Durban Metal Products, Limit cutting edges of bulldozer bill nternal decision-making pur Cost Pool
Q: Richie Riches, a clothing resale store, employs one salesperson, Danielle Hopeton. Hopeton's…
A: The questions are asked to compute the net wages, and gross wages paid to Hopeton, and, prepare the…
Q: 11. Ford Motor Company produces a lithium battery for its cars that has the following costs per…
A: The differential analysis is performed to compare two different alternatives available to the…
Q: A6 Valuation Using the PE Multiple Nokia Corp. recently traded at $5.29 per share. At that time,…
A: In order to calculate the share price and understand whether this year is under overweight this…
Q: On May 10, a company issued for cash 1,600 shares of no-par common stock (with a stated value of $3)…
A: Common stock and preferred stock are two different types of shares issued by the entity for raising…
Q: Legislate Company purchased equipment for $80,000 on January 1, 2017, and will use the…
A: Under the double declining balance method of depreciation, rate of depreciation is taken at a twice…
Q: Make the Statement of Financial Position by making the Statement of Income and Statement of Equity.…
A: The Inventory is to be calculated as- Inventory: Raw Materials $ 24,000 Work in…
Q: Sep. 6 Birdy Birdhouses purchases 58 birdhouses at $42 each with cash. Sep. 8 Birdy Birdhouses…
A: Periodic inventory method: It is an inventory valuation method in which inventory is updated at the…
Q: 1) A company is considering two projects. The projects have the following expected cash flows: 1 2 3…
A: When a company has alternative projects, it has to evaluate which project is more beneficial to the…
Q: Blue Company is constructing a building. Construction began on February 1 and was completed on…
A: The expense of borrowing to acquire a long-term asset is known as capitalized interest. Capitalized…
Q: Base Inc. (Base) and Space Ltd. (Space) formed a joint venture, Moon Ltd., on January 1, 2023. Base…
A: Introduction A business's balance sheet lists plant and equipment as a non-current, actual financial…
Q: Hardy HarHar purchases a new equipment with a cost of $55,000 on March 1, 2020. They estimate the…
A: Cost = 55000 Salvage Value = 5000 Depreciable value = Cost - Salvage Value = 55000 - 5000 = 50000…
Q: AYALA LAND, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Amounts in Thousands, Except…
A: Common size: In the income statement, total revenue or sales become the base and each item in the…
Q: What is the asset turnover?
A: Formula of Assets turnover sales÷ average total assets Since the question wants the answer in…
Q: Noren Company uses the balance sheet aging method to account for uncollectible debt on receivables.…
A: The bad debt expense is estimated on the basis of the percentage of uncollectible for the current…
Q: E9-5A Budget Cash Flow The following various elements relate to Whitfield, Inc.'s cash budget for…
A: The cash flow statement is prepared to record the cash flow from various activities during the…
Q: Indigo Company is considering investing in an annuity contract that will return $53,000 annually at…
A: An annuity is a scheme that provides investors with a series of equalized payments in return for the…
Q: What are the drawbacks to ROI? Give examples of each
A: Return on Investment-ROI Return on investment is frequently questioned as a performance indicator.…
Q: Sumter Pumps Corporation, a manufacturer of industrial pumps, reports the following results for the…
A: Note: When stock dividend is issued then retained earnings is decreased by the market value of the…
Q: 15 Horses 10 Dairy cattle (2 8 Carabaos 20 Hogs (1 year old ) years old) ( 2.5 years old ) 1,000,000…
A: Assets - Any resource that a company or other economic body owns or controls is considered to be an…
Q: 5. You are the project manager of a project that has 34 weeks of total duration. You are evaluating…
A: There are two types of estimations estimate to complete(ETC) and estimate at completion(EAC). The…
Q: Mr. Gilbert is self-employed and makes annual contributions to a Keogh plan. Mrs. Gilbert's employer…
A: The IRA deduction is only available if either spouse participates in the scheme and income…
Q: Prepare Changes in Equity for the year ended December 31, 2020.
A: Equity Capital - The term "equity capital" describes the portion of an organization's funding that…
Q: 11. Debt to Equity Ratio A company has $100,000 on a line of credit and a $500,000 mortgage on it's…
A: "Since you have asked multiple questions, we will solve first question for you. If you want any…
Q: All of the following are factors that determine whether an individual is a qualifying child EXCEPT:…
A: In order to assess if the individual is a qualifying child, the following five tests are used:…
Q: 17. Where is Accumulated Other Comprehensive Loss reported on the balance sheet?
A: A financial statement that lists a company's assets, liabilities, and shareholder equity at a…
Q: You are the owner of a catering company and require advance payments from clients before providing…
A: Journal entries are the primary reporting of the business transactions in the books of accounts of…
Q: Avery, an unmarried taxpayer, had the following income items: $ 42,600 5,340 Salary Net income from…
A: Introduction All of the earnings made throughout the period of the year are added up to create the…
Q: Calculate the missing information for the purchase. Item Selling Price (in $) Sales Tax Rate Sales…
A: Introduction:- The following Formula for purchase price after sales tax as follows:- Purchase price…
Q: Discuss possible strategies of the company to decrease breakeven point, Contribution margin, and…
A: Introduction:- Break-even point point means, where no profit or loss At Break-even point point,…
Q: Salaries of the office staff, advertising expense, and depreciation expense would be included in the…
A: Production Budget :— This budget estimates the number of units to be produced during the period.…
Q: Chapter 1 - Instruction #1 Peyton Smith enjoys listening to all types of music and owns countless…
A: Income Statement :— It is one of the financial statement that shows profitability of company during…
Q: 3. Compute the quality of earnings ratio and the capital expenditures ratio. (Enter your answers in…
A: Quality of earnings ratio is an important metric used for determining the financial health and…
Q: Morning Sky, Incorporated (MSI), manufactures and sells computer games. The company has several…
A: It is one of the techniques in decision making process that determines the true difference in costs…
Q: The auditor worked for this client for years. But before accepting or continuing with the client,…
A: Auditing is a process of examining the financial statements of a company and provide an opinion…
Q: Beridze Manufacturing expects to produce 2,300 units in January and 3,900 units in February. Beridze…
A: Direct material is the raw material used in the making of the goods. It is a product cost which is…
Q: The physical count of inventory of a retailer was lower than shown by the perpetual records. Which…
A: Perpetual inventory system shows that the inventory would be counted by the company on a regular…
Q: Purchase price Expected useful life Scrap value Depreciation per year Minimum required rate of…
A: The payback period is the period in which the investment is recovered completely. It is calculated…
Q: Bryan and Cody each contributed $120,000 to the newly formed BC Partnership in exchange for a 50%…
A: Partnership is the business form that is carried by the two or more partners who will in turn share…
Q: If a taxpayer suffered a casualty loss in Laura and/or Delta, they will be able to take the…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: The normal wage of Anne is R200 per hour and her normal working day comprises 9 hours. The standard…
A: 1. Anne's remuneration for 15th April 2022 is R1,900.
Q: Chadwick Enterprises, Incorporated, operates several restaurants throughout the Midwest. Three of…
A: Answer:- Impairment loss:- When an asset's carrying value of the value of a cash-generating unit…
Q: Sheffield Corporation has income from continuing operations of $256,000 for the year e following…
A: A financial document known as a partial income statement is something that experts could put…
Q: Additional information: 1. As at 1 February 2021, current assets were P280,000, and current…
A: Calculation of Current Ratio: At the beginning of the month i.e As at 1 February 2021 Current Ratio:…
Q: Required: For Minmin Company, how much was allocated to: i. Land ii. Building iii. Machinery…
A: Minmin company acquired some assets i.e land and building, machinery and equipment and delivery…
Q: Assume Skyler Industries has debt of $4,153,821with a cost of capital of 7.4% and equity of…
A: Weighted average cost of capital represents the average rate which an entity is ready to pay for its…
Q: Issuing Stock Professional Products Inc., a wholesaler of office products, was organized on February…
A: Introduction:- Journal entry is the first stage of accounting process. Journal entry used to record…
Q: Required: a. Compute residual income for the three regions. Ignore taxes. b. How have these regions…
A: Introduction:- Calculation of gross profit ratio Gross profit ratio =Individual Divisional gross…
Q: hat will be your first step to generating a busine
A: Budget is very important in the business and preparing the budget is the important step in the…
Q: Martin Services Company provides its employees vacation benefits and a defined contribution pension…
A: Journal Entry is the primary step to record the transaction in the books of accounts. The expense…
Q: You put $7,364 in the bank for 13 years at 7%. Using the Future Value of 1 Table, what factor would…
A: when the investment is made by the person or the company there is the growth in investment over the…
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
- San Mateo Optics, Inc., specializes in manufacturing lenses for large telescopes and cameras used in space exploration. As the specifications for the lenses are determined by the customer and vary considerably, the company uses a job-order costing system. Manufacturing overhead is applied to jobs on the basis of direct labor hours, utilizing the absorption- or full-costing method. San Mateos predetermined overhead rates for 20x1 and 20x2 were based on the following estimates. Jim Cimino, San Mateos controller, would like to use variable (direct) costing for internal reporting purposes as he believes statements prepared using variable costing are more appropriate for making product decisions. In order to explain the benefits of variable costing to the other members of San Mateos management team, Cimino plans to convert the companys income statement from absorption costing to variable costing. He has gathered the following information for this purpose, along with a copy of San Mateos 20x1 and 20x2 comparative income statement. San Mateo Optics, Inc. Comparative Income Statement For the Years 20x1 and 20x2 San Mateos actual manufacturing data for the two years are as follows: The companys actual inventory balances were as follows: For both years, all administrative expenses were fixed, while a portion of the selling expenses resulting from an 8 percent commission on net sales was variable. San Mateo reports any over-or underapplied overhead as an adjustment to the cost of goods sold. Required: 1. For the year ended December 31, 20x2, prepare the revised income statement for San Mateo Optics, Inc., utilizing the variable-costing method. Be sure to include the contribution margin on the revised income statement. 2. Describe two advantages of using variable costing rather than absorption costing. (CMA adapted)Evans, Inc., has a unit-based costing system. Evanss Miami plant produces 10 different electronic products. The demand for each product is about the same. Although they differ in complexity, each product uses about the same labor time and materials. The plant has used direct labor hours for years to assign overhead to products. To help design engineers understand the assumed cost relationships, the Cost Accounting Department developed the following cost equation. (The equation describes the relationship between total manufacturing costs and direct labor hours; the equation is supported by a coefficient of determination of 60 percent.) Y=5,000,000+30X,whereX=directlaborhours The variable rate of 30 is broken down as follows: Because of competitive pressures, product engineering was given the charge to redesign products to reduce the total cost of manufacturing. Using the above cost relationships, product engineering adopted the strategy of redesigning to reduce direct labor content. As each design was completed, an engineering change order was cut, triggering a series of events such as design approval, vendor selection, bill of materials update, redrawing of schematic, test runs, changes in setup procedures, development of new inspection procedures, and so on. After one year of design changes, the normal volume of direct labor was reduced from 250,000 hours to 200,000 hours, with the same number of products being produced. Although each product differs in its labor content, the redesign efforts reduced the labor content for all products. On average, the labor content per unit of product dropped from 1.25 hours per unit to one hour per unit. Fixed overhead, however, increased from 5,000,000 to 6,600,000 per year. Suppose that a consultant was hired to explain the increase in fixed overhead costs. The consultants study revealed that the 30 per hour rate captured the unit-level variable costs; however, the cost behavior of other activities was quite different. For example, setting up equipment is a step-fixed cost, where each step is 2,000 setup hours, costing 90,000. The study also revealed that the cost of receiving goods is a function of the number of different components. This activity has a variable cost of 2,000 per component type and a fixed cost that follows a step-cost pattern. The step is defined by 20 components with a cost of 50,000 per step. Assume also that the consultant indicated that the design adopted by the engineers increased the demand for setups from 20,000 setup hours to 40,000 setup hours and the number of different components from 100 to 250. The demand for other non-unit-level activities remained unchanged. The consultant also recommended that management take a look at a rejected design for its products. This rejected design increased direct labor content from 250,000 hours to 260,000 hours, decreased the demand for setups from 20,000 hours to 10,000 hours, and decreased the demand for purchasing from 100 component types to 75 component types, while the demand for all other activities remained unchanged. Required: 1. Using normal volume, compute the manufacturing cost per labor hour before the year of design changes. What is the cost per unit of an average product? 2. Using normal volume after the one year of design changes, compute the manufacturing cost per hour. What is the cost per unit of an average product? 3. Before considering the consultants study, what do you think is the most likely explanation for the failure of the design changes to reduce manufacturing costs? Now use the information from the consultants study to explain the increase in the average cost per unit of product. What changes would you suggest to improve Evanss efforts to reduce costs? 4. Explain why the consultant recommended a second look at a rejected design. Provide computational support. What does this tell you about the strategic importance of cost management?Potterii sells its products to large box stores and recently added a retail line of products to sell directly to consumers. These estimates are to be used in determining the overhead allocation rate for ABC: What would be the predetermined rate for each cost pool?
- Tom Young, vice president of Dunn Company (a producer of plastic products), has been supervising the implementation of an activity-based cost management system. One of Toms objectives is to improve process efficiency by improving the activities that define the processes. To illustrate the potential of the new system to the president, Tom has decided to focus on two processes: production and customer service. Within each process, one activity will be selected for improvement: molding for production and sustaining engineering for customer service. (Sustaining engineers are responsible for redesigning products based on customer needs and feedback.) Value-added standards are identified for each activity. For molding, the value-added standard calls for nine pounds per mold. (Although the products differ in shape and function, their size, as measured by weight, is uniform.) The value-added standard is based on the elimination of all waste due to defective molds (materials is by far the major cost for the molding activity). The standard price for molding is 15 per pound. For sustaining engineering, the standard is 60 percent of current practical activity capacity. This standard is based on the fact that about 40 percent of the complaints have to do with design features that could have been avoided or anticipated by the company. Current practical capacity (the first year) is defined by the following requirements: 18,000 engineering hours for each product group that has been on the market or in development for five years or less, and 7,200 hours per product group of more than five years. Four product groups have less than five years experience, and 10 product groups have more. There are 72 engineers, each paid a salary of 70,000. Each engineer can provide 2,000 hours of service per year. There are no other significant costs for the engineering activity. For the first year, actual pounds used for molding were 25 percent above the level called for by the value-added standard; engineering usage was 138,000 hours. There were 240,000 units of output produced. Tom and the operational managers have selected some improvement measures that promise to reduce non-value-added activity usage by 30 percent in the second year. Selected actual results achieved for the second year are as follows: The actual prices paid per pound and per engineering hour are identical to the standard or budgeted prices. Required: 1. For the first year, calculate the non-value-added usage and costs for molding and sustaining engineering. Also, calculate the cost of unused capacity for the engineering activity. 2. Using the targeted reduction, establish kaizen standards for molding and engineering (for the second year). 3. Using the kaizen standards prepared in Requirement 2, compute the second-year usage variances, expressed in both physical and financial measures, for molding and engineering. (For engineering, explain why it is necessary to compare actual resource usage with the kaizen standard.) Comment on the companys ability to achieve its targeted reductions. In particular, discuss what measures the company must take to capture any realized reductions in resource usage.Larsen, Inc., produces two types of electronic parts and has provided the following data: There are four activities: machining, setting up, testing, and purchasing. Required: 1. Calculate the activity consumption ratios for each product. 2. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plantwide rate? Which product is undercosted? 3. What if the machine hours were used for the plantwide rate? Would this remove the cost distortion of a plantwide rate?Reducir, Inc., produces two different types of hydraulic cylinders. Reducir produces a major subassembly for the cylinders in the Cutting and Welding Department. Other parts and the subassembly are then assembled in the Assembly Department. The activities, expected costs, and drivers associated with these two manufacturing processes are given below. Note: In the assembly process, the materials-handling activity is a function of product characteristics rather than batch activity. Other overhead activities, their costs, and drivers are listed below. Other production information concerning the two hydraulic cylinders is also provided: Required: 1. Using a plantwide rate based on machine hours, calculate the total overhead cost assigned to each product and the unit overhead cost. 2. Using activity rates, calculate the total overhead cost assigned to each product and the unit overhead cost. Comment on the accuracy of the plantwide rate. 3. Calculate the global consumption ratios. 4. Calculate the consumption ratios for welding and materials handling (Assembly) and show that two drivers, welding hours and number of parts, can be used to achieve the same ABC product costs calculated in Requirement 2. Explain the value of this simplification. 5. Calculate the consumption ratios for inspection and engineering, and show that the drivers for these two activities also duplicate the ABC product costs calculated in Requirement 2.
- Use the following information for Brief Exercises 4-34 and 4-35: Sanjay Company manufactures a product in a factory that has two producing departments, Assembly and Painting, and two support departments, S1 and S2. The activity driver for S1 is square footage, and the activity driver for S2 is number of machine hours. The following data pertain to Sanjay: Brief Exercises 4-34 (Appendix 4B) Assigning Support Department Costs by Using the Direct Method Refer to the information for Sanjay Company above. Required: 1. Calculate the cost assignment ratios to be used under the direct method for Departments S1 and S2. (Note: Each support department will have two ratiosone for Assembly and the other for Painting.) 2. Allocate the support department costs to the producing departments by using the direct method.Geneva, Inc., makes two products, X and Y, that require allocation of indirect manufacturing costs. The following data were compiled by the accountants before making any allocations: The total cost of purchasing and receiving parts used in manufacturing is 60,000. The company uses a job-costing system with a single indirect cost rate. Under this system, allocated costs were 48,000 and 12,000 for X and Y, respectively. If an activity-based system is used, what would be the allocated costs for each product?The management of Wheeler Company has decided to develop cost formulas for its major overhead activities. Wheeler uses a highly automated manufacturing process, and power costs are a significant manufacturing cost. Cost analysts have decided that power costs are mixed; thus, they must be broken into their fixed and variable elements so that the cost behavior of the power usage activity can be properly described. Machine hours have been selected as the activity driver for power costs. The following data for the past eight quarters have been collected: Required: 1. Prepare a scattergraph by plotting power costs against machine hours. Does the scatter-graph show a linear relationship between machine hours and power cost? 2. Using the high and low points, compute a power cost formula. 3. Use the method of least squares to compute a power cost formula. Evaluate the coefficient of determination. 4. Rerun the regression and drop the point (20,000; 26,000) as an outlier. Compare the results from this regression to those for the regression in Requirement 3. Which is better?
- A manufacturing company has two service and two production departments. Human Resources and Machine Repair are the service departments. The production departments are Grinding and Polishing. The following data have been estimated for next years operations: The direct charges identified with each of the departments are as follows: The human resources department services all departments of the company, and its costs are allocated using the numbers of employees within each department, while machine repair costs are allocable to Grinding and Polishing on the basis of machine hours. 1. Distribute the service department costs, using the direct method. 2. Distribute the service department costs, using the sequential distribution method, with the department servicing the greatest number of other departments distributed first.Becker Tabletops has two support departments (Janitorial and Cafeteria) and two production departments (Cutting and Assembly). Relevant details for these departments are as follows: Allocate the support department costs to the production departments using the direct method.Bounce Back Insurance Company carries three major lines of insurance: auto, workers compensation, and homeowners. The company has prepared the following report: Management is concerned that the administrative expenses may make some of the insurance lines unprofitable. However, the administrative expenses have not been allocated to the insurance lines. The controller has suggested that the administrative expenses could be assigned to the insurance lines using activity-based costing. The administrative expenses are comprised of five activities. The activities and their rates are as follows: Activity-base usage data for each line of insurance were retrieved from the corporate records as follows: a. Complete the product profitability report through the administrative activities. Determine the operating income as a percent of premium revenue, rounded to the nearest whole percent. b. Interpret the report.
