Recently, it has conducted a further analysis of the trousers line of product, using ABC. In the study, eight activities were identified, and direct labor was assigned to the activities. The total conversion cost (labor and overhead) for the eight activities, after allocation to the trousers line, is as follows:

Determine the profit margin for trousers using ABC. Please show all calculations step by step

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $76,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

Raw materials purchased for cash, $ 167,000.

Raw materials used in production, $144,000 (materials costing $121,000 were charged directly to jobs; the remaining materials were indirect).

Cash paid to employees as follows:

Cash paid for rent during the year was $18,600 ($13,400 of this amount related to factory operations, and the remainder related to selling and administrative activities).

Cash paid for utility costs in the factory, $19,000.

Cash paid for advertising, $15,000.

Depreciation recorded on equipment, $22,000. ($15,000 of this amount related to equipment used in factory operations; the remaining $7,000 related to equipment used in selling and administrative activities.)

Manufacturing overhead cost was applied to jobs, $ ? .

Goods that had cost $227,000 to manufacture according to their job cost sheets were completed.

Sales for the year (all paid in cash) totaled $501,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.)

Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts). (Do not round intermediate calculations.)

Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31, 2018. Transit’s fiscal year ends on December 31. Its annual financial statements are issued in April.

Transit has outstanding 5.5% bonds with a face amount of $73 million. The bonds mature on July 31, 2027. Bondholders have the option of calling (demanding payment on) the bonds on July 31, 2019, at a redemption price of $73 million. Market conditions are such that the call option is not expected to be exercised.

A $22 million 7% bank loan is payable on October 31, 2024. The bank has the right to demand payment after any fiscal year-end in which Transit’s ratio of current assets to current liabilities falls below a contractual minimum of 1.9 to 1 and remains so for 6 months. That ratio was 1.75 on December 31, 2018, due primarily to an intentional temporary decline in parts inventories. Normal inventory levels will be reestablished during the sixth week of 2019.

Transit management intended to refinance $59 million of 5% notes that mature in May of 2019. In late February 2019, prior to the issuance of the 2018 financial statements, Transit negotiated a line of credit with a commercial bank for up to $53 million any time during 2019. Any borrowings will mature two years from the date of borrowing.

Transit is involved in a lawsuit resulting from a dispute with a food caterer. On February 13, 2019, judgment was rendered against Transit in the amount of $45 million plus interest, a total of $46 million. Transit plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company.

Required:
1. How should the 5.5% bonds be classified by Transit among liabilities in its balance sheet?
2. How should the 7% bank loan be classified by Transit among liabilities in its balance sheet?
3. How should the 5% notes be classified by Transit among liabilities in its balance sheet?
4. How should the lawsuit be reported by Transit?
5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airlines at December 31, 2018. Transit's accounts payable and accruals were $51 million.

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $84,000 of manufacturing overhead for an estimated activity level of $40,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

1. Raw materials purchased on account, $ 170,000.
2. Raw materials used in production, $143,000 (materials costing $123,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

1. Rent for the year was $18,800 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
2. Utility costs incurred in the factory, $20,000.
3. Advertising costs incurred, $14,000.
4. Depreciation recorded on equipment, $20,000. ($17,000 of this amount related to equipment used in factory operations; the remaining $3,000 related to equipment used in selling and administrative activities.)
5. Record the manufacturing overhead cost applied to jobs.
6. Goods that had cost $228,000 to manufacture according to their job cost sheets were completed.
7. Sales for the year (all paid in cash) totaled $517,000. The total cost to manufacture these goods according to their job cost sheets was $219,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $95,000 of manufacturing overhead for an estimated activity level of $50,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

1. Raw materials purchased on account, $ 169,000.
2. Raw materials used in production, $144,000 (materials costing $128,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

1. Rent for the year was $19,000 ($13,600 of this amount related to factory operations, and the remainder related to selling and administrative activities).
2. Utility costs incurred in the factory, $16,000.
3. Advertising costs incurred, $13,000.
4. Depreciation recorded on equipment, $21,000. ($16,000 of this amount related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities.)
5. Record the manufacturing overhead cost applied to jobs.
6. Goods that had cost $226,000 to manufacture according to their job cost sheets were completed.
7. Sales for the year (all paid in cash) totaled $499,000. The total cost to manufacture these goods according to their job cost sheets was $220,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.

Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts). (Do not round intermediate calculations.)

• Prepare an income statement for the year. (All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.)

  	Gold Nest Company Income Statement For the Year Ended 0 Selling and administrative expenses: 0 $0

• Req 3B

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.

The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $67,500 of manufacturing overhead for an estimated activity level of $45,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

During the year, the following transactions were completed:

1. Raw materials purchased on account, $165,000.
2. Raw materials used in production, $143,000 (materials costing $127,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

1. Rent for the year was $18,800 ($13,000 of this amount related to factory operations, and the remainder related to selling and administrative activities).
2. Utility costs incurred in the factory, $11,000.
3. Advertising costs incurred, $13,000.
4. Depreciation recorded on equipment, $22,000. ($17,000 of this amount related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities.)
5. Manufacturing overhead cost was applied to jobs, $ ? .
6. Goods that had cost $225,000 to manufacture according to their job cost sheets were completed.
7. Sales for the year (all paid in cash) totaled $498,000. The total cost to manufacture these goods according to their job cost sheets was $219,000.

Required:

1. Prepare journal entries to record the transactions for the year.

2. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

3A. Is Manufacturing Overhead underapplied or overapplied for the year?

3B. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

4. Prepare an income statement for the year. All of the information needed for the income statement is available in the journal entries and T-accounts you have prepared.

Gold Nest Company of Guandong, China, is a family-owned enterprise that makes birdcages for the South China market. The company sells its birdcages through an extensive network of street vendors who receive commissions on their sales.The company uses a job-order costing system in which overhead is applied to jobs on the basis of direct labor cost. Its predetermined overhead rate is based on a cost formula that estimated $95,000 of manufacturing overhead for an estimated activity level of $50,000 direct labor dollars. At the beginning of the year, the inventory balances were as follows:

1. Raw materials purchased on account, $168,000.
2. Raw materials used in production, $143,000 (materials costing $128,000 were charged directly to jobs; the remaining materials were indirect).
3. Costs for employee services were incurred as follows:

1. Rent for the year was $18,300 ($13,100 of this amount related to factory operations, and the remainder related to selling and administrative activities).
2. Utility costs incurred in the factory, $17,000.
3. Advertising costs incurred, $14,000.
4. Depreciation recorded on equipment, $22,000. ($17,000 of this amount related to equipment used in factory operations; the remaining $5,000 related to equipment used in selling and administrative activities.)
5. Manufacturing overhead cost was applied to jobs, $ ? .
6. Goods that had cost $229,000 to manufacture according to their job cost sheets were completed.
7. Sales for the year (all paid in cash) totaled $519,000. The total cost to manufacture these goods according to their job cost sheets was $218,000.

QUESTIONS:

1. Prepare T-accounts for each inventory account, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the beginning balances in your inventory accounts).

2. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold.

3. Is Manufacturing Overhead underapplied or overapplied for the year?

Transit Airlines provides regional jet service in the Mid-South. The following is information on liabilities of Transit at December 31, 2018. Transit’s fiscal year ends on December 31. Its annual financial statements are issued in April. Transit has outstanding 6.4% bonds with a face amount of $85 million. The bonds mature on July 31, 2027. Bondholders have the option of calling (demanding payment on) the bonds on July 31, 2019, at a redemption price of $85 million. Market conditions are such that the call option is not expected to be exercised. A $34 million 7% bank loan is payable on October 31, 2024. The bank has the right to demand payment after any fiscal year-end in which Transit’s ratio of current assets to current liabilities falls below a contractual minimum of 1.9 to 1 and remains so for 6 months. That ratio was 1.75 on December 31, 2018, due primarily to an intentional temporary decline in parts inventories. Normal inventory levels will be reestablished during the sixth week of 2019. Transit management intended to refinance $41 million of 5% notes that mature in May of 2019. In late February 2019, prior to the issuance of the 2018 financial statements, Transit negotiated a line of credit with a commercial bank for up to $36 million any time during 2019. Any borrowings will mature two years from the date of borrowing. Transit is involved in a lawsuit resulting from a dispute with a food caterer. On February 13, 2019, judgment was rendered against Transit in the amount of $52 million plus interest, a total of $53 million. Transit plans to appeal the judgment and is unable to predict its outcome though it is not expected to have a material adverse effect on the company. Required: 1. How should the 6.4% bonds be classified by Transit among liabilities in its balance sheet? 2. How should the 7% bank loan be classified by Transit among liabilities in its balance sheet? 3. How should the 5% notes be classified by Transit among liabilities in its balance sheet? 4. How should the lawsuit be reported by Transit? 5. Calculate the total current liabilities, total long-term liabilities, and total liabilities of a classified balance sheet for Transit Airlines at December 31, 2018. Transit's accounts payable and accruals were $41 million.

Study the following table containing information on the South African labour force in the first quarter of 2019 (January to March) and answer the following question:

Table: Labour force by all sexes and all population group

Source: Stats SA Quarterly labour force survey, Quarter 1, 2019

What is the current unemployment rate in SA?     

If real gross domestic product is R500 billion and planned aggregate expenditure is R458 billion, then inventories will:

A.

pile up and output will decrease.

B.

pile up and output will increase.

C.

be depleted and output will decrease.

D.

be depleted and output will increase.

E.

stay constant, as will output.

The government of an open economy determines that the current equilibrium level of income in the economy is lower than the full-employment level of income and wishes to close this gap. The Minister of Economic Affairs hears that you have just studied the Keynesian model of the macro-economy and approaches you for advice. Which one of the following suggestions would be inappropriate in this context?

Which one of the following statements about a simple Keynesian model without a government or foreign sector is incorrect?

In the Keynesian model, unemployment can be reduced by:

Study the table below and answer the following question.

What was the economic growth rate in 2010?