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 the answers below. Round your 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 the answers below. Round your final answers to the nearest dollar.

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

Raw materials $40,000

Work in process $18,000

Finished goods $35,000

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 $16.25 per direct labor-hour was based on a cost formula that estimated $650,000 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, $510,000.

• Raw materials used in production, $480,000. All of of the raw materials were used as direct materials.

• The following costs were accrued for employee services: direct labor, $600,000; indirect labor, $150,000; selling and administrative salaries, $240,000.

• Incurred various selling and administrative expenses (e.g., advertising, sales travel costs, and finished goods warehousing), $367,000.

• Incurred various manufacturing overhead costs (e.g., depreciation, insurance, and utilities), $500,000.

• Manufacturing overhead cost was applied to production. The company actually worked 41,000 direct labor-hours on all jobs during the year.

• Jobs costing $1,680,000 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 $2,800,000. The jobs cost $1,690,000 to manufacture according to their job cost sheets.

Required (Show all work/Calculations!)

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

2. What is the ending balance in Raw Materials? (Show T-Account)

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? (Show complete calculations)

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 bullet point number 7 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? (Show T-Account)

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? (Show complete calculations)

11. What is the journal entry to record the cost of goods sold referred to in bullet point number 8 above?

12. What is the ending balance in Finished Goods? (Show T-Account)

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.

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.

The following information applies to Tammy Taxpayer, employed by Time Travellers Ltd. (a Canadian Controlled Private Corporation).

Gross salary $110,000

Bonus. 50,000

Bonus based on Tammy's hard work negotiating contracts on behalf of the company (of which $15,000 was received on December 25, 2019 and the remainder will be received on January 15, 2020)                    

During 2019, Time Travellers withheld the following amounts from her gross salary:

Registered Pension Plan. $6,000

Charitable Donations - United Way. 2,000

Federal and Provincial Income Taxes. 28,750

• Tammy's employer made a $6,000 matching contribution to her registered pension plan.

• Travelling expenses for a 3 week trip for Tammy were reimbursed by Time Traveller. The cost of the entire trip was $3,000. Tammy spend one week attending a business conference and the other two weeks she stayed on as a vacation

• Time Traveller provided Tammy with a Mercedes Benz, which she used for 10 months of the year for work and pleasure. The following pertains to her automobile usage:

Monthly lease payment. $800

Kilometres driven for employment purposes 29,000 kms

Total kilometres driven during the year 32,000 kms

Operating costs paid by the employer $4,300

• Tammy was required to pay professional association dues of $1,500 for the year.

• Tammy incurred the following expenses while on company business trips throughout the year:

Hotel accommodations $3,500

Airline fare 6,400

Meals 2,300

All of these expenses were charged to Tammy's personal credit card and reimbursed by the employer.

• Tammy was awarded a Shirley Elford glass sculpture, valued at $900, for exceeding her sales targets by 20%.

• Tammy was given one of the limited underground parking spots in her building. The cost of the parking spot is $1,500 and is paid by Time Travellers Ltd.

• Tammy exercised her stock options in 2019. She acquired 2,000 shares on August 1, 2019 for $15 per share when the shares were trading for $22 per share. The options were granted in 2018, when the shares were trading for $14 per share. On November 1, 2019, Tammy sold her shares for $25 per share.

• Time Travellers paid $300 for Tammy's income tax preparation.

REQUIRED:    

Calculate the amount that would be included in calculation of Tammy Taxpayer's Net Employment Income for taxation purposes for the 2019 taxation year. PLEASE SHOW EACH ITEM THAT MAKES UP NET EMPLOYMENT INCOME.

The following information applies to Tammy Taxpayer, employed by Time Travellers Ltd. (a Canadian Controlled Private Corporation).

Bonus based on Tammy’s hard work negotiating contracts on behalf of the company (of which $15,000 was received on December 25, 2019 and the remainder will be received on January 15, 2020)                    

During 2019, Time Travellers withheld the following amounts from her gross salary:

• Tammy’s employer made a $6,000 matching contribution to her registered pension plan.

• Travelling expenses for a 3 week trip for Tammy were reimbursed by Time Traveller. The cost of the entire trip was $3,000. Tammy spend one week attending a business conference and the other two weeks she stayed on as a vacation

• Time Traveller provided Tammy with a Mercedes Benz, which she used for 10 months of the year for work and pleasure. The following pertains to her automobile usage:

• Tammy was required to pay professional association dues of $1,500 for the year.

• Tammy incurred the following expenses while on company business trips throughout the year:

All of these expenses were charged to Tammy’s personal credit card and reimbursed by the employer.

• Tammy was awarded a Shirley Elford glass sculpture, valued at $900, for exceeding her sales targets by 20%.

• Tammy was given one of the limited underground parking spots in her building. The cost of the parking spot is $1,500 and is paid by Time Travellers Ltd.

• Tammy exercised her stock options in 2019. She acquired 2,000 shares on August 1, 2019 for $15 per share when the shares were trading for $22 per share. The options were granted in 2018, when the shares were trading for $14 per share. On November 1, 2019, Tammy sold her shares for $25 per share.

• Time Travellers paid $300 for Tammy’s income tax preparation.

REQUIRED:

Calculate the amount that would be included in calculation of Tammy Taxpayer’s Net Employment Income for taxation purposes for the 2019 taxation year. PLEASE SHOW EACH ITEM THAT MAKES UP NET EMPLOYMENT INCOME.

The following information applies to Tammy Taxpayer, employed by Time Travellers Ltd. (a Canadian Controlled Private Corporation).

Bonus based on Tammy’s hard work negotiating contracts on behalf of the company (of which $15,000 was received on December 25, 2019 and the remainder will be received on January 15, 2020)                    

During 2019, Time Travellers withheld the following amounts from her gross salary:

• Tammy’s employer made a $6,000 matching contribution to her registered pension plan.

• Travelling expenses for a 3 week trip for Tammy were reimbursed by Time Traveller. The cost of the entire trip was $3,000. Tammy spend one week attending a business conference and the other two weeks she stayed on as a vacation

• Time Traveller provided Tammy with a Mercedes Benz, which she used for 10 months of the year for work and pleasure. The following pertains to her automobile usage:

• Tammy was required to pay professional association dues of $1,500 for the year.

• Tammy incurred the following expenses while on company business trips throughout the year:

All of these expenses were charged to Tammy’s personal credit card and reimbursed by the employer.

• Tammy was awarded a Shirley Elford glass sculpture, valued at $900, for exceeding her sales targets by 20%.

• Tammy was given one of the limited underground parking spots in her building. The cost of the parking spot is $1,500 and is paid by Time Travellers Ltd.

• Tammy exercised her stock options in 2019. She acquired 2,000 shares on August 1, 2019 for $15 per share when the shares were trading for $22 per share. The options were granted in 2018, when the shares were trading for $14 per share. On November 1, 2019, Tammy sold her shares for $25 per share.

• Time Travellers paid $300 for Tammy’s income tax preparation.

REQUIRED:

Calculate the amount that would be included in calculation of Tammy Taxpayer’s Net Employment Income for taxation purposes for the 2019 taxation year. PLEASE SHOW EACH ITEM THAT MAKES UP NET EMPLOYMENT INCOME.

The following information applies to Tammy Taxpayer, employed by Time Travellers Ltd. (a Canadian Controlled Private Corporation). Gross salary $110,000 Bonus 50,000 Bonus based on Tammy’s hard work negotiating contracts on behalf of the company (of which $15,000 was received on December 25, 2019 and the remainder will be received on January 15, 2020) During 2019, Time Travellers withheld the following amounts from her gross salary: Registered Pension Plan $6,000 Charitable Donations – United Way 2,000 Federal and Provincial Income Taxes 28,750 Tammy’s employer made a $6,000 matching contribution to her registered pension plan. Travelling expenses for a 3 week trip for Tammy were reimbursed by Time Traveller. The cost of the entire trip was $3,000. Tammy spend one week attending a business conference and the other two weeks she stayed on as a vacation Time Traveller provided Tammy with a Mercedes Benz, which she used for 10 months of the year for work and pleasure. The following pertains to her automobile usage: Monthly lease payment $800 Kilometres driven for employment purposes 29,000 kms Total kilometres driven during the year 32,000 kms Operating costs paid by the employer $4,300 Tammy was required to pay professional association dues of $1,500 for the year. Tammy incurred the following expenses while on company business trips throughout the year: Hotel accommodations $3,500 Airline fare 6,400 Meals 2,300 All of these expenses were charged to Tammy’s personal credit card and reimbursed by the employer. Tammy was awarded a Shirley Elford glass sculpture, valued at $900, for exceeding her sales targets by 20%. Tammy was given one of the limited underground parking spots in her building. The cost of the parking spot is $1,500 and is paid by Time Travellers Ltd. Tammy exercised her stock options in 2019. She acquired 2,000 shares on August 1, 2019 for $15 per share when the shares were trading for $22 per share. The options were granted in 2018, when the shares were trading for $14 per share. On November 1, 2019, Tammy sold her shares for $25 per share. Time Travellers paid $300 for Tammy’s income tax preparation. REQUIRED: Calculate the amount that would be included in calculation of Tammy Taxpayer’s Net Employment Income for taxation purposes for the 2019 taxation year. PLEASE SHOW EACH ITEM THAT MAKES UP NET EMPLOYMENT INCOME

in a slow year, Deutsche Burgers will produce 3.800 million hamburgers at a cost of $5.400 million. in a good year, it can produce 5.800 million hamburgers at a total cost of $6.500 million

what is the fixed costs of hamburger production, variable cost per hamburger, an average cost per burger when 3 million burgers are made, an average cost per burger when 4 million are produced?

When a company has a limited resource, it should apply additional capacity of that resource to providing more units of the product or service that has the:

Select one:

a. highest contribution margin per unit of that limited resource.

b. highest gross profit.

c. highest contribution margin.

d. highest selling price.

XYZ Company manufactures ultra sound equipment. Based on past experience, XYZ has found that total annual repair and maintenance cost can be represented by the following formula: total annual repair and maintenance cost = GH¢ 205,000 + GH¢ 7.50x, where x = machine hours. Last year, XYZ incurred 145,000 machine hours. What was the repair and maintenance cost per machine hour last year?

Select one:

a. GH¢ 9.95.

b. GH¢ 9.45.

c. GH¢ 8.91.

d. GH¢ 8.00.

Fred’s Company was making a product for GH¢ 60 and selling it for GH¢ 80. A competitor began selling the same product for GH¢ 68. If Fred is to meet the competition's price, and maintain the same amount of profit per unit, what is target cost?

Select one:

a. GH¢ 40.

b. GH¢ 48.

c. GH¢ 60.

d. GH¢ 63.

Product X has a contribution margin of GH¢ 6.00 per unit, and Product Y has a contribution margin of GH¢ 7.50 per unit. Total fixed costs are GH¢ 300,000. Sales mix and total volume varies from one period to another. Which of the following is true?

Select one:

a. The ratio of contribution margin to total sales always will be larger for X than for Y.

b. At a sales volume in excess of 25,000 units of X and 25,000 units of Y, operations will be profitable.

c. Variable costs are GH¢ 1.50 more for Y than for X.

d. The ratio of net profit to total sales for Y will be larger than the ratio of net profit to total sales for X.

The distinction between direct and indirect costs is based on whether in relation to the cost object, the cost is

Select one:

a. Flexible or committed.

b. Avoidable or unavoidable.

c. Identifiable or unidentifiable.

d. Variable or fixed.