Dobson Manufacturing Company uses a job order cost system with manufacturing overhead applied to products on the basis of direct labor dollars. At the beginning of the most recent period, the company estimated its total direct labor cost to be $51,700 and its total manufacturing overhead cost to be $98,230.

Several incomplete general ledger accounts show the transactions that occurred during the most recent accounting period which is given in second requirement.

Required:

2. Fill in the missing values in the T-accounts.

3. Compute over- or underapplied overhead.

4. Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead.

5. Prepare a brief income statement for the company.

Fill in the missing values in the T-accounts.

Compute over- or underapplied overhead.

Prepare a statement of cost of goods manufactured and sold including the adjustment for over- or underapplied overhead.

Prepare a brief income statement for the company.

Manufacturing Income Statement, Statement of Cost of Goods Manufactured

Several items are omitted from the income statement and cost of goods manufactured statement data for two different companies for the month of December.

Required:

1. Determine the amounts of the missing items, identifying them by letter. Enter all amounts as positive numbers.

2. Prepare On Company's statement of cost of goods manufactured for December.

3. Prepare On Company's income statement for December.

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A firm wants a buyer to adjust their purchasing amount and frequency by changing the price it charges so that they purchase the target times per year. For example, if the firm purchases 10 times a year a firm might want it to purchase 5 times yearly instead. The firm recognizes that an incentive will have to be offered to do this and has set the incentive as the amount the purchaser would save in total (based on total material cost as used in inventory analysis) from the current cost to the purchaser. Data on the customer is given below as well as the target savings identified the firm thinks is required to get the purchaser to change their buying pattern.

NOTE: The customer may not be applying EOQ to its current ordering quantity and frequency.

a. What is the total annual cost to the customer of the current ordering policy?

b. What is the highest price the seller can offer the customer so the customer orders 4 times yearly and meets the targeted savings?

Emmet Property Management entered into a 2-year contract on June 1, 2016, to build an apartment building. The contract starts on July 1, 2016. Under the terms of the contract, Emmet will be paid a fixed fee of $1,500,000 and will receive an additional 10% of the fixed fee provided that building is ready to occupy at the end of the two years. Emmet estimates a 60% chance it will meet the completion date. The total costs of the project are expected to be $1,200,000, and the costs to date (at the end of 2016) are $400,000.

1. Under Option A, Emmet uses the expected value approach to calculate variable consideration. What is the expected total transaction price for the full contract under Option A?
2. And how much revenue should Emmet recognize on this contract in 2016 under option A? (Assume the cost-to-cost method.)
3. Under Option B, Emmet uses the most-likely method to calculate the variable consideration. What is the expected total transaction price for the full contract under Option B?
4. And how much revenue should Emmet recognize on the contract in 2016 under Option B? (Assume the cost-to-cost method.)
5. So, which option (A or B) results in a higher amount of net income in 2016?

For firms in perfectly competitive markets, the market price is

A firm in a perfectly competitive market will maximize its profits by producing

If the market price falls below the minimum point of the firm’s ATC curve,

In the short run, the relevant costs for a firm to consider in deciding whether to shut down production are

Sandy Bank, Inc., makes one model of wooden canoe. And, the information for it follows:

Required:
1. Suppose that Sandy Bank raises its selling price to $500 per canoe. Calculate its new break-even point in units and in sales dollars. (Do not round intermediate calculations. Round your final answers to nearest whole number.)



2. If Sandy Bank sells 1,510 canoes, compute its margin of safety in dollars and as a percentage of sales. (Use the new sales price of $500.) (Round your answers to the nearest whole number.)



3. Calculate the number of canoes that Sandy Bank must sell at $500 each to generate $110,000 profit. (Round your answer to the nearest whole number.)

Kluth Corporation has two manufacturing departments--Molding and Customizing. The company used the following data at the beginning of the year to calculate predetermined overhead rates:

During the most recent month, the company started and completed two jobs--Job C and Job M. There were no beginning inventories. Data concerning those two jobs follow:

Required:

Assume that the company uses departmental predetermined overhead rates with machine-hours as the allocation base in both production departments. Further assume that the company uses a markup of 20% on manufacturing cost to establish selling prices. Calculate the selling prices for Job C and for Job M. (Do not round intermediate calculations.)