XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at $60 each. The investment bank charged 7% spread. At the end of the 1st day of trading, XYZ stock price closed at $79. Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?
In: Finance
XYZ used an investment bank to do IPO. In IPO, XYZ sold 1 million shares at $66.52 each. The investment bank charged 7% spread. At the end of the 1st day of trading, XYZ stock price closed at $72.63. Calculate the total cost of IPO. That is, what is the sum of direct and indirect cost?
In: Finance
The beginning inventory at Midnight Supplies and data on purchases and sales for a three-month period ending March 31, are as follows:
|
Date |
Transaction |
Number of Units |
Per Unit |
Total |
|
| Jan. | 1 | Inventory | 2,500 | $70.00 | $175,000 |
| 10 | Purchase | 8,000 | 78.00 | 624,000 | |
| 28 | Sale | 3,800 | 140.00 | 532,000 | |
| 30 | Sale | 1,250 | 140.00 | 175,000 | |
| Feb. | 5 | Sale | 500 | 140.00 | 70,000 |
| 10 | Purchase | 17,000 | 80.00 | 1,360,000 | |
| 16 | Sale | 9,100 | 145.00 | 1,319,500 | |
| 28 | Sale | 8,700 | 145.00 | 1,261,500 | |
| Mar. | 5 | Purchase | 14,300 | 81.60 | 1,166,880 |
| 14 | Sale | 9,800 | 145.00 | 1,421,000 | |
| 25 | Purchase | 3,000 | 82.00 | 246,000 | |
| 30 | Sale | 7,900 | 145.00 |
1,145,500 |
|
| Instructions | |
| 1. | Record the inventory, purchases, and cost of merchandise sold
data in a perpetual inventory record similar to the one illustrated
in
Exhibit 3 using the first-in, first-out method. |
| 2. | Determine the total sales and the total cost of merchandise sold for the period. Journalize the entries in the sales and cost of merchandise sold accounts. Assume that all sales were on account and date your journal entry March 31. Refer to the Chart of Accounts for exact wording of account titles. |
| 3. | Determine the gross profit from sales for the period. |
| 4. | Determine the ending inventory cost as of March 31. |
| 5. | Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower? |
chart of accounts ensure to use the exact lables
| CHART OF ACCOUNTS | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Midnight Supplies | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| General Ledger | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. Record the inventory, purchases, and cost of merchandise sold data in a perpetual inventory record similar to the one illustrated in
Exhibit 3
, using the first-in, first-out method.
| Date | Purchases | Cost of Merchandise Sold | Inventory | ||||||
| Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost | Quantity | Unit Cost | Total Cost | |
| Jan. 1 | |||||||||
| 10 | |||||||||
| 10 | |||||||||
| 28 | |||||||||
| 28 | |||||||||
| 30 | |||||||||
| Feb. 5 | |||||||||
| 10 | |||||||||
| 10 | |||||||||
| 16 | |||||||||
| 16 | |||||||||
| 28 | |||||||||
| Mar. 5 | |||||||||
| 5 | |||||||||
| 14 | |||||||||
| 14 | |||||||||
| 25 | |||||||||
| 25 | |||||||||
| 30 | |||||||||
| 30 | |||||||||
| 31 | Balances | ||||||||
3. Determine the gross profit from sales for the period.
4. Determine the ending inventory cost as of March 31.
5. Based upon the preceding data, would you expect the inventory using the last-in, first-out method to be higher or lower?
Lower
Higher
In: Accounting
1. Flexible Budget for Assembly Department
Cabinaire Inc. is one of the largest manufacturers of office furniture in the United States. In Grand Rapids, Michigan, it assembles filing cabinets in an Assembly Department. Assume the following information for the Assembly Department:
| Direct labor per filing cabinet | 30 minutes |
| Supervisor salaries | $123,000 per month |
| Depreciation | $16,000 per month |
| Direct labor rate | $18 per hour |
Prepare a flexible budget for 10,000, 13,000, and 15,000 filing cabinets for the month of March in the Assembly Department similar to Exhibit 5. Enter all amounts as positive numbers.
| Cabinaire Inc. | |||
| Assembly Department Budget | |||
| Month Ending March 31 (assumed data) | |||
| Units of production | 10,000 | 13,000 | 15,000 |
| Variable cost: | |||
| $ | $ | $ | |
| Total variable cost | $ | $ | $ |
| Fixed cost: | |||
| $ | $ | $ | |
| Total fixed cost | $ | $ | $ |
| Total department costs | $ | $ | $ |
2.
Production Budget
Weightless Inc. produces a Bath and Gym version of its popular electronic scale. The anticipated unit sales for the scales by sales region are as follows:
| Bath Scale | Gym Scale | |||
| East Region unit sales | 23,800 | 36,900 | ||
| West Region unit sales | 25,700 | 27,000 | ||
| Total | 49,500 | 63,900 | ||
The finished goods inventory estimated for October 1, for the Bath and Gym scale models is 1,800 and 2,600 units, respectively. The desired finished goods inventory for October 31 for the Bath and Gym scale models is 1,300 and 2,800 units, respectively.
Prepare a production budget for the small and large scales for the month ended October 31. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Weightless Inc. | ||
| Production Budget | ||
| For the Month Ending October 31 | ||
| Units Bath Scale | Units Gym Scale | |
| Total | ||
| Total units to be produced | ||
3.
Sales and Production Budgets
Sonic Inc. manufactures two models of speakers, Rumble and Thunder. Based on the following production and sales data for June, prepare (a) a sales budget and (b) a production budget:
| Rumble | Thunder | ||
| Estimated inventory (units), June 1 | 288 | 84 | |
| Desired inventory (units), June 30 | 331 | 73 | |
| Expected sales volume (units): | |||
| Midwest Region | 3,750 | 3,300 | |
| South Region | 5,700 | 6,450 | |
| Unit sales price | $130 | $200 |
a. Prepare a sales budget.
| Sonic Inc. | |||
| Sales Budget | |||
| For the Month Ending June 30 | |||
| Product and Area | Unit Sales Volume | Unit Selling Price | Total Sales |
| Model: Rumble | |||
| Midwest Region | $ | $ | |
| South Region | |||
| Total | $ | ||
| Model: Thunder | |||
| Midwest Region | $ | $ | |
| South Region | |||
| Total | $ | ||
| Total revenue from sales | $ | ||
b. Prepare a production budget. For those boxes in which you must enter subtracted or negative numbers use a minus sign.
| Sonic Inc. | ||
| Production Budget | ||
| For the Month Ending June 30 | ||
| Units Rumble | Units Thunder | |
| Total | ||
| Total units to be produced | ||
In: Accounting
Market Forms
The following questions address some of the price and output decisions faced by firms other than those found in perfect competition. Some numbers may be rounded.
|
Table 1-a |
||||
|
Average Fixed cost |
Average Variable Cost |
Average Total Cost |
||
|
Output |
||||
|
0 |
||||
|
1 |
$ 180.00 |
$ 135.00 |
$ 315.00 |
|
|
2 |
$ 90.00 |
$ 127.50 |
$ 217.50 |
|
|
3 |
$ 60.00 |
$ 120.00 |
$ 180.00 |
|
|
4 |
$ 45.00 |
$ 112.50 |
$ 157.50 |
|
|
5 |
$ 36.00 |
$ 111.00 |
$ 147.00 |
|
|
6 |
$ 30.00 |
$ 112.50 |
$ 142.50 |
|
|
7 |
$ 25.71 |
$ 115.70 |
$ 141.41 |
|
|
8 |
$ 22.50 |
$ 121.90 |
$ 144.40 |
|
|
9 |
$ 20.00 |
$ 130.00 |
$ 150.00 |
|
|
10 |
$ 18.00 |
$ 139.50 |
$ 157.50 |
|
|
Table 1-a (continued) |
||||
|
Marginal Cost |
Price |
Total Revenue |
Marginal Revenue |
|
|
Output |
||||
|
0 |
$ 345.00 |
|||
|
1 |
$ 300.00 |
|||
|
2 |
$ 249.00 |
|||
|
3 |
$ 213.00 |
|||
|
4 |
$ 189.00 |
|||
|
5 |
$ 165.00 |
|||
|
6 |
$ 144.00 |
|||
|
7 |
$ 126.00 |
|||
|
8 |
$ 111.00 |
|||
|
9 |
$ 99.00 |
|||
|
10 |
$ 87.00 |
|||
Questions:
In: Economics
Outputs per hour Total Cost Fixed Cost Variable Cost Avg Total Cost Avg Fixed Cost Avg Var Cost Marg Cost
0 $100 $100 $30
1 $130 $100 $30 $130 $100 30 $28
2 $158 $100 $58 $79 $50 $29 $25
3 $183 $100 $83 $61 $33.33 $27.67 $21
4 $204 $100 $104 $51 $25 $26.00 $18
5 $222 $100 $122 $44.40 $20 $24.40 $20
6 $242 $100 $142 $40.33 $16.67 $23.67 $23
7 $265 $100 $165 $37.86 $14.29 $23.57 $30
8 $295 $100 $195 $36.88 $12.50 $24.38 $38
9 $333 $100 $233 $37 $11.11 $25.89 $40
10 $373 $100 $273 $37.30 $10.00 $27.30
In: Economics
The Barberton Municipal division of Road Maintenance is charged with road repair in the city of Barberton and the surrounding area. Cindy Kramer, road maintenance director, must submit a staffing plan for the next year based on a set schedule for repairs and on the city budget. Kramer estimates that the labor hours required for the next four quarters are 7,000, 12,000, 19,500, and 9,000, respectively. Each of the 11 workers on the workforce can contribute 500 hours per quarter. Payroll costs are $6,000 in wages per worker for regular time worked up to 500 hours, with an overtime pay rate of $ 17 for each overtime hour. Overtime is limited to 20 percent of the regular-time capacity in any quarter. Although unused overtime capacity has no cost, unused regular time is paid at $ 12 per hour. The cost of hiring a worker is $4,000, and the cost of laying off a worker is $2,000.
Subcontracting is not permitted. (Hint: When calculating the number of workers, make sure to round up to the next whole number before proceeding with any further calculations.)
a. Find a level workforce plan that relies just on overtime and the minimum amount of undertime possible. Overtime can be used to its limits in any quarter. What is the total cost of the plan?
b. Use a chase strategy that varies the workforce level without using overtime or undertime. What is the total cost of this plan?
c.
. Consider the following proposed plan, for a different demand schedule, that combines the strategy of hiring, layoffs, and utilizing overtime. Payroll costs are
$6,000
in wages per worker for regular time worked, with an overtime pay rate of
$ 17
for each overtime hour. The cost of hiring a worker is
$4,000
and the cost of laying off a worker is
$2,000.
The total cost for this plan would be
(Enter your response as an integer.)
In: Accounting
During the first month of operations ended August 31, Kodiak Fridgeration Company manufactured 40,000 mini refrigerators, of which 36,000 were sold. Operating data for the month are summarized as follows:
|
1 |
Sales |
$8,280,000.00 |
|
|
2 |
Manufacturing costs: |
||
|
3 |
Direct materials |
$2,800,000.00 |
|
|
4 |
Direct labor |
1,200,000.00 |
|
|
5 |
Variable manufacturing cost |
800,000.00 |
|
|
6 |
Fixed manufacturing cost |
440,000.00 |
5,240,000.00 |
|
7 |
Selling and administrative expenses: |
||
|
8 |
Variable |
$540,000.00 |
|
|
9 |
Fixed |
216,000.00 |
756,000.00 |
| Required: | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 1. | Prepare an income statement based on the absorption costing concept.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 2. | Prepare an income statement based on the variable costing concept.* | |||||||||||||||||||||||||||||||||||||||||||||||||||||
| 3. | Explain the reason for the
difference in the amount of income from operations reported in (1)
and (2).
|
In: Accounting
Green Furniture (GF) manufactures a variety of furniture for household use and just two items for office use: desks and cabinets. The production process for desks and cabinets is similar, although machines must be retooled for each product. Both materials and labour costs are directly traceable to individual products; however, overhead is a common cost and allocated using direct labour-hours as the allocation base. GF’s accountant is considering the use of activity-based costing (ABC) and has suggested evaluating the system by applying it to the two office use products (desks and cabinets). The following data are available for a typical quarter.
| Activity Cost Pool | Activity Base | Activity Rate | Activity Usage | |||||||
| Desks | Cabinets | |||||||||
| Parts receipts | Number of parts | $ | 2.00 | per part | 1,200 | parts | 800 | parts | ||
| Machining | Machine-hours | $ | 12.00 | per machine-hour | 120 | machine-hours | 180 | machine-hours | ||
| Assembly | Units produced | $ | 1.60 | per unit | 600 | units | 800 | units | ||
| Quality control | Units tested | $ | 3.00 | per unit | 60 | units | 700 | units | ||
| Direct materials | $ | 3,000 | $ | 1,600 | ||||||
| Direct labour | $ | 7,200 | $ | 7,200 | ||||||
Each product consumed 360 direct labour-hours.
Required:
1. Determine the total manufacturing cost and cost per unit for each of the two product lines for the quarter, using activity-based costing to allocate overhead costs. (Round "Cost per unit" answers to 2 decimal places.)
| dusters | cabinets | |
| total manufacturing costs | ||
| cost per unit |
2. Redo the above using direct labour-hours as the allocation base. (Round "Cost per unit" answers to 2 decimal places.)
| Mops | Dusters | |
| total manufacturing costs | ||
| Cost per unit |
In: Accounting
Butrico Manufacturing Corporation uses a standard cost system, records materials price variances when direct materials are purchased, and prorates all variances at year-end. Variances associated with direct materials are prorated based on the balances of direct materials in the appropriate accounts, and variances associated with direct labor and manufacturing overhead are prorated to Finished Goods Inventory and to Cost of Goods Sold (CGS) on the basis of the relative direct labor cost in these accounts at year-end.
The following information is for the year ended December 31:
The company had no beginning inventories and no ending Work-in-Process (WIP) Inventory. It applies manufacturing overhead at 80% of standard direct labor cost.
| Finished goods inventory at 12/31: | |||
| Direct materials | $ | 85,500 | |
| Direct labor | 130,400 | ||
| Applied manufacturing overhead | 104,700 | ||
| Direct materials inventory at 12/31 | 65,300 | ||
| Cost of goods sold for the year ended 12/31: | |||
| Direct materials | $ | 352,100 | |
| Direct labor | 740,600 | ||
| Applied manufacturing overhead | 592,500 | ||
| Direct materials price variance (unfavorable) | 11,100 | ||
| Direct materials usage variance (favorable) | 15,300 | ||
| Direct labor rate variance (unfavorable) | 19,900 | ||
| Direct labor efficiency variance (favorable) | 5,500 | ||
| Actual manufacturing overhead incurred | 691,300 | ||
Required:
1. Compute the amount of Direct Materials Price Variance to be prorated to Finished Goods Inventory at December 31.
2. Compute the total amount of direct materials cost in the Finished Goods Inventory at December 31, after all materials variances have been prorated.
3. Compute the total amount of direct labor cost in the Finished Goods Inventory at December 31, after all variances have been prorated.
4. Compute the total Cost of Goods Sold (CGS) for the year ended December 31, after all variances have been prorated.
In: Accounting