Hoffman Company manufactures car seats in its Boise plant. Each car seat passes through the assembly department and the testing department. This problem focuses on the assembly department.

The​ process-costing system at Hoffman Company has a single​ direct-cost category​ (direct materials) and a single​ indirect-cost category​ (conversion costs). Direct materials are added at the beginning of the process. Conversion costs are added evenly during the process. When the assembly department finishes work on each car​ seat, it is immediately transferred to testing. Hoffman Company uses the FIFO method of process costing

Data for the assembly department for October 2017 are as follows:

a Degree of​ completion: direct​ materials, ?%; conversion​ costs,45​%.
b Degree of​ completion: direct​ materials, ?%; conversion​ costs, 65​%.

Requirement 1. For each cost​ category, compute equivalent units in the assembly department. Show physical units in the first column of your schedule. ​(For amounts with a 0​ balance, make sure to enter​ "0" in the appropriate​ cell.)

Requirement 2. For each cost​ category, summarize total assembly department costs for October 2017 and calculate the cost per equivalent unit.
Begin by summarizing the total costs to account for.

Next calculate cost per equivalent unit for direct materials and conversion costs.

Requirement 3. Assign total costs to units completed and transferred out and to units in ending work in process.

Begin by calculating the total from beginning​ inventory, then calculate the total costs accounted for. ​(Abbreviation used; WIP​ = work in process. For amounts with a​ $0 balance, make sure to enter​ "0" in the appropriate​ cell.)

Requirement 4. Explain any difference between the cost per equivalent unit in the assembly department under the​ weighted-average method and the FIFO method.

The cost per equivalent unit ▼(differs/ is the same) between the two methods because each method uses ▼

(different/ the same) costs as the numerator of the calculation. The FIFO method uses ▼(costs from the beginning work-in-process as well as costs added during the current period/ only the beginning work-in-process costs / only the costs added during the current period) and the​ weighted-average method uses ▼ (costs from the beginning work-in-process as well as costs added during the current period. / only the beginning work-in-process costs. / only the costs added during the current period.) Both methods use ▼(different / the same) equivalent units in the denominator.

Requirement 5. Should Hoffman​'s managers choose the​ weighted-average method or the FIFO​ method? Explain briefly.
Begin by completing the table below that summarizes the costs assigned to units completed and those still in process under the​ weighted-average and FIFO​ process-costing methods.

Hoffman​'s managers should consider the ▼ (FIFO / weighted-average) method because even though it shows ▼ (lower / higher) operating income and ▼ (lower / higher) cost of goods​ sold, it ▼ (lower / higher) taxes. Managers may have an​ incentive, however, to use the ▼( FIFO / weighted-average) method and show higher income if the​ managers' compensation increases with ▼ ( lower / higher) operating income or if there are debt covenants that would be violated by showing ▼ ( lower / higher) income. Another advantage of the FIFO method is that it provides better information for managing the business because it keeps ▼ ( separate the costs of the current period from costs incurred in previous periods. / smootsh the cost per equivalent unit.)

5. In Year 6, a donor gives $112.000 to a private not-for-profit entity to enable it to buy a new bus for transportation purposes. Near the end of Year 7. this money is used for the stipulated purpose. The donor made no provisions about the accounting for this acquisition. Which of the following is true about the statement of activities for Year 7?

a. Net assets without donor restrictions increased by $112,000.

b. Net assets with donor restrictions did not change.

c. Net assets without donor restrictions did not change.

d. Net assets with donor restrictions goes up by $112,000 and also down by $112.000

6. In Year 6, a donor gives $112,000 to a private not-for-profit entity to enable it to pay the salary of a new doctor to be hired by the organization. Near the end of Year 7, this money is used for the stipulated purpose. Which of the following is true about the statement of activities for Year 7？

a. Net assets with donor restrictions increased by $112,000.

b. Net assets with donor restrictions did not change.

c. Net assets without donor restrictions goes up by $112.000 and also down by $112.000

d. Net assets with donor restrictions goes up by $112.000 and also down by $112.000.

7. The governing board of a private not-for-profit entity votes to set $400,000 in cash aside in an investment fund so that this money and future interest will be available in five years, when a new building is scheduled for construction. Which of the following is not true?

a. The investments are reported on the statement of financial position as net assets without donor restrictions,

b. The acquisition of the investments is not reported on the statement of activities.  

c. Board-designated funds will appear in the net asset section of the week of not as net assets with donor restrictions

d. Income earned by these investments appears on the statement of activities under the out donor restrictions.

8. A private not-for-profit entity receives three large cash donations .

One gift of $70,000 is restricted by the down so that it cannot be spent for four years .

One gift of $90,000 is restricted to pay the salaries of the entity's workers .

One gift of $120.000 must be held forever with the income to be used to provide food for tid families. In the current yeas, income of $10,000 was carved but not spen.

What is the increase in the current year in wet assets with donor restrictions

a. $190,000 b. $210,000 C. $280,000 d. $290,000

9. A private not-for-profit university changes student tuition of $1 million for the current year. Finan cial aid grants total $220,000. The school also receives a $100,000 grant restricted for faculty sala ries. Of that amount, $30,000 is spent appropriately this year. In preparing a statement of activities, which of the following is not true?

a. Net assets without donor restrictions should show an increase of $30,000 for net assets reclassified

b. Net assets without donor restrictions should report revenue of $1 million

c. Net assets without donor restrictions should report expenses of $30.000

d. Net assets without donor restrictions should report a direct reduction of $220.000 in reporting the tuition revenue.

10. Which of the following statements about the reporting of functional expenses is not true!

a. A statement of functional expenses is now required of all private not-for-profit entities. b. Functional expenses are divided between program services and supporting services. c. Functional expenses can be reported as a footnote rather than as a separate statement of func tional expenses.

d. Functional expenses can be reported within the statement of activities rather than as a separate statement of functional expenses.

11. A private not-for-profit entity has the following expenses for the current year.

Research to cure disease $60,000

Fundraising costs 70,000

Work to help individuals with disabilities .... 40,000

Administrative salaries... 90,000

How should the not-for-profit entity report these costs?

a. Program service expenses of $100,000 and supporting service expenses of $160,000

b. Program service expenses of $160,000 and supporting service expenses of $100,000

c. Program service expenses of $170,000 and supporting service expenses of $90,000

d. Program service expenses of $190,000 and supporting service expenses of $70,000

12. A private not-for-profit entity spends $100,000 to send a mailing that solicits donations and pro- vides educational and other information about the charity. Which of the following is true?

a. No part of the $100,000 can be reported as a program service expense.

b. Some part of the $100,000 must be reported as a program service expense.

c. No authoritative guidance exists, so the entity can allocate the cost as it believes best.

d. Under certain circumstances, the entity should allocate a portion of the $100,000 to program service expenses.

13. A private not-for-profit entity sends a mailing to all of its current and former members regardless of whether they have ever donated money or not. The mailing has a total cost of $22,000. It asks for monetary contributions to help achieve the charity's stated mission. In addition, 80 percent of the mailed material is educational in nature, providing information about the entity's goals. Which of the following is true?

a.Some part of the $22000 should be reported as a program service cost because of the educational materials included.

b.No part of the $22000 should be reported as a program service cost because there is no specific call to action.

C. No part of the $22000 should be reported as a program service cost because the mailing was sent to both current and former members regardless of their donation history.

d.Some part of the $22000 should be reported as a program service cost because more than 50 percent of the material was educational in nature.

Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:

On January 14, Beech Soda, Inc. sold 29 units of this product. The other 34 units remained in inventory at January 31.

Assuming that Beech Soda uses the FIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:

Question 8 (2 points)

Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:

Assuming that Beech Soda uses the LIFO cost flow assumption, the cost of goods sold to be recorded at January 14 is:

On January 14, Beech Soda, Inc. sold 34 units of this product. The other 41 units remained in inventory at January 31.

Question 9 (2 points)

Beech Soda, Inc. uses a perpetual inventory system. The company's beginning inventory of a particular product and its purchases during the month of January were as follows:

On January 14, Beech Soda, Inc. sold 22 units of this product. The other 24 units remained in inventory at January 31.

Assuming that Beech Soda uses the FIFO cost flow assumption, the 24 units of this product in inventory at January 31 have a total cost of:

Question 10 (2 points)

At the end of last year, Games-2-Use had merchandise costing $290,000 in inventory. During January of the current year, the company purchased merchandise costing $236,000, and sold merchandise that it had purchased at a total cost of $188,000. Games-2-Use uses a perpetual inventory system.

The total amount debited to the Inventory account during January was:

Question 11 (2 points)

At the end of last year, Games-2-Use had merchandise costing $140,000 in inventory. During January of the current year, the company purchased merchandise costing $102,000, and sold merchandise that it had purchased at a total cost of $84,000. Games-2-Use uses a perpetual inventory system.

The balance in the Inventory account at January 31 was:

Question 12 (2 points)

At the end of last year, Games-2-Use had merchandise costing $170,000 in inventory. During January of the current year, the company purchased merchandise costing $111,000, and sold merchandise that it had purchased at a total cost of $96,000. Games-2-Use uses a perpetual inventory system.

The amount of goods transferred from the Inventory account to the Cost of Goods Sold account during January was:

Question 13 (2 points)

Castle TV, Inc. purchased 1,400 monitors on January 5 at a per-unit cost of $126, and another 1,400 units on January 31 at a per-unit cost of $246. In the period from February 1 through year-end, the company sold 2,500 units of this product. At year-end, 300 units remained in inventory.

Assume that Castle TV, Inc. uses the LIFO flow assumption. The cost of the 300 units in the year-end inventory is:

Question 14 (2 points)

Venus Wholesale Co. started carrying a new product in December. Purchases and sales of this product during the month were:

Assuming the LIFO flow assumption is in use, the perpetual inventory records will indicate an ending inventory of this product of:

Question 15 (2 points)

On Saturday, June 30, BD Pool Supplies sold merchandise to E. Luang on account. The sales price was $5,700, and the cost of goods sold was $4,830. The sales revenue was recorded immediately, but the entry recording the cost of goods sold was dated Monday, July 2. As a result, net income for June was:

Question 16 (2 points)

Venus Wholesale Co. started carrying a new product in December. Purchases and sales of this product during the month were:

Assuming the LIFO flow assumption is in use, the perpetual inventory records will indicate an ending inventory of this product of:

Question 17 (2 points)

The specific identification method is acceptable only when the actual cost of individual units of merchandise can be determined from the accounting records.

True

False

Question 18 (2 points)

An advantage of the average-cost method of accounting for inventory is that the inventory is valued in the balance sheet at current replacement costs.

True

False

Question 19 (2 points)

An advantage to the LIFO method of accounting for inventory is that it values the cost of goods sold at current replacement costs.

True

False

Equivalent Units and Related Costs; Cost of Production Report; Entries

Dover Chemical Company manufactures specialty chemicals by a series of three processes, all materials being introduced in the Distilling Department. From the Distilling Department, the materials pass through the Reaction and Filling departments, emerging as finished chemicals.

The balance in the account Work in Process—Filling was as follows on January 1:

The following costs were charged to Work in Process—Filling during January:

During January, 70,400 units of specialty chemicals were completed. Work in Process—Filling Department on January 31 was 6,100 units, 30% completed.

Required:

1. Prepare a cost of production report for the Filling Department for January. If an amount is zero, enter "0". If required, round your cost per equivalent unit answers to two decimal places.

Feedback

1. Calculate equivalent units for materials and conversion costs. Calculate the cost per equivalent unit for materials and conversion costs. Calculate the costs assigned to the beginning inventory, the units started and completed, and the ending inventory.

2. Journalize the entries for (1) costs transferred from Reaction to Filling and (2) the cost transferred from Filling to Finished Goods.

3. Determine the increase or decrease in the cost per equivalent unit from December to January for direct materials and conversion costs. If required, round your answers to two decimal places.

4. Discuss the uses of the cost of production report and the results of part (3).

The cost of production report may be used as the basis for allocating product costs between Work in Process and Finished Goods . The report can also be used to control costs by holding each department head responsible for the units entering production and the costs incurred in the department. Any differences in unit product costs from one month to another, such as those in part (3), can be studied carefully and any significant differences investigated.

Identify Cost Graphs

The following cost graphs illustrate various types of cost behavior:

For each of the following costs, identify the cost graph that best illustrates its cost behavior as the number of units produced increases:

a. Total direct materials cost

b. Electricity costs of $1,000 per month plus $0.10 per kilowatt-hour

c. Per-unit cost of straight-line depreciation on factory equipment

d. Salary of quality control supervisor, $20,000 per month

e. Per-unit direct labor cost

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:

Required:
Journalize the transactions in a general journal.


Analyze:
What was the amount of trade discounts received on the June 15 purchase from Park Research?

Create a supply and demand graph illustrating the scenario, the shock, and the predicted effects on wages and employment:

Scenario #1

Airbnb has housed over 150 million guests in over 65,000 cities since 2008. Do a bit of research on what Airbnb is and how cities and the hotel industry has been responding to it. Using standard supply and demand graphs from the course, model the labor market for hotel workers, pre-Airbnb, and show how Airbnb has likely affected the market.

Scenario #2

We all love to go to little, local ice cream shops. Many of these places hire teenagers over the summer to serve these delicious treats for us. Suppose that a new minimum wage bill comes online this summer, raising the minimum to $10/hour. Create two graphs: 1) model the market for these ice cream shop workers and how shop owners will likely respond to the minimum wage increase immediately after it happens; 2) model what would happen if a company starts using very cheap robot ice cream servers.

Scenario #3

Research and find specific examples of immigrants working as a) substitutes for U.S. workers and b) compliments to U.S. workers. Make sure you put the correct graph with each story.

Scenario #4

Many parts of the U.S. have a shortage of IT workers... not enough people are trained in these fields. Model the market for IT workers. What would happen if a new training program was targeted toward people in Appalachia who have a hard time finding work... the program trains this group to be IT technicians.

Scenario #5

You are looking at the labor market for young, childless males seeking work with low-paying employers (i.e. Wal-Mart). With a supply and demand graph, show the effects of expanding the EITC to these workers. Illustrate an initial equilibrium (before EITC), the shift due to the new EITC expansion, and point out the wage they get paid from the employer and the additional “pay” they get due to the EITC.

Problem

NewTech Medical Devices is a medical devices wholesaler that commenced business on June 1, 2019. NewTech Medical Devices purchases merchandise for cash and on open account. In June 2019, NewTech Medical Devices engaged in the following purchasing and cash payment activities:
DATE TRANSACTIONS
2019
June 1 Issued Check 101 to purchase merchandise, $4,000.
3 Purchased merchandise for $1,450from BioCenter Inc., Invoice 606; terms 2/10, n/30.

5 Purchased merchandise for $5,350, plus a freight charge of $100, from New Concepts Corporation, Invoice 1011, terms 2/10, n/30.
9 Paid amount due to BioCenter Inc. for purchase of June 3, less discount, Check 102.
10 Received Credit Memorandum 227 from New Concepts Corporation for damaged merchandise totaling $250 that was returned; the goods were purchased on Invoice 1011, dated June 5.
11 Purchased merchandise for $1,630 from BioCenter Inc., Invoice 612; terms 2/10, n/30.
14 Paid amount due to New Concepts Corporation for Invoice 1011 of June 5, less the return of June 10 and less the cash discount, Check 103.
15 Purchased merchandise with a list price of $8,700 and trade discounts of 20 percent and 15 percent from Park Research, Invoice 1029, terms n/30.
20 Issued Check 104 to purchase merchandise, $2,500.
25 Returned merchandise purchased on June 20 as defective, receiving a cash refund of $230.
30 Purchased merchandise for $2700, plus a freight charge of $80, from New Concepts Corporation, Invoice 1080; terms 2/10, n/30.
INSTRUCTIONS
Journalize the transactions in a general journal. Use 1 as the journal page number.
Analyze:
What was the amount of trade discounts received on the June 15 purchase from Park Research?

Managerial Economics Question.

(Please solve both A and B, and mention which one is A and B, thank you for working so much hard for me, I appreciate it.)

1. Royersford Kinitting Mills Ltd. sells a line of women's knit underwear. The firm now sells about 20,000 pairs a year at an average price of $10 each. Fixed costs amount to $60,000, and total variable costs equal $120,000. The production department has estimated that a 10 percent increase in output would not affect fixed costs but would reduce average variable cost by 40 cents.

The marketing department advocates a price reduction of 5 percent to increase sales, total revenues, and profits. The arc elasticity of demand with respect to prices is estimated at -2.

A) Evaluate the impact of the proposal to cut prices on (i) total revenue, (ii) total cost, and (iii) total profits.

B) If average variable costs are assumed to remain constant over a 10 percent increase in output, evaluate the effects of the proposed price cut on total profits.

ontribution Margin, Break-Even Sales, Cost-Volume-Profit Chart, Margin of Safety, and Operating Leverage
Belmain Co. expects to maintain the same inventories at the end of 20Y7 as at the beginning of the year. The total of all production costs for the year is therefore assumed to be equal to the cost of goods sold. With this in mind, the various department heads were asked to submit estimates of the costs for their departments during the year. A summary report of these estimates is as follows:
 Estimated
Fixed Cost Estimated Variable Cost
(per unit sold)Production costs:      Direct materials  $17   Direct labor  12   Factory overhead$626,700  9  Selling expenses:      Sales salaries and commissions130,200  4   Advertising44,100      Travel9,800      Miscellaneous selling expense10,800  3  Administrative expenses:      Office and officers' salaries127,300      Supplies15,700  1   Miscellaneous administrative expense14,600  2   Total$979,200  $48  
It is expected that 10,200 units will be sold at a price of $192 a unit. Maximum sales within the relevant range are 13,000 units.
Required:

1.   Prepare an estimated income statement for 20Y7.

Belmain Co.Estimated Income StatementFor the Year Ended December 31, 20Y7 $Cost of goods sold: $  Cost of goods soldGross profit$Expenses:Selling expenses: $   Total selling expenses$Administrative expenses: $  Total administrative expensesTotal expensesIncome from operations$

2.  What is the expected contribution margin ratio? Round to the nearest whole percent.
 %
3.  Determine the break-even sales in units and dollars.
Units unitsDollars units
4.  Construct a cost-volume-profit chart on your own paper. What is the break-even sales?
$ 
5.  What is the expected margin of safety in dollars and as a percentage of sales?
Dollars:$ Percentage: (Round to the nearest whole percent.)%
6.  Determine the operating leverage. Round to one decimal place.