Disposal of Fixed Asset

Equipment acquired on January 6 at a cost of $422,300, has an estimated useful life of 9 years and an estimated residual value of $55,100.

a. What was the annual amount of depreciation for the Years 1-3 using the straight-line method of depreciation?

Year

Depreciation Expense

Year 1

$

Year 2

$

Year 3

$

b. What was the book value of the equipment on January 1 of Year 4?

$

c. Assuming that the equipment was sold on January 3 of Year 4 for $284,900, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

d. Assuming that the equipment had been sold on January 3 of Year 4 for $305,900 instead of $284,900, journalize the entry to record the sale. If an amount box does not require an entry, leave it blank.

let's say the Pentagon wants to know what the cost of the War in Iraq has been. It then wants to compare that to the cost of the War in Vietnam.

Do you think the U.S. government is more likely to use a costing system that is more closely aligned with Job Order Costing or one that is more closely aligned with Process Costing? Support your view.

They are interested in remodeling an existing vacant store at initial cost (t=0) of $95,000 and then paying $8,000 per year in rent and $38,000 in other annual expenses.  Cash inflows are expected at $78,000 per year over the next five years.  All Cash Flows except the $95,000 occur at the end of each year.  Given a required return of 8.6% per year, is this a good deal?

No, the Net Present Value (NPV) is negative.
Yes, the Net Present Value (NPV) is $27,771.
Yes, the Net Present Value (NPV) is $30,771.
No, the Discounted Payback Period is less than five years.

What is the "Cost of Poor Quality", and what role does it play in the company-wide assessment of quality?

1.

With the information for the first four months of production, determine the variable cost per unit and the fixed

cost using the high-low method.

Total Cost

Units Produced

January

$155,100

9,000

February

166,350

9,750

March

158,100

9,200

April

157,350

9,150

2.

For 20Y5, Moore’s Mowers had total sales of $42,000, with each product selling for $15 each. Each product had

variable costs of $8. Calculate the (a) contribution margin, (b) contribution margin ratio, and (c) unit contribution

margin. Round contribution margin ratio to the nearest percent.

3.

Use the following information to determine the change in income from operations for each situation if the

company sells its products for $4 each.

a.

Contribution margin ratio of 35% and a 10,000 increase in sales units.

b.

Unit contribution margin of $2.10 and an increase of $20,000 in sales.

c.

Contribution margin ratio of 30% and an increase in sales of $30,000.

4.

During 20Y5, Jackson Computer Supply produced income from operations of $95,000 from sales of 80,000 units at

$2.50 each. The company’s fixed costs totaled $22,000. If the company has a 4,000 increase in sales units in the

upcoming year, what will income from operations be for 20Y6? Assume that fixed costs and the selling price and

variable cost per unit will remain the same.

Edwards Construction currently has debt outstanding with a market value of $82,500 and a cost of 7 percent. The company has EBIT of $5,775 that is expected to continue in perpetuity. Assume there are no taxes.

a-1. What is the value of the company's equity? (Do not round intermediate calculations. Leave no cell blank - be certain to enter "0" wherever required.) Calculate Value of equity

a-2. What is the debt-to-value ratio? (Do not round intermediate calculations and round your answer to the nearest whole number, e.g., 32.) Calculate Debt-to-value ratio

b. What are the equity value and debt-to-value ratio if the company's growth rate is 3 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Equity value $ Debt-to-value

c. What are the equity value and debt-to-value ratio if the company's growth rate is 5 percent? (Do not round intermediate calculations and round your "Debt-to-value" answer to 3 decimal places, e.g., 32.161.) Calculate Equity value $ Debt-to-value

Describe standard costs. Explain the benefits of using a standard cost system at Apple.

Assume that the mean hourly cost to operate a commercial airplane follows the normal distribution with a mean of $1660 per hour and a standard deviation of $190.

What is the maximum operating cost for the lowest 2% of the airplanes? (Round z-score computation to 2 decimal places and the final answer to 1 decimal place.)

Maximum operating cost           $

Statement of Cost of Goods Manufactured and Income Statement for a Manufacturing Company

The following information is available for Shanika Company for 20Y6:

Required:

1. Prepare the 20Y6 statement of cost of goods manufactured.

2. Prepare the 20Y6 income statement.

In the manufacturing sector, if the indirect cost amount is large enough, an incorrect allocation base could have serious repercussions. What might be some examples of the effects of an incorrect allocation? How might that affect a company’s profitability and decision-making?