bartlebvoomld.the cheatersEDITECQ Inc. is in the process of completing labor negotiations for the coming year. Part ofthese negotiations call for an increase in the base wage rate for direct labor from P10to P12 per hour, with a corresponding increase in fringe benefits. At present, fringebenefits amount to 35% of total wages, and this percentage will remain unchangedwith the new contract. The present labor standards call for 8 direct labor hours perunit of output. Other conversion costs amount to P40 per unit, of which 75% is forvariable costs. Materials costs amount to $8 per unit. Administrative costs are fixedand amount to P10 per unit at the present production level. Products are sold with agross margin of 30% on sales.Compute the new selling price to be charged if there is no increase in productivity as aresult of the new labor contract.•..MoreAdd to Story

A pricing decision is a process of determining the price of the product. Various factor affects this…

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Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter10: Short-term Decision Making

Section: Chapter Questions

Problem 1PB: Variety Artisans has a bottleneck in their production that occurs within the engraving department....

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Huron Manufacturing Co. uses a job order cost system to cost its products. It recently signed a new contract with the union that calls for time-and-a-half for all work over 40 hours a week and double-time for Saturday and Sunday. Also, a bonus of 1% of the employees earnings for the year is to be paid to the employees at the end of the fiscal year. The controller, the plant manager, and the sales manager disagree as to how the overtime pay and the bonus should be allocated. An examination of the first months payroll under the new union contract provisions shows the following: Analysis of the supporting payroll documents revealed the following: a. More production was scheduled each day than could be handled in a regular workday, resulting in the need for overtime. b. The Saturday and Sunday hours resulted from rush orders with special contract arrangements with the customers. The controller believes that the overtime premiums and the bonus should be charged to factory overhead and spread over all production of the accounting period, regardless of when the jobs were completed. The plant manager favors charging the overtime premiums directly to the jobs worked on during overtime hours and the bonus to administrative expense. The sales manager states that the overtime premiums and bonus are not factory costs chargeable to regular production but are costs created from administrative policies and, therefore, should be charged only to administrative expense. Required: 1. Evaluate each positionthe controllers, the plant managers, and the sales managers. If you disagree with all of the positions taken, present your view of the appropriate allocation. 2. Prepare the journal entries to illustrate the position you support, including the accrual for the bonus.
Variety Artisans has a bottleneck in their production that occurs within the engraving department. Arjun Naipul, the COO, is considering hiring an extra worker, whose salary will be $45,000 per year, to solve the problem. With this extra worker, the company could produce and sell 3,500 more units per year. Currently, the selling price per unit is $18 and the cost per unit is $5.85. Using the information provided, calculate the annual financial impact of hiring the extra worker.
Jonas Consulting enters into a contract to provide cost management consulting services over a 1-year period for $10,000 per month. At the end of the contract, Jonas will either give the customer a $24,000 refund or be entitled to an additional $24,000, depending on the level of cost savings. The company believes there is an 80% chance that it will be entitled to an additional $24,000 and a 20% chance it will give a refund of $24,000. In addition, Jonas believes it is probable that a significant reversal of any previously recognized revenue will not occur. The contract performance is determined to be satisfied over time. Required: 1. Determine the monthly transaction price that Jonas should use for recording the contract and prepare Jonas’s journal entry at the end of the first month of the contract using the most likely amount approach.
WHAT US THE ESTIMATED LIABILITY FOR VACATION PAY? Four factory workers and a supervisor make a team in the Machining Department. The supervisor earns P100 per hour, and the combined hourly charge of the four workers is P320. Each employee is entitled to a 2-week paid vacation and a bonus equal to 4 week's wages each year. Vacation pay and bonuses are treated as indirect costs and are accrued over the 50 week work year. A provision in the union contract does not allow these employees to work in excess of 40 hours per week.
To improve productivity, ST. MICHAEL Corp. instituted a bonus plan where employees are paid 75% of the time saved when production performance exceeds the standard level of production. The company computes the bonus on the basis of four-week periods. The standard production is set at 3 units per hour. Each employee works 37 hours per week, and the wage rate is P24 per hour. Below are data for one 4-week period: Weekly Production (Units) Employee 1st 2nd 3rd 4th Total ALAN 107 100 110 108 425 JOEL 104 110 115 115 444 ROMY 108 112 112 133 465 TONY 123 120 119 124 486 The employee who had the inconsistent performance (sometimes performing below standard) but got a bonus is A. Joel= 54 bonus B. Alan= 36 bonus C. Romy= 126 bonus D. Tony= 252 bonus The following production and average cost data per unit for two levels of monthly production volume have been supplied by a company that produces a single product: Production volume 2,000 units 4,000 units Direct materials P88.40 P88.40 Direct…
On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Financial over a six-month period. Revis will receive $51,200 from Green at the end of each month. If total cost savings reach a specific target, Revis will receive an additional $25,600 from Green at the end of the contract, but if total cost savings fall short, Revis will refund $25,600 to Green. Revis estimates an 80% chance that cost savings will reach the target and calculates the contract price based on the expected value of future payments to be received.Required:Prepare the following journal entries for Revis:1. to 3. Prepare the journal entry on January 31 to record the collection of cash and recognition of the first month’s revenue. Also record the entry on June 30 for receipt of the bonus assuming total cost savings exceed target. And record the entry on June 30 for payment of the penalty assuming total cost savings fall short of target. Do not give answer in image
Senorita Private Limited operates a piecework system of remuneration, but also guarantees its employees 80% of a time-based rate of pay which is based on $20 per hour for an eight-hour working day. Three minutes is the standard time allowedper unit of output. Piecework is paid at the rate of $18 per standard hour. If an employee produces 200 units in eight hours on a particular day, what is the employee’s gross pay for that day?
Flower corporation, which manufactures dog toys, is developing direct labor standards. The basic direct labor rate is $11.48 per hour. Payroll taxes are 12% of the basic direct labor rate, while fringe benefits such as vacation and health care insurance are $2.55 per hour. Compute the standard rate per direct labor hour for Flower Corp.
Your company has won a one-year contract that was planned to start on January 1, 2016 and be completed by December 31, 2016. The work that was to be performed by the engineering department was estimated at 1000 hours per month for the duration of the twelve-month project using pay grade 7 employees (i.e., regular engineers). The customer informs you that they wish to start the project on July 1 rather than January 1, and they assume that there is no financial impact on the total cost of the project. According to company policy, in 2016 the project account would be charged at a rate of $51 per hour for grade 7 employees, plus an overhead rate of 150%. Also, a salary increase will take effect on January 1, 2017, so the hourly rate will be $54 in 2017 for the grade 7 employees. Moreover, it is expected that the overhead rate will be increased to 155% in 2017. Is there a financial impact on the total cost of the project, and if so, how much of an impact? The escalation reserve should be…
On January 1, Revis Consulting entered into a contract to complete a cost reduction program for Green Financialover a six-month period. Revis will receive $20,000 from Green at the end of each month. If total cost savingsreach a specific target, Revis will receive an additional $10,000 from Green at the end of the contract, but if totalcost savings fall short, Revis will refund $10,000 to Green. Revis estimates an 80% chance that cost savings willreach the target and calculates the contract price based on the expected value of future payments to be received.Required:Prepare the following journal entries for Revis:1. Prepare the journal entry on January 31 to record the collection of cash and recognition of the first month’srevenue.2. Assuming total cost savings exceed target, prepare the journal entry on June 30 to record receipt of the bonus.3. Assuming total cost savings fall short of target, prepare the journal entry on June 30 to record payment of thepenalty
*THIS IS THE LAST PART OF THE QUESTION- THE IMAGE ARE THE FIRST PART THIS IS THE ENDING* A&R bills audit services based on billable hours and advising services at a fixed fee. The cost for audit services is determined by multiplying the billable hours by the quoted employee rates. Staff rates for the following year are $370 per hour and manager rates are $925 per hour. The rates are set to meet the competition in the area. To determine the cost (not the price) of the job. A&R uses a job costing system. To the employee costs (not the billing rates) is added an amount for overhead based on the predetermined rate and the billable hours in the job. The predetermined rate is based on expected billable hours. Total revenue at A&R next year is expected to be $16 million. The two founding partners of A&R are looking at these forecasts for next year and trying to decide whether to drop one of these services. "We should probably become more focused, as we sometimes remind our…
ABC Co. does printing jobs for various customers. On January 1, 20x1, ABC Co. forecasted the purchase of 1,000 reams of paper in the next quarter. The expected purchase date is on April 15, 20x1. ABC Co. expects that the price of paper will fluctuate because of the upcoming elections. Thus, on January 1, 20x1, ABC Co. enters into a forward contract to purchase 1,000 reams of paper at a forwardrate of ₱600 per ream. If the market price on April 15, 20x1 is more than ₱600, ABC Co. shall receive the difference from the broker. On the other hand, if the market price is less than ₱600, ABC Co. shall pay the difference to the broker. The forward contract will be settled net on April 15, 20x1. The discount rateis 10%. If the price of paper is ₱700 per ream on March 31, 20x1, how much is the derivative asset (liability) to be recognized in ABC Co.’s first quarter financial statements?a. 100,000 assetb. 100,000 liabilityc. 98,772 assetd. 98,772 liability

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