Bumblebee Company estimates that 318,000 direct labor hours will be worked during the coming year, 2020, in the Packaging Department. On this basis, the following budgeted manufacturing overhead cost data are computed for the year.

It is estimated that direct labor hours worked each month will range from 22,500 to 33,900 hours.

During October, 22,500 direct labor hours were worked and the following overhead costs were incurred.

Fixed overhead costs: Supervision $7,830, Depreciation $5,760, Insurance $2,510, Rent $1,730, and Property taxes $1,120.

Variable overhead costs: Indirect labor $11,890, Indirect materials, $5,920, Repairs $2,170, Utilities $3,775, and Lubricants $1,415.

(a) Prepare a monthly manufacturing overhead flexible budget for each increment of 3,800 direct labor hours over the relevant range for the year ending December 31, 2020. (List variable costs before fixed costs.)

Question 1 (1 point)

Equity-method investments (20%-50% ownership) are generally shown at their fair market value on the Balance Sheet.

A: True

B: False

Question 2 (1 point)

For Equity-Method investments (20-50% ownership), dividends received from the investee company will result in the following journal entry:

A: Dr. Cash and Cr. Investment

B: Dr. Investment and Cr. Cash

C: Dr. Investment and Cr. Dividend Revenue

D: Dr. Cash and Cr. Dividend Revenue

Question 3 (1 point)

On 1/1/20, Hershey Corporation purchases 20,000 of the 60,000 outstanding shares of CC Confectioneer for $40 per share. During 2020, CC Confectioneer reports net income of $600,000 and pays total dividends to common shareholders of $300,000. Hershey's 2020 pre-tax Net Income will be ________ because of this investment.

A: $600,000 higher

B: $200,000 higher

C: $100,000 higher

D: $300,000 higher

Question 4 (1 point)

There is usually more uncertainty about the accuracy of Level 3 investment valuations than Level 1 investment valuations.

A: True

B: False

The following data were taken from the records of Vaughn Company for the fiscal year ended June 30, 2020.

Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)

Prepare an income statement through gross profit.

Prepare the current assets section of the balance sheet at June 30, 2020. (List Current Assets in order of liquidity.)

Consider the following information which relates to dividends per share (DPS) for a given company:

Today, we are in 2020. Management is in the process of deciding whether to expand or not to expand the firm’s branches. Below, is a set of inputs associated with each scenario:

Scenario #1 – Do Not Expand: Dividend by the end of 2020 is expected to grow at the historical annual growth rate for the period 2015−2019, which is currently undetermined. This period adds up to four years based upon starting at time zero. Once determined, this rate is expected to continue in the future. Under this scenario, the required return on common stock is 14.36%.

Scenario #2 – Expand: Dividend in 2021 is expected to be $2.13 per share, which will grow at an annual rate of 14.12% for two years (2022 and 2023), and then, the dividend would grow at the same unknown rate in the first scenario from 2024 thereafter. Under this scenario, the required return on common stock is 17.58%.

Required: What is the dollar difference in the present value per share of common stock between both scenarios?

Consider the following information which relates to dividends per share (DPS) for a given company:

Today, we are in 2020. Management is in the process of deciding whether to expand or not to expand the firm’s branches. Below, is a set of inputs associated with each scenario:

Scenario #1 – Do Not Expand: Dividend by the end of 2020 is expected to grow at the historical annual growth rate for the period 2015−2019, which is currently undetermined. This period adds up to four years based upon starting at time zero. Once determined, this rate is expected to continue in the future. Under this scenario, the required return on common stock is 14.49%.

Scenario #2 – Expand: Dividend in 2021 is expected to be $2.17 per share, which will grow at an annual rate of 14.42% for two years (2022 and 2023), and then, the divided would grow at the same unknown rate in the first scenario from 2024 thereafter. Under this scenario, the required return on common stock is 16.65%.

Required: What is the dollar difference in the present value per share of common stock between both scenarios?

Consider the following information which relates to dividends per share (DPS) for a given company:

Today, we are in 2020. Management is in the process of deciding whether to expand or not to expand the firm’s branches. Below, is a set of inputs associated with each scenario:

Scenario #1 – Do Not Expand: Dividend by the end of 2020 is expected to grow at the historical annual growth rate for the period 2015−2019, which is currently undetermined. This period adds up to four years based upon starting at time zero. Once determined, this rate is expected to continue in the future. Under this scenario, the required return on common stock is 14.36%.

Scenario #2 – Expand: Dividend in 2021 is expected to be $2.13 per share, which will grow at an annual rate of 14.12% for two years (2022 and 2023), and then, the divided would grow at the same unknown rate in the first scenario from 2024 thereafter. Under this scenario, the required return on common stock is 17.58%.

Required: What is the dollar difference in the present value per share of common stock between both scenarios?

Consider the following information which relates to dividends per share (DPS) for a given company:

Today, we are in 2020. Management is in the process of deciding whether to expand or not to expand the firm’s branches. Below, is a set of inputs associated with each scenario:

Scenario #1 – Do Not Expand: Dividend by the end of 2020 is expected to grow at the historical annual growth rate for the period 2015−2019, which is currently undetermined. This period adds up to four years based upon starting at time zero. Once determined, this rate is expected to continue in the future. Under this scenario, the required return on common stock is 14.36%.

Scenario #2 – Expand: Dividend in 2021 is expected to be $2.13 per share, which will grow at an annual rate of 14.12% for two years (2022 and 2023), and then, the divided would grow at the same unknown rate in the first scenario from 2024 thereafter. Under this scenario, the required return on common stock is 17.58%.

Required: What is the dollar difference in the present value per share of common stock between both scenarios?

The following data were taken from the records of Clarkson Company for the fiscal year ended June 30, 2020.

Prepare a cost of goods manufactured schedule. (Assume all raw materials used were direct materials.)

Prepare an income statement through gross profit.

Prepare the current assets section of the balance sheet at June 30, 2020. (List Current Assets in order of liquidity.)

1) Calculate daily returns over the sample period.

2) Compute "mean" and "standard deviation" for the daily returns.

3)Calculate the 1-day VaR (99%) on a percentage basis using the calculated mean and standard deviation.

Answer in EXCEL . Use data provided below

Current Designs faces a number of important decisions that require incremental analysis.

Recently, Mike Cichanowski, owner and CEO of Current Designs, received a phone call from the president of a brewing company. He was calling to inquire about the possibility of Current Designs producing “floating coolers” for a promotion his company was planning. These coolers resemble a kayak but are about one-third the size. They are used to float food and beverages while paddling down the river on a weekend leisure trip. The company would be interested in purchasing 100 coolers for the upcoming summer. It is willing to pay $250 per cooler. The brewing company would pick up the coolers upon completion of the order.

Mike met with Diane Buswell, controller, to identify how much it would cost Current Designs to produce the coolers. After careful analysis, the following costs were identified.

Direct materials
$77/unitVariable overhead
$23/unit

Direct labor
$61/unitFixed overhead
$1,000

Current Designs would be able to modify an existing mold to produce the coolers. The cost of these modifications would be approximately $2,000.

(a)

Prepare an incremental analysis to determine whether Current Designs should accept this special order to produce the coolers. (Enter decrease in net income then enter with a negative sign preceding the number or parenthesis, e.g. -15,000 or (15,000).)

Reject OrderAccept OrderNet Income
Increase (Decrease)

Revenues$ $ $

Costs

Net Income$ $ $

Current Designs should                                                           accept or reject the order based on the incremental analysis.