The financial statements of PLC Pte Ltd had been completed but not yet released to shareholders. The closing inventory of PLC Pte Ltd amounted to $332,000 as at 31 December 20X1, its financial year-end. This total included two products with the following information:
(i) 150 units of Product A were carried at a cost of $12 each. On 2
January 20X2, they were sold for $9 each, with total selling
expenses of $100.
(ii) 300 units of Product B were carried at a cost of $15 each. The
products were found to be defective on 31 December 20X1. On 2
January 20X2, remedial work was conducted and cost $700 and shortly
after, they were then sold for $20 each. The selling expenses were
$250.
Illustrate and explain the accounting treatment by PLC Pte Ltd for the above.
In: Accounting
The following data relate to the direct materials cost for the production of 2,200 automobile tires:
| Actual: | 55,700 lbs. at $1.9 | $105,830 |
| Standard: | 56,800 lbs. at $1.95 | $110,760 |
a. Determine the direct materials price variance, direct materials quantity variance, and total direct materials cost variance. Enter a favorable variance as a negative number using a minus sign and an unfavorable variance as a positive number.
| Price variance | $ | |
| Quantity variance | $ | |
| Total direct materials cost variance | $ |
b. The direct materials price variance should normally be reported to the . If lower amounts of direct materials had been used because of production efficiencies, the variance would be reported to the . If the favorable use of raw materials had been caused by the purchase of higher-quality raw materials, the variance should be reported to the .
In: Accounting
Information for Cooper’s Manufacturing Company for the month of
May is as follows:
|
Beginning work in process: |
Cost of inventory at process, May 1 |
$5,000 |
|
Units, 600 |
||
|
Direct materials, 100% complete |
||
|
Conversion costs, 80% complete |
||
|
Units started in May, 14,000 |
Costs charged to Work in Process during May: |
|
Ending work in process inventory: |
Direct materials costs, $42,400 |
|
Units, 1,600 |
Direct labor costs, $20,049 |
|
Direct materials, 100% complete |
Factory overhead costs, $52,400 |
|
Conversion costs, 30% complete |
What is the equivalent cost per unit for materials for the month of May?
What is the equivalent cost per unit for conversion costs for the month of May?
Equivalent Units
Units Materials Conversion Total
Beginning Inventory
% complete
Started & Finished
Ending Inventory
% complete
Total
In: Accounting
Huston Makena is the owner and CEO of H3 Solar Inc., a startup that makes and installs solar panels. In January, H3 Solar received 4 independent orders. The company applies overhead at a rate of $6 per direct labor hour. Direct labor wages average $10 per hour.
| Job 213 | Job 214 | Job 217 | Job 225 | |
| Total sales revenue | $4,375 | $5,600 | $1,150 | |
| Price per unit | $12 | $14 | $5 | |
| Materials used in production | $365 | $488 | $207 | |
| Direct labor cost | $700 | $2,000 | $230 | |
| Overhead applied | $240 | $138 | ||
| Total manufacturing cost | $1,005 | $3,073 | $575 | |
| Number of units | 350 | 400 | ||
| Unit cost | $10.05 | $9.22 |
What is the number of units being produced for Job# 213?
In: Accounting
On October 31, the end of the first month of operations, Maryville Equipment Company prepared the following income statement, based on the variable costing concept:
| Maryville Equipment Company Variable Costing Income Statement For the Month Ended October 31 |
||||
| Sales (14,100 units) | $648,600 | |||
| Variable cost of goods sold: | ||||
| Variable cost of goods manufactured | $286,200 | |||
| Inventory, October 31 (1,800 units) | (32,400) | |||
| Total variable cost of goods sold | (253,800) | |||
| Manufacturing margin | $394,800 | |||
| Variable selling and administrative expenses | (169,200) | |||
| Contribution margin | $225,600 | |||
| Fixed costs: | ||||
| Fixed manufacturing costs | $63,600 | |||
| Fixed selling and administrative expenses | 42,300 | |||
| Total fixed costs | (105,900) | |||
| Operating income | $119,700 | |||
Prepare an income statement under absorption costing. Round all final answers to whole dollars.
In: Accounting
Following is information from Kaitlyn Company for the year ended December 31, 2018.
Direct labor $ 90,000
Operating and administrative expenses (costs) of sales ????
Net sales $ 520,000
Initial Inventories (None)
Direct Material Inventory-December 31, 2018 $ 55,000
Inventory of Work in process-December 31, 2018 $ 30,000
Inventory of finished goods- December 31, 2018 $ 4,000
Purchase of direct material ???
Direct material used $ 53,000
Indirect manufacturing costs ???
Total manufacturing costs incurred (in this period) ???
Cost of manufactured goods $ 245,000
Cost of sales ???
Gross margin (gain) ???
Net income (ignore taxes) $ 60,000
Calculate: operating and administrative expenses, purchase of direct materials, indirect manufacturing costs, total manufacturing costs, cost of sales and gross margin
In: Accounting
(SHOW CALCULATIONS PLEASE) Unlevered Corporation (Firm U) has a total market value of $15,000,000, a tax rate of 40 percent, and earnings before interest and taxes (EBIT) of $2,000,000. Levered Corporation (Firm L) is identical in all respects to Firm U, but Firm L has $13,000,000 market (and book) value of debt outstanding. Firm L pays total annual interest of $1,040,000 on this debt. Both firms satisfy the MM assumptions. Now answer next 4 questions.
a. What is the value of Firm L according to MM’s Proposition I with corporate taxes?
b. What is Firm U’s cost of equity?
c. What is Firm L’s cost of equity?
d. What is Firm L’s weighted average cost of capital?
In: Finance
Question 1
The table below shows the cost and revenue information of a firm.
|
Output (units) |
Price (RM) |
Total Cost (RM) |
Total revenue (RM) |
Marginal Cost (RM) |
Marginal Revenue (RM) |
|
0 |
14 |
10 |
|||
|
1 |
14 |
14 |
|||
|
2 |
14 |
22 |
|||
|
3 |
14 |
34 |
|||
|
4 |
14 |
48 |
|||
|
5 |
14 |
64 |
|||
|
6 |
14 |
82 |
(a) Complete the table above. [9 marks]
(b) Determine the price and output at equilibrium. [6 marks]
(c) Calculate the profit or loss at equilibrium. [4 marks]
(d) Is this firm in the short-run or long-run? Explain your answer. [5 marks]
(e) To what type of market structure does this firm belong? Why do you say so? [6 marks]
In: Accounting
Micromedia offers computer training seminars on a variety of topics. In the seminars each student works at a personal computer, practicing the particular activity that the instructor is presenting. Micromedia is currently planning a two-day seminar on the use of Microsoft Excel in statistical analysis. The projected fee for the seminar is $600 per student. The cost for the conference room, instructor compensation, lab assistants, and promotion is $9600. Micromedia rents computers for its seminars at a cost of $60 per computer per day.
a) Develop a model for the total cost to put on the seminar. Let ? represent the number of students who enroll in the seminar.
b) Develop a model for the total profit if ? students enroll in the seminar.
c) Micromedia has forecasted an enrollment of 30 students for the seminar. How much profit will be earned if its forecast is accurate?
d) Compute the breakeven point.
In: Operations Management
|
Miller Toy Company manufactures a plastic swimming pool at its Westwood Plant. The standard cost for one pool is as follows: |
| Standard Quantity or Hours | Standard Price or Rate |
Standard Cost |
|||||
| Direct materials | 1.60 | kilograms | $5.00 | per kilogram | $ | 8.00 | |
| Direct labour | 0.90 | hours | $5.00 | per hour | 4.50 | ||
| Variable manufacturing overhead | 0.40 | machine-hours | $2.00 | per machine-hour | 0.80 | ||
| Total standard cost | $ | 13.30 | |||||
|
The plant has been experiencing problems for some time, as is shown by its June income statement when it made and sold 15,200 pools; the normal volume is 15,350 pools per month. Fixed costs are allocated using machine-hours. |
| Flexible Budgeted | Actual | |||
| Sales (15,200 pools) | $ | 456,000 | $ | 456,000 |
| Less: Variable expenses: | ||||
| Variable cost of goods sold* | 202,160 | 203,534 | ||
| Variable selling expenses | 20,300 | 20,300 | ||
| Total variable expenses | 222,460 | 223,834 | ||
| Contribution margin | 233,540 | 232,166 | ||
| Less: Fixed expenses: | ||||
| Manufacturing overhead | 132,000 | 132,000 | ||
| Selling and administrative | 85,120 | 85,120 | ||
| Total fixed expenses | 217,120 | 217,120 | ||
| Net income | $ | 16,420 | $ | 15,046 |
| *Contains direct materials, direct labour, and variable manufacturing overhead. |
|
Janet Dunn, the general manager of the Westwood Plant, wants to get things under control. She needs information about the operations in June since the income statement signalled that the problem could be due to the variable cost of goods sold. Dunn learns the following about operations and costs in June: |
| a. | 31,500 kilograms of materials were purchased at a cost of $4.10 per kilogram. |
| b. |
24,500 kilograms of materials were used in production. (Finished goods and work-in-process inventories are insignificant and can be ignored.) |
| c. | 11,900 direct labour-hours were worked at a cost of $8 per hour. |
| d. |
Variable manufacturing overhead cost totalling $14,184 for the month was incurred. A total of 5,910 machine-hours was recorded. |
|
It is the company’s policy to close all variances to cost of goods sold on a monthly basis. |
|
| 4. |
Compute the fixed overhead cost variances. (Round intermediate calculation to 2 decimal places. Indicate the effect of variance by selecting "F" for favourable, "U" for unfavourable, and "None" for no effect (i.e., zero variance).) Fixed Overhead Volume Variance= ? |
In: Accounting