You have just been appointed as the financial accountant at Caulfield Warehouse Direct (CWD), an electrical company. CWD makes all sales under terms of Free On Board (FOB) shipping point. FOB shipping point specifies that the title and responsibility of goods transfer from the seller to the buyer when the goods are placed on the delivery vehicle. During your first week, you have been asked to conduct a review of all income items as the Australian Tax Office wants to know details of all income in the last financial year, which ended on 31 December. During your review, you became aware that CC had post-dated a significant sales transaction of $500,000 (goods were delivered on 27 December, but invoiced on 3 January). Post-dating the sales transaction would lower CWD’s taxable income. You approached the owner, Megan Simpson, and discussed about it. Megan asked you to ignore the finding because it is part of the company’s policy. After all, there was a difference of only one week between 27 December and 3 January.

1. Explain the ethical issue (or dilemma) that you face.
2. Identify four (4) parties (stakeholders) that may be harmed.
3. Discuss three (3) specific interests that are in conflict [HINT: For each, you must identify pairs of stakeholders whose interests might be in conflict and explain why].
4. What are your options and the consequences of each option? Specify two (2) options, and for each option, explain the impact of that option on the stakeholders.

ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 119,700 units.

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $247,000.

In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $29 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.75 per unit because of shipping costs but would not increase fixed costs and expenses.

(a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Should ThreePoint Sports Inc. accept the special order?

No OR Yes

What is the minimum selling price on the special order to produce net income of $5.09 per ball? (Round answer to 2 decimal places, e.g. 15.25.)

As the accountant for Wheatley International, it is your job to prepare the company’s income statement and balance sheet. Use the accounts listed below to construct the statements. Assume that the tax rate is 25%.

I recommend that you should first go through each account and determine if it is a balance sheet account (i.e., asset, liability, or owners' equity) or income statement account (i.e., revenue, costs of goods sold, expense, or net income). Hint: ending inventory goes on both the balance sheet and income statement; on the income statement, both beginning and ending inventory are used to calculate cost of goods sold.

This is a tough assignment. The important thing is to understand is if accounts are balance sheet accounts (i.e., assets, liabilities, or owners' equity) or income statement accounts (i.e., revenue, cost of goods sold, expense, or net income). Additionally, it's important to understand the fundamental accounting equation (A = L + OE).

Income Statements under Absorption and Variable Costing

The Duller Edge Inc. assembles and sells MP3 players. The company began operations on May 1, 2016, and operated at 100% of capacity during the first month. The following data summarize the results for May:

Sales (14,500 units) $2,030,000

Production costs (19,000 units):

Direct materials $984,200

Direct labor 473,100

Variable factory overhead 235,600

Fixed factory overhead 157,700 1,850,600

Selling and administrative expenses:

Variable selling and administrative expenses $286,800

Fixed selling and administrative expenses 111,000 397,800

If required, round interim per-unit calculations to the nearest cent.

a. Prepare an income statement according to the absorption costing concept.

The Duller Edge Inc.

Absorption Costing Income Statement

For the Month Ended May 31, 2016

Sales

$

Cost of goods sold

Gross profit

$

Selling and administrative expenses

Income from operations

$

Feedback

a. Under absorption costing, the cost of goods manufactured includes direct materials, direct labor, and factory overhead costs. Both fixed and variable factory costs are included as part of factory overhead.

Learning Objective 1.

b. Prepare an income statement according to the variable costing concept.

The Duller Edge Inc.

Variable Costing Income Statement

For the Month Ended May 31, 2016

Sales

$

Variable cost of goods sold

Manufacturing margin

$

Variable selling and administrative expenses

Contribution margin

$

Fixed costs:

Fixed factory overhead

$

Fixed selling and administrative expenses

Income from operations

$

A company that makes baseball gloves produces them using 2 production departments. When the gloves are produced they first go through the Fabrication Department, which produces the pieces that are later assembled into a glove. After the Fabrication Department completes its work on the glove, the glove goes to the Assembly Department to finish putting the glove together.

The following data is for the Assembly Department (the second department that works on the gloves) for the month of November:

Units in the beginning work-in-process inventory 5,500

Units started during the month 38,500

Units completed during the month and transferred to Finished Goods 38,000

Units in the ending work-in-process inventory 6,000

Units in the ending work-in-process inventory are 85% completed in terms of direct materials and 55% completed in terms of conversion costs

Costs in the beginning work-in-process inventory - $35,000 of costs transferred in from the Fabrication Department, $47,000 of direct materials costs, and $36,000 of conversion costs

Costs added in the month of June - $405,000 of costs transferred in from the Fabrication Department, $470,200 of direct materials costs, and $542,200 of conversion costs

Please complete the 5 steps of involved in process costing:

1. Account for all the units

2. Calculate the number of equivalent units in terms of direct materials and conversion costs

3. Calculate the amounts spent on direct materials and conversion costs

4. Calculate the cost per equivalent unit for direct materials and conversion costs

5. Allocate the total amount spent between the cost of goods completed (transferred to Finished Goods) and the cost assigned to the ending work-in-process inventory.

Please complete all questions

Conklin Company manufactures outdoor fireplaces. For the first 9 months of 2017, the company reported the following operating results while operating at 80% of plant capacity:

Sales (75,000 units)                $6,750,000

                                    Cost of goods sold                  4,875,000

                                    Gross profit                             1,875,000

                                    Operating expenses                      750,000

                                    Net income                              $1,125,000

Cost of goods sold was 80% variable and 20% fixed; operating expenses were 70% variable and 30% fixed.

In October, Conklin Company receives a special order for 4,000 fireplaces at $62 each from Langston’s Landscape Company.   Acceptance of the order would result in an additional $7,000 of shipping costs but no increase in fixed operating expenses.

(a)        Prepare an incremental analysis for the special order.

(b)        Should Conklin Company accept the special order? Why or why not?

(c)        Before Conklin could give Langston’s Landscape Company an answer, they received a special order from Benson Building & Supply for 15,000 fireplaces. Benson is willing to pay $65 per fireplace but they want a special design imbedded into the fireplace that increases cost of goods sold by $67,500. The special design also requires the purchase of a part that costs $5,000 and will have no future use for Conklin Company. Benson Building & Supply will pick up the fireplaces, so no shipping costs are involved. Due to capacity limitations, Conklin cannot accept both special orders. Which order should be accepted? Document your decision by preparing an incremental analysis for Benson’s order.

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

8.Prepare the following journal entries. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field. Do not round intermediate calculations.) Designate a credit or debit. Designate one of the following: No journal entry required, accounts payable, cost of finished goods, or cost of goods sold.

Record the purchase of direct material on account and the direct-material purchase price variance.

Record the addition of direct-material cost to work-in-process inventory and direct-material quantity variance.

Record the addition of direct-labor cost to work-in-process inventory and the direct-labor variances.

Record the closing of the direct materail and direct labor variances to cost of goods sold.

value:
10.00 points

Required information

CC6-1 Accounting for Merchandising Operations [LO 6-4, LO 6-5]

ThreePoint Sports Inc. manufactures basketballs for the Women’s National Basketball Association (WNBA). For the first 6 months of 2020, the company reported the following operating results while operating at 80% of plant capacity and producing 119,500 units.

Fixed costs for the period were cost of goods sold $960,000, and selling and administrative expenses $236,000.

In July, normally a slack manufacturing month, ThreePoint Sports receives a special order for 10,000 basketballs at $27 each from the Greek Basketball Association (GBA). Acceptance of the order would increase variable selling and administrative expenses $0.77 per unit because of shipping costs but would not increase fixed costs and expenses.

Partially correct answer iconYour answer is partially correct.

(a) Prepare an incremental analysis for the special order. (Round all per unit computations to 2 decimal places, e.g. 15.25. Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)

(b) Should ThreePoint Sports Inc. accept the special order?

  

What is the minimum selling price on the special order to produce net income of $5.15 per ball? (Round answer to 2 decimal places, e.g. 15.25.)