Answer:
$16,260
Explanation:
The computation of total overhead is shown below:-
Unit level = $40,800 ÷ 6,800 × 310 $1,860
Batch level = $13,800 ÷ 276 × 40 $2,000
Product Level = $9,600 ÷ 100 × 25% $2,400
Facility level = $50,400 ÷ $50,400 × 10,000 units $10,000
Total overhead allocated $16,260
So, for computing the total overhead allocated we simply added the unit level, batch level, product level and facility level.
Blade Breeze Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $70, and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.08 Machining Machine hours 7.20 Assembling Number of parts 0.35 Packaging Number of finished units 2.80What is the cost of machining per ceiling fan
Answer:
cost of machining per ceiling fan= $18 per unit
Explanation:
Activity-based costing is a form of absorption costing where overheads are charged to product using cost drivers. Under this method, overheads are first analyzed and categorized by the activities responsible for them and then charged to product based on the amount of benefits enjoyed using cost drivers.
For example, the machining overhead would charged to each ceiling fan using the machining overhead rate per machine hours.
Cost of machining per ceiling fan = Machining hours × overhead rate per machine hours
= 2.50 × $7.20= $18 per unit
cost of machining per ceiling fan= $18 per unit
The dual role of strategic alliance refers to the ________. constant requirement of resources and markets process of finding skilled personnel and training them to work efficiently conflict between cooperation and competition differences between home and host governments
Answer:
Conflict between cooperation and competition
Explanation:
A strategic alliance consists in a temporary union between two or more firms, with the goal of working closely, in a cordinated manner, in order to achieve a specific result.
Because a strategic alliance is not a formal or definitive union, and each member of the alliance remains an independent firm, a conflict between cooperation and competition may arise, because the independent firms, while desiring to cooperate in order to achieve the best results under the alliance, are expected to compete again at some point in time as independent entities once the alliance ends.
Wickland Company installs a manufacturing machine in its production facility at the beginning of the year at a cost of $151,000. The machine's useful life is estimated to be 4 years, or 130,000 units of product, with a $2,000 salvage value. During its second year, the machine produces 26,000 units of product. Determine the machines' second year depreciation under the straight-line method. Multiple Choice $38,250. $30,200. $29,800. $37,750. $37,250.
The machines' second year depreciation under the straight-line method is $37250. The machine is having an cost of $151,000 and a residual value of $2000 after 4 years. Thus, the last option is the appropriate answer.
Depreciation, according to the straight-line technique, is the distribution of an asset's cost over its anticipated useful life. A typical form of depreciation that reduces the value of a fixed asset over the course of its useful life is straight line depreciation.
It is employed to lower a fixed asset's carrying amount throughout the course of its useful life. When using straight line depreciation, the cost of an asset is lost over each accounting period by the same amount. Then, on your firm balance sheet or tax income statement, you can deduct important assets.
Calculation for depreciation is as follows:
[tex]\dfrac{\rm Cost- Residual\ value}{\rm No. \ of \ years} \\\\=\dfrac{\$151,000-\$2000}{4} \\\\=\$37,250[/tex]
Therefore, $37,250 yearly depreciation expense.
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Raul, an engineer with a leading manufacturer, pointed out a few things have contributed to his motivation. First, top managers were sharing company goals with employees. Second, his manager recently met with Raul's group to discuss the goals relevant to their jobs. Third, his manager requested that each person think about how he or she could personally help achieve these goals. As he followed through on his manager's request, Raul found himself becoming clearer about the role he is expected to play in reaching the organization's goals. This manufacturer is using __________ to help its managers boost employee motivation.
The manufacturer employs Management by Objectives (MBO) to motivate employees by aligning their SMART goals with the overall organizational objectives, thus enhancing productivity and motivation.
The manufacturer Raul works for is using Management by Objectives (MBO) to boost employee motivation. This approach involves setting specific, measurable, aggressive, realistic, and time-bound (SMART) goals that help employees to focus their efforts in a direction that benefits the organization. The goals are designed to challenge employees, make them rethink traditional methods, and align with the company's broader objectives. By sharing the company's goals, engaging employees in goal-setting, and reviewing their contributions during performance appraisals, managers can ensure employee goals align with the organization's goals. This systematic alignment can significantly enhance motivation and productivity within the company.
Olinick Corporation is considering a project that would require an investment of $289,000 and would last for 8 years. The incremental annual revenues and expenses generated by the project during those 8 years would be as follows (Ignore income taxes.): Sales$254,000 Variable expenses 24,000 Contribution margin 230,000 Fixed expenses: Salaries 27,000 Rents 40,000 Depreciation 35,000 Total fixed expenses 102,000 Net operating income$128,000 The scrap value of the project's assets at the end of the project would be $17,000. The cash inflows occur evenly throughout the year. The payback period of the project is closest to: (Round your answer to 1 decimal place.) Noreen_5e_Rechecks_2019_10_16 Multiple Choice 1.8 years 2.3 years 2.1 years 1.5 years
Answer:
1.8 years
Explanation:
the net cash flow per year = [(total sales revenue - total costs) x (1 - tax rate)] + depreciation
total sales revenue = $254,000 total costs = $126,000depreciation costs = $35,000taxes = 0the net cash flow per year = $254,000 - $126,000 + $35,000 = $163,000
the payback period = total investment / net cash flow = $289,000 / $163,000 = 1.77 years, which is closest to 1.8 years
The payback period is the time it takes the project to recover the initial investment required to carry it out.
Trendy's and Style Store are the only two clothing manufacturers in a market. The two stores wish to collude to form a cartel. Based on the payoff matrix to the right, what level of output should each firm select if they wish to maximize joint profits? The first number in each pair is Trendy's profit; the second is Style Store's profit. All numbers are in millions of dollars. Trendy should choose ▼ a high output a low output , and Style Store should choose ▼ a high output a low output . One reason why this cartel is likely to fail is because A. the cartel's output is too high. B. it is not profitable. C. each firm has an incentive to cheat and produce more. D. there are too many firms in the market.
Answer: Trendy should choose a low output, and Style Store should choose a low output; One reason why this cartel is likely to fail is because each firm has an incentive to cheat and produce more (low output, a low output, option c: each firm has an incentive to cheat and produce more)
Explanation:
a cartel can simply be said to be a union or the association of producers in some specific industry that arrive at a joint agreement/consensus to bring about or set common prices specific and also output quotas so as to mitigate, limit or prevent competition.
in the enforcement of a cartel agreement, it is very unreliable and difficult because firms in the cartel have an incentive to cheat on the agreement
Jannet Company, currently pays its employees at the end of a week. The weekly payroll totals $400,000. If it were to extend the pay period so as to pay its employees 1 week later throughout an entire year, the employees would in effect be lending the firm ________ for a year.
Answer:
The answer is $400,000
Explanation:
Solution
The Jannet Company, presently pays its employees at the end of a week. The weekly payroll totals $400,000
The company would like to extend pay period for one week.
now,
The 52nd week for the current year will be paid in the 53rd week, that is, it will be paid in the next year.
Therefore, the employees would in effect be lending or borrowing the firm $400,000 for a year
The adjusted account balance of Spooky Town Internal Service Fund on June 30, 2016, was as follows: Cash $4,000 Receivable from Enterprise Fund $3,000 Building $313,000 - Inventory of supplies $32,150 Vouchers payable $7,150 Transfer in from General Fund $12,000 Net Assets, July 1,2015 $315,000, Charges for services $81,000, Personal services expense $10,600, Supplies expense $42,000, Heat, light, and power expense $3,000, Depreciation expense $24,000, Accounts Payable $1,500 Prepare a statement of revenues, expenses, and changes in net assets l for the Spooky Town Internal Service Fund for the fiscal year ended June 30, 2016.Academia
Answer:
Explanation:
assets:Cash95,000Accounts receivable47,000Due from general fund40,000Materials and supplies18,000Total current assets200,000Noncurrent assets:Capital assets700,000Total noncurrent assets700,000Total assets900,000LiabilitiesCurrent liabilities:Accounts payable115,000Accrued interest payable4,000Total current liabilities119,000Noncurrent liabilities:Revenue bonds payable625,000Total noncurrent liabilities625,000Total liabilities744,000Net PositionNet investment in capital assets30,000Unrestricted69,000Total net position99,000
Mr. Smith employs a team of sales representatives whose primary task is to answer calls from prospective and current customers who have received their company catalog and are interested in making a purchase. He compensates his team using a competitive hourly rate, and he is able to keep costs low since these salespeople do not meet with clients and therefore have no expense account for travel, meals, etc. His salespeople are most likely:
Answer:
Inside sales representative.
Explanation:
A sales representative can be described as an individual that is responsible for selling goods and services to the customers.
A sales representative should be able to carry out the following functions:
1) He/she should be able to properly explain the different features of a product inorder to increase the brand loyalty.
2) The sales rep should be able to quickly respond to the different enquires that customers have about the product.
3) He/she must be able to carry out online transactions.
An inside sales representative is one who works inside the office, this type of sales rep do not transact business directly with the customers instead transaction is carried out through phone calls, email, skype.
A customer has requested that Inga Corporation fill a special order for 2,400 units of product K81 for $29 a unit. While the product would be modified slightly for the special order, product K81's normal unit product cost is $23.10: Direct materials $ 6.00 Direct labor 6.00 Variable manufacturing overhead 3.10 Fixed manufacturing overhead 8.00 Unit product cost $23.10 Direct labor is a variable cost. The special order would have no effect on the company's total fixed manufacturing overhead costs. The customer would like modifications made to product K81 that would increase the variable costs by $1.60 per unit and that would require an investment of $14,000 in special molds that would have no salvage value. This special order would have no effect on the company's other sales. The company has ample spare capacity for producing the special order. If the special order is accepted, the company's overall net operating income would increase (decrease) by:
Answer:
Inga Corporation
Special Order:
If the special order is accepted, the company's overall net operating income would decrease by $3,680.00.
Explanation:
a) We need to perform some calculations to get the relevant costs. Relevant costs are costs that are avoidable if a decision is taken. Fixed overhead is not a relevant cost because it is unavoidable, especially in this case.
Relevant Costs:
Unit Product cost = $23.10
less Fixed overhead = $8.00
Relevant unit cost = $15.10
b) An income statement is prepared to determine the Operating Income from Special Order:
Sales (2,400 x $29) = $69,600
less Relevant costs:
Unit (2,400 x $15.10) = $40,080
Special Equipment Cost = $14,000
Contribution = $15,520
less Fixed cost ($8.00 x 2,400) = $19,200
Net Operating Income ($3,680)
c) To accept or reject the special order should not be based solely on the net operating loss. The character of the allocated fixed cost should be investigated and analyzed to understand whether the amount that is avoidable or not. Avoidable fixed cost is relevant in making such decision.
AcuBlade Castings Inc. casts blades for turbine engines. Within the Casting Department, alloy is first melted in a crucible, then poured into molds to produce the castings. On May 1, there were 900 pounds of alloy in process, which were 40% complete as to conversion. The Work in Process balance for these 900 pounds was $102,960, determined as follows:
Direct materials (900 x $110) $99,000
Conversion (900 x 40% x $11) 3,960
$102,960
During May, the Casting Department was charged $901,000 for 8,500 pounds of alloy and $33,920 for direct labor. Factory overhead is applied to the department at a rate of 150% of direct labor. The department transferred out 8,700 pounds of finished castings to the Machining Department. The May 31 inventory in process was 20% complete as to conversion.
Determine the Work in Process-Casting Department May 31 balance.
Answer:
Work In Process Ending Inventory 700 pounds
Cost Of Ending Inventory $ 75,873.69
Explanation:
AcuBlade Castings Inc.
The Work in Process Ending inventory is calculated by adding the beginning inventory WIP to the Work started and subtracting the transferred out.
Opening Work In Process Inventory = 900 pounds
Add Work Started 8500 pounds
Less Transferred Out (8700) pounds
Work In Process Ending Inventory 700 pounds
We only need to find the Ending Work in Process Inventory which is 700 pounds complete for materials and 20 % complete as to conversion. which means it has 700 pounds of materials and 140 pounds were worked on .
Equivalent Units Of Production
Particulars Units % of Completion Equivalent Units
Materials Conversion Materials Conversion
Transferred Out 8700 100 100 8700 8700
Work In Process
Ending Inventory 700 100 20 700 140
Equivalent Units 9400 8840
Costs Materials Conversion
Opening Inventory 99000 3960
Units Started 901,000 (33,920 + 50880) = $ 84800
Total Costs 1000,000 88760
Equivalent Units 9400 8840
Cost/ Unit $ 106.38 $10.04
Cost Of Ending Inventory $ 75,873.69
Materials = $ 106.38* 700= $ 74468.09
Conversion = $ 10.04 * 140= 1405.6
g You invest 56% of your money in Stock A and the rest in Stock B. The standard deviation of annual returns is 49% for Stock A and 49% for Stock B. The correlation between the two stocks is 0.2. By how many percentage points does diversifying between these two stocks reduce your risk? Go out three decimals - for example, write 5.6% as .056.
Answer:
The risk will be reduced by 0.109
Explanation:
Standard deviation for stock A = 49%
Standard deviation for stock B = 49%
Correlation = 0.2
Let's use the standard deviation of portfolio equation:
[tex]= \sqrt{w_A^2 \sigma _A^2 + w_B^2 \sigma _B^2 + 2w_A w_B \sigma _A \sigma _B * C}[/tex]
Where[tex] w_B [/tex] = 100% - 56% = 44%
[tex]= \sqrt{(0.56^2 * 0.49^2) + (0.44^2 * 0.49^2) + (2*0.56*0.44*0.49*0.49)0.2}[/tex]
= 0.381 = 38.1%
The risk will be reduced by:
(0.56*0.49)+(0.44*0.49)-0.381
= 0.109
b. Evaluate the statement in the case made by Toru Sakuragi that "… Toyota has been caught between a need to cut costs to overcome the strong yen and the need to improve quality to prevent recalls." And that "They are now pursuing both strategies but they are essentially at odds with one another." Is this a realistic strategy? Do you have suggestions for how the strategy might be improved?
Answer:
Both strategies can be at odds with each other, because cutting costs can reduce the quality of the cars produced and exported, leading to the undesired effect of increasing recalls, which is precisely the other thing that Toyota wants to reduce.
Explanation:
For this reason, Toyota should try instead to improve quality instead of cutting costs, so that its cars become so desirable that even a strong yen does not prevent consumers from buying.
This strategy can be contrasted with country-wide strategies when it comes to export goods: some countries depreciate their currency and/or rely on the export of cheap goods, these countries tend to be less competitive, and the strategy may not live up to expectations. Italy implemented this strategy until it adopted the euro, and could not devalue its currency anymore.
On the contrary, other countries aim for quality even if their currency is strong. This is the German strategy, which has maintained a healthy export economy when it had the mark, and now with the euro, both strong currencies.
In conclusion, Toyota should try to be more like Germany, and less like Italy.
Although challenging, Toyota can manage the strategy of balancing cost reduction and increasing quality. They can consider technological improvements or the use of revenue from non-impacted markets to subsidize their efforts in quality improvements.
Explanation:The statement by Toru Sakuragi implies that Toyota is grappling with two significant but conflicting strategies. The tension lies between reducing operational costs to counter the impact of a robust yen and enhancing product quality to prevent recalls from potentially damaging the brand's reputation. Though it may seem that these strategies oppose each other fundamentally, it is not impossible to pursue both; it is just incredibly challenging.
Essentially, Toyota must strike a balance between cost and quality. A potential improvement to this strategy could be the adoption of new technologies or process improvements that could reduce production costs without compromising product quality. Alternatively, Toyota could leverage some of its revenue from non-affected markets to subsidize quality improvements without the need for significant cost reductions.
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Carper Company is considering a capital investment of $390,000 in additional productive facilities. The new machinery is expected to have useful life of 6 years with no salvage value. Depreciation is by the straight-line method. During the life of the investment, annual net income and net annual cash flows are expected to be $20,000 and $85,000, respectively. Carper has an 8% cost of capital rate, which is the required rate of return on the investment. Instructions (Round to two decimals.)
Answer:
1. 4.59
2. 5.13%
Explanation:
(1) the cash payback period
Pay back period = Capital investment / Annual net annual cash flows = $390,000 / $85,000 = 4.59, or 4 years and (0.58823529411765 * 12 months) = 4 years and 7 months.
(2) The annual rate of return on the proposed capital expenditure
Annual rate of return = Annual net income / Capital investment = $20,000 / $390,000 = 0.0513, or 5.13%.
Jackson comma Inc. is a manufacturer of lead crystal glasses. The standard direct materials quantity is 0.9 pound per glass at a cost of $ 0.60 per pound. The actual result for one month's production of 7 comma 100 glasses was 1.2 pounds per glass, at a cost of $ 0.40 per pound. Calculate the direct materials cost variance and the direct materials efficiency variance.
Answer:
$426 Favorable
$1,278 Unfavourable
Explanation:
Direct material cost variance = Standard cost - Actual cost
= 65
7,100*0.9*0.60 - 7,100*1.2*0.40
=3,834-3,408
= $426 Favorable
Direct labor efficiency variance = (standard quantity - actual quantity)*standard price
= (7,100*0.9- 7,100*1.2)*0.60
=6,390-8,520*0.60
=-2,130*0.60
=$-1,278 Unfavourable
If the dollar interest rate is 10 percent, the euro interest rate is 6 percent, and the expected return on dollar depreciation against the euro is 8 percent, thenA.an investor should invest only in dollars.B.an investor should invest only in euros.C.an investor should be indifferent between dollars and euros.D.It is impossible to tell given the information.E.All of the above.
Answer:
The answer is option B
Explanation:
Given the information provided, an investor would be indifferent between investing in dollars and euros as there is no clear advantage in terms of expected return.
Explanation:In this scenario, the U.S. dollar interest rate is higher than the euro interest rate, which may make investing in dollars more attractive to investors. However, the expected return on dollar depreciation against the euro is also considered. If the dollar is expected to depreciate against the euro, it means that the value of the dollar is expected to decrease compared to the euro. This would mean that even though the interest rate on dollars is higher, the decrease in the value of the dollar may offset the higher interest rate.
Therefore, an investor should consider both the interest rate differential and the expected return on currency depreciation. Given the information provided, an investor would be indifferent between investing in dollars and euros as there is no clear advantage in terms of expected return.
Consider the equation %ΔM + %ΔV ≈ %ΔP + %ΔY. If the velocity of money does not change (%ΔV = 0), and the change in real GDP exactly keeps pace with the change in the money supply (%ΔM = %ΔY), what will happen to the price level (P)?
Answer: It will stay the same i.e %ΔP = 0
Explanation:
We are given the following formula,
%ΔM + %ΔV ≈ %ΔP + %ΔY
And told that,
%ΔV = 0
%ΔM = %ΔY
If that is the case therefore then the new formula should be written as follows,
%ΔM = %ΔY
This is because the % change in money supply is the only variable that is on the left side of the equation. For it to be equal to % change in real GDP on the right side of the equation then ONLY the % change in real GDP can exist on the right side. Which means that %ΔP has to be 0 as well.
For example, assume both %ΔM and %ΔY are 2 and %ΔP is 1
%ΔM = %ΔY
2 ≠ 2 + 1
The equation is not satisfied.
Now assume %ΔP = 0.
2 = 2 + 0.
Equation is satisfied.
Seeing as %ΔP is 0 that means there is no change in Prices so the Price Level stays the same.
When The Equation is satisfied %ΔP is = 0 norms there is no change in Prices so the Price Level stays the same.
What is Real GDP?
We are given the ensuing formula,
After that %ΔM + %ΔV ≈ %ΔP + %ΔY
And also the told that is,
Then %ΔV is = 0
After that %ΔM is = %ΔY
When If that is the case Thus then the new procedure should be written as follows,
Then %ΔM is = %ΔY
This is because the % change in money supply is the greatest variable that is on the left flank of the equation. For it to be equal to the % change in real GDP on the right side of the equation then Exclusively the % change in real GDP can exist on the right side. This indicates that %ΔP has to be 0 as well.
For illustration, consider both %ΔM and %ΔY are 2 and %ΔP is 1
Then %ΔM = %ΔY
After that 2 ≠ 2 + 1
Then The equation is not satisfied.
Now we assume that %ΔP = 0.
Then 2 = 2 + 0.
Thus, The Equation is satisfied.
Then Noticing as %ΔP is 0 means there is no change in Prices so the Price Level stays identical.
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A subsidiary ledger:
Multiple Choice
Includes transactions not covered by special journals.
Is a listing of all of the accounts of a business.
Is a listing of individual accounts and amounts with a common characteristic.
Is also called a general ledger.
Is also called a special journal.
A subsidiary ledger contains a listing of individual accounts with a common characteristic, providing a detailed breakdown which contributes to the total balance of a specific general ledger account.
The correct answer to the question "A subsidiary ledger" is - Is a listing of individual accounts and amounts with a common characteristic. A subsidiary ledger is a group of similar accounts whose combined balances equal the balance in a specific general ledger account. The general ledger, or GL, is the main accounting record of a company which uses double-entry bookkeeping. Subsidiary ledgers serve as a detailed breakdown of the GL accounts, allowing for easier and more focused review for accountants and auditors. For example, an accounts receivable subsidiary ledger (customer ledger) would include information about individual sales to customers and payments received, with its total equating to the accounts receivable line on the balance sheet.
General ledgers typically include debits and credits for all transactions, which can also be recorded in subsidiary ledgers if needed. Subsidiary ledgers provide detailed information that feeds into the general ledger and eventually into the financial statements such as the balance sheet, the income statement, and the cash flow statement.
The following are selected items derived from Dibb Company's adjusted trial balance on December 31, 2016: Loss on sale of land $5,000 Cost of goods sold $130,000 Sales (net) $198,000 Operating expenses 45,000 Twelve thousand shares of common stock were outstanding the entire year. Required: Assuming a 30% income tax rate on all items of income, prepare a 2016 income statement for Dibb's Company using a multiple-step format. Round earnings per share computations to two decimal places. DIBB COMPANY Income Statement (Multiple-Step) For Year Ended December 31, 2016
Answer:
See the explanation below.
Explanation:
DIBB COMPANY
Income Statement (Multiple-Step)
For Year Ended December 31, 2016
Details Amount ($)
Sales (net) 198,000
Cost of goods sold (130,000)
Gross profit 68,000
Operating expenses (45,000)
Operating profit before tax 23,000
Tax (23,000 * 30%) (6,900)
Profit after tax 16,100
Loss on sale of land (5,000)
Profit for the year 11,100
Earning per share (11,100/12,000) 0.93
To prepare a multiple-step income statement for Dibb Company for the year ended December 31, 2016, we need to follow a structured format that separates different components of income and expenses.
Here's how you can create the income statement:
DIBB COMPANY Income Statement (Multiple-Step)
For Year Ended December 31, 2016
Sales (Net): $198,000
Cost of Goods Sold:
Beginning Inventory: $0 (assuming no information provided)
Purchases: (if given, subtract this amount)
Ending Inventory: (if given, subtract this amount)
Cost of Goods Sold: $130,000
Gross Profit: $198,000 - $130,000 = $68,000
Operating Expenses:
Operating Expenses: $45,000
Income Before Tax: $68,000 - $45,000 = $23,000
Other Income and Expenses:
Loss on Sale of Land: $5,000
Income Before Income Tax: $23,000 - $5,000 = $18,000
Income Tax Expense (30%): $18,000 * 0.30 = $5,400
Net Income: $18,000 - $5,400 = $12,600
Earnings per Share (EPS):
EPS = Net Income / Number of Outstanding Shares
EPS = $12,600 / 12,000 shares = $1.05 per share
In this income statement, we used a multiple-step format, which separates various components of income and expenses. It starts with the gross profit, then deducts operating expenses, followed by other income and expenses. Finally, income tax is calculated to arrive at the net income, and the earnings per share are computed.
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Brief Exercise 9-17 Record early retirement of bonds issued at a premium (LO9-7)
Premium Pizza retires its 7% bonds for $53,000 before their scheduled maturity. At the time, the bonds have a face value of $50,700 and a carrying value of $54,965. Record the early retirement of the bonds. (If no entry is required for a transaction/event, select "No journal entry required" in the first account field.)
Answer:
Dr Bonds payable $50,700
Dr premium on bonds payable $4,265
Cr Cash $53,000
Cr gain on bonds retirement($50,700+$4,265-$53000) $1,965
Explanation:
The premium yet to be amortized on the bond at retirement is the carrying value minus face value i.e $54,965-$50,700=$4265
The premium on bonds payable would now be debited with $4265
The cash paid on retirement would be credited to cash account
The face value of the bonds payable of $50,700 would be debited to bonds payable in order to show that the obligation has been discharged.
QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 175,000 $ 230,000 Unit-level costs 33,000 44,000 Batch-level costs 20,500 32,000 Product-level costs 23,000 25,000 Facility-level costs 18,000 20,500 What is the differential revenue for this decision?
Answer:
$55,000
Explanation:
Differential Revenue
Alternative A Alternative B
Projected revenue $ 175,000 $ 230,000
Hence :
Alternative A - Alternative B = Differential Revenue
$ 175,000 - $ 230,000
=$55,000
Therefore the differential revenue for this decision will be $55,000
Lott Company uses a job order cost system and applies overhead to production on the basis of direct labor costs. On January 1, 2017, Job No. 50 was the only job in process. The costs incurred prior to January 1 on this job were as follows: direct materials $ 20,000 , direct labor $ 12,000 , and manufacturing overhead $ 16,000 . As of January 1, Job No. 49 had been completed at a cost of $ 90,000 and was part of finished goods inventory. There was a $ 15,000 balance in the Raw Materials Inventory account.
During the month of January, Lott Company began production on Jobs 51 and 52, and completed Jobs 50 and 51. Jobs 49 and 50 were also sold on account during the month for $ 122,000 and $ 158,000 , respectively. The following additional events occurred during the month.
1. Purchased additional raw materials of $ 90,000 on account.
2. Incurred factory labor costs of $ 70,000 . Of this amount $ 16,000 related to employer payroll taxes.
3. Incurred manufacturing overhead costs as follows: indirect materials $ 17,000 ; indirect labor $ 20,000 ; depreciation expense on equipment $ 12,000 ; and various other manufacturing overhead costs on account $ 16,000 .
4. Assigned direct materials and direct labor to jobs as follows.
Job No.
Direct Materials
Direct Labor
50 $ 10,000 $ 5,000
51 39,000 25,000
52 30,000 20,000
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Calculate the predetermined overhead rate for 2017, assuming Lott Company estimates total manufacturing overhead costs of $840,000, direct labor costs of $700,000, and direct labor hours of 20,000 for the year. (Round answer to the nearest whole percent, e.g. 25%.)
Predetermined overhead rate
%
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Open job cost sheets for Jobs 50, 51, and 52. Enter the January 1 balances on the job cost sheet for Job No. 50.
Job No. 50
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Beg. $
$
$
Jan.
$
$
$
Cost of completed job
Direct materials $
Direct labor
Manufacturing overhead
Total cost $
Job No. 51
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan. $
$
$
$
$
$
Cost of completed job
Direct materials $
Direct labor
Manufacturing overhead
Total cost $
Job No. 52
Date
Direct Materials
Direct Labor
Manufacturing Overhead
Jan. $
$
$
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Prepare the journal entries to record the purchase of raw materials, the factory labor costs incurred, and the manufacturing overhead costs incurred during the month of January. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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Prepare the journal entries to record the assignment of direct materials, direct labor, and manufacturing overhead costs to production. In assigning manufacturing overhead costs, use the overhead rate calculated in (a). (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(2)
(3)
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Total the job cost sheets for any job(s) completed during the month. Prepare the journal entry to record the completion of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
Account Titles and Explanation
Debit
Credit
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Prepare the journal entries to record the sale of any job(s) during the month. (Credit account titles are automatically indented when amount is entered. Do not indent manually.)
No.
Account Titles and Explanation
Debit
Credit
(1)
(To record sale of jobs)
(2)
(To record cost of jobs)
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What is the balance in the Finished Goods Inventory account at the end of the month? What does this balance consist of?
Finished Goods Inventory $
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What is the amount of over- or underapplied overhead?
Manufacturing Overhead $
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Answer:
1. N = 840.66 RPM
2. 1023 w
Explanation:
See attached images
Marian Corporation has two separate divisions that operate as profit centers. The following information is available for the most recent year: Black Division Navy Division Sales (net) $ 600,000 $ 330,000 Salary expense 21,000 41,000 Cost of goods sold 160,000 152,000 The Black Division occupies 26,000 square feet in the plant. The Navy Division occupies 39,000 square feet. Rent is an indirect expense and is allocated based on square footage. Rent expense for the year was $65,000. Compute departmental income for the Black and Navy Divisions, respectively. (Do not round your intermediate computations)
Answer and Explanation:
The computation of the departmental income for the black and navy decisions is shown below:
Particulars Black Division Navy Division
Net sales $600,000 $330,000
Less:
Salary expense -$21,000 -$41,000
Cost of goods sold -$160,000 -$152,000
Rent expense -$26,000 -$39,000
Departmental income $393,000 $98,000
We simply deduct all expenses from the sales so that the departmental income could come
At the end of the current year, the accounts receivable account has a debit balance of $2,950,000 and sales for the year total $27,400,000. The allowance account before adjustment has a debit balance of $9,500. Bad debt expense is estimated at 3/4 of 1% of sales. The allowance account before adjustment has a debit balance of $9,500. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $188,000. The allowance account before adjustment has a credit balance of $31,400. Bad debt expense is estimated at 1/2 of 1% of sales. The allowance account before adjustment has a credit balance of $31,400. An aging of the accounts in the customer ledger indicates estimated doubtful accounts of $175,000. Determine the amount of the adjusting entry to provide for doubtful accounts under each of the assumptions (a through d) listed above
Answer:
The treatments and adjusting entry balances are given for each case.
Explanation:
1) Sales $27,400,000
Accounts receivable account $2,950,000
The allowance account before adjustment has a debit balance of $9,500
Bad debt expense is estimated at 3/4 of 1% of sales= 274000 *3/4= $205500
Treatment for a :
Un adjusted Balance = $ 9500 debit
Bad Debts Expense- $ 205500 Cr
Required Adjustment = $ 215000
End of period adjustment entry
Bad Debts Expense $215000 Dr
Allowance for Doubtful Accounts $ 215000 Cr.
Treatment for b :
Un adjusted Balance = $ 9500 debit
Estimated Balance - $ 188,000 credit
Required Adjustment = $ 197,500
End of period adjustment entry
Bad Debts Expense $ 197500 Dr
Allowance for Doubtful Accounts $ 197500 Cr.
Treatment for c :
Un adjusted Balance = $ 31,400 Cr
Estimated Balance - $ 137000 (274000/2) Cr
Required Adjustment = $ 105600
End of period adjustment entry
Bad Debts Expense $ 105600 Dr
Allowance for Doubtful Accounts $ 105,600 Cr.
Treatment for d:
Un adjusted Balance = $ 31,400 Cr
Estimated Balance - $ 175000 Cr
Required Adjustment = $ 143,600
End of period adjustment entry
Bad Debts Expense $ 143,600 Dr
Allowance for Doubtful Accounts $ 143,600 Cr.
2. QuickDraw performs drafting services for local builders. At the end of its first year of operations, QuickDraw had performed $10,000 in services (revenue under GAAP) for which cash had not been received (and is not taxable under IRS rules). Assuming a 35% tax rate, determine the amount of any deferred taxes and designate whether they are a deferred tax asset or deferred tax liability.
Answer:
$3,500 and deferred tax liability
Explanation:
The computation of the deferred tax is shown below:
= Service performed × tax rate
where,
Service performed is $10,000
And, the tax rate is 35%
Now placing the values
The amount of deferred tax is
= $10,000 × 35%
= $3,500
This amount reflect the deferred tax liability
We simply multiplied the service performed amount with the tax rate so that the deferred tax could come
Tharaldson Corporation makes a product with the following standard costs: Standard Quantity or HoursStandard Price or RateStandard Cost Per Unit Direct materials 5.8ounces$3.00per ounce$17.40 Direct labor 0.5hours$12.00per hour$6.00 Variable overhead 0.5hours$5.00per hour$2.50 The company reported the following results concerning this product in June. Originally budgeted output 3,800units Actual output 3,400units Raw materials used in production 20,800ounces Purchases of raw materials 21,900ounces Actual direct labor-hours 520hours Actual cost of raw materials purchases$42,500 Actual direct labor cost$13,800 Actual variable overhead cost$3,900 The company applies variable overhead on the basis of direct labor-hours. The direct materials purchases variance is computed when the materials are purchased. The variable overhead efficiency variance for June is: Multiple Choice
$6,490 F
$5,900 U
$6,490 U
$5,900 F
Answer:
variable overhead efficiency variance= $5,900 favorable
Explanation:
Giving the following information:
Standard Variable overhead:
0.5 hours
$5.00 per hour
Actual output= 3,400 units
Actual direct labor-hours= 520 hours
To calculate the variable overhead efficiency variance, we need to use the following formula:
variable overhead efficiency variance= (Standard Quantity - Actual Quantity)*Standard rate
variable overhead efficiency variance= (1,700 - 520)*5= $5,900 favorable
If the government follows an easy monetary policy and the exchange rate is flexible, which of the following will likely be the result? A falling real interest rate but higher net exports. A strong currency, which will help stimulate net exports. Increases in the demand for the currency and decreases in the supply of the currency. A higher real interest rate but lower net exports.
Answer:
A falling real interest rate but higher net exports.
Explanation:
An easy monetary policy is a policy in which the interest rates decrease in order to increase the money supply and when interest rates are lower, there is an increase in spending and on net exports. Also, a flexible exchange rate is when the system allows the events on the market to determine the exchange rate.
According to this, the answer is that if the government follows an easy monetary policy and the exchange rate is flexible, the result will likely be a falling real interest rate but higher net exports.
Consider the following situations. a. Bank reserves are $100, the public holds $200 in currency, and the desired reserve-deposit ratio is 0.25. Find deposits and the money supply. Instructions: Enter your responses as whole numbers. Deposits: $ Money supply: $ b. The money supply is $500 and currency held by the public equals bank reserves. The desired reserve-deposit ratio is 0.25. Find currency held by the public and bank reserves. Instructions: Enter your responses as whole numbers. Currency held by the public: $ Bank reserves: $ c. The money supply is $1,250, of which $250 is currency held by the public. Bank reserves are $100. Find the desired reserve-deposit ratio.
Answer: Please refer to Explanation
Explanation:
a) The amount of Deposits are calculated as,
Deposits = Reserve / Reserve Deposit ratio
Deposits = $100 / 0.25
= $400
Deposits are $400
Using the Deposits, Money Supply is calculated by,
Money supply = Currency in circulation + Deposit
Money Supply = $200 + $400
= $600.
Money Supply is $600
b) The currency held by the Public which is equal to bank reserves can be calculated by,
Currency held by public = Money Supply - Deposits
The desired reserve-deposit ratio is 0.25 so we can denote the currency held with C.
That means that
C = 500 - C/0.25
0.25C = 500(0.25) - C
O.25C + C = 125
1.25C = 125
C = $100
Currency held by the public and bank reserves is $100
c. To find the reserve deposit ratio, we can use the Money Supply equation.
Money supply = Currency in circulation + Reserves / Reserve deposit ratio ( denoted Rd)
Which is,
1,250 = 250 + 100 / Rd
1,250 - 250 = 100/ Rd
1,000 = 100 / Rd
1,000Rd = 100
Rd = 100/1,000
Rd = 10%
Reserve Deposit Ratio = 10% or 0.10.
a. Deposits: $800 Money supply: $1,000 b. Currency held by the public: $125 Bank reserves: $375 c. Desired reserve-deposit ratio: 0.2857
Explanation:a. To find the deposits, we can use the formula: deposits = currency / reserve-deposit ratio. In this case, currency = $200 and reserve-deposit ratio = 0.25. Deposits = 200 / 0.25 = $800. To find the money supply, we can add the currency and deposits: money supply = currency + deposits = 200 + 800 = $1,000.
b. To find the currency held by the public, we can use the formula: currency held by the public = reserve-deposit ratio * deposits. In this case, the reserve-deposit ratio = 0.25 and deposits = $500. Currency held by the public = 0.25 * 500 = $125. To find the bank reserves, we can subtract the currency held by the public from the desired reserves: bank reserves = desired reserves - currency held by the public = 500 - 125 = $375.
c. To find the desired reserve-deposit ratio, we can use the formula: desired reserve-deposit ratio = bank reserves / (currency held by the public + bank reserves). In this case, the bank reserves = $100, and the currency held by the public = $250. Desired reserve-deposit ratio = 100 / (250 + 100) = 0.2857 (rounded to four decimal places).
Sunland Company issued $530,000, 15-year, 6% bonds at 96. (a) Prepare the journal entry to record the sale of these bonds on January 1, 2022. (Credit account titles are automatically indented when the amount is entered. Do not indent manually.)
Answer:
January 1, 2022
Dr. Cash $508,800
Dr. Discount on Bond $21,200
Cr. Bond Payable $530,000
Explanation:
The bond is issued on discount when the bond issuance proceeds are less than the face value of the bond. The discount is expensed over the bond period until maturity. It is added to the interest expense value to expense it.
Issuance value = $530,000 x 96% = $508,800
Discount on the bond = Face value - Issuance value = $530,000 - $508,800 = $21,200
If market interest rates rise after a bond is issued, the bond's price will decrease to remain competitive. To determine the price you'd pay for a bond with higher prevailing interest rates, you discount the bond's future payments by the current market rate. In this case, you'd likely pay less than the bond's face value due to the interest rate increase from 6% to 9%.
Explanation:Understanding Bond Pricing and Interest Rates
When a bond is issued, its face value and interest payments are based on the current interest rates. If the market interest rates increase, as in the scenario from 6% to 9%, the bond's fixed interest payments become less attractive compared to new bonds on the market offering higher rates. As a result, the existing bond's price will decrease to offer a potential investor the same effective yield as the new bonds issued at the higher rate. Therefore, if you are considering buying a $10,000 bond one year before its maturity when the market interest rate is 9%, you would expect to pay less than the face value of $10,000.
To calculate what you would be willing to pay for the bond, you need to discount the bond's remaining payments (interest and principal) back to their present value at the current market rate of 9%. Assuming annual interest payments, you would be entitled to one more interest payment of $600 (6% of $10,000) and the repayment of the $10,000 principal at maturity. Discounting these amounts back at 9% would give you the price you should be willing to pay today.
Using the formula for present value (PV) of a single payment, PV = FV / (1 + r)n, where FV is the future value, r is the interest rate, and n is the number of periods, calculate the present value of the interest payment and the principal, then sum them for the total price of the bond.
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Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000. RequiredDetermine the sales volume in units and dollars required to break even. (Do not round intermediate calculations.)Calculate the break-even point assuming fixed costs increase to $192,000. (Do not round intermediate calculations.)
Answer:
Instructions are below.
Explanation:
Giving the following information:
Adams Company produces a product that sells for $33 per unit and has a variable cost of $13 per unit. Adams incurs annual fixed costs of $120,000.
To calculate the break-even point both in dollars and units, we need to use the following formulas:
Break-even point in units= fixed costs/ contribution margin per unit
Break-even point in units= 120,000/ (33 - 13)
Break-even point in units= 6,000 units
Break-even point (dollars)= fixed costs/ contribution margin ratio
Break-even point (dollars)= 120,000/ (20/33)
Break-even point (dollars)= $198,000
Now, for fixed costs= 192,000
Break-even point in units= 192,000/ (33 - 13)= 9,600 units
Break-even point (dollars)= 192,000/ (20/33)= $316,800