy of the commons states that individuals will overproduce a common                        resource.

C) When evaluating social welfare, a government must take a subjective stance on what constitutes welfare.

D) Absent government intervention, a perfectly competitive market maximizes total surplus.

Q2. Design a Pearson modular program that asks the user to enter the monthly costs for each of the following expenses incurred from operating his or her automobile: loan payment, insurance, gas, and maintenance (create a module for each expense). The program should then display the total monthly cost of these expenses, and the total annual cost of these expenses in the main Module. Use Pass arguments By Reference method to design your modules. Submit your pseudocode with comments at appropriate places.

Problem 9-4

Karam Inc. has compiled the following data in order to put together their first quarter operating budget for 2011:

Each unit requires three hours of direct labor.

Additional information:
Karam sells each unit for $95.
Company policy is to have 30 percent of next month's sales (in units) in ending finished goods inventory.
Company policy is to have 40 percent of next month's production needs in ending raw materials inventory. The production needs for April is 95,500.
It takes three pounds of material to produce each unit and the cost is $2.75/pound.

Required:

A. Prepare a sales budget for the January, February and March and for the first quarter in total.

B. Prepare a production budget for January, February and March and for the first quarter in total.

C. Prepare a direct materials purchases budget for January, February and March and for the first quarter in total.

McCullough Hospital uses a job-order costing system to assign costs to its patients. Its direct materials include a variety of items such as pharmaceutical drugs, heart valves, artificial hips, and pacemakers. Its direct labor costs (e.g., surgeons, anesthesiologists, radiologists, and nurses) associated with specific surgical procedures and tests are traced to individual patients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and the labor costs associated with around-the clock monitoring of patients are treated as overhead costs.

Historically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a patient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. Recently a member of the hospital’s accounting staff has suggested using two predetermined overhead rates (allocated based on the number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to the hospital’s estimated number of patient-days, its estimated overhead costs, and two of its patients—Patient A and Patient B—is provided below:

Required:

1. Assuming McCullough uses only one predetermined overhead rate, calculate:

a. The predetermined overhead rate.

b. The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B.

2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate:

a. The ICU and Other overhead rates.

b. The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B.

(Round "Predetermined overhead rate" to 2 decimal places. Round your intermediate calculations and final answers to the nearest dollar amount.)

McCullough Hospital uses a job-order costing system to assign costs to its patients. Its direct materials include a variety of items such as pharmaceutical drugs, heart valves, artificial hips, and pacemakers. Its direct labor costs (e.g., surgeons, anesthesiologists, radiologists, and nurses) associated with specific surgical procedures and tests are traced to individual patients. All other costs, such as depreciation of medical equipment, insurance, utilities, incidental medical supplies, and the labor costs associated with around-the-clock monitoring of patients are treated as overhead costs.

Historically, McCullough has used one predetermined overhead rate based on the number of patient-days (each night that a patient spends in the hospital counts as one patient-day) to allocate overhead costs to patients. Recently a member of the hospital’s accounting staff has suggested using two predetermined overhead rates (allocated based on the number of patient-days) to improve the accuracy of the costs allocated to patients. The first overhead rate would include all overhead costs within the Intensive Care Unit (ICU) and the second overhead rate would include all Other overhead costs. Information pertaining to the hospital’s estimated number of patient-days, its estimated overhead costs, and two of its patients—Patient A and Patient B—is provided below:

Required:

1. Assuming McCullough uses only one predetermined overhead rate, calculate:

a. The predetermined overhead rate.

b. The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B.

2. Assuming McCullough calculates two overhead rates as recommended by the staff accountant, calculate:

a. The ICU and Other overhead rates.

b. The total cost, including direct materials, direct labor and applied overhead, assigned to Patient A and Patient B.

(Round "Predetermined overhead rate" to 2 decimal places. Round other intermediate calculations and final answers to the nearest whole dollar amount.)

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $15.75 per direct labor-hour was based on a cost formula that estimated $630,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours. The following transactions were recorded for the year:

1. Raw materials were purchased on account, $646,000.
2. Raw materials use in production, $608,000. All of of the raw materials were used as direct materials.
3. The following costs were accrued for employee services: direct labor, $580,000; indirect labor, $150,000; selling and administrative salaries, $317,000.
4. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $376,000.
5. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $480,000.
6. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.
7. Jobs costing $1,765,050 to manufacture according to their job cost sheets were completed during the year.
8. Jobs were sold on account to customers during the year for a total of $2,970,000. The jobs cost $1,775,050 to manufacture according to their job cost sheets.

rev: 09_28_2018_QC_CS-140681

Required:

1. What is the journal entry to record raw materials used in production?

2. What is the ending balance in Raw Materials?

3. What is the journal entry to record the labor costs incurred during the year? 4. What is the total amount of manufacturing overhead applied to production during the year?

5. What is the total manufacturing cost added to Work in Process during the year?

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

11. What is the journal entry to record the cost of goods sold referred to in item h above?

12. What is the ending balance in Finished Goods?

13. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?

14. What is the gross margin for the year?

15. What is the net operating income for the year?

Bunnell Corporation is a manufacturer that uses job-order costing. On January 1, the company’s inventory balances were as follows:

Raw materials $ 86,500

Work in process $ 22,600

Finished goods $ 63,900 The company applies overhead cost to jobs on the basis of direct labor-hours. For the current year, the company’s predetermined overhead rate of $15.00 per direct labor-hour was based on a cost formula that estimated $600,000 of total manufacturing overhead for an estimated activity level of 40,000 direct labor-hours.

The following transactions were recorded for the year: Raw materials were purchased on account, $632,000. Raw materials use in production, $585,600. All of the raw materials were used as direct materials.

The following costs were accrued for employee services:

direct labor, $550,000; indirect labor, $150,000; selling and administrative salaries, $328,000. Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $375,000. Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $450,000. Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year. Jobs costing $1,670,300 to manufacture according to their job cost sheets were completed during the year. Jobs were sold on account to customers during the year for a total of $3,172,500. The jobs cost $1,680,300 to manufacture according to their job cost sheets. 1. Record the raw materials used in production.

2. What is the ending balance in Raw Materials?

3. What is the journal entry to record the labor costs incurred during the year?

4. What is the total amount of manufacturing overhead applied to production during the year?

5. What is the total manufacturing cost added to Work in Process during the year?

6. What is the journal entry to record the transfer of completed jobs that is referred to in item g above?

7. What is the ending balance in Work in Process?

8. What is the total amount of actual manufacturing overhead cost incurred during the year?

9. Is manufacturing overhead underapplied or overapplied for the year? By how much?

10. What is the cost of goods available for sale during the year?

11. What is the journal entry to record the cost of goods sold referred to in item h above?

12. What is the ending balance in Finished Goods?

13. Assuming that the company closes its underapplied or overapplied overhead to Cost of Goods Sold, what is the adjusted cost of goods sold for the year?

14. What is the gross margin for the year?

15. What is the net operating income for the year?

ABC-A Service Application
Grand Haven is a senior living community that offers a full range of services including independent living, assisted living, and skilled nursing care. The assisted living division provides residential space, meals, and medical services (MS) to its residents. The current costing system adds the cost of all of these services (space, meals, and MS) and divides by total resident days to get a cost per resident day for each month. Recognizing that MS tends to vary significantly among the residents, Grand Haven's accountant recommended that an ABC system be designed to calculate more accurately the cost of MS provided to residents. She decided that residents should be classified into four categories (A, B, C, D) based on the level of services received, with group A representing the lowest level of service and D representing the highest level of service. Two cost drivers being considered for measuring MS costs are number of assistance calls and number of assistant contacts. A contact is registered each time an assistance professional provides medical services or aid to a resident. The accountant has gathered the following data for the most recent annual period:

a. Determine the ABC cost of a resident day for each category of residents using assistance hours as the cost driver.

Round answer below to the nearest dollar.

Medical services cost per assistance hour $Answer

NOTE: Use your rounded answer above to compute answers below. Round final answers to the nearest dollar.

b. Determine the ABC cost of a resident day for each category of residents using assistance contacts as the cost driver.

Round answer below to the nearest dollar.

Medical services cost per assistance contacts $Answer

NOTE: Use your rounded answer above to compute answers below. Round final answers to the nearest dollar.