Question 3 – Better Than That, Co. provides the following information:

• October 31 inventory of raw materials is $35,000.
• Raw materials purchases in November are $240,000.
• Total factory payroll cost (includes both direct and indirect labor) in November is $105,850.
• Actual factory overhead costs incurred in November are as follows: indirect materials, $15,900; indirect labor, $9,000; factory rent, $25,000; factory utilities, $23,880; and factory equipment depreciation, $42,000.
• The predetermined overhead rate is 120% of direct labor cost.
• Job L5 is sold to a customer in November for $255,000 on account.
• Costs related to the three jobs worked on in November follow.
  

1. Determine:
   1. The WIP inventory account balance as of October 31^st.
   2. Total direct materials cost for November
   3. Total direct labor cost for November
   4. Total Applied factory OH cost for November
   5. The total costs assigned to each job as of November 30^th (including any balances from October 31).
2. Prepare journal entries for the month of November to record the below transactions (make sure to use proper journal entry formatting and include a brief description of each entry).

1. Raw materials purchases (on credit).
2. Direct materials used in production.
3. Direct labor paid in cash and assigned to Work in Process Inventory.
4. Overhead costs applied to Work in Process Inventory.
5. Indirect materials used and assigned to Factory Overhead.
6. Indirect labor paid in cash and assigned to Factory Overhead.
7. Actual other overhead costs incurred (assume Factory rent and utilities are paid in cash).
8. Transfer of Jobs L5 and T2 to Finished Goods Inventory.
9. Revenue from the sale of Job L5.
10. Cost of goods sold for Job L5.
11. Assignment of any underapplied or overapplied overhead to the Cost of Goods Sold account (Assume the amount is not material).

3. Determine the November 30^th balances of the firm’s three inventory accounts:
   1. raw materials inventory account
   2. WIP inventory account
   3. finished goods inventory account (assume finished goods inventory balance as of October 31^st was $0).
4. Prepare a schedule of cost of goods manufactured for November.
5. Calculate the firm’s gross profit for November.

(I only need c,d, & e answered)

Required information

[The following information applies to the questions displayed below.]

Trico Company set the following standard unit costs for its single product.

The predetermined overhead rate is based on a planned operating volume of 80% of the productive capacity of 56,000 units per quarter. The following flexible budget information is available.

During the current quarter, the company operated at 90% of capacity and produced 50,400 units of product; actual direct labor totaled 299,400 hours. Units produced were assigned the following standard costs.

Actual costs incurred during the current quarter follow.

(a) Compute the variable overhead spending and efficiency variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.)

AH = Actual Hours
SH = Standard Hours
AVR = Actual Variable Rate
SVR = Standard Variable Rate

(b) Compute the fixed overhead spending and volume variances. (Round "cost per unit" and "rate per hour" answers to 2 decimal places.)

AH = Actual Hours
SH = Standard Hours
AFR = Actual Fixed Rate
SFR = Standard Fixed Rate

(c) Compute the total overhead controllable variance.

1) Required information

Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:

Required:

1. Compute the activity rate for each activity.

2. Classify each activity as facility, product, batch, or unit level.

2) Required information

Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows:

Suppose that Gable Company manufactures three products, A, B, and C. Information about these products follows:

Required:
Using activity rates, determine the amount of overhead assigned to each product.

3) Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe.

Schell has a total of $25,640 in overhead. It currently uses a traditional cost system with overhead applied to the product on the basis of either labor hours or machine hours. Schell has compiled the following information about possible cost drivers and its two product lines:

Required:
1. Suppose Schell uses a traditional costing system with direct labor hours as the cost driver. Determine the amount of overhead assigned to each product line.
2. Suppose Schell uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line.

4) Schell Company manufactures automobile floor mats. It currently has two product lines, the Standard and the Deluxe. Suppose that Schell has conducted further research into its overhead and potential cost drivers. As a result, the company has compiled the following detailed information, breaking total overhead into three cost pools:

Required:

1. Calculate the activity rates for each cost pool assuming Schell uses an ABC system.

2. Calculate the amount of overhead that Schell will assign to the Standard floor mat line.

3. Determine the amount of overhead Schell will assign to the Deluxe product line.

5) Turtle Inc. has developed a new and improved widget. The company plans to sell the product through an existing website. Turtle’s marketing department believes the product will sell for $110. Turtle’s goal is a 30 percent profit margin on the widget.

Required:

1. If current prototypes cost $61.00 to produce, will Turtle meet its profit goal?

• Yes

• No

2. Calculate the target cost necessary for Turtle to earn 30 percent profit.

Make sure to scroll left and right to see full question and please show work. Waterway makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, the company implemented an activity-based costing system, and managers determined the following activity pools and rates based on total overhead of $1,592,000:

Only the Complex product requires bonding, so all the costs of bonding should be allocated to Complex. The following data relate to both products.

Using the traditional method of allocating overhead costs,

(Round overhead rate and overhead per unit answers to 2 decimal places, e.g. 15.25.)

Using the activity-based costing rates,

(Round per unit answers to 2 decimal places, e.g. 15.25)

1. You are given the following demand equations:

Q 450 16P

Q 360 80P

Q 1,500 500P

a. Determine each equation’s total revenue and marginal revenue equations.

b. Plot the demand equation and the marginal and total revenue equations on a graph.

c. Use calculus to determine the prices and quantities that maximize the revenue foreach equation. Show the points of revenue maximization on the graphs that you have constructed.

2. You are given the following cost equations:

TC 1,500 300Q 25Q2 1.5Q3

TC 1,500 300Q 25Q2

TC 1,500 300Q

a. Determine each equation’s average variable cost, average cost, and marginal cost.

b. Plot each equation on a graph. On separate graphs, plot each equation’s average variable cost, average cost, and marginal cost.

c. Use calculus to determine the minimum point on the marginal cost curve.

3. Given the demand equation shown, perform the following tasks:

Q 10 .004P

a. Combine this equation with each cost equation listed in question 3. Use calculus to find the price that will maximize the short-run profit for each of the cost equations.

b. Plot the profit curve for each of the cost equations.

c. Use calculus to determine the minimum point on the marginal cost curve.

4. Given the demand equation shown, perform the following tasks:

Q 10 .004P

a. Combine this equation with each cost equation listed in question 3. Use calculus to find the price that will maximize the short-run profit for each of the cost equations.

b. Plot the profit curve for each of the cost equations.

Surgery Center is an outpatient surgical clinic that wants to better understand its costs. It decides to prepare an activity-based cost analysis, including an estimate of the average cost of both general surgery and orthopedic surgery. The clinic's three cost centers and their cost drivers follow as does information on the two main surgery centers.

1. Assume costs are allocated based on the number of patients only. Compute the average cost per patient.

2. Compute the cost applied to the general surgery center using the predetermined overhead rate computed in Question 1.

3. Compute the cost applied to the orthopedic surgery center using the predetermined overhead rate computed in Question 1.

4. Using activity-based costing to allocate overhead, compute the cost per driver for each of the three cost centers presented above. Then use that information to calculate the amount of overhead applied to the general surgery center. Only provide the total amount overhead allocated to the general surgery center in the blank.

5. Using activity-based costing to allocate overhead, compute the cost per driver for each of the three cost centers presented above. Then use that information to calculate the amount of overhead applied to the orthopedic surgery center. Only provide the total amount overhead allocated to the orthopedic surgery center in the blank.

The Bowman Corporation has a bond obligation of $23 million outstanding, which it is considering refunding. Though the bonds were initially issued at 12 percent, the interest rates on similar issues have declined to 10.7 percent. The bonds were originally issued for 20 years and have 10 years remaining. The new issue would be for 10 years. There is a call premium of 8 percent on the old issue. The underwriting cost on the new $23,000,000 issue is $530,000, and the underwriting cost on the old issue was $420,000. The company is in a 35 percent tax bracket, and it will use an 12 percent discount rate (rounded aftertax cost of debt) to analyze the refunding decision. Use Appendix D for an approximate answer but calculate your final answer using the formula and financial calculator methods.

a. Calculate the present value of total outflows. (Do not round intermediate calculations and round your answer to 2 decimal places.) PV of total outflows $

b. Calculate the present value of total inflows. (Do not round intermediate calculations and round your answer to 2 decimal places.) PV of total inflows $

c. Calculate the net present value. (Negative amount should be indicated by a minus sign. Do not round intermediate calculations and round your answer to 2 decimal places.) Net present value $

Exercise 9-25 Budgeting Production and Raw-Material Purchases (LO 9-3, 9-6)

Greener Grass Fertilizer Company plans to sell 200,000 units of finished product in July and anticipates a growth rate in sales of 5 percent per month. The desired monthly ending inventory in units of finished product is 80 percent of the next month’s estimated sales. There are 160,000 finished units in inventory on June 30. Each unit of finished product requires four pounds of raw material at a cost of $1.15 per pound. There are 700,000 pounds of raw material in inventory on June 30.

Required:
1. Compute the company’s total required production in units of finished product for the entire three-month period ending September 30.
2. Independent of your answer to requirement 1, assume the company plans to produce 600,000 units of finished product in the three-month period ending September 30, and to have raw-material inventory on hand at the end of the three-month period equal to 25 percent of the use in that period. Compute the total estimated cost of raw-material purchases for the entire three-month period ending September 30.

1 Total required production in Units =

2 Total estimated cost =

Calculate Cash Flows

Nature’s Way Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The new garden tool is expected to generate additional annual sales of 5,600 units at $42 each. The new manufacturing equipment will cost $97,000 and is expected to have a 10-year life and $7,400 residual value. Selling expenses related to the new product are expected to be 5% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis:

Determine the net cash flows for the first year of the project, Years 2–9, and for the last year of the project. Use the minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.

Calculate Cash Flows

Nature’s Way Inc. is planning to invest in new manufacturing equipment to make a new garden tool. The garden tool is expected to generate additional annual sales of 8,800 units at $48 each. The new manufacturing equipment will cost $171,500 and is expected to have a 10-year life and $13,100 residual value. Selling expenses related to the new product are expected to be 4% of sales revenue. The cost to manufacture the product includes the following on a per-unit basis:

Determine the net cash flows for the first year of the project, Years 2–9, and for the last year of the project. Use the minus sign to indicate cash outflows. Do not round your intermediate calculations but, if required, round your final answer to the nearest dollar.