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: Estimated Cost Pool Cost Driver Overhead Wholesale Retail Ordering Number of Orders $94,500 170,000 40,000 Machine Setups Number of Setups 92,500 210,000 160,000 Inspection Number of Inspections 55,000 40,000 15,000 What would be the predetermined rate for each cost pool? Round "Rate" answers to two decimal places. Estimated Total Cost Pool Cost Driver Overhead Activity Rate Ordering Number of Orders $94,500 per order Machine Number of Setups 92,500 $ per setup Setups Number of per Inspection 55,000 Inspections inspection

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: Estimated Cost Pool Cost Driver Overhead Wholesale Retail Ordering Number of Orders $94,500 170,000 40,000 Machine Setups Number of Setups 92,500 210,000 160,000 Inspection Number of Inspections 55,000 40,000 15,000 What would be the predetermined rate for each cost pool? Round "Rate" answers to two decimal places. Estimated Total Cost Pool Cost Driver Overhead Activity Rate Ordering Number of Orders $94,500 per order Machine Number of Setups 92,500 $ per setup Setups Number of per Inspection 55,000 Inspections inspection

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter6: Inventories

Section: Chapter Questions

Problem 1MAD: Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation...

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Company MN is a wholesale distributor. It uses an ABC system to analyze customer profitability for its small- and medium-sized retail customers. The cost pool, cost driver and other relevant information is shown below. Cost pool Costs Cost driver Small retailer Medium retailer Ordering 300,000 Number of orders 8,000 4,000 Delivery 750,000 Number of deliveries 10,800 4,200 Customer Service 1,200,000 Number of products sold 320,000 480,000 Total overhead 2,250,000 What is the average total overhead cost per product sold to small and medium retailers? (Assuming every item sold requires certain involvement of customer service) Choose answer as below. A. Small: $3.81; Medium: $2.15 B. Small: $3.81; Medium: $1.5 C. Small: $3.81; Medium: $0.44 D. Small: $3.81; Medium: $0.21
Company MN is a wholesale distributor. It uses an ABC system to analyze customer profitability for its small- and medium-sized retail customers. The cost pool, cost driver and other relevant information is shown below. Cost pool Costs Cost driver Small retailer Medium retailer Ordering 300,000 Number of orders 8,000 4,000 Delivery 750,000 Number of deliveries 10,800 4,200 Customer Service 1,200,000 Number of products sold 320,000 480,000 Total overhead 2,250,000 What is the average total overhead cost per product sold to small retailers? (Assuming every item sold requires certain involvement of customer service) Choose the below answer. A. $3.81 B. $1.50 C. $25.00 D. $50.00
Fairvalue Ltd is a wholesale distribution firm which has provided you with the followinginformation from stores in relation to a particular product line – CRIS20 Dates Details Units Unit Price $ Value $ 08/3/12 Delivery from Manufacturer 500 10 5,000 12/3/12 Delivery from Manufacturer 100 11.20 1,120 17/3/12 Issued to sales 400 25/3/12 Delivery from Manufacturer 300 11.50 3,450 27/3/12 Issued to sales 250 Sales of 650 units @ $20 per item are recorded for the month. There is an opening stock of 250units, valued at $2 000 at 1st March 2012. Required:a. Calculate the gross profit for the month of March 2012 using each of the following methodsof inventory valuation:(i) FIFO. (ii) LIFO. (iii) Weighted average. b. Explain which inventory valuation is most relevant for decision making purposes.
ABC, wholesale, customer protability. Veritek Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Veritek commented, “We apply ABC to determine product-line protability. The same ideas apply to customer protability, and we should nd out our customer protability as well.” Veritek Wholesalers sends catalogs to corporate purchasing departments on a monthly basis. The customers are entitled to return unsold merchandise within a six-month period from the purchase date and receive a full purchase price refund. The following data were collected from last year’s operations:
Mischief, Inc., is a regional pet toy supplier that tracks its business sales in a spreadsheet. The owner, Lisa Derrick, has provided you with a skeleton worksheet, T2_TotalMischief_ Data.xls, with the totals for each quarter by sales region. Lisa needs you to total each column and row, and then provide her with a clustered column chart of each region by quarter. See Figure T2.21 for a sample of what Lisa would like you to do. Regional Sales Summary 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Totals Northeast $ 119,700.00 $ 125,100.00 $ 133,400.00 $ 139,500.00 South $ 48,900.00 $ 52,000.00 $ 49,600.00 $ 54,500.00 Midwest $ 34,600.00 $ 32,200.00 $ 47,000.00 $ 45,900.00 West $ 56,200.00 $ 49,000.00 $ 52,000.00 $ 51,300.00 Totals
Paint Company has two customers Commercial and Consumer with data as follows: Commercial Consumer Selling Price per unit $15 $15 Units Sold 5,000 8,000 Manufacturing Cost per unit $8.25 $8.25 Number of Purchase Orders 76 212 Number of Deliveries 104 287 Number of Expedited deliveries 357 589 Customer Visits 58 75 Paint Company’s management accountant has gathered the following ABC rate information: ABC Cost Rate Purchase Orders $ 72 per purchase order Deliveries $ 43 per delivery Expedited Deliveries $ 18 per expedited delivery Customer Visits $ 56 per customer visit Using the information in the tables above and allocating indirect support costs using ABC to customers, what is the Operating Income for the Commercial customer?
Sandhill Decor sells home decor items through three distribution channels—retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $12,000,000 $3,700,000 $6,600,000 Variable expenses 4,000,000 1,355,000 1,950,000 Direct fixed expenses 5,960,000 994,500 4,188,000 Average assets 8,000,000 3,700,000 2,000,000 Required rate of return 12% 12% 12% (a1) Calculate the margin and asset turnover for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12% or 5.12.) Retail Stores Internet Catalog Sales Margin enter percentages % enter percentages % enter percentages % Asset turnover enter a ratio enter a ratio enter a ratio
(a) Xesta Limited (XL) operates an incubation centre for its new product(s) ideas. This centre purchases raw materials and any complete output is sold at a price as part of its test marketing independently. The centre fixes prices to make a standard gross profit percentage on sales of 25%.The following information is available for the year ended 28 February 2019.Inventory (1 March 2018) Shs 243 million; purchases for the year Shs 595.6 million; purchase returns Shs 41.2 million; inventory (28 February 2019) shs 261.7 million.Required: Compute the sales made by the centre for the year ended 28 February 2019.(b)The following information relates to the main operations of Xesta Limited (XL) for the year ended 28 February 2019.1. On 1 March 2018, the summary of assets and liabilities were as follows; cash at Hand Shs 42,300,000; shs Cash at Bank Shs 40,800,000; Trade payables Shs 60,500,000 and rent outstanding Shs 2,480,000.2. The following information relates to transactions that look…
A domestic appliance retailer with multiple outlets sells a popular toaster known as the Autocrisp 2000, for which the following information is available: Average sales 75 per day Maximum sales 95 per day Minimum sales 50 per day Lead time 12-18 days Reorder quantity 1,750 6.3 Based on the data above, at what level of inventory would a replenishment order be issued? A 600 units B 1,125 units C 1,710 units D 1,750 units
baby Company provided the followingdata:Items included in thebodega 4,000,000Items included in the specificallysegregated per sale oncontract 100,000Items in receiving department,returned by customer, in goodcondition 50,000Items ordered and in thereceiving department 400,000Items ordered, invoice receivedbut goods not received. Freightis on account on seller 300,000Items shipped today, invoicemailed, FOB shipping point 250,000Items shipped today, invoicemailed, FOB destination 150,000Items currently being used forwindow display 200,000Items on counter for sale 800,000Items in receiving department,refused because of damage 50,000Items in the shippingDepartment 250,000 How much is the cost of ending inventory?
The Port Authority sells a wide variety of cables and adapters for electronic equipment online. Last year the mean value of orders placed with the Port Authority was 47.28, and management wants to assess whether the mean value of orders placed to date this year is the same as last year. The values of a sample of 49,896 orders placed this year are collected and recorded in the tile PortAuthority. a. Formulate hypotheses that can be used to test whether the mean value of orders placed this year differs from the mean value of orders placed last year. b. Use the data in the file PortAuthority to conduct your hypothesis test. What is the p value for your hypothesis test? At = 0.01, what is your conclusion?
Amazon.com, Inc. (AMZN) is one of the largest Internet retailers in the world. Target Corporation (TGT) is one of the largest value-priced general merchandisers operating in the United States. Target sells through nearly 1,800 brick-and-mortar stores and through the Internet. Amazon and Target compete for customers across a wide variety of products, including media, general merchandise, apparel, and consumer electronics. Cost of goods sold and inventory information from a recent annual report are provided for both companies as follows (in millions): a. Compute the inventory turnover for both companies. Round all calculations to one decimal place. b. Compute the number of days sales in inventory for both companies. Use 365 days and round all calculations to one decimal place. c. Which company has the better inventory efficiency? d. What might explain the difference in inventory efficiency between the two companies?