XYZ Company has the following data from its costing system regarding its two product lines, A1 and B1:

Using a traditional system, the company would apply manufacturing overhead to the units based on direct labor-hours for the upcoming period as follows:

Using an activity-based costing system, the company would assign manufacturing overhead to the following four activity cost pools. The "Other" cost pool includes organization-sustaining costs and idle capacity costs.

1. (8 points) Compute Product Margins for the A1 and B1 products using the traditional costing system (present your margins in an income statement format similar to Exhibit 6-13 in the textbook).

2. (12 points) Compute Product Margins for the A1 and B1 products using the activity-based costing system (present your margins in an income statement format similar to Exhibit 6-11 in the textbook).

3. (4 points) Based on your analysis above, estimate how much manufacturing overhead was allocated under the traditional costing system to (i) batch setups, and (ii) product sustaining activities for A1 and B1.

Please provide your answers to the questions above on an Excel spreadsheet or Word document and upload using the upload controls.

The following trial balance was taken from the books of Coyote Company as of December 31, 2019.

            Account                                                    Debit             Credit

Cash                                                                  $60,000

Accounts receivable                                            50,000

Allowance for doubtful accounts                                               $ 1,000

Short-Term notes receivable                                 20,000

Inventory, January 1, 2019                                   70,000

Furniture and equipment                                      210,000

Accumulated depreciation of F & E                                           40,000

Patents                                                               100,000

Accounts payable                                                                        22,000

Bonds payable                                                                        20,000

L-T notes payable                                                                   15,000

Common stock                                                                          290,000

Retained earnings                                                                       87,000

Dividends                                                           20,000

Prior period adjustments                                     10,000

Sales                                                                                          700,000

Sales returns & allowance                                    40,000

Sales discount                                                      10,000

Rent revenues                                                                            60,000

Interest revenues                                                                        10,000

Purchase                                                            420,000

Purchase returns & allowance                                                     20,000

Selling expenses                                                60,000

Advertising expense                                           30,000

Supplies expense                                                 6,000

Insurance expense                                              24,000

Wage and Salary expense                                    90,000

Rent expense                                                         60,000

Loss on sale of PS store before tax                     10,000

Operating income from PS store before tax                             25,000

Totals                                                                1,290,000        1,290,000

At the year-end, the following items have not been recorded.

1. Insurance premium expired during the year, $14,000.
2. Estimated bad debts expense, 1.0% of net sales.
3. Inventory as of 12/31/2019 turned out to be $50,000.
4. Office supplies were purchased for $6,000 and charged to supplies expenses then. There are $2,000 of supplies remaining as of 12/31/2019
5. Six months’ rent of $60,000 was paid in advance on September 1, 2019, and charged to rent expense then.
6. Furniture and equipment have an average useful life of 5 years and a salvage value of $10,000. Coyote Company uses the straight-line method of depreciation.
7. Patents have been amortized by $10,000/year.
8. The utility bill of $2,000 for the month of December 2019 will be paid on its due date, January 10, 2020.
9. Salaries earned but not yet paid by December 31, 2019, $8,000.
10. The tax rate is 30%.

Instructions: Prepare the following:

1. Any necessary adjusting entries at the end of 2019.
2. Income Statement and statement of retained earnings, and balance sheet of the company for the year 2019 in good forms (i.e. multiple-steps statements)
3. Any necessary closing entries at the end of 2019.

A group is considering installing a solar power station and has asked you for your recommendation for a photovoltaic system or a solar thermal system. At this stage you are asked not to include cost factors. The single point design condition they have given you is for an incident solar radiation on the collector of 550 W/m2, a surrounding temperature of 18 C. The dead state for this problem should be taken as To = 291 K, Po = 1 bar. You can perform your analysis at steady state conditions. In addition to determining the power output and first law efficiency of the options, you have been requested to determine the exergy destroyed for each of them. The photovoltaic system has an efficiency of 0.15 defined as the power output/incident solar radiation. The basic photovoltaic collector is 1.1 m2 and losses heat from both the front and back surface. The edge area can be neglected. The convective heat transfer coefficient is 10 W/m2 K. The inverter and signal conditioning device used to connect the photovoltaic collector to the grid and household has an efficiency of 0.87. The inverter operates isothermally. The solar thermal collector will heat the working fluid from a temperature of 32 C and has a concentration factor of 10,000. The concentration factor is the ratio of the incident solar radiation on the heat transfer surface to the incident solar radiation area. It is a concentrating collector with an opening of 1.1 m2 and a heat transfer area of 0.05 m2. The mass flow rate of the working fluid through the system is 0.009 Kg/s. The heat transfer area is not equal to the area of absorption. The convective heat transfer coefficient is 1.0 W/m2 K. The heat transfer from the collector can be considered to be at the average temperature of the working fluid, (Tin + Tout)/2. The specific heat of the working fluid is 678 J/(Kg K). The useful energy from this collector system is the change in the enthalpy of the flow through the system. The working fluid enters a heat engine with an efficiency of 0.30 that is connected to a generator with an efficiency of 0.90. The generator operates isothermally.

Answer the following:

a) Determine the power output for each type of system for a basic collector area.

b) Determine the exergy destroyed for each type of system.

c) Which system would you recommend on this analysis? This question neglects the costs.

Marine, Inc., manufactures a product that is available in both a flexible and a rigid model. The company has made the rigid model for years; the flexible model was introduced several years ago to tap a new segment of the market. Since introduction of the flexible model, the company’s profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the flexible model have been increasing rapidly.

Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $600,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the flexible model and 10,000 units of the regular model. The flexible model requires 2.0 hours of direct labor time per unit, and the regular model requires 1.0 hours. Direct materials and labor costs per unit are given below:

Required:   

1-a. Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products.

1-b. Compute the unit product cost for one unit of each model.

2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows:

Compute the activity rate for each of the activity cost pools.     

3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year.

3-b. Using activity-based costing, compute the unit product cost for one unit of each model.

CHAPTER 2-4

Exercise 2.38

Ninety percent of residential gas customers in Illinois use gas for residential heating. Sixteen residential gas customers are randomly selected to participate in a panel discussion for a state energy fair. A gas industry executive is hopeful that at least twelve of the panel members, i.e., 75%, will come from homes in which gas is used for residential heating. If you were the executive's assistant, what degree of assurance could you give the executive that her 75% goal might be reached or exceeded?

14. A common design requirement is that an environment must fit the range of people who fall between the 5th percentile for women and the 95th percentile for men. In designing an assembly work​ table, the sitting knee height must be​ considered, which is the distance from the bottom of the feet to the top of the knee. Males have sitting knee heights that are normally distributed with a mean of 21.1 in. and a standard deviation of 1.1 in. Females have sitting knee heights that are normally distributed with a mean of 19.4 in. and a standard deviation of 1.0 in. Use this information to answer the following questions.

1. What is the minimum table clearance required to satisfy the requirement of fitting​ 95% of​ men?____​(Round to one decimal place as​ needed.)

2. Determine if the following statement is true or false. If there is clearance for 95% of males, there will certainly be clearance for all women in the bottom 5%.

A. The statement is true because some women will have sitting knee heights that are outliers.

B. The statement is false because some women will have sitting knee heights that are outliers.

C. The statement is true because the 95th percentile for men is greater than the 5th percentile for women.

D. The statement is false because the 95th percentile for men is greater than the 5th percentile for women.

3. The author is writing this exercise at a table with a clearance of 23.9 in. above the floor. What percentage of men fit this table?

4. What percentage of women fit this table?

5. Does the table appear to be made to fit almost everyone? Choose the correct answer below.

A. The table will fit almost everyone except about 22% of men with the largest sitting knee heights.

B. The table will fit only 22% of men.

C. The table will only fit 1% of women.

D. Not enough information to determine if the table appears to be made to fit almost everyone.

15.The lengths of pregnancies are normally distributed with a mean of 269 days and a standard deviation of 15 days.

a. Find the probability of a pregnancy lasting 308 days or longer.____​(Round to four decimal places as​ needed.)

b. If the length of pregnancy is in the lowest 4​%, then the baby is premature. Find the length that separates premature babies from those who are not premature.____​(Round to four decimal places as​ needed.)

1.         Borden Road Music is producing CDs for five (5) artists, Sarah D, Tom Boy, Uber Lyft, Vinny Joe, and Wanda, and X-terra. Borden Road Music makes the following unit profits on each artist’s CD as follows

Each artist needs recording studio time and mastering studio time. There are 10,000 Minutes of available mastering time and 25,000 minutes of available recording time.

Each artists CD must be packaged after production. There is 2,000 minutes of packaging time.

Each artist will need promotion time. There are only 50,000 minutes of promotional time available.

Marketing has the following consumer behavior information:

            i.          There are already 200 copies of Uber Lyft CDs pre-ordered.

            ii.         There are already 100 copies of Vinny Joe CDs pre-ordered.

            iii.       For every 2 Sarah D CDs sold there is a Tom Boy CD sold.

As a quality control measure Wanda CDs cannot exceed half of the other CDs produced.

a.         Formulate the standard form of Borden Road Music’s linear program in the table below.

b.         Use excel to solve the linear program and attach the Solution worksheet, the Sensitivity Analysis worksheet.

c.         What happens to Borden Road’s profits if they gain 100 minutes of Mastering time?

            Profits:                                           .

d.         What happens to Borden Road’s profits if they lose 100 minutes of recording time?

            Profits:                                           .

According to the latest financial reports from a sporting goods store, the mean sales per customer was $75 with a population standard deviation of $6. The store manager believes 39 randomly selected customers spent more per transaction.

What is the probability that the sample mean of sales per customer is between $76 and $77 dollars?

You may use a calculator or the portion of the z -table given below. Round your answer to two decimal places if necessary.

$\mu_{\overline{x}}=$ $

sigma sub line segment x is equal to $\sigma_{\overline{x}}=$

$

cap p times open paren 76 is less than or equal to line segment x comma line segment x is less than or equal to 77 close paren is equal to $P\left(76\le\overline{x}\le77\right)=$

Crawford Company is a family-run business that manufacturers steering wheels for self-driving cars. Crawford makes both a standard wheel which is similar to traditional car steering wheels and a deluxe model which is larger to allow a human driver to easily reach over and take control over the automated system. The company has been using a plant-wide overhead rate based on direct labor hours to allocate its overhead to each model. LeeAnn Lucky, the new controller, is convinced that an activity-based costing system will provide better information about the costs and profitability of each model which should lead to better decisions about whether the company should focus on one model or the other. She has pulled the following information about overhead costs from the past year and inserted activity-based costing (ABC) information:  

The company's managers expect to produce 1,000 units of each model during the upcoming year. Answer the following questions. Each question is worth 1 point.

1. Compute the total budgeted manufacturing overhead cost for the upcoming year using ABC costing information.

2. Compute the manufacturing overhead cost per wheel of the standard model using Activity-Based Costing.

3. Compute the manufacturing overhead cost per deluxe wheel using Crawford's traditional plant-wide overhead rate.  

4. If Crawford continues with the traditional method of allocating manufacturing overhead based on direct labor hours instead of switching to the Activity-Based Costing system, by how much will the Deluxe wheel line be over- or under-costed per unit? Enter an under-costed amount as a negative number and an over-costed amount as a positive number.