|
Unit Selling Price |
$18 |
|
Units in beginning inventory |
0 |
|
Units produced |
10,000 |
|
Units sold |
9,500 |
|
Variable costs per unit: |
|
|
Direct materials |
$6 |
|
Direct labor |
$4 |
|
Manufacturing overhead |
$3 |
|
Selling and administrative costs |
$1 |
|
Fixed costs: |
|
|
Manufacturing overhead |
$12,000 |
|
Selling and administrative costs |
$8,000 |
Required:
Prepare an income statement using an absorption costing format.
LO2
Solution:
Sales $171,000
Less cost of goods sold:
Variable manufacturing $123,500
Fixed manufacturing 11,400 134,900
Gross profit 36,100
Less selling and administrative expenses
Variable 9,500
Fixed 8,000 17,500
Net operating income $ 18,600
How is the 11,400 (fixed manufacturing) calculated??
In: Accounting
The American Baker’s Association reports that annual sales of
bakery goods last year rose 15 percent, driven by a 50 percent
increase in the demand for bran muffins. Most of the increase was
attributed to a report that diets rich in bran help prevent certain
types of cancer. You are the manager of a bakery that produces and
packages gourmet bran muffins, and you currently sell bran muffins
in packages of three. However, as a result of this new report, a
typical consumer’s inverse demand for your bran muffins is now
P = 4 - 0.5Q.
If your cost of producing bran muffins is C(Q) =
1.5Q, determine the optimal number of bran muffins to sell
in a single package and the optimal package price.
Instruction: Enter your response for the optimal
package price rounded to two decimal places.
Optimal package size:__ units
Optimal package price: $
In: Economics
Elasticity Analysis
Examine this list of consumer goods.
Rank these items from most elastic to least elastic in terms of price elasticity of demand and explain your ranking. Things to think about:
How would a 10% price increase for the good affect the consumer's total budget?
For each good, if the seller wanted to increase total revenue, would you advise him/her to increase price or decrease price, based upon your elasticity assessment above.
In: Economics
Choose one of the questions below to discuss. (200 word min)
1. What is meant by the term "open economy"? "Closed economy?"
2. What imported goods do you often buy? How would you be affected if the U.S. restricted international trade or stopped trading with other nations entirely?
3. What happens to the trade from either developed or underdeveloped nations when monopoly export and import agencies are set up? Why?
4. What are the differences between common markets, custom unions and free trade agreements? Which of these is the most comprehensive form of trade agreement.
5. What was the basic role of GATT? What is the basic objective of the WTO?
6. What are the major threats to further world trade liberalization?
7. What are the differences between the static vie of comparative advantage and the dynamic view of growth?
In: Economics
Reflective Question # 2:
The Lebanese government is trying to increase its wealth; it will
be using trade barriers to protect
its industries from global competition. The main exported
commodities are jewelry,
miscellaneous consumer goods, fruit and vegetables, tobacco,
construction minerals, and paper.
Lebanon mainly imports oil, electrical equipment, precious stones,
metals, chemical products,
base metals, vehicles, food and beverages, vegetable products and
animal products. Most of
Lebanon imports are mainly from China, Italy and Egypt. The only
country that Lebanon does
not trade with is “Israel” because they are an occupied country and
abuse human rights.
1- What are the barriers that Lebanon would consider to put upon
the importing of vegetables
products? What about the barriers imposed on “Israel?
2- In order to make the Lebanese product more competitive compared
with overseas firms, what
are the measurements that the government must take?
In: Operations Management
Exporting, Licensing, or FDI
A firm has three basic choices if it wants to sell its products in a foreign market—exporting, licensing, and foreign direct investment (FDI). The choice of the best option depends on characteristics of the product, the processes used to make these products, the control a firm needs to exercise over operations, and how the know-how of the firm might be protected. The best option is a strategic choice the international business manager must make, considering the interplay among these factors.
Internalization theories explore the limitations of exporting and licensing from both explanatory and business perspectives. These theories identify with some precision how the relative profitability of foreign direct investment, exporting, and licensing vary with circumstances. Other theories help explain the direction of FDI. The internalization theories help explain why firms prefer FDI to licensing or exporting.
Read the case below and answer the questions that follow.
Your firm manufactures a range of household goods and appliances. Over the years, your firm has developed proprietary processes, using environmentally-friendly chemicals that have given your firm a leadership position for "green" customers. Your products are competitively priced. The appliances and products you manufacture tend to be bulky and a bit heavy for their size.
You are interested in exploring international business options. You need to decide whether exporting, licensing, or foreign direct investment strategies would be the most appropriate for your firm. You want to maintain your competitive advantages, so you consider different strategic options by answering the questions below.
1. The effect of bulky or heavy products on transportation costs can make _______ an inappropriate strategy.
- Exporting
- Foreign Direct Investment
- Licensing
2. If your proprietary know-how of “green” processes is difficult to transfer to other firms, the most effective approach would be _____ .
- Exporting or Foreign Direct Investment
- Licensing or Exporting
- Foreign Direct Investment or Licensing
3. If your household goods can be efficiently produced through economies of scale, it would be a good idea to use a(n) _______ strategy.
- Exporting
- Licensing
- Foreign Direct Investment
4. If a firm's know-how, skills, and capabilities can be protected by contract, and if tight control over foreign operations is not vital to remain competitive, and there are reasons to believe that additional costs through transportation or tariffs would be high, the most effective approach would be _________ .
- Foreign Direct Investment
- Exporting
- Licensing
5. If the firm is facing the threat of trade barriers such as high import tariffs or quotas and the firm has proprietary technology, the firm should consider ______.
- Licensing
- Foreign Direct Investment
- Exporting
In: Economics
Compare liberalist and socialist political economic views regarding what kinds of goods should be provided by the state as public goods, and in your view, which goods should be provided as public goods in the 21st Century, and why?
In: Economics
The goal of a rational consumer is to maximize (Plus explanation)
the MU/P of all goods consumed.
the quantities of all goods consumed.
total utility from all goods consumed.
marginal utility of all goods consumed.
In: Accounting
Peeke Company uses the periodic method of accounting. Peeke Company has the following inventory information summarizing activity during November:
|
Beginning Inventory |
100 units @ $30.00 per unit |
|
Purchase #1 |
60 units @ $35.00 per unit |
|
Purchase #2 |
40 units @ $40.00 per unit |
|
Ending Inventory (physical count) |
30 units |
Peeke's recorded 17,000 in Sales Revenue.
1. What cost is assigned to Peeke's ending inventory using Average Cost? Round interim computations to the nearest penny and your final answer to the nearest dollar.
| A. |
$1200 |
|
| B. |
$1005 |
|
| C. |
$900 |
|
| D. |
$6700 |
2. What is the cost assignment to Peeke’s COGS (cost of goods sold) using FIFO (First In First Out)?
| A. |
$5695 |
|
| B. |
$5500 |
|
| C. |
$5800 |
|
| D. |
$5650 |
3. What is Peeke’s cost of ending inventory using LIFO (Last In First Out)?
| A. |
$1200 |
|
| B. |
$5800 |
|
| C. |
$1050 |
|
| D. |
$900 |
4. What will Peeke report as gross margin for November assuming they use LIFO (Last In First Out)?
| A. |
$11200 |
|
| B. |
$5800 |
|
| C. |
$11500 |
|
| D. |
$5500 |
|
| E. |
$17000 |
5. What is the COGAS (cost of good available for sale) for November?
HINT: Remember, COGAS is sum of COGS and cost of ending inventory. This is the same regardless of if you are using FIFO, LIFO or Weighted Average, so you pick whichever one you'd like. It is the allocation of COGAS between COGS and EI that varies depending on the method employed.
| A. |
$9000 |
|
| B. |
$3800 |
|
| C. |
$6700 |
|
| D. |
$17000 |
In: Accounting
|
Westin Watercraft’s predetermined overhead rate for year 2011 is 200% of direct labor. Information on the company’s production activities during May 2011 follows. |
| a. | Purchased raw materials on credit, $240,000. |
| b. | Paid $127,800 cash for factory wages. |
| c. | Paid $15,500 cash to a computer consultant to reprogram factory equipment. |
| d. | Materials requisitions record use of the following materials for the month. |
| Job 136 | $ | 48,000 | |
| Job 137 | 33,500 | ||
| Job 138 | 19,800 | ||
| Job 139 | 22,800 | ||
| Job 140 | 7,200 | ||
| Total direct materials | 131,300 | ||
| Indirect materials | 20,000 | ||
| Total materials used | $ | 151,300 | |
| e. | Time tickets record use of the following labor for the month. |
| Job 136 | $ | 12,200 | |
| Job 137 | 10,500 | ||
| Job 138 | 37,900 | ||
| Job 139 | 39,600 | ||
| Job 140 | 3,600 | ||
| Total direct labor | 103,800 | ||
| Indirect labor | 24,000 | ||
| Total | $ | 127,800 | |
| f. | Applied overhead to Jobs 136, 138, and 139. |
| g. | Transferred Jobs 136, 138, and 139 to Finished Goods. |
| h. | Sold Jobs 136 and 138 on credit at a total price of $540,000. |
| i. |
The company incurred the following overhead costs during the month (credit Prepaid Insurance for expired factory insurance). |
| Depreciation of factory building | $ | 69,500 | |
| Depreciation of factory equipment | 37,000 | ||
| Expired factory insurance | 11,000 | ||
| Accrued property tax payable | 35,500 | ||
| j. |
Applied overhead at month-end to the Goods in Process (Jobs 137 and 140) using the predetermined overhead rate of 200% of direct labor cost. |
25.
Required information
| Required: | |
| 1. |
Prepare a job cost sheet for each job worked on during the month. (Omit the "$" sign in your response.) |
| Job No. 136 | Job No. 137 | Job No. 138 | Job No. 139 | Job No. 140 | |
| Materials | $ | $ | $ | $ | $ |
| Labor | |||||
| Overhead | |||||
| Total cost | $ | $ | $ | $ | $ |
26.
Required information
| 2. |
Prepare journal entries to record the events and transactions a through j. (Omit the "$" sign in your response. ) |
| General Journal | Debit | Credit | |
| a. | (Click to select)CashFactory payrollAccounts payableRaw materials inventoryFactory overheadAccounts receivableCost of goods soldFinished goods inventory | ||
| (Click to select)Cost of goods soldFactory payrollRaw materials inventoryFactory overheadCashAccounts receivableAccounts payableFinished goods inventory | |||
| b. | (Click to select)Factory payrollAccounts payableFinished goods inventoryAccounts receivableSalesGoods in process inventoryCashFactory overhead | ||
| (Click to select)Factory payrollAccounts receivableSalesAccounts payableGoods in process inventoryCashFinished goods inventoryFactory overhead | |||
| c. | (Click to select)Prepaid insuranceRaw materials inventoryAccounts receivableFactory payrollGoods in process inventoryFactory overheadProperty taxes payableCash | ||
| (Click to select)Goods in process inventoryPrepaid insuranceFactory overheadCashAccounts receivableRaw materials inventoryProperty taxes payableFactory payroll | |||
| d. | (Click to select)Property taxes payableCost of goods soldCashFactory payrollAccounts payableRaw materials inventoryGoods in process inventoryFactory overhead | ||
| (Click to select)Factory overheadRaw materials inventoryFactory payrollProperty taxes payableGoods in process inventoryCost of goods soldCashAccounts payable | |||
| (Click to select)Property taxes payableAccounts payableFactory payrollCashCost of goods soldRaw materials inventoryGoods in process inventoryFactory overhead | |||
| e. | (Click to select)Factory overheadProperty taxes payableFactory payrollPrepaid insuranceRaw materials inventoryFinished goods inventoryGoods in process inventoryCost of goods sold | ||
| (Click to select)Finished goods inventoryPrepaid insuranceFactory overheadProperty taxes payableFactory payrollRaw materials inventoryCost of goods soldGoods in process inventory | |||
| (Click to select)Finished goods inventoryCost of goods soldFactory overheadGoods in process inventoryFactory payrollPrepaid insuranceRaw materials inventoryProperty taxes payable | |||
| f. | (Click to select)Cost of goods soldGoods in process inventorySalesRaw materials inventoryFinished goods inventoryPrepaid insuranceFactory payrollFactory overhead | ||
| (Click to select)Finished goods inventoryFactory overheadPrepaid insuranceRaw materials inventoryGoods in process inventoryCost of goods soldSalesFactory payroll | |||
| g. | (Click to select)Factory payrollAccounts receivableFactory overheadGoods in process inventoryFinished goods inventoryProperty taxes payablePrepaid insuranceCost of goods sold | ||
| (Click to select)Goods in process inventoryAccounts receivableFinished goods inventoryCost of goods soldPrepaid insuranceFactory PayrollProperty taxes payableFactory overhead | |||
| h. | (Click to select)Factory overheadPrepaid insuranceAccounts receivableSalesCost of goods soldFinished goods inventoryFactory payrollGoods in process inventory | ||
| (Click to select)Factory payrollPrepaid insuranceGoods in process inventoryAccounts receivableCost of goods soldFactory overheadFinished goods inventorySales | |||
| (Click to select)Raw materials inventoryCashFinished goods inventoryAccounts receivableFactory overheadSalesFactory payrollCost of goods sold | |||
| (Click to select)Factory payrollRaw materials inventorySalesFactory overheadAccounts receivableFinished goods inventoryCost of goods soldCash | |||
| i. | (Click to select)Property taxes payableAccum. Depreciation-factory equipmentPrepaid insuranceFactory overheadGoods in process inventoryAccum. depreciation-factory buildingSalesCost of goods sold | ||
| (Click to select)SalesGoods in process inventoryAccum. depreciation-factory buildingAccum. depreciation-factory equipmentProperty taxes payableCost of goods soldPrepaid insuranceFactory overhead | |||
| (Click to select)Prepaid insuranceGoods in process inventoryFactory overheadCost of goods soldAccum. depreciation-factory buildingSalesProperty taxes payableAccum. depreciation-factory equipment | |||
| (Click to select)Prepaid insuranceProperty taxes payableAccum. depreciation-factory buildingGoods in process inventoryCost of goods soldSalesFactory overheadAccum. depreciation-factory equipment | |||
| (Click to select)Accum. depreciation-factory equipmentCost of goods soldSalesAccum. depreciation-factory buildingGoods in process inventoryProperty taxes payablePrepaid insuranceFactory overhead | |||
| j. | (Click to select)CashRaw materials inventoryGoods in process inventorySalesFactory payrollFactory overheadAccounts receivableFinished goods inventory | ||
| (Click to select)Accounts receivableRaw materials inventoryGoods in process inventorySalesFinished goods inventoryFactory payrollCashFactory overhead | |||
27.
Required information
| 4. |
Prepare a report showing the total cost of each job in process and prove that the sum of their costs equals the Goods in Process Inventory account balance. Prepare similar reports for Finished Goods Inventory and Cost of Goods Sold. (Omit the "$" sign in your response.) |
| Reports of Job Costs | |
| Goods in Process Inventory | |
| (Click to select)Job 137Job 139Job 138Job 136 | $ |
| (Click to select)Job 140Job 139Job 138Job 137Job 136 | |
| Balance | $ |
| Finished Goods Inventory | |
| (Click to select)Job 137Job 138Job 140Job 136Job 139 | $ |
| Balance | $ |
| Cost of Goods Sold | |
| (Click to select)Job 137Job 139Job 136Job 140 | $ |
| (Click to select)Job 137Job 139Job 138Job 136Job 140 | |
| Balance | $ |
In: Accounting