The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows:

The beginning inventory of merchandise at Dunne Co. and data on purchases and sales for a three-month period ending June 30, 2016, are as follows:

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FIFO

1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in

Exhibit 4

, using the first-in, first-out method.

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Chart of Accounts

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Journal

2. Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account, and date your journal entry June 30. Refer to the Chart of Accounts for exact wording of account titles.

PAGE 1

JOURNAL

Solution

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Final Questions

3. Determine the gross profit from sales for the period.

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Explanation

4. Determine the ending inventory cost on June 30, 2016.

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5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method

The method of inventory costing based on the assumption that the cost of merchandise sold is the cost of the most recent purchases.

to be higher or lower?

Higher

Lower

World Company expects to operate at 80% of its productive capacity of 50,000 units per month. At this planned level, the company expects to use 24,400 standard hours of direct labor. Overhead is allocated to products using a predetermined standard rate of 0.610 direct labor hours per unit. At the 80% capacity level, the total budgeted cost includes $53,680 fixed overhead cost and $273,280 variable overhead cost. In the current month, the company incurred $320,000 actual overhead and 21,400 actual labor hours while producing 37,000 units.

(1) Compute the overhead volume variance.
(2) Compute the overhead controllable variance.

Complete this question by entering your answers in the tabs below.

Compute the overhead volume variance. Classify as favorable or unfavorable. (Round "OH costs per DL hour" to 2 decimal places.)

Compute the overhead controllable variance. Classify as favorable or unfavorable.

A deadweight loss:

a)can be large in a perfectly competitive market.

b)is a reduction in aggregate surplus below its maximum possible value.

c)is independent the amount produced and consumed.

d)is equal to the difference between total willingness to pay and the total avoidable cost of production.

Sales price: $500,000

Property taxes attributable to period before purchase: 8,000

Property taxes attributable to period between purchase and year-end: 2,500

Title insurance: 500

Total amount spent: $511,000

What is the total cost of the property for tax purposes?

A. The Contribution Margin Income Statement has a higher Net Operating Income than the Absorption Costing Income Statement: true or false

B. The horizontal line on the CVP Graph represents what one?

fixed costs

total revenue

total expenses

Variable Cost

Stackelberg Leader-Follower duopolists face a market demand curve given by P = 120 - 3Q where Q is total market demand. Each firm can produce output at a constant marginal cost of 20 per unit. The equilibrium price for the total market will be...?

63)

Which of the following would NOT usually be a short-run decision for the firm?

Select one:

a. recalling workers who were previously laid off

b. having labour work two hours overtime each day in order to expand output

c. building another wing on the plant in order to add a new assembly line

d. placing an order with a supplier for additional raw materials

Which of the firms below would we expect might typically have the longest short run?

Select one:

a. Sears

b. McDonald's

c. A law firm

d. General Motors

Fixed costs are

Select one:

a. costs that never change.

b. the costs that a firm must pay when output is zero.

c. the costs that don't change when the firm doubles output.

d. costs that increase at a constant rate when output increases.

A firm's average fixed costs will always

Select one:

a. rise continuously as output rises.

b. fall then rise as output rises.

c. rise then fall as output rises.

d. fall continuously as output rises.

In the range of output with diminishing marginal returns, a firm will experience

Select one:

a. constant average total costs.

b. increasing average fixed costs.

c. increasing marginal costs.

d. decreasing average variable costs.

Table 8.3

Using Table 8.3, determine the Total Fixed Cost?

Select one:

a. $4.00

b. $25.00

c. $7.00

d. $99.70

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Using Table 8.3, calculate the Average Total Cost of producing 4 units.

Select one:

a. $5.50

b. $68.80

c. $17.20

d. $4.30

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Using Table 8.3, what is the Marginal Cost of producing the 5th unit?

Select one:

a. $4.00

b. $4.80

c. $7.00

d. $3.00

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Using Table 8.3:

Calculate the Average Variable Cost of producing 2 units:

Select one:

a. $2.00

b. $8.00

c. $16.00

d. $4.00

82)

A single-plant firm trying to select the appropriate sized plant for a particular rate of output will choose the size plant

Select one:

a. for which the minimum point of the short-run average total cost curve is at that rate of output.

b. for which the minimum point of the short-run average variable cost curve is at that rate of output.

c. for which the short-run average total cost curve is lowest at that rate of output.

d. with the lowest fixed costs.

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A firm's long-run average cost curve is

Select one:

a. the set of points representing the minimum unit cost of producing any given rate of output.

b. the set of points made up of the minimum point on each short-run average total cost curve.

c. the envelope of the firm's variable cost curves.

d. identical to the lowest short-run average cost curve the firm has.

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Economies of scale exist when the long-run average cost curve is

Select one:

a. horizontal.

b. decreasing.

c. increasing.

d. vertical.

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Minimum efficient scale is defined as the

Select one:

a. lowest output level at which long-run average costs are at their minimum.

b. amount of labour that maximizes the marginal product of labour.

c. point at which marginal cost, average variable cost, and average fixed cost are all equal.

d. point at which economies of scale are at their maximum.

Balance Sheet Analysis

Complete the balance sheet and sales information in the table that follows for J. White Industries using the following financial data:

Total assets turnover: 1.7
Gross profit margin on sales: (Sales - Cost of goods sold)/Sales = 20%
Total liabilities-to-assets ratio: 50%
Quick ratio: 0.80
Days' sales outstanding (based on 365-day year): 36.5 days
Inventory turnover ratio: 3.25

Do not round intermediate calculations. Round your answers to the nearest whole dollar.