After receiving your bachelor’s degree in personnel management, you were hired by a small but expanding life insurance company. Your first assignment is to develop a more efficient technique for the preliminary screening of applicants for sales positions. Since the firm employs only college graduates, you decide to work with information focusing on their performance during college. A random sample of 25 from the firm’s current sales force is selected and the following information is obtained:

Last year’s performance evaluation score

College grade point average (GPA)

Percent of total college expenses earned by the individual

Number of social organizations the individual belonged to

                                    Percent of       Number of

Performance               Expenses         Social

Score               GPA    Earned                        Organizations

43                    2.1       50                    2

47                    2.8       20                    5

53                    2.6       10                    3

56                    2.7       60                    1

57                    3.8       0                      0

64                    2.6       30                    2

68                    3.2       10                    1

68                    2.8       30                    2

74                    2.6       10                    2

75                    2.9       40                    1

77                    3.0       30                    0

78                    3.2       15                    1

81                    3.4       20                    2

83                    2.8       40                    3

87                    2.6       60                    5

88                    3.1       50                    0

89                    2.4       80                    4

90                    3.3       10                    2

91                    2.9       50                    6

92                    3.5       40                    1

93                    3.7       30                    2

94                    3.1       20                    5

95                    3.6       70                    1

96                    3.2       10                    4

97                    3.4       40                    0

On the basis of the data obtained, what recommendations can you make regarding the preliminary screening of applicants for sales positions?

Widgets R US Corp. Master Budget 2019 Sales Budget (Part 1) Data Input Q1 az Q3 Year Unit Sales Sales Price $380.00 65.000 $380 00 $24,700,000.00 60,000 $380.00 $22.800,000.00 75.000 $380.00 $28,500,000.00 80.000 $380.00 $30,400,000.00 280.000 $1.520.00 $ 106,400,000.00 65,000 60,000 75,000 80,000 Sales in Units Selling price/unit 1 Gross Revenue Cash Collections: 3 Collections of Accounts Receivable + 75% Current Quarter's Sales 5 25% Previous Quarter's Sales 5 Total Cash Collections Unit Materials Cost $65.00 $18,525,000.00 $3,250,000.00 $21.775.000.00 $17,100,000.00 $6,175,000.00 $23.275.000.00 $21,375,000.00 $5,700,000.00 $27,075,000.00 $22,800,000.00 $7,125,000.00 $29,925,000.00 $79,800,000.00 $22,250,000.00 $102.050.000.00 01 2020 sales: production 70,000 80,000 Direct Labor Rate $21.00 Per Hour Ctrly Dividend $300,000.00 Variable Overhead $6.00 /Dir. Labor Hr. Production Budget (Part 2) 91 Variables R A EXO $8.00 /Unit Sold 03 Year 65,000 60,000 75,000 80,000 280,000 3 Budgeted Unit Sales # Add: Desired End.Inv. 5 of finished goods 5 Total units needed Less: Bee Iny 3 Budgeted production 9.000 74,000 13,000 61,000 11,250 71,250 9,000 62,250 12,000 87,000 11.250 75,750 10,500 90,500 12,000 78.500 42,750 322,750 45.250 277,500
G H EF Direct Materials Purchases Budget (Part 3) Q2 Q3 Year 36,000 28,800 Budgeted production Raw materials needed/Unit Total needed for production Add: Desired raw materials ending inventory Total Direct Materials needed Less: Beginning inventory Total D.M. Purchased Unit materials cost Total Direct Materials Cost Cash Disbursements for D.M. 85% Current Quarter's Purchases 15% Previous Quarter's Purchases Total Cash Disbursements for D.M. $1,500,000.00 Direct Labor Budget (Part 4) Q1 Q2 Q3 Q4 Year 250 250 2.50 250 Budgeted Production Direct Labor hours per unit Total Direct Labor Hours Needed Hourly Wage Rate Budgeted Direct Labor Costs
Factory Overhead Budget (Part 5) Q2 03 Year Budgeted Direct Labor Hours: Variable Overhead Rate per Direct Labor Hour Total Variable Mfg. Overhead Fixed Mfg. Overhead: Depreciation Other Fixed Overhead Expenses Total Fixed Overhead Total Mfg. Overhead Less: non-cash exp (depreciation) Cash Disbursements for Factory Overhead Selling and Administration Expense Budget (Part 6) Q2 03 Q4 Year Budgeted Units Sold Variable Selling and Administration Expenses per Unit Total Variable S & A Expenses Fixed Selling and Administration Exp. Depreciation Other Fixed S & A Expense Total Fixed Selling and Admin. Exp. Total Selling and Administration Exp. Less: non-cash exp (depreciation) Cash Disbursements for Selling and Administration Expenses
The desired ending product inventory is 20% of the next quarter's budgeted sales. 3 pounds of direct materials are needed to produce each unit of product. The desired ending raw materials inventory is 15% of raw materials needed for the next quarter's budgeted production. Factory overhead includes $250,000 per quarter of depreciation and $350,000 per quarter of other fixed overhead. Selling and administration expenses include $50,000 of depreciation per quarter and $250,000 of other fixed overhead per quarter. The tax rate is 35%

Operating Budget, Comprehensive Analysis

Allison Manufacturing produces a subassembly used in the production of jet aircraft engines. The assembly is sold to engine manufacturers and aircraft maintenance facilities. Projected sales in units for the coming 5 months follow:

The following data pertain to production policies and manufacturing specifications followed by Allison Manufacturing:

1. Finished goods inventory on January 1 is 32,000 units, each costing $166.06. The desired ending inventory for each month is 80% of the next month's sales.
2. The data on materials used are as follows:

   Direct Material	Per-Unit Usage		DM Unit Cost ($)
   Metal	10 lbs.		8
   Components	6		5

   Inventory policy dictates that sufficient materials be on hand at the end of the month to produce 50% of the next month's production needs. This is exactly the amount of material on hand on December 31 of the prior year.
3. The direct labor used per unit of output is 3 hours. The average direct labor cost per hour is $14.25.
4. Overhead each month is estimated using a flexible budget formula. (Note: Activity is measured in direct labor hours.)

   	Fixed-Cost   Component ($)		Variable-Cost Component ($)
   Supplies	—		1.00
   Power	—		0.50
   Maintenance	30,000		0.40
   Supervision	16,000		—
   Depreciation	200,000		—
   Taxes	12,000		—
   Other	80,000		0.50

5. Monthly selling and administrative expenses are also estimated using a flexible budgeting formula. (Note: Activity is measured in units sold.)

   	Fixed    Costs ($)		Variable Costs ($)
   Salaries	50,000		—
   Commissions	—		2.00
   Depreciation	40,000		—
   Shipping	—		1.00
   Other	20,000		0.60

6. The unit selling price of the subassembly is $205.
7. All sales and purchases are for cash. The cash balance on January 1 equals $400,000. The firm requires a minimum ending balance of $50,000. If the firm develops a cash shortage by the end of the month, sufficient cash is borrowed to cover the shortage. Any cash borrowed is repaid at the end of the quarter, as is the interest due (cash borrowed at the end of the quarter is repaid at the end of the following quarter). The interest rate is 12% per annum. No money is owed at the beginning of January.

j. Schedule 10: Cash Budget. If an amount is zero, enter "0". Use a minus sign to enter a negative amount.

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. All of the company’s transactions with customers, employees, and suppliers are conducted in cash; there is no credit. 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 $126,000 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: Raw materials $ 10,900 Work in process $ 4,900 Finished goods $ 8,000 During the year, the following transactions were completed: a. Raw materials purchased for cash, $166,000. b. Raw materials requisitioned for use in production, $143,000 (materials costing $129,000 were charged directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor $ 179,000 Indirect labor $ 461,300 Sales commissions $ 22,000 Administrative salaries $ 46,000 d. Rent for the year was $18,400 ($13,800 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $11,000. f. Advertising costs incurred, $14,000. g. Depreciation recorded on equipment, $23,000. ($15,000 of this amount was on equipment used in factory operations; the remaining $8,000 was on equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $? i. Goods that had cost $228,000 to manufacture according to their job cost sheets were completed. j. Sales for the year totaled $503,000. The total cost to manufacture these goods according to their job cost sheets was $216,000.

Required: 1. Prepare journal entries to record the transactions for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Round your intermediate calculations to 2 decimal places.)

Required:

1. Which of the following is true of the calculation of equivalent units when there is nonuniform application of manufacturing inputs?

Equivalent units are calculated using weighted average cost method only.

The ending work in process is ignored in the calculation of equivalent units.

Equivalent cost of ending work in process is considered as the equivalent cost throughout the period.

Equivalent units are calculated for each category of manufacturing input.

2. The hard disk department of a computer manufacturing company had the following data for July.

Assume that all materials are added at the beginning of the process. The company follows the weighted average method. What is the equivalent unit of output of the hard disk department for July considering the nonuniform application?

Equivalent units (materials) $40,000 and equivalent units (conversion) $52,500

Equivalent units (materials) $65,000 and equivalent units (conversion) $52,500

Equivalent units (materials) $65,000 and equivalent units (conversion) $65,000

Equivalent units (materials) $40,000 and equivalent units (conversion) $65,000

3. Which of the following is true of the transferred-in goods while calculating equivalent units?

The transferred-in goods are usually treated as a separate material category.

The cost of transferred-in goods is added to the material costs.

The cost of transferred-in goods is added to the conversion costs.

The transferred-in goods are not considered in the calculation of equivalent units.

4. Which of the following is true of the FIFO method of costing?

The total cost is treated as if it were the current period’s total manufacturing cost.

It combines the cost incurred on the units in beginning work in process and the cost incurred on the units started and completed during the current period.

It creates two categories of completed units, one for beginning work in process and the other for units started and completed.

The average cost of the units in beginning work in process and the units started and completed in the current year is considered.

5. Indigo Devices Corp. has 25,000 units in process on September 1 that are 70% complete. In September, the company completed and transferred out 60,000 units. The company has 12,000 units in process on September 30 that are 40% complete. Calculate the equivalent units of Indigo Devices for September assuming the company uses the FIFO method of costing.

35,000 units

39,800 units

60,000 units

47,300 units

6. A manufacturing company at the time of preparation of production report creates two categories of completed units namely, beginning work in process units and units started and completed during the period. It uses only current work and costs to calculate this period’s unit cost. Which of the following methods of costing is the company using?

First-in, first-out method

Weighted average method

Job costing method

Standard method

creating a master budget

purchase prices are forecast for direct materials:

Summary data used in developing budgets for 2017 are as follows:
Sales:
a. Tea, 1080 lots at $9,000 selling price per lot.
b. lemonade, 540 lots at $8,500 selling price per lot.

Opening stock of direct materials:

a. Syrup for tea, 80 lots at $1,100 purchase price per lot.
b. Syrup for lemonade, 70 lots at $1,000 purchase price per lot.
c. Containers, 200 lots at $950 purchase price per lot.
d. Packaging, 400 lots at $900 purchase price per lot.
Opening (1 January 2017) stock of finished goods:
a. Tea, 100 lots at $5,300 per lot.
b. lemonade, 50 lots at $5,200 per lot.
Target closing (31 December 2017) stock of direct materials:
a. Syrup for tea, 30 lots.
b. Syrup for lemonade, 20 lots.
c. Containers, 100 lots.
d. Packaging, 200 lots.
Target closing (31 December 2017) stock of finished goods:
a. tea, 20 lots.
b. lemonade, 10 lots.
Each lot requires 20 direct manufacturing labor hours at the 2017 budgeted rate of $25
per hour. Indirect manufacturing labor costs are included in the manufacturing
overhead forecast.
Variable manufacturing overhead is forecast to be $600 per hour of bottling time;
bottling time is the time the filling equipment is in operation. It takes 2 hours to bottle
one lot of tea and 2 hours to bottle one lot of lemonade. Fixed
manufacturing overhead is forecast to be $1,200,000 for 2017.
Hours of budgeted bottling time is the sole allocation base for all fixed manufacturing
overhead.
Administration costs are forecast to be 10% of the cost of goods manufactured for 2017.
Marketing costs are forecast to be 12% of sales for 2017. Distribution costs are forecast
to be 8% of sales for 2017.
Required:
Using the first-in, first-out (FIFO) method for costing all stock. Prepare the following budgets for 2017:
1. Revenue Budget (in $)
2. Production Budget (in units)
3. Direct materials usage budget (in units and $)
4. Direct materials purchases budget (in units and $)
5. Direct manufacturing labor budget
6. Manufacturing overhead costs budget
7. Closing finished goods stock budget
8. Cost of goods sold budget
9. Marketing costs budget
10. Distribution costs budget
11. Administration costs budget
12. Budgeted Profit and loss account (Income
Statement)

Carpenter Cornices, Ltd., produces a wide variety of cornice moldings for windows at a plant located in Evergreen Park, Illinois. Because there are hundreds of products, some of which are made only to order, the company uses a job-order costing system. On July 1, the start of the company’s fiscal year, inventory account balances were as follows: Raw materials $ 12,700 Work in process $ 6,700 Finished goods $ 10,400 The company applies overhead cost to jobs on the basis of machine-hours. Its predetermined overhead rate for the fiscal year starting July 1 was based on a cost formula that estimated $191,400 of manufacturing overhead for an estimated activity level of 58,000 machine-hours. During the year, the following transactions were completed (Assume all purchases and services were acquired on account): a. Raw materials purchased on account, $202,000. b. Raw materials requisitioned for use in production, $164,000 (materials costing $152,500 were chargeable directly to jobs; the remaining materials were indirect). c. Costs for employee services were incurred as follows: Direct labor $ 111,000 Indirect labor $ 48,300 Sales commissions $ 34,500 Administrative salaries $ 53,500 d. Prepaid insurance expired during the year, $28,000 ($17,700 of this amount related to factory operations, and the remainder related to selling and administrative activities). e. Utility costs incurred in the factory, $25,500. f. Advertising costs incurred, $14,800. g. Depreciation recorded on equipment, $39,000. ($25,500 of this amount was on equipment used in factory operations; the remaining $13,500 was on equipment used in selling and administrative activities.) h. Manufacturing overhead cost was applied to jobs, $?. (The company recorded 31,000 machine-hours of operating time during the year.) i. Goods that had cost $326,000 to manufacture according to their job cost sheets were completed. j. Sales (all on account) to customers during the year totaled $614,000. These goods had cost $325,000 to manufacture according to their job cost sheets.1. 1.- Prepare journal entries to record the transactions for the year. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare T-accounts for inventories, Manufacturing Overhead, and Cost of Goods Sold. Post relevant data from your journal entries to these T-accounts (don’t forget to enter the opening balances in your inventory accounts). Compute an ending balance in each account. (Round your intermediate calculations to 2 decimal places.) 3-a. Is Manufacturing Overhead underapplied or overapplied for the year? (Round your intermediate calculations to 2 decimal places.) 3-b. Prepare a journal entry to close any balance in the Manufacturing Overhead account to Cost of Goods Sold. (Round your intermediate calculations to 2 decimal places. If no entry is required for a transaction/event, select "No journal entry required" in the first account field.) Prepare an income statement for the year. (Round your intermediate calculations to 2 decimal places.)

Cost of Goods Sold, Profit margin, and Net Income for a Manufacturing Company

The following information is available for Bandera Manufacturing Company for the month ending January 31:

For the month ended January 31, determine Bandera's (a) cost of goods sold, (b) gross profit, and (c) net income.

(a)

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a. Add the cost of goods manufactured to the beginning finished goods. Subtract the ending finished goods.

(b)

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b. Sales minus cost of goods sold equals gross profit.

(c)