almo company manufactures and sells adjustable canopies that att 274061

Aug 29, 2021 | Uncategorized

Almo Company manufactures and sells adjustable canopies that attach to motor homes and trailers. The market covers both new unit purchases as well as replacement canopies. Almo developed its 2010 business plan based on the assumption that canopies would sell at a price of $400 each. The variable costs for each canopy were projected at $200, and the annual fixed costs were budgeted at $100,000. Almo’s after tax profit objective was $240,000; the company’s effective tax rate is 40 percent.

While Almo’s sales usually rise during the second quarter, the May financial statements reported that sales were not meeting expectations. For the first five months of the year, only 350 units had been sold at the established price, with variable costs as planned, and it was clear that the 2010 after tax profit projection would not be reached unless some actions were taken. Almo’s president assigned a management committee to analyze the situation and develop several alternative courses of action. The following mutually exclusive alternatives, labeled A, B, and C, were presented to the president.

A. Reduce the sales price by $40. The sales organization forecasts that with the significantly reduced sales price, 2,700 units can be sold during the remainder of the year.

Total fixed and variable unit costs will stay as budgeted.

B. Lower the variable costs per unit by $25 through the use of less expensive materials and slightly modified manufacturing techniques. The sales price will also be reduced by $30, and sales of 2,200 units for the remainder of the year are forecast.

C. Cut fixed costs by $10,000, and lower the sales price by 5 percent. Variable costs per unit will be unchanged. Sales of 2,000 units are expected for the remainder of the year.

Required:

1. Determine the number of units that Almo Company must sell in order to break even assuming no changes are made to the selling price and cost structure.

2. Determine the number of units that Almo Company must sell in order to achieve its after tax profit objective.

3. Determine which one of the alternatives Almo Company should select to achieve its annual after tax profit objective. Be sure to support your selection with appropriate calculations.

4. The precision and reliability of CVP analysis are limited by several underlying assumptions. Identify at least four of these assumptions. (CMA adapted)

bill johnson sales manager and diane buswell controller at c 274094

Aug 29, 2021 | Uncategorized

Bill Johnson, sales manager, and Diane Buswell, controller, at Current Designs are beginning to analyze the cost considerations for one of the composite models of the kayak division. They have provided the following production and operational costs necessary to produce one composite kayak.

Kevlar® …………………………………………..$250 per kayak

Resin and supplies ………………………………$100 per kayak

Finishing kit (seat, rudder, ropes, etc.) ………….$170 per kayak

Labor …………………………………………….$420 per kayak

Selling and administrative expenses—variable …. $400 per kayak

Selling and administrative expenses—fixed …….$119,700 per year

Manufacturing overhead—fixed ………………..$240,000 per year

Bill and Diane have asked you to provide a cost volume profit analysis, to help them finalize the budget projections for the upcoming year. Bill has informed you that the selling price of the composite kayak will be $2,000.

Instructions

(a) Calculate variable costs per unit.

(b) Determine the contribution margin per unit.

(c) Using the contribution margin per unit, determine the break even point in units for this product line.

(d) Assume that Current Designs plans to earn $270,600 on this product line. Using the contribution margin per unit, calculate the number of units that need to be sold to achieve this goal.

(e) Based on the most recent sales forecast, Current Designs plans to sell 1,000 units of this model. Using your results from part (c), calculate the margin of safety and the margin of safety ratio.

blazer delivery is a rapidly growing delivery service last year 274101

Aug 29, 2021 | Uncategorized

Blazer Delivery is a rapidly growing delivery service. Last year 80% of its revenue came from the delivery of mailing “pouches” and small, standardized delivery boxes (which provides a 10% contribution margin). The other 20% of its revenue came from delivering non standardized boxes (which provides a 60% contribution margin). With the rapid growth of Internet retail sales, Blazer believes that there are great opportunities for growth in the delivery of non standardized boxes. The company has fixed costs of $12,000,000.

Instructions

(a) What is the company’s break even point in total sales dollars? At the break even point, how much of the company’s sales are provided by each type of service?

(b) The company’s management would like to hold its fixed costs constant, but shift its sales mix so that 60% of its revenue comes from the delivery of non standardized boxes and the remainder from pouches and small boxes. If this were to occur, what would be the company’s break even sales, and what amount of sales would be provided by each service type?

canastar group sells three lines of prepared foods into a 274115

Aug 29, 2021 | Uncategorized

Canastar Group sells three lines of prepared foods into a marketplace where total demand is 240 million cases. Canastar’s market share is 2 ?1 percent; the average selling price per case is $30 and their variable costs per case are $23. Canastar spends $15 million on marketing and sales expenses. Other operational expenses add up to $6 million. The lemonade mix and the corndogs are both positive in terms of net profit before taxes, with lemonade contributing the greater share. Canastar’s cheese line produces a net negative profit. Last year, the Group’s internally produced accounting information system was voted best in the food industry for its ability to track inventory and accurately predict cost variations.

1. What is Canastar Group’s marketing return on sales (ROS)? Show your work.

a) 10.6%

b) 12%

c) 15%

d) 140%

e) 180%

2. If Canastar Group lowered its prices by 10% and spent an additional $5 million on marketing, causing a boost in market share to 4%, what would the approximate net marketing contribution be? Show your work.

candyland inc produces a particularly rich praline fudge each 274118

Aug 29, 2021 | Uncategorized

Candyland Inc. produces a particularly rich praline fudge. Each 10 ounce box sells for $5.60. Variable unit costs are as follows:

Pecans ……………………..$0.70

Sugar ………………………..0.35

Butter ………………………1.85

Other ingredients …………..0.34

Box, packing material ………0.76

Selling commission …………0.20

Fixed overhead cost is $32,300 per year. Fixed selling and administrative costs are $12,500 per year. Candyland sold 35,000 boxes last year.

Required:

1. What is the contribution margin per unit for a box of praline fudge? What is the contribution margin ratio?

2. How many boxes must be sold to break even? What is the break even sales revenue?

3. What was Candyland’s operating income last year?

4. What was the margin of safety?

5. Suppose that Candyland Inc. raises the price to $6.20 per box but anticipates a sales drop to 31,500 boxes. What will be the new break even point in units? Should Candyland raise the price? Explain.

carbex inc produces cutlery sets out of high quality wood and 274121

Aug 29, 2021 | Uncategorized

Carbex, Inc., produces cutlery sets out of high quality wood and steel. The company makes a standard cutlery set and a deluxe set and sells them to retail department stores throughout the country. The standard set sells for $60, and the deluxe set sells for $75. The variable expenses associated with each set are given below.



The company’s fixed expenses each month are:



Salespersons are paid on a commission basis to encourage them to be aggressive in their sales efforts. Mary Parsons, the financial vice president, watches sales commissions carefully and has noted that they have risen steadily over the last year. For this reason, she was shocked to find that even though sales have increased, profits for the current month—May—are down substantially from April. Sales, in sets, for the last two months are given below:



Required:

1. Prepare contribution format income statements for April and May. Use the following headings:



Place the fixed expenses only in the Total column. Do not show percentages for the fixed expenses.

2. Explain the difference in net operating incomes between the two months, even though the same total number of sets was sold in each month.

3. What can be done to the sales commissions to improve the sales mix?

a. Using April’s sales mix, what is the break even point in sales dollars?

b. Without doing any calculations, explain whether the break even points would be higher or lower with May’s sales mix than April’s salesmix.

carlyle lighting products produces two different types of lamps 274123

Aug 29, 2021 | Uncategorized

Carlyle Lighting Products produces two different types of lamps: a floor lamp and a desk lamp. Floor lamps sell for $30, and desk lamps sell for $20. The projected income statement for the coming year follows:

Sales ………………………………..$600,000

Less: Variable costs …………………400,000

Contribution margin ……………….$200,000

Less: Fixed costs ……………………150,000

Operating income …………………..$ 50,000

The owner of Carlyle estimates that 60 percent of the sales revenues will be produced by floor lamps and the remaining 40 percent by desk lamps. Floor lamps are also responsible for 60 percent of the variable expenses. Of the fixed expenses, one third are common to both products, and one half are directly traceable to the floor lamp product line.

Required:

1. Compute the sales revenue that must be earned for Carlyle to break even.

2. Compute the number of floor lamps and desk lamps that must be sold for Carlyle to break even.

3. Compute the degree of operating leverage for Carlyle Lighting Products. Now assume that the actual revenues will be 40 percent higher than the projected revenues. By what percentage will profits increase with this change in sales volume?

cheryl montoya picked up the phone and called her boss 274134

Aug 29, 2021 | Uncategorized

Cheryl Montoya picked up the phone and called her boss, Wes Chan, the vice president of marketing at Piedmont Fasteners Corporation: ?oWes, I’m not sure how to go about answering the questions that came up at the meeting with the president yesterday:’

?oWhat’s the problem???

?oThe president wanted to know the break even point for each of the company’s products, but I am having trouble figuring them out:’

?oI’m sure you can handle it, Cheryl. And, by the way, I need your analysis on my desk tomorrow morning at 8:00 sharp in time for the follow up meeting at 9:00.??

Piedmont Fasteners Corporation makes three different clothing fasteners in its manufacturing facility in North Carolina. Data concerning these products appear below:



Total fixed expenses are $400,000 per year.

All three products are sold in highly competitive markets, so the company is unable to raise its prices without losing unacceptable numbers of customers.

The company has an extremely effective lean production system, so there are no beginning or ending work in process or finished goods inventories.

Required:

1. What is the company’s over all break even point in total sales dollars?

2. Of the total fixed costs of $400,000, $20,000 could be avoided if the Velcro product were dropped, $80,000 if the Metal product were dropped, and $60,000 if the Nylon product were dropped. The remaining fixed costs of $240,000 consist of common fixed costs such as administrative salaries and rent on the factory building that could be avoided only by going out of business entirely.

a. What is the break even point in units for each product?

b. If the company sells exactly the break even quantity of each product, what will be the overall profit of the company? Explain thisresult.

fiinance 308 422080

Aug 29, 2021 | Uncategorized

Which of the following statements is CORRECT?

a. If a firm has the highest price/earnings ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president. b. If a firm has the highest market/book ratio of any firm in its industry, then, other things held constant, this suggests that the board of directors should fire the president. c. Other things held constant, the higher a firm’s expected future growth rate, the lower its P/E ratio is likely to be. d. The higher the market/book ratio, then, other things held constant, the higher one would expect to find the Market Value Added (MVA). e. If a firm has a history of high Economic Value Added (EVA) numbers each year, and if investors expect this situation to continue, then its market/book ratio and MVA are both likely to be below average.

accounting 422107

Aug 29, 2021 | Uncategorized

Which of the following statements is true with regard to depreciation expense?

accounting deprecitation journals 422119

Aug 29, 2021 | Uncategorized

The following transactions and adjusting entries were completed by a local delivery company called Super Swift. The company uses straight line depreciation for delivery vehicles, and double declining balance depreciation for buildings, and straight line amortization for franchise rights.

Give the journal entries required on each of the above dates

show work on how to get to answers for positive ratings

accounting 2302 422128

Aug 29, 2021 | Uncategorized

Folson Company is planning to produce 4,250,000 speakers for the coming year. Actual production was 4,000,000 speakers. Each speaker requires 0.80 direct labor hours per unit. Predetermined overhead rates are calculated using expected production, measured in direct labor hours. The budgeted variable overhead for the coming year is $680,000. The actual variable overhead incurred was $714,000. The applied variable overhead for the year is Answer

hospital accounting 422148

Aug 29, 2021 | Uncategorized

ØEach question needs beanswered in 1.5 pages typewritten, double spaced 10 pt. type.

Ø Please complete 4 out of 6 questions. All responses must be in essay form. In your response please address all facets of the question being posed. While your notes should provide ample information to thoroughly answer each question, feel free to use other reference sources.

1.Discuss the role of the AICPA in establishing performance standards in hospital accounting. Give specific examples of their efforts to revise and improve the quality of accounting practice in health care organizations.

2.Although Sarbanes Oxley compliance is currently voluntary for non profit hospitals Bigalke and Roach (2005) suggest that all hospitals prepare an implementation plan to ensure GAAP guided accounting practices and transparent financial reporting. Based on your course readings and investigation, provide a summary of an implementation plan that you would recommend to enhance accurate accounting practice in regards to improved internal controls, financial statements, policy making and full disclosure by corporate officers and board members.

3.Interim financial statements provide information about financial performance at the time the statements are prepared.Why is this important to internal decision makers, vendors and interested citizens? How does the posting of expense accruals improve the accuracy of interim statements?

4.What is the function of hospital accounting? How does it serve the needs of internal and external stakeholders of the hospital? Provide detailed examples to support your position.

5.Describe in detail how the accounting information processing steps from journalizing to the preparation of financial statements with closing entries. Show at each stephow the processmaintains the integrityof the basic accounting equation :

Assets = Liabilities + Owner’s Equity(Net Assets)

6.How do the accounting practices of tax exempt and non tax exempt health care corporations differ in recording the distribution of operating profits to the “owners” of the corporation?

discuss the role of the aicpa in establishing performance standards in hospital acco 422161

Aug 29, 2021 | Uncategorized

? Each question needs be answered in 1.5 pages typewritten, double spaced 10 pt. type. ? Please complete 4 out of 6 questions. All responses must be in essay form. In your response please address all facets of the question being posed. While your notes should provide ample information to thoroughly answer each question, feel free to use other reference sources. 1. Discuss the role of the AICPA in establishing performance standards in hospital accounting. Give specific examples of their efforts to revise and improve the quality of accounting practice in health care organizations. 2. Although Sarbanes Oxley compliance is currently voluntary for non profit hospitals Bigalke and Roach (2005) suggest that all hospitals prepare an implementation plan to ensure GAAP guided accounting practices and transparent financial reporting. Based on your course readings and investigation, provide a summary of an implementation plan that you would recommend to enhance accurate accounting practice in regards to improved internal controls, financial statements, policy making and full disclosure by corporate officers and board members. 3. Interim financial statements provide information about financial performance at the time the statements are prepared. Why is this important to internal decision makers, vendors and interested citizens? How does the posting of expense accruals improve the accuracy of interim statements? 4. What is the function of hospital accounting? How does it serve the needs of internal and external stakeholders of the hospital? Provide detailed examples to support your position. 5. Describe in detail how the accounting information processing steps from journalizing to the preparation of financial statements with closing entries. Show at each step how the process maintains the integrity of the basic accounting equation : Assets = Liabilities + Owner’s Equity(Net Assets) 6. How do the accounting practices of tax exempt and non tax exempt health care corporations differ in recording the distribution of operating profits to the “owners” of the corporation?

Attachments:

4 our of 6.docx

flexible budget variance 422165

Aug 29, 2021 | Uncategorized

Fort Worth Company is a printer and binder of specialized booklets and pamphlets. Last year, the company’s sales manager estimated sales to be 10,000 booklets and pamphlets combined. The sales manager also estimated that the items would retail for approximately $10 each. Various production costs, including direct and indirect material, direct and indirect labor, and variable overhead, were estimated to total $50,000, while fixed costs were estimated to be $20,000.

During the year, Fort Worth’s unit sales equaled its production of 12,000 units. Because of changing market conditions”specifically, competition”the average selling price fell to just $9.50 per unit. There were increased variable costs as well that resulted in average per unit variable costs of $6. At the end of the year, the company’s controller accumulated fixed costs and found them to be $21,000.

Required:

If required, round your answers to two decimal places. Enter all amounts as positive numbers.

Prepare a report to show the difference between the actual contribution margin and the budgeted contribution margin per the static budget.

Then, compare the actual contribution margin and the budgeted contribution margin per the flexible budget.

financial accounting help for statement of cash flows 422216

Aug 29, 2021 | Uncategorized

accounting 422233

Aug 29, 2021 | Uncategorized

Gemini, LLC, invested $1 million in a state of the art information system that promises to reduce processing costs for its purchasing activities by $120,000 per year for the by Savings Explorer” href=”http://sjc.cengagenow.com/ilrn/takeAssignment/takeAssignmentMain.do#” class=”c1″>next 10 years. The company will scrap its old information system and will receive no money as a consequence. The new system will be depreciated over 10 years at a rate of $100,000 per year. Gemini’s tax rate is 30 percent, and the company has a 7 percent after taxcost of capital.

Required:

What is the after tax net present value of Gemini’s new information system? Use thetime value of money charts as needed for your calculations. If required, use a minus sign to indicate a negative net present value. Do not round intermediate amounts. Round your final answer to two decimal places.

please check my answer for me and help on the ones i did not answer 422250

Aug 29, 2021 | Uncategorized

In general, a CPA will satisfy his professional responsibilities under the Statement on Standards for Tax Services when recommending a tax return position if he complies with the standards imposed by the applicable tax authority. (Points : 5) True
False

accounting for managers 125 422270

Aug 29, 2021 | Uncategorized

Accounting for Managers 125

Document Preview:

? HYPERLINK “http://coursesite.umtweb.edu/bin/common/course.pl?course_id=_846_1” t “content” ?ACCT125 1. ACCOUNTING FOR MANAGERS (ACCT125 1)? > TAKE ASSESSMENT: EXAM 1????Take Assessment: Exam 1 Top of Form ?? Name?Exam 1 ??Instructions???Multiple Attempts?This Test allows 2 attempts. This is attempt number 2. ??Force Completion?This Test can be saved and resumed later. ???? ? Question Completion Status: ??1?2?3?4?5?6?7?8?9?10?11?12?13?14?15?16?17?18?19?20??21?22?23?24?25?26?27?28?29?30?31?32?33?34?35?36?37?38?39?40??41?42?43?44?45?46?47?48?49?50?51?52?53?54?55?56?57?58?59?60??61?62?63?64?65?66?67?68?69?70?71?72?73?74?75?76?77?78?79?80??81?82?83?84?85?86?87?88?89?90?91?92?93?94?95?96?97?98?99?100?????????????????????????   Question 1 ?1 points   ?? HYPERLINK “javascript:saveItem(‘_11691462_1′,’1’)” ?Save?   ?? ?Stockholders’ Equity will be reduced by all of the following accounts EXCEPT: ??????? ??Revenues ????Expenses ????Dividends ????All of the above reduce Stockholders’ Equity. ????????   Question 2 ?1 points   ?? HYPERLINK “javascript:saveItem(‘_11691463_1′,’2’)” ?Save?   ?? ?For EFG Co., the transaction “Cash sales to customers” would ??????? ??increase total assets. ????decrease total assets. ????have no effect on total assets. ????decrease stockholders’ equity. ???????This document was truncated here because it was created in the Evaluation Mode.

Attachments:

ACCT125.docx

differential analysis and product pricing 422309

Aug 29, 2021 | Uncategorized

Gilroy Corporation is considering new equipment. The equipment can be purchased from an overseas supplier for $3,200. The freight and installation costs for the equipment are $640. If purchased, annual repairs and maintenance are estimated to be $400 per year over the four year useful life of the machine. Alternatively, Gilroy can lease the machine from a domestic supplier for $1,400 per year for four years, with no additional costs.

Prepare a differential analysis dated October 3, 2012 to determine whether Gilroy should lease (Alternative 1) or purchase (Alternative 2) the machine. (Hint: This is a “lease or buy” decision, which must be analyzed from the perspective of the equipment user, as opposed to the equipment owner.) If an amount is zero, enter zero “0”.

Lease Machine (Alternative 1)

Costs:

Purchase Price

Freight and Installation

Repair and Maintenance (4 years)

Lease (4 years)

Income (loss)

Buy Machine (Alternative 2)

Costs:

Purchase Price

Freight and Installation

Repair and Maintenance (4 years)

Lease (4 years)

Income (loss)

Differential Income (Alternative 3)

Costs:

Purchase Price

Freight and Installation

Repair and Maintenance (4 years)

Lease (4 years)

Income (loss)

equivalent units of production 422313

Aug 29, 2021 | Uncategorized

Units of production data for the two departments of Continental Cable and Wire Company for April of the current fiscal year are as follows:
drawing department winding department

working process april 1 5400 units 40 % completed 2200 units 70 % completed
completed and transfer to next
processing department during april 74000 units 73200 untis
work inprocess april 30 4100 units, 55 % complted 3000 units 15 % completed

a. If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for April
for the Drawing Department. Enter all amounts as positive numbers. If an amount is zero or a blank, enter in 0.
Equivalent untis
direct materials conversion

Q ) invontory in process april 1 ___________ _________
Q ) transfer to winding department in april ____________ ____________

b)If all direct materials are placed in process at the beginning of production, determine the direct materials and conversion equivalent units of production for April for the Winding Department. Enter all amounts as positive numbers. If an amount is zero or a blank, enter in 0.
direct materials conversion
Q ) invontory in process april 1 __________ ___________ ???
Q) transfer to finishing goods in april ___________ _______________

foreign currency exchange rates 422322

Aug 29, 2021 | Uncategorized

Ginvold Co. began operating a subsidiary in a foreign country on January 1, 2011 by acquiring all of the common stock for A?§50,000. This subsidiary immediately borrowed A?§120,000 on a five year note with ten percent interest payable annually beginning on January 1, 2012. A building was then purchased for A?§170,000 on January 1, 2011. This property had a ten year anticipated life and no salvage value and was to be depreciated using the straight line method. The building was immediately rented for three years to a group of local doctors for A?§6,000 per month. By year end, payments totaling A?§60,000 had been received. On October 1, A?§5,000 were paid for a repair made on that date and it was the only transaction of this kind for the year. A cash dividend of A?§6,000 was transferred back to Ginvold on December 31, 2011. The functional currency for the subsidiary was the stickle. Currency exchange rates were as follows:

January 1, 2011 A?§1 = $2.40

October 1, 2011 A?§1 = $2.22

December 31, 2011 A?§1 = $2.28

Average for 2011 A?§1 = $2.16

1. Prepare an income statement for this subsidiary in stickles and then translate these amounts to U.S. dollars.

2. Prepare a statement of retained earnings for this subsidiary in stickles and then translate these amounts into U.S. dollars.

3. Prepare a balance sheet for this subsidiary in stickles and then translate these amounts into U.S. dollars.

4. Prepare a statement of cash flows for this subsidiary in stickles and then translate these amounts into U.S. dollars

accounting reporting 422332

Aug 29, 2021 | Uncategorized

You have been given the following information for Ethan Company as of June 1, 2010. Ethan Company purchased a parcel of land and then incurred specific costs for the construction of a new building. Below is a list of these costs: Cost of Parking Lot and gates=$14,000 Cost of filling the building site= $10,000 Legal Fees to buy land= $2,000 Cost of driveway= $9,000 Property Taxes for Jan 1,2010 to June 1, 2010= $5,000 Title Insurance= $2,000 Interest on the construction loan= $13,000 Proceeds from the sale of salvage materials= ($1500) Purchase price of land= $200,000 Cost of the building construction= $650,000 Cost of razing building on lot= $9,500 Cost of grading the lot= $5,000 On April 25, 2010, Bullseye Company purchased all of the outstanding common stock of Vista Company, paying $14,000,000. The book values and fair values of Vista’s assets and liabilities acquired are shown below in dollar amounts: Accounts Book Value Fair Value Accounts Receivables $1,900,000 $1,725,000 Inventories $2,800,000 $4,000,000 Accounts Payable $2,000,000 $2,000,000 Property, Plant and Equipment $8,000,000 $12,625,000 Bonds Payable $4,600,000 $4,225,000

cost accounting 422360

Aug 29, 2021 | Uncategorized

Glade Company produces a single product. The costs of producing and selling a single unit of this product at the company’s current activity level of 8,500 units per month are:

Direct Material: $1.80 ; Direct Labor: $2.00 ; variable manufacturing overhead: $.60 ; Fixed Manufacturing overhead: $4.35 ; Variable selling and manufacturing expenses:$1 ; Fixed selling and manufacturing expenses: $1.

accounting 422395

Aug 29, 2021 | Uncategorized

Gordon knits wool caps for sale at the local ski resorts. He prepared a budget for the production and sale of 150 wool caps. Unfortunately, Gordon fell ill with a bad case of the flu and was able to make and sell only 125 wool caps. Here is Gordon’s budget:

Sales Revenue 1,500.00

Variable costs:

Direct Material (yarn) 375.00

Direct Labor 750.00

Commission to Resort 112.50

Fixed costs 75.00

Net income 187.50

Prepare a flexible budget for Gordon based on the production and sale of 125 wool caps. Input all amounts as positive value. If required, round your final answers to two decimal places. Do not round your intermediate calculations.

calculate balance in the investment account thank you 422422

Aug 29, 2021 | Uncategorized

Grant, Inc. acquired 30% of South Company’s common stock for $350,000 on January 1, 2011. During 2011, South Company reported a

net income of $120,000 and paid dividends totaling $30,000. For 2012, South Company paid 60% of its net income to stockholders

as dividends. On December 31, 2012, Grant, Inc. sold
one half of its investment in South Company for $250,000 cash. Grant, Inc.

reported a gain from selling one half of its investment in South Company on its 2012 income statement (note the amount of the

gain has been intentionally omitted from the given information). Calculate the
balance in the investment in South Company account reported on Grant, Inc.’s December 31, 2011 balance sheet.

Assume the total increase to Grant, Inc.’s 2012 net income resulting from its investment in South Company’s stock was $103,500.

Calculate the
net income reported by South Company in 2012. Do not use decimals in your answer.

Thank you!

accounting question 422451

Aug 29, 2021 | Uncategorized

Greenland Sports, Inc. has been asked to submit a bid to the National Hockey League on supplying 1,000 pairs of professional quality skates. The cost per pair of skates has been determined as follows:

Direct materials $80

Direct Labor $60

Variable Overhead $30

Fixed overhead (allocated) $20

Other non manufacturing costs associated with each pair of skates are:

Variable selling cost (commission) $25

Fixed selling and administrative cost $10

Assume the commission on the sale of skates to the National Hockey League would be reduced to $15 per pair and that available production capacity exists to produce the 1,000 pairs of skates. The lowest price the firm can bid is some price greater than:

A. $185
B. $190
C. $215
D. $225

intro to business 422456

Aug 29, 2021 | Uncategorized

need help with accounting 421534

Aug 29, 2021 | Uncategorized

Fenwick Corporation’s manufacturing and finished goods warehouse facilities burned to the ground on January 31. The loss was fully covered by insurance. The insurance company wanted to know the cost of the inventories destroyed in the fire. The company’s accountants gathered the following information:

accounting 421567

Aug 29, 2021 | Uncategorized

step by step instructions 421584

Aug 29, 2021 | Uncategorized

Financial statements for Pracht Company appear below:

managerial accounting 421594

Aug 29, 2021 | Uncategorized

Finestra Corporation produces a single product that it currently sells for $10. Fixed expenses are $120,000 for the year and variable expenses are $6 per unit. In addition, Finestra’s salespersons are paid a commission of 10% of their sales.

A customer has just approached Finestra to make a special, one time purchase of 10,000 units. These units would not be sold by the salespeople, and therefore no commission would have to be paid. The price Finestra would have to charge on this special order to earn an additional profit of $40,000 is: Question 13 options:

foggy mountain company case study 421671

Aug 29, 2021 | Uncategorized

Foggy Mountain Company manufactures several styles of banjos. Management estimates that during the second quarter of the current year, the company will be operating at 80 percentof normal capacity. Because Foggy Mountain wants to increase utilization of the plant, the company has decided to consider special orders for its products.

Foggy Mountain has just received inquires from a number of companies concerning the possibility of a special order and has narrowed the decision to two companies. The first inquiry is from CCR Company, which would like to market a banjo very similar to the one of Foggy Mountain’s. The CCR banjo would be marketed under CCR’s own label. CCR has offered Foggy Mountain $57.50 per banjo for 20,000 banjos to be shipped by June 1st. The cost data for the Foggy Mountain banjo are as follows: Regular selling price per banjo is $90.00. Costs Per unit: Raw Material is $25.00. Direct Labor(5 hours @ $6) is $30.00. Overhead (2.5 . machine hours @ $4.00) is $10.00. Total Costs is $65.00.

According to the specifications provided by CCR, the banjo that the company wants requires less expensive raw material. Consequently, the raw material would cost only $22 per banjo. Foggy Mountain has estimated that all remaining costs would not change.

The second special order was submitted by Seager & Buffet Company for 7,500 banjos at $75 per banjo. These banjos would be marketed under the Seager & Buffet label and also would be shipped by June 1st. However, the Seager & Buffet model is different from any banjo in the Foggy Mountain product line. The estimated per unit costs are as follows: Raw Material is $32.50. Direct Labor(5 hours @ $6) is $30.00. Overhead(5 machine hours @ $4) is $20.00. Total Costs are $82.50.

In addition, Foggy Mountain would incur $15,000 in additional setup costs and would have to purchase a $22,500 special machine to manufacture these banjos; this machine would be discarded once the special order has been completed.

The Foggy Mountain manufacturing capabilities are limited in the total machine hours available. The plant capacity under normal operations is 900,000 machine hours per year, or 75,000 machine hours per month. The budgeted fixed overhead for the year is $2,160,000. All manufacturing overhead costs are applied to production on the basis of machine hours at $4 per hour. Foggy Mountain will have the entire second quarter to work on the special orders. Management does not expect any repeat sales to be generated from either special order. Company practice precludes Foggy Mountain from subcontracting any portion of an order when special orders are not expected to generate repeat sales.

Cannot use excel and MUST SHOW work

A) What is the excess capacity of machine hours available in the second quarter?

B) What is the variable overhead rate per machine hour?

C) Based on the preceding information and your analysis, would you accept CCR’s offer?

D) What is the unit contribution margin per banjo for the Seager & Buffet order?

E) What is the actual gain (loss) incurred by accepting Seager & Buffet’s offer?

managerial accounting 421681

Aug 29, 2021 | Uncategorized

The following accounts will be used in this problem:

A. Raw materials inventory

B. Accounts payable

C. Cost of goods sold

D. Work in process inventory

E. Manufacturing overhead

F. Wages and salaries expense

G. Accumulated depreciation

H. Depreciation expense

I. Finished goods inventory

J. Wages and salaries payable

K. Prepaid insurance

L. Insurance expense

Required: Enter identifying letters in the blanks below to indicate the accounts debited and credited under a job order costing system for each of the following summary transactions:

Debit Credit

1 Insurance expired on the factory building.

2 Cost of goods sold is recorded.

3 Materials are purchased on account.

4 Direct labor cost is incurred.

5 Cost of goods manufactured is recorded.

6 Salaries are recorded for the sales staff.

7 Depreciation is recorded on the factory building

8 Materials are placed into production.

9 Manufacturing overhead is assigned to units of product.

Hirschman Corporation has provided the following data for the month of April:

Inventories Beginning Ending

Raw materials……………………………………… $ 21,000 $ 35,000

Work in process……………………………………… 17,000 19,000

Finished goods………………………………………. 46,000 38,000

Additional information:

Raw materials purchases…………………………………………………………. $ 76,000

Direct labor cost………………………………………………………………………. 81,000

Manufacturing overhead cost incurred………………………………………… 42,000

Indirect materials included in manufacturing overhead cost incurred…… 6,000

Manufacturing overhead cost applied to Work in Process………………… 44,000

Prepare a Schedule of Cost of Goods Manufactured and a Schedule of Cost of Goods Sold in good form.

factory overhead volume variance 421770

Aug 29, 2021 | Uncategorized

The following data is given for the Bahia Company:
Budgeted production 1,000 units
Actual production 980 units
Materials:
Standard price per pound $2.00
Standard pounds per completed unit 12
Actual pounds purchased and used in production 11,800
Actual price paid for materials $23,000
Labor:
Standard hourly labor rate $14 per hour
Standard hours allowed per completed unit 4.5
Actual labor hours worked 4,560
Actual total labor costs $62,928
Overhead:
Actual and budgeted fixed overhead $27,000
Standard variable overhead rate $3.50 per standard labor hour
Actual variable overhead costs $15,500
Overhead is applied on standard labor hours. The factory overhead volume variance is:
a. $65U
b. $540U
c. $540F
d. $65

Please provide explanation with answer

the direct labor time variance is 421775

Aug 29, 2021 | Uncategorized

The following data is given for the Harry Company:

Budgeted production 26,000 units

Actual production 27,500 units

Materials:

Standard price/ounce $6.50

Standard ouncese per completed unit 8

Actual ounces purchased and used in production 228,000

Actual price paid for materials $1,504,800

Labor:

Standard hourly rate $22 per hour

Standard hours allowed per completed unit 6.6

Actual labor hours worked 183,000

Actual total labor costs $4,020,000

Overhead:

Actual and budgeted fixed overhead $1,029,600

Standard variable overhead rate $24.50 per standard labor hour

Actual variable overhead costs $4,520,000

Overhead is applied on standard labor hours.

The direct labor time variance is:

a) 6,000 favorable

b) 6,000 unfavorable

c) 33,000 unfavorable

d) 33,000 favorable

managerial accounting 421802

Aug 29, 2021 | Uncategorized

The following data relate to the operations of Picanuy Corporation, a wholesale distributor of consumer goods:

brandon co 421828

Aug 29, 2021 | Uncategorized

rev: 10_27_2011

whats the answer to this question 421844

Aug 29, 2021 | Uncategorized

Which of the following expenditures is most likely to be deductible for a construction business?

pru company balance sheet analysis 421847

Aug 29, 2021 | Uncategorized

i need to have project about this topic for PRU company. i attached a file for format of this homework

Document Preview:

PRU –Prudential Financial SECTION 2: BALANCE SHEET ANALYSIS 1. Using elements listed on your company’s balance sheet, prepare a common size balance sheet using the following format. (Vertical Analysis Chapter 5) COMPANY Account?Current Year?% ?Prior Year?‘ %???????? 2. Using elements listed on your company’s balance sheet calculate the increase or decrease in dollars and percent between the years using the following format. (Year to Year Change Analysis Chapter 5) COMPANY Account?Current Year?Prior Year? +/ $? %???????? 3. Using elements listed on your company’s balance sheet calculate the ratios and amounts using two years prior as the base year (100%) using the following format. Your answers should all be in percentages (Horizontal Analysis Chapter 5). COMPANY Account?Current Year/Base ?Prior Year/Base?????? 4. In thoughtful, well organized paragraphs comment on changes you see in the balance sheet with regards to the company over the two year period.? Among the items to consider:? Comment on any significant changes in the company in assets and liabilities. Comment on any significant changes in the company in the composition of current assets and current liabilities. Which assets in the company have the most significant investment? Is the company financed primarily with debt or equity? Is the debt primarily short term or long term?

Attachments:

PRU Prudenti….docx

reporting operating cash flows by the direct method 421862

Aug 29, 2021 | Uncategorized

The following income statement and selected balance sheet account data are available for Treece, Inc., at December 31, 2011.

Revenue:

Net Sales …………………………………… 2,850,000

Divident Income ….. ……………………… 104,000

Interest Income ……………………………. 70,000

Gain on sales of marketable securities …. 4,000

Total Revenue and Gains ………………. 3,028,000

Costs and Expenses:

Cost of good sold ………………………….. 1,550,000

Operating expense ………………………… 980,000

Interest Expense …………………………… 185,000

Income tax expense ………………………. 90,000

Total Costs and Expenses …………….. 2,805,000

Net Income …………………………………. 223,000

Selected account balances:

End of Year Beginning of Year

Accounts recievable ………………………….. 650,000 ……………………. 720,000

Accrued Interest recievable …………………. 9,000 ……………………….. 6,000

Inventories …………………………………….. 800,000 …………………… 765,000

Short term prepayments …………………….. 20,000 ……………………… 15,000

Accounts Payable (merchandise suppliers)…. 570,000 …………………… 562,000

Accrued operating expense payable ………… 65,000 …………………….. 94,000

Accrued Interest Payable …………………….. 21,000 …………………….. 12,000

Accrued income taxes payable ………………. 22,000 ……………………… 35,000

Additional Information:

1. Divident revenue is recognized on the cash basis. All othe rincome statement amounts are recognized on the accrual basis.

2. Operating expenses include depreciation expense of $ 115,000

Instructions:

a) Prepare a partial statement of cash flows, including only the operating activities section of the statement and using the direct method. Place brackets around numbers representing cash payments. Show supporting computations for the following:

1. Cash recieved from customers

2. Interest and dividents received

3. Cash paid to suppliers and employees

4. Interest paid

5. Income taxes paid

6. Cash used in operating activities

7. Net cash flow from operating activities.

income statement schedule of cost of goods sold 421873

Aug 29, 2021 | Uncategorized

The following information appears in Toledo Toy Company’s records for last year:

Sales revenue…………………………………..$99,300

Administrative costs……………………………19,700

Manufacturing building depreciation………….11,750

Indirect materials and supplies…………………2,150

Sales commissions……………………………….6,800

Raw material inventory, January 1…………….8,200

Direct labor………………………………………16,300

Raw material inventory, December 31…………9,000

Finished goods inventory, January 1…………..4,450

Finished goods inventory, December 31……….3,900

Raw materials purchases………………………10,150

Work in process inventory, December 31…….5,550

Supervisory and indirect labor………………….6,200

Property taxes, manufacturing plant…………..3,700

Plant utilities and power……………………….11,500

Work in process inventory, January 1………..6,600

Prepare an income statement with a supporting schedule of cost of goods sold.

accounting 2 421888

Aug 29, 2021 | Uncategorized

The following information is available for the Blizzard Corporation for

20X3:

Af?o Materials inventory decreased $4,000 during 20X3.

Af?o Materials inventory on December 31, 20X3, was 50% of materials

inventory on January 1, 20X3.

Af?o Beginning work in process inventory was $140,000.

Af?o Ending finished goods inventory was $65,000.

Af?o Purchases of direct materials were $150,000.

Af?o Direct materials used were 2.5 times the cost of direct labor.

Af?o Manufacturing overhead was 50% of the cost of direct labor.

Af?o Total manufacturing costs incurred were $246,400, 80% of cost of

goods manufactured and $150,000 less than cost of goods sold.

Compute:

a) finished goods inventory on January 1, 20X3

b) work in process inventory on December 31, 20X3

c) direct labor incurred

d) manufacturing overhead incurred

e) direct materials used

f) materials inventory on January 1, 20X3

g) materials inventory on December 31, 20X3

equivalent units of production 421915

Aug 29, 2021 | Uncategorized

The following information concerns production in the Baking Department for May. All direct materials are placed in process at the beginning of production.

A. Determine the number of units in work in process inventory at the end of the month.

B. Determine the equivalent units of production for direct materials and conversion costs in May. In an amount is zero or blank, enter in Af?cAc‚¬A??o0Af?cAc‚¬.

aon project network 421924

Aug 29, 2021 | Uncategorized

From the following information, develop an AON project network. Complete the forward and backward pass, compute activity slack, and identify the critical path. How many days will the project take? Attach or insert your AON network. You may use MSP to check your work, but your submitted file should be similar to that shown in figure 6.8 of Larson & Gray.

accounting 421945

Aug 29, 2021 | Uncategorized

The following information pertains to questions 13 through 17

Buchanan enterprises is considering investing in a machine that costs $400,000. The machine expected to generate revenues of $175,000 per year for five years. The machine would be depreciated using the straight line method over its five year life and have no salvage value company has a 40 percent income tax rate and desires a rate of return of 10 percent on its capital investments.

13) The internal rate of return of the machine is:

a) Greater than 20%

b) Between 18% and 20%

c) Between 16% and 18%

d) Less than 16%

14. The accounting rate of return of the machine is (round your answer to two decimal places)

a) 11.25%

b) 12.25%

c) 13.25%

d) 14.25%

15. The pay period of the machine is(round your answer to 2 decimal places)

a) 2.82 yrs

b) 2.92 yrs

c) 3.02 yrs

d) 3.12 yrs

16. The net present value of the machine is

a) $179,992

b) $(13,338)

c) $119,367

d) $ (1,966)

17) The profitability index of the machine is(round your answer to two decimal places)

a) 1.10

b) 1.20

c) 1.30

d) 1.40

cost acct 421970

Aug 29, 2021 | Uncategorized

The following information is used for Lucky’s Inc.’s monthly master budget.

June’s balance sheet balances: <?xml:namespace prefix = o ns = “urn:schemas microsoft com:office:office” />

Cash

$10,500

Accounts payable

$53,760

Accounts receivable

$80,000

Capital stock

$260,000

Inventory

$26,000

Retained earnings

$2,740

Building and equipment (net)

$200,000

Actual sales for June and budgeted sales for July, August, and September:

June (actual)

$140,000

July (budget)

$320,000

August (budget)

$180,000

September (budget)

$200,000

Sales are 25% cash and 75% on credit. All credit sales are collected in the following month. There are no bad debts.

Gross margin percentage is 60% of sales.

The desired ending inventory is expected to be 20% of the following month’s cost of goods sold. One fifth of the purchases are paid for in the month of purchase, and the remaining balance is purchased on credit and paid in the following month.

The monthly cash operating expenses are $80,000, including the monthly depreciation expense of $7,000.

During July, Lucky’s Inc. will purchase new office equipment for $17,000 cash.

Dividends of $13,500 were declared and paid in July.

The company must maintain a minimum cash balance of $25,000. A line of credit is used to maintain this balance. Borrowing will be made in increments of $1,000. All borrowing is done at the beginning of the month, and repayments are made at the end of the month. The annual interest rate is 12%, paid when the loan is repaid (ignore accrual of interest).

Required:
Prepare a budgeted income statement, and cash budget for the month of July.

Problem 2:

The Sparkly Corporation has the following budget and actual results.

Budgeted data

Unit sales

30,000

Unit production

30,000

Fixed overhead

Supervision

$54,000

Depreciation

$60,000

Rent

$30,000

Variable costs per unit

Direct materials

$18.00

Direct labor

$25.00

Supplies

$0.25

Indirect labor

$1.20

Electricity

$0.15

Actual results

Unit sales

33,000

Unit production

36,000

Fixed overhead

Supervision

$53,550

Depreciation

$60,000

Rent

$30,000

Variable costs

Direct materials

$642,000

Direct labor

$960,000

Supplies

$7,500

Indirect labor

$30,000

Electricity

$4,500

Required:

(originally part 2) Prepare a performance report for all costs, showing flexible budget variances (indicate F favorable or U unfavorab

accounting 422020

Aug 29, 2021 | Uncategorized

The following merchandise transactions occurred during December for two different companies: Rippen and Burnen. Both companies use a perpetual inventory system.

On December 3, Rippen Corporation sold merchandise on account to Burnen Corp. for $493,000, terms 1/10, n/30. This merchandise originally cost Rippen $310,000.

On December 8, Burnen Corp. returned merchandise to Rippen Corporation for a credit of $3,900. Rippen returned this merchandise to inventory at its original cost of $2,452.
December 12, Burnen Corp. paid Rippen Corporation for the amount owed.

thomson company a manufacturing firm has supplied the followin 273881

Aug 29, 2021 | Uncategorized

Thomson Company, a manufacturing firm, has supplied the following information from its accounting records for the last calendar year:

Direct labor cost ………………………………………..$371,500

Purchases of direct materials …………………………… 160,400

Freight in on materials ………………………………… 1,000

Factory supplies used ………………………………….. 37,800

Factory utilities ………………………………………… 46,000

Commissions paid ……………………………………… 80,000

Factory supervision and indirect labor ………………… 190,000

Advertising ……………………………………………. 23,900

Material handling ……………………………………… 26,750

Work in process inventory, January 1 …………………. 201,000

Work in process inventory, December 31 ……………… 98,000

Direct materials inventory, January 1 …………………. 47,000

Direct materials inventory, December 31 ……………… 17,000

Finished goods inventory, January 1 …………………… 28,000

Finished goods inventory, December 31 ………………. 45,200

Required:

1. Prepare a cost of goods manufactured statement.

2. Prepare a cost of goods sold statement.

three possible product cost definitions were introduced 1 val 273883

Aug 29, 2021 | Uncategorized

Three possible product cost definitions were introduced:

(1) Value chain,

(2) Operating, and

(3) Manufacturing. Identify which of the three product cost definitions best fits the following situations (justify your choice):

a. Setting the price for a new product

b. Valuing finished goods inventories for external reporting

c. Determining whether to add a complementary product to the product line

d. Choosing among competing product designs

e. Calculating cost of goods sold for external reporting

f. Deciding whether to increase the price of an existing product

g. Deciding whether to accept or reject a special order, where the price offered is lower than the normal selling price

h. Determining which of several potential new products should be developed, produced, and sold

i. Deciding whether to produce and sell a product whose design and development costs were higher than budgeted

tom young vice president of dunn company a producer of 273888

Aug 29, 2021 | Uncategorized

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 Tom’s 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.) Valueadded 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 (at the end of 2009) 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 2009, 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 2010. Selected actual results achieved for 2010 are as follows:

Units produced …………… 240,000

Pounds of material ……… 2,600,000

Engineering hours …………. 126,200

The actual prices paid per pound and per engineering hour are identical to the standard or budgeted prices.

Required:

1. For 2009, 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 2010).

3. Using the kaizen standards prepared in Requirement 2, compute the 2010 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 company’s ability to achieve its targeted reductions. In particular, discuss what measures the company must take to capture any realized reductions in resource usage.

wayne johnson president of banshee company recently returned f 273892

Aug 29, 2021 | Uncategorized

Wayne Johnson, president of Banshee Company, recently returned from a conference on quality and productivity. At the conference, he was told that many American firms have quality costs totaling 20 to 30 percent of sales. He, however, was skeptical about this statistic.

But even if the quality gurus were right, he was sure that his company’s quality costs were much lower—probably less than 5 percent. On the other hand, if he was wrong, he would be passing up an opportunity to improve profits significantly and simultaneously strengthen his competitive position. The possibility was at least worth exploring. He knew that his company produced most of the information needed for quality cost reporting—but there never was a need to bother with any formal quality data gathering and analysis.

This conference, however, had convinced him that a firm’s profitability can increase significantly by improving quality—provided the potential for improvement exists. Thus, before committing the company to a quality improvement program, Wayne requested a preliminary estimate of the total quality costs currently being incurred. He also indicated that the costs should be classified into four categories: prevention, appraisal, internal failure, and external failure. He has asked you to prepare a summary of quality costs and to compare the total costs to sales and profits. To assist you in this task, the following information has been prepared from the past year, 2010:

a. Sales revenue, $15,000,000; net income, $1,500,000.

b. During the year, customers returned 90,000 units needing repair. Repair cost averages $1 per unit.

c. Four inspectors are employed, each earning an annual salary of $60,000. These four inspectors are involved only with final inspection (product acceptance).

d. Total scrap is 150,000 units. Of this total, 60 percent is quality related. The cost of scrap is about $5 per unit.

e. Each year, approximately 450,000 units are rejected in final inspection. Of these units, 80 percent can be recovered through rework. The cost of rework is $0.75 per unit.

f. A customer cancelled an order that would have increased profits by $150,000. The customer’s reason for cancellation was poor product performance.

g. The company employs three full time employees in its complaint department. Each earns $40,500 a year.

h. The company gave sales allowances totaling $45,000 due to substandard products being sent to the customer.

i. The company requires all new employees to take its three hour quality training program. The estimated annual cost of the program is $30,000.

Required:

1. Prepare a simple quality cost report classifying costs by category.

2. Compute the quality cost to sales ratio. Also, compare the total quality costs with total profits. Should Wayne be concerned with the level of quality costs?

3. Prepare a pie chart for the quality costs. Discuss the distribution of quality costs among the four categories. Are they properly distributed? Explain.

4. Discuss how the company can improve its overall quality and at the same time reduce total quality costs.

5. By how much will profits increase if quality costs are reduced to 2.5 percent of sales?

accounting excercise 11 8 421250

Aug 29, 2021 | Uncategorized

Exercise 11 8 Net Present Value Analysis of Two Alternatives [LO1]

exercise 12 10 dropping or retaining a segment 421257

Aug 29, 2021 | Uncategorized

Exercise 12 10 Dropping or Retaining a Segment [LO2]

make or buy a component 421263

Aug 29, 2021 | Uncategorized

Exercise 12 12 Make or Buy a Component [LO3]

i need the answer to A.C.and D

need help fast 421274

Aug 29, 2021 | Uncategorized

Exercise 12 4 Allocating overhead costs among products [LO 3, 4]

direct labor standards for nonmanufacturing expenses 421284

Aug 29, 2021 | Uncategorized

Exercise 23 11 (Algorithmic)
Direct Labor Standards for Nonmanufacturing Expenses

St. Luke Hospital began using standards to evaluate its Admissions Department. The standard was broken into two types of admissions as follows:

The unscheduled admission took longer, since name, address, and insurance information needed to be determined at the time of admission. Information was collected on scheduled admissions prior to the admissions, which was less time consuming.

The Admissions Department employs two full time people (40 productive hours per week, with no overtime) at $12.00 per hour. For the most recent week, the department handled 66 unscheduled and 126 scheduled admissions.

a. How much was actually spent on labor for the week?
$

b. What are the standard hours for the actual volume for the week (round to the nearest whole hour)?
hours

c. Calculate the time variance. In your computation, round the standard direct labor rate to the nearest whole cent. If required, use the minus sign to enter a favorable variance as a negative number.

Report how well the department performed for the week.

The input in the box below will not be graded, but may be reviewed and considered by your instructor.

accounting 421318

Aug 29, 2021 | Uncategorized

Exercise 7 7 Percent of receivables method L.O. P2

Exercise 7 8 Writing off receivables L.O. P2

managerial accounting 4 12 421327

Aug 29, 2021 | Uncategorized

managerial accounting 4 12 421332

Aug 29, 2021 | Uncategorized

Selling price: (Relational) AVariable cost: (Relational) BContribution Margin: (Relational) CFixed costs:Amount DAf·Amount E=Formula Fb. What level of sales is needed for a monthly profit of$60,000 ?(Amount G+Amount H) Af·Amount I=Formula Jc. For the month of July, the marina anticipates sales of$1,000,000 What is the expected level of profit?(Amount K*Amount L) Amount M=Formula N REQUIRED answers for A thru N

managerial accounting 5 4 421338

Aug 29, 2021 | Uncategorized

managerial accounting 6 6 421343

Aug 29, 2021 | Uncategorized

managerial accounting 6 8 421347

Aug 29, 2021 | Uncategorized

managerial accounting 7 4 421352

Aug 29, 2021 | Uncategorized

fundamentals of financial accounting 4th edition phillips libby libby 421399

Aug 29, 2021 | Uncategorized

Explain the closing entry process and prepare the closing entries in journal form based on the information in question 1.

POST INC. BANK RECONCILIATION

Cash balance per bank $8,200

Cash balance per books (general ledger) $6,500

Outstanding checks $2,460

Check mailed to the bank for deposit had not reached the bank by the statement date. $500

NSF check returned by the bank for accounts receivable $100

July interest earned on the bank statement $20

Check no. 700 for misc. expense cleared the bank for $200; erroneously recorded in our books for $20

~ Prepare a bank reconciliation.

~ Shown the accounting entries that must be made by

~ Matrix Inc. in journal entry and T Account format.

Fill in the blanks:

Sales Revenue $800

Beginning Inventory $100

Purchases $700

Available for Sale ?

Ending Inventory $500

Cost of Goods Sold ?

Gross Profit ?

Operating Expenses $200

Net Income ?

Assume you serve on the board of a local golf and country club. In preparation for renegotiating the club’s bank loans, the president indicates that the club needs to increase its operating cash flows before the end of the current year. The club’s treasurer reassures the president and other board members that he knows a couple of ways to boost the club’s operating cash flows. First, he says, the club can sell some of its accounts receivable to a collections company that is willing to pay the club $97,000 up front for the right to collect $1 00,000 of the overdue accounts. That will immediately boost operating cash flows. Second, he indicates that the club paid about $200,000 last month to relocate the 18th fairway and green closer to the clubhouse. The treasurer indicates that although these costs have been reported as expenses in the club’s own monthly financial statements, he feels an argument can be made for reporting them as part of land and land improvements (a long lived asset) in the year end financial statements that would be provided to the bank. He explains that, by recording these payments as an addition to a long lived asset, they will not be shown as a reduction in operating cash flows.

Required:

1. Does the sale of accounts receivable to generate immediate cash harm or mislead anyone? Would you consider it an ethical business activity?

2. What category in the statement of cash flows is used when reporting cash spent on long lived assets, such as land improvements? What category is used when cash is spent on expenses, such as costs for regular upkeep of the grounds?

3. What facts are relevant to deciding whether the costs of the 18th hole relocation should be reported as an asset or as an expense? Is it appropriate to make this decision based on the impact it could have on operating cash flows?

4. As a member of the board, how would you ensure that an ethical decision is made?

Following is the adjusted trial balance of Post Company. Based on this information prepare a Balance Sheet, Income Statement and Statement of Retained Earnings.

POST COMPANY ADJUSTED TRIAL BALANCE

Debit Credit

Cash 80,000

Accounts Receivable 12,000

Prepaid Insurance 2,000

Equipment 4,000

Accumulated Depreciation 100

Supplies 400

Accounts Payable 800

Wages Payable 200

Unearned Revenue 1,200

Contributed Capital 82,400

Retained Earnings 0

Sales 16,000

Gas Expense 200

Supply Expense 400

Insurance Expense 400

Depreciation Expense 100

Wage Expense 200

Dividends 1,000

100,700 100,700

what tax year end should xyz use and which test or rule requires this year end 421467

Aug 29, 2021 | Uncategorized

PLEASE EXPLAIN YOUR THEORY ON WHY YOU CHOSE THE ANSWER YOU DID…THANKS!

XYZ, LLC has several individual and corporate members. Abe and Joe, individuals with 4/30 year ends, each have a 23% profits and capital interest. RST, Inc., a corporation with a 6/30 year end, owns a 4% profits and capital interest while DEF, Inc., a corporation with an 8/30 year end, owns a 4.9% profits and capital interest. Finally, thirty other calendar year end individual partners (each with less than a 2% profits and capital interest) own the remaining 45% of the profits and capital interests in XYZ. What tax year end should XYZ use and which test or rule requires this year end?

accounting equation effect 421483

Aug 29, 2021 | Uncategorized

25b 3 421530

Aug 29, 2021 | Uncategorized

for each of the following situations two scenarios are describe 273721

Aug 29, 2021 | Uncategorized

For each of the following situations, two scenarios are described, labeled A and B. Choose which scenario is descriptive of a setting corresponding to activity based responsibility accounting and which is descriptive of financial based responsibility accounting.

Provide a brief commentary on the differences between the two systems for each situation, addressing the possible advantages of the activity based view over the financial based view.

Situation 1

A: The purchasing manager, receiving manager, and accounts payable manager are given joint responsibility for procurement. The charges given to the group of managers are to reduce costs of acquiring materials, decrease the time required to obtain materials from outside suppliers, and reduce the number of purchasing mistakes (e.g., wrong type of materials or the wrong quantities ordered).

B: The plant manager commended the manager of the grinding department for increasing his department’s machine utilization rates—and doing so without exceeding the department’s budget. The plant manager then asked other department managers to make an effort to obtain similar efficiency improvements.

Situation 2

A: Delivery mistakes had been reduced by 70 percent, saving over $40,000 per year. Furthermore, delivery time to customers had been cut by two days. According to company policy, the team responsible for the savings was given a bonus equal to 25 percent of the savings attributable to improving delivery quality. Company policy also provided a salary increase of 1 percent for every day saved in delivery time.

B: Bill Johnson, manager of the product development department, was pleased with his department’s performance on the last quarter’s projects. They had managed to complete all projects under budget, virtually assuring Bill of a fat bonus, just in time to help with this year’s Christmas purchases.

Situation 3

A: ?oHarvey, don’t worry about the fact that your department is producing at only 70 percent capacity. Increasing your output would simply pile up inventory in front of the next production department. That would be costly for the organization as a whole. Sometimes, one department must reduce its performance so that the performance of the entire organization can improve.??

B: ?oSusan, I am concerned about the fact that your department’s performance measures have really dropped over the past quarter. Labor usage variances are unfavorable, and I also see that your machine utilization rates are down. Now, I know you are not a bottleneck department, but I get a lot of flack when my managers’ efficiency ratings drop.??

Situation 4

A: Colby was muttering to himself. He had just received last quarter’s budgetary performance report. Once again, he had managed to spend more than budgeted for both materials and labor. The real question now was how to improve his performance for the next quarter.

B: Great! Cycle time had been reduced and, at the same time, the number of defective products had been cut by 35 percent. Cutting the number of defects reduced production costs by more than planned. Trends were favorable for all three performance measures.

Situation 5

A: Cambry was furious. An across the board budget cut! ?oHow can they expect me to provide the computer services required on less money? Management is convinced that costs are out of control, but I would like to know where—at least in my department!??

B: After a careful study of the accounts payable department, it was discovered that 80 percent of an accounts payable clerk’s time was spent resolving discrepancies between the purchase order, receiving document, and the supplier’s invoice. Other activities such as recording and preparing checks consumed only 20 percent of a clerk’s time. A redesign of the procurement process eliminated virtually all discrepancies and produced significant cost savings.

Situation 6

A: Five years ago, the management of Breeann Products commissioned an outside engineering consulting firm to conduct a time and motion study so that labor efficiency standards could be developed and used in production. These labor efficiency standards are still in use today and are viewed by management as an important indicator of productive efficiency.

B: Janet was quite satisfied with this quarter’s labor performance. When compared with the same quarter of last year, labor productivity had increased by 23 percent. Most of the increase was due to a new assembly approach suggested by production line workers. She was also pleased to see that materials productivity had increased. The increase in materials productivity was attributed to reducing scrap because of improved quality.

Situation 7

A: ?oThe system, not people at work stations, is what converts materials into products. Therefore, process efficiency is more important than labor efficiency—but we also must pay particular attention to those who use the products we produce, whether inside or outside the firm.??

B: ?oI was quite happy to see a revenue increase of 15 percent over last year, especially when the budget called for a 10 percent increase. However, after reading the recent copy of our trade journal, I now wonder whether we are doing so well. I found out that the market expanded by 30 percent, and our leading competitor increased its sales by 40 percent.??

gaston company manufactures furniture one of its product lines 273725

Aug 29, 2021 | Uncategorized

Gaston Company manufactures furniture. One of its product lines is an economy line kitchen table. During last year, Gaston produced and sold 100,000 units for $100 per unit. Sales of the table are on a bid basis, but Gaston has always been able to win sufficient bids using the $100 price. This year, however, Gaston was losing more than its share of bids. Concerned, Larry Franklin, owner and president of the company, called a meeting of his executive committee (Megan Johnson, marketing manager; Fred Davis, quality manager; Kevin Jones, production manager; and Helen Jackson, controller).

Larry: I don’t understand why we’re losing bids. Megan, do you have an explanation?

Megan: Yes, as a matter of fact. Two competitors have lowered their price to $92 per unit. That’s too big a difference for most of our buyers to ignore. If we want to keep selling our 100,000 units per year, we will need to lower our price to $92. Otherwise, our sales will drop to about 20,000 to 25,000 per year.

Helen: The unit contribution margin on the table is $10. Lowering the price to $92 will cost us $8 per unit. Based on a sales volume of 100,000, we’d make $200,000 in contribution margin. If we keep the price at $100, our contribution margin would be $200,000 to $250,000. If we have to lose, let’s just take the lower market share. It’s better than lowering our prices.

Megan: Perhaps. But the same thing could happen to some of our other product lines. My sources tell me that these two companies are on the tail end of a major quality improvement program—one that allows them significant savings. We need to rethink our whole competitive strategy—at least if we want to stay in business. Ideally, we should match the price reduction and work to reduce the costs to recapture the lost contribution margin.

Fred: I think I have something to offer. We are about to embark on a new quality improvement program of our own. I have brought the following estimates of the current quality costs for this economy line. As you can see, these costs run about 16 percent of current sales. That’s excessive, and we believe that they can be reduced to about 4 percent of sales over time.

Scrap ………………………………………….. $ 700,000

Rework …………………………………………. 300,000

Rejects (sold as seconds to discount houses) …… 250,000

Returns (due to poor workmanship) …………… 350,000

Total …………………………………………. $1,600,000

Larry: This sounds good. Fred, how long will it take for you to achieve this reduction?

Fred: All these costs vary with sales level, so I’ll express their reduction rate in those terms. Our best guess is that we can reduce these costs by about 1 percent of sales per quarter. So it should take about 12 quarters, or three years, to achieve the full benefit. Keep in mind that this is with an improvement in quality.

Megan: This offers us some hope. If we meet the price immediately, we can maintain our market share. Furthermore, if we can ever reach the point of reducing the price below the $92 level, then we can increase our market share. I estimate that we can increase sales by about 10,000 units for every $1 of price reduction beyond the $92 level. Kevin, how much extra capacity for this line do we have?

Kevin: We can handle an extra 30,000 or 40,000 tables per year.

Required:

1. Assume that Gaston immediately reduces the bid price to $92. How long will it be before the unit contribution margin is restored to $10, assuming that quality costs are reduced as expected and that sales are maintained at 100,000 units per year (25,000 per quarter)?

2. Assume that Gaston holds the price at $92 until the 4 percent target is achieved. At this new level of quality costs, should the price be reduced? If so, by how much should the price be reduced, and what would be the increase in contribution margin? Assume that price can be reduced only in $1 increments.

3. Now assume that Gaston begins the quality improvement program but does not immediately reduce the bid price. Instead, prices will be reduced when profitable to do so. Assume that prices can be reduced only by $1 increments. Identify when the first future price change (if any) should occur.

4. Discuss the differences in viewpoints concerning the decision to decrease prices and the short run contribution margin analysis done by Helen, the controller. Did quality cost information play an important role in the strategic decision making illustrated by the problem?

huebert company provided the following information for last year 273755

Aug 29, 2021 | Uncategorized

Huebert Company provided the following information for last year:

Beginning inventories:

Direct materials …………………….$ 52,700

Work in process ……………………. 25,000

Finished goods ……………………… 75,000

Ending inventories:

Direct materials …………………….$ 42,700

Work in process ……………………. 50,000

Finished goods …………………….. 140,000

During the year, direct materials purchases amounted to $270,000, direct labor cost was $304,000, and overhead cost was $506,000. During the year, 25,000 units were completed.

Required:

1. Calculate the total cost of direct materials used in production.

2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost.

3. Of the unit manufacturing cost calculated in Requirement 2, assume $11 is direct materials and $12 is direct labor. What is the prime cost per unit? Conversion cost per unit?

in the 1400s europeans valued the gold gems drugs and 273772

Aug 29, 2021 | Uncategorized

In the 1400s, Europeans valued the gold, gems, drugs, and spices that came from the Orient. However, these goods were very costly, since they could be transported to Europe only via long overland caravans. Portuguese sailors tried to reach the Orient by sea—around Africa. Christopher Columbus felt that a shorter, easier route lay to the west. He offered Queen Isabella of Spain a business proposition: financing for three completely outfitted ships, honors, titles, and a percentage of the trade in exchange for opening up a direct route to the Indies and establishing a city devoted to trade. King John II of Portugal had previously turned down his offer, but Queen Isabella accepted. On August 3, 1492, the Nina, Pinta, and Santa Maria set sail from Palos, Spain.

Required:

Form a cooperative learning group (typically a group of four or five). Using a single piece of paper and a pen, record the ideas/responses of each member of the group to the following two items:

1. Suppose a communication device had existed in 1492 that permitted Isabella to talk with Columbus for 15 minutes once each month during the eight month voyage. What types of accounting information would she have wanted to obtain regarding the success of the enterprise? Write down a list of the questions she might have asked (each group member in turn should come up with a question).

2. Classify each question as a financial accounting (F) or cost management (CM) type of question. Do the questions change as the months progress?

jackson company has installed a jit purchasing and manufacturing 273780

Aug 29, 2021 | Uncategorized

Jackson Company has installed a JIT purchasing and manufacturing system and is using backflush accounting for its cost flows. It currently uses the purchase of materials as the first trigger point and the completion of goods as the second trigger point. During the month of August, Jackson had the following transactions:

Raw materials purchased ……. $810,000

Direct labor cost ……………… 135,000

Overhead cost ………………… 675,000

Conversion cost applied ……… 877,500*

*$135,000 labor plus $742,500 overhead.

There were no beginning or ending inventories. All goods produced were sold with a 60 percent markup. Any variance is closed to Cost of Goods Sold. (Variances are recognized monthly.)

Required:

1. Prepare the journal entries that would have been made using a traditional accounting approach for cost flows.

2. Prepare the journal entries for the month using backflush costing.

jerry goff president of harmony electronics was concerned abou 273783

Aug 29, 2021 | Uncategorized

Jerry Goff, president of Harmony Electronics, was concerned about the end of the year marketing report that he had just received. According to Emily Hagood, marketing manager, a price decrease for the coming year was again needed to maintain the company’s annual sales volume of integrated circuit boards. This would make a bad situation worse.

The current selling price of $18 per unit was producing a $2 per unit profit—half the customary $4 per unit profit. Foreign competitors keep reducing their prices. To match the latest reduction would reduce the price from $18 to $14. This would put the price below the cost to produce and sell it. How could the foreign firms sell for such a low price? Determined to find out if there were problems with the company’s operations, Jerry decided to hire Jan Booth, a well known consultant who specializes in methods of continuous improvement. Jan indicated that she felt that an activity based management system needed to be implemented. After three weeks, Jan had identified the following activities and costs:

Batch level activities:

Setting up equipment ………………… $ 125,000

Materials handling ……………………… 180,000

Inspecting products …………………….. 122,000

Product sustaining activities:

Engineering support …………………… 120,000

Handling customer complaints ………… 100,000

Filling warranties ………………………. 170,000

Storing goods ……………………………. 80,000

Expediting goods ……………………….. 75,000

Unit level activities:

Using materials ………………………… 500,000

Using power ……………………………… 48,000

Manual insertion labora …………………. 250,000

Other direct labor ………………………. 150,000

Total costs ………………………….. $1,920,000b

a Diodes, resistors, and integrated circuits are inserted manually into the circuit board.

b This total cost produces a unit cost of $16 for last year’s sales volume.

Jan reported that some preliminary activity analysis shows that per unit costs can be reduced by at least $7. Since Emily had indicated that the market share (sales volume) for the boards could be increased by 50 percent if the price could be reduced to $12, Jerry became quite excited.

Required:

1. What is activity based management? What connection does it have to continuous improvement?

2. Identify as many non value added costs as possible. Compute the cost savings per unit that would be realized if these costs were eliminated. Was Jan correct in her preliminary cost reduction assessment? Discuss actions that the company can take to reduce or eliminate the non value added activities.

3. Compute the target cost required to maintain current market share while earning a profit of $4 per unit. Now, compute the target cost required to expand sales by 50 percent. How much cost reduction would be required to achieve each target?

4. Assume that Jan suggested that kaizen costing be used to help reduce costs. The first suggested kaizen initiative is described by the following: switching to automated insertion would save $60,000 of engineering support and $90,000 of direct labor. Now, what is the total potential cost reduction per unit available? With these additional reductions, can Harmony Electronics achieve the target cost to maintain current sales? To increase it by 50 percent? What form of activity analysis is this kaizen initiative: reduction, sharing, elimination, or selection?

5. Calculate income based on current sales, prices, and costs. Now, calculate the income using a $14 price and a $12 price, assuming that the maximum cost reduction possible is achieved (including Requirement 4’s kaizen reduction). What price should be selected?

organizational plan and financial plan develop key parts of an organizational plan 273784

Aug 29, 2021 | Uncategorized

Develop key parts of an organizational plan.

1. Describe the legal form of your business (proprietorship, partnership, or corporation).
2. Justify the legal form you selected by detailing its advantages over other forms.
3. Identify the positions and describe the roles of the executive management team.
4. Address whether or not you will use a board of directors and / or a board of advisors and why.

Develop the rudiments of a financial plan:

1. Explain the financial requirements for the venture, including the amounts needed for cash flow and profitability.
2. Create a cost of operating report for your venture.
3. Prepare a break even analysis for your venture.
4. Explain the sources of funding for the venture.
5. Research and cite at least five (5) reputable academic sources.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one inch margins on all sides; references must follow APA or school specific format. Check with your professor for any additional instructions.
• Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required page length.

The specific course learning outcomes associated with this assignment are:

• Examine the organization plan options and how the organizational structure aligns with the business strategy.
• Analyze the financial planning process for a new venture.
• Analyze different sources of capital to determine the appropriate financing for a business venture.
• Use technology and information resources to research issues in entrepreneurship and innovation.
• Write clearly and concisely about entrepreneurship and innovation using proper writing mechanics.

Attachments:

Isaac Farmer ….docx

Bus521 Assign….docx

Isaac Farmer ….docx

jordan company produced 150 000 floor lamps during the past cale 273788

Aug 29, 2021 | Uncategorized

Jordan Company produced 150,000 floor lamps during the past calendar year. Jordan had 2,500 floor lamps in finished goods inventory at the beginning of the year. At the end of the year, there were 11,500 floor lamps in finished goods inventory. The lamps sell for $50 each. Jordan’s accounting records provide the following information for the past year:

Purchases of direct materials …………………………$1,675,000

Direct materials inventory, January ………………….. 1 380,000

Direct materials inventory, December 31 ……………. 327,000

Direct labor …………………………………………… 2,000,000

Indirect labor …………………………………………. 790,000

Depreciation, factory building ……………………….. 1,100,000

Depreciation, factory equipment ……………………… 630,000

Property taxes on the factory …………………………. 65,000

Utilities, factory ………………………………………. 150,000

Insurance on the factory ………………………………. 200,000

Research and development ……………………………. 120,000

Salary, sales supervisor ………………………………… 85,000

Commissions, salespersons ……………………………. 370,000

General administration ………………………………… 390,000

Work in process inventory, January 1 …………………. 450,000

Work in process inventory, December 31 ……………… 750,000

Finished goods inventory, January 1 …………………… 107,500

Finished goods inventory, December 31 ………………. 489,000

Required:

1. Prepare a cost of goods manufactured statement.

2. Compute the cost of producing one floor lamp last year.

3. Prepare an income statement on an absorption costing basis.

cruz company deposits all cash receipts on the day when they are received and it mak 273789

Aug 29, 2021 | Uncategorized

Cruz Company deposits all cash receipts on the day when they are received and it makes all cash payments by check. At the close of business on June 30, 2011. its Cash account shows an $11.352 debit balance. Cruz’s June 30 bank statement shows $10,332 on deposit in the bank. a. Outstanding checks as of June 30 total $1,713. b. The June 30 bank statement included a $23 debit memorandum for bank services; Cruz has not yet recorded the cost of these services. c. In reviewing the bank statement, a $90 check written by Cruz Company was mistakenly recorded in Cruz Company’s books at $99. d. June 30 cash receipts of $2.724 were placed in the bank’s night depository after banking hours and were not recorded on the June 30 bank statement. e. The bank statement included a $5 credit for interest earned on the cash in the bank. Prepare a bank reconciliation for Cruz Company using the above information. (Input all amounts as positive values. Omit the “S” sign in your response.)

CRUZ COMPANY Bank Reconciliation June 30, 2011

Bank statement balance Add: (Click to select)

Book balance Add: I (Click to select)

I (Click to select)

Deduct: Deduct:

I (Click to select)

H I H I

I (Click to select)

Adjusted bank balance Adjusted book balance

$I

Attachments:

accounting.JPG

kelly gray production manager was upset with the latest perfor 273792

Aug 29, 2021 | Uncategorized

Kelly Gray, production manager, was upset with the latest performance report, which indicated that she was $100,000 over budget. Given the efforts that she and her workers had made, she was confident that they had met or beat the budget. Now, she was not only upset but also genuinely puzzled over the results. Three items—direct labor, power, and setups—were over budget. The actual costs for these three items follow:

Actual Costs

Direct labor …………. $210,000

Power ………………… 135,000

Setups ………………… 140,000

Total …………………. $485,000

Kelly knew that her operation had produced more units than originally had been budgeted, so more power and labor had naturally been used. She also knew that the uncertainty in scheduling had led to more setups than planned. When she pointed this out to John Huang, the controller, he assured her that the budgeted costs had been adjusted for the increase in productive activity. Curious, Kelly questioned John about the methods used to make the adjustment.

John: If the actual level of activity differs from the original planned level, we adjust the budget by using budget formulas—formulas that allow us to predict what the costs will be for different levels of activity.

Kelly: The approach sounds reasonable. However, I’m sure something is wrong here. Tell me exactly how you adjusted the costs of labor, power, and setups.

John: First, we obtain formulas for the individual items in the budget by using the method of least squares. We assume that cost variations can be explained by variations in productive activity where activity is measured by direct labor hours. Here is a list of the cost formulas for the three items you mentioned. The variable X is the number of direct labor hours:

Labor cost = $10X

Power cost = $5,000 + $4X

Setup cost = $100,000

Kelly: I think I see the problem. Power costs don’t have a lot to do with direct labor hours. They have more to do with machine hours. As production increases, machine hours increase more rapidly than direct labor hours. Also, . . .

John: You know, you have a point. The coefficient of determination for power cost is only about 50 percent. That leaves a lot of unexplained cost variation. The coefficient for labor, however, is much better—it explains about 96 percent of the cost variation. Setup costs, of course, are fixed.

Kelly: Well, as I was about to say, setup costs also have very little to do with direct labor hours. And I might add that they certainly are not fixed—at least not all of them.

We had to do more setups than our original plan called for because of the scheduling changes. And we have to pay our people when they work extra hours. It seems as if we are always paying overtime. I wonder if we simply do not have enough people for the setup activity. Supplies are used for each setup, and these are not cheap. Did you build these extra costs of increased setup activity into your budget?

John: No, we assumed that setup costs were fixed. I see now that some of them could vary as the number of setups increases. Kelly, let me see if I can develop some cost formulas based on better explanatory variables. I’ll get back with you in a few days.

Assume that after a few days’ work, John developed the following cost formulas, all with a coefficient of determination greater than 90 percent:

Labor cost = $10X, where X = direct labor hours

Power cost = $68,000 + 0.9Y, where Y = machine hours

Setup cost = $98,000 + $400Z, where Z = number of setups

The actual measures of each of the activity drivers are as follows:

Direct labor hours ……….. 20,000

Machine hours ………….. 90,000

Number of setups …………. 110

Required:

1. Prepare a performance report for direct labor, power, and setups using the direct labor based formulas.

2. Prepare a performance report for direct labor, power, and setups using the multiple cost driver formulas that John developed.

3. Of the two approaches, which provides the more accurate picture of Kelly’s performance? Why?

4. After reviewing the approach to performance measurement, a consultant remarked that non value added cost trend reports would be a much better performance measurement approach than comparing actual costs with budgeted costs—even if activity flexible budgets were used. Do you agree or disagree? Explain.

myers electronics inc produces hand held calculators three o 273812

Aug 29, 2021 | Uncategorized

Myers Electronics, Inc., produces hand held calculators. Three of the major electronic components are produced internally (components 2X334K, 5Y227M, and 8Z555L). There is a separate department in the plant for each component. The three manufactured components and other parts are assembled (by the assembly department) and then tested (by the testing department). Any unit that fails the test is sent to the rework department where the unit is taken apart and the failed component is replaced. Data from the testing department reveal that component 2X334K is the most frequent cause of calculator failure. One out of every 100 calculators fails because of a faulty 2X334K component. Recently, William Dawson was hired to manage the 2X334K department. The plant manager told William that he needed to be more sensitive to the needs of the department’s customers. This charge puzzled William somewhat—after all, the component is not sold to anyone but is used in producing the plant’s calculators.

Required:

1. Explain to William who his ?ocustomers?? are.

2. Discuss how William can be sensitive to his customers. Explain also how this increased sensitivity could improve the company’s time based competitive ability.

3. What role would cost management play in helping William be more sensitive to his customers?

nico parts inc produces electronic products with short life c 273813

Aug 29, 2021 | Uncategorized

Nico Parts, Inc., produces electronic products with short life cycles (of less than two years). Development has to be rapid, and the profitability of the products is tied strongly to the ability to find designs that will keep production and logistics costs low. Recently, management has also decided that post purchase costs are important in design decisions. Last month, a proposal for a new product was presented to management. The total market was projected at 200,000 units (for the two year period). The proposed selling price was $130 per unit. At this price, market share was expected to be 25 percent. The manufacturing and logistics costs were estimated to be $120 per unit.

Upon reviewing the projected figures, Brian Metcalf, president of Nico, called in his chief design engineer, Mark Williams, and his marketing manager, Cathy McCourt. The following conversation was recorded.

Brian: Mark, as you know, we agreed that a profit of $15 per unit is needed for this new product. Also, as I look at the projected market share, 25 percent isn’t acceptable. Total profits need to be increased. Cathy, what suggestions do you have?

Cathy: Simple. Decrease the selling price to $125 and we expand our market share to 35 percent. To increase total profits, however, we need some cost reductions as well.

Brian: You’re right. However, keep in mind that I do not want to earn a profit that is less than $15 per unit.

Mark: Does that $15 per unit factor in preproduction costs? You know we have already spent $100,000 on developing this product. To lower costs will require more expenditure on development.

Brian: Good point. No, the projected cost of $120 does not include the $100,000 we have already spent. I do want a design that will provide a $15 per unit profit, including consideration of preproduction costs.

Cathy: I might mention that postpurchase costs are important as well. The current design will impose about $10 per unit for using, maintaining, and disposing our product. That’s about the same as our competitors. If we can reduce that cost to about $5 per unit by designing a better product, we could probably capture about 50 percent of the market. I have just completed a marketing survey at Mark’s request and have found out that the current design has two features not valued by potential customers.

These two features have a projected cost of $6 per unit. However, the price consumers are willing to pay for the product is the same with or without the features.

Required:

1. Calculate the target cost associated with the initial 25 percent market share. Does the initial design meet this target? Now calculate the total life cycle profit that the current (initial) design offers (including preproduction costs).

2. Assume that the two features that are apparently not valued by consumers will be eliminated. Also assume that the selling price is lowered to $125.

a. Calculate the target cost for the $125 price and 35 percent market share.

b. How much more cost reduction is needed?

c. What are the total life cycle profits now projected for the new product?

d. Describe the three general approaches that Nico can take to reduce the projected cost to this new target. Of the three approaches, which is likely to produce the most reduction?

3. Suppose that the engineering department has two new designs: Design A and Design B. Both designs eliminate the two non valued features. Both designs also reduce production and logistics costs by an additional $8 per unit. Design A, however, leaves post purchase costs at $10 per unit, while Design B reduces post purchase costs to $4 per unit. Developing and testing Design A costs an additional $150,000, while Design B costs an additional $300,000. Calculate the total lifecycle profits under each design. Which would you choose? Explain. What if the design you chose cost an additional $500,000 instead of $150,000 or $300,000?

Would this have changed your decision?

4. Refer to Requirement 3. For every extra dollar spent on preproduction activities, how much benefit was generated? What does this say about the importance of knowing the linkages between preproduction activities and later activities?

photo dive inc manufactures disposable underwater cameras du 273815

Aug 29, 2021 | Uncategorized

Photo Dive, Inc., manufactures disposable underwater cameras. During the last calendar year, a total of 270,000 cameras were made, and 274,000 were sold for $8 each. The actual unit cost per camera produced during the year is as follows:

Direct materials ……………………….$2.25

Direct labor …………………………… 1.50

Variable overhead ……………………. 0.65

Fixed overhead ……………………….. 0.70

Total unit cost …………………………$5.10

Research and development expenses amounted to $70,000. The selling expenses consisted of a commission of $0.25 per unit sold and advertising copayments totaling $36,000. Administrative expenses, all fixed, equaled $83,000. There were no beginning and ending work in process inventories. Beginning finished goods inventory was $30,600 for 6,000 cameras.

Required:

1. Calculate the number of cameras in ending finished goods inventory and their costs.

2. Prepare a cost of goods sold statement for last year.

3. Prepare an absorption costing income statement for last year.

provide at least one example of an appropriate cost driver 273818

Aug 29, 2021 | Uncategorized

Provide at least one example of an appropriate cost driver (allocation base) for each of the following activities.

a. Workers count completed goods before moving them to a warehouse.

b. A logistics manager runs a computer program to determine the materials release schedule.

c. Janitors clean the factory floor after workers have left.

d. Mechanics apply lubricant to machines.

e. Engineers design a product production layout.

f. Engineers set up machines to produce a product.

g. The production supervisor completes the paperwork initiating a work order.

h. The production manager prepares materials requisition forms.

i. Workers move materials from the warehouse to the factory floor.

j. Assembly line machines are operated.

refer to integrative case 9 48 in chapter 9 assume that 273847

Aug 29, 2021 | Uncategorized

Refer to Integrative Case 9 48 in Chapter 9. Assume that all of the facts in Case 9 48 still hold except that the practical capacity of the machinery is 20,000 hours instead of 10,000 hours.

Required

a. Recompute the unit costs for each of the cola products: Diet, Regular, Cherry, and Grape.

b. What is the cost of unused capacity? What do you recommend that Rockness Bottling do with this unused capacity?

c. Now assume that Rockness is considering producing a fifth product: Vanilla cola. Because Vanilla cola is in high demand in Rockness Bottling’s market, assume that it would use 10,000 hours of machine time to make 100,000 units. (Recall that the machine capacity in this case is 20,000 hours, while Diet, Regular, Cherry, and Grape consume only 10,000 hours.) Vanilla cola’s per unit costs would be identical to those of Diet cola except for the machine usage costs. What would be the cost of Vanilla cola? Calculate on a per unit basis, and then in total.

unit3 prinicpal of accountingdb 273860

Aug 29, 2021 | Uncategorized

need 4 paragraph 4paragraphs Details: The Discussion Board (DB) is part of the core of online learning.

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4paragraphs??Details:?The Discussion Board (DB) is part of the core of online learning. Classroom discussion in an online environment requires the active participation of students and the instructor to create robust interaction and dialogue. Every student is expected to create an original response to the open ended DB question as well as engage in dialogue by responding to posts created by others throughout the week. At the end of each unit, DB participation will be assessed based on both level of engagement and the quality of the contribution to the discussion. At a minimum, each student will be expected to post an original and thoughtful response to the DB question and contribute to the weekly dialogue by responding to at least two other posts from students. The first contribution must be posted before midnight (Central Time) on Wednesday of each week. Two additional responses are required after Wednesday of each week. Students are highly encouraged to engage on the Discussion Board early and often, as that is the primary way the university tracks class attendance and participation. The purpose of the Discussion Board is to allow students to learn through sharing ideas and experiences as they relate to course content and the DB question. Because it is not possible to engage in two way dialogue after a conversation has ended, no posts to the DB will be accepted after the end of each unit. You have been hired as the CFO of a new company and are determining the company’s accounting needs. Explain to your staff at least 2 ways in which accounting data are used to make business decisions. Explain at least three related accounting terms or theories.??

Attachments:

Unit3 Prinica….docx

terry guentner the production manager was grumbling about the 273865

Aug 29, 2021 | Uncategorized

Terry Guentner, the production manager, was grumbling about the new quality cost system the plant controller wanted to put into place. ?oIf we start trying to track every bit of spoiled material, we’ll never get any work done. Everybody knows when they ruin something. Why bother to keep track? This is a waste of time. Besides, this isn’t the first time scrap reduction has been emphasized. You tell my workers to reduce scrap, and I’ll guarantee it will go away, but not in the way you would like.??

Required:

1. Why do you suppose that the controller wants a written record of spoiled material? If ?oeverybody knows?? what the spoilage rate is, what benefits can come from keeping a written record?

2. Now consider Terry Guentner’s position. In what way(s) could he be correct? What did he mean by his ?oguarantee?? concerning scrap reduction? Can this be avoided? Explain.

the actions listed next are associated with either an activity b 273867

Aug 29, 2021 | Uncategorized

The actions listed next are associated with either an activity based operational control system or a functional based operational control system:

a. Budgeted costs for the maintenance department are compared with the actual costs of the maintenance department.

b. The maintenance department manager receives a bonus for ?obeating?? budget.

c. The costs of resources are traced to activities and then to products.

d. The purchasing department is set up as a responsibility center.

e. Activities are identified and listed.

f. Activities are categorized as adding or not adding value to the organization.

g. A standard for a product’s material usage cost is set and compared against the product’s actual materials usage cost.

h. The cost of performing an activity is tracked over time.

i. The distance between moves is identified as the cause of materials handling cost.

j. A purchasing agent is rewarded for buying parts below the standard price set by the company.

k. The cost of the materials handling activity is reduced dramatically by redesigning the plant layout.

l. An investigation is undertaken to find out why the actual labor cost for the production of 1,000 units is greater than the labor standard allowed.

m. The percentage of defective units is calculated and tracked over time.

n. Engineering has been charged with finding a way to reduce setup time by 75 percent.

o. The manager of the receiving department lays off two receiving clerks so that the fourth quarter budget can be met.

Required:

Classify the preceding actions as belonging to either an activity based operational control system or a functional based control system. Explain why you classified each action as you did.

the administrator of elections for the city of sweetwater has 273868

Aug 29, 2021 | Uncategorized

The administrator of elections for the city of Sweetwater has been asked to perform an activity analysis of its optical scanning center. The optical scanning center reads voter forms into the computer. The result of the activity analysis is summarized as follows:

Activities Activity Cost

Correcting errors identified by election commission ………..$ 96,000

Correcting jams ………………………………………………..84,000

Correcting scan errors …………………………………………48,000

Loading ………………………………………………………..24,000

Logging in control codes (for later reconciliation) ……………18,000

Program scanner ……………………………………………….24,000

Rerunning job due to scan reading errors ……………………..22,000

Scanning ……………………………………………………….52,000

Verifying scan accuracy via reconciling totals …………………20,000

Verifying scanner accuracy with test run ………………………12,000

Total …………………………………………………………$400,000

Instructions

1. Prepare a Pareto chart of the department activities.

2. Use the activity cost information to determine the percentages of total department costs that are prevention, appraisal, internal failure, external failure, and not costs of quality. Round percentages to one decimal place.

3. Determine the percentages of the total department costs that are value and non value added. Round percentages to one decimal place.

4. Interpret the information.

accounting questions ec3076 assignment 1 2013 273880

Aug 29, 2021 | Uncategorized

Attachments:

EC3076 Assign….xlsx

help with accounting please answer all the questions 421088

Aug 29, 2021 | Uncategorized

Els Company most recently reconciled its bank statement and book balances of cash on August 31
and it reported two checks outstanding, No. 5888 for $1,038.05 and No. 5893 for $484.25. The following
information is available for its September 30, 2005, reconciliation:
ELS COMPANY

August 31 bank reconciliation:
Outstanding checks:
No. 5888 1,038.05
No. 5893 495.95

From the September 30 bank statement:

September 30 Bank Statement:

Previous balance 16,800.45
Total Checks and Debits 9,620.05
Total Deposits and Credits 11,182.85
Current Balance 18,363.25

Checks and Debits Daily Balance
Date Check Amount Date Amount
09/03 5888 1,038.05 8/31 16,800.45
09/04 5902 731.90 9/3 15,762.40
09/07 5901 1,824.25 9/4 15,030.50
09/17 NSF 588.25 9/5 16,134.25
09/20 5905 937.00 9/7 14,310.00
09/22 5903 399.10 9/12 16,536.90
09/22 5904 2,080.00 9/17 16,948.65
09/28 5907 213.85 9/20 15,011.65
09/29 5909 1,807.65 9/21 19,104.65
9/22 1,625.55
9/25 18,977.25
Deposits and Credits 9/28 18,763.40
Date Description Amount 9/29 16,955.75
09/05 Deposit 1,103.75 9/30 18,363.25
09/12 Deposit 2,226.90
09/21 Deposit 4,093.00
09/25 Deposit 2,351.70
09/30 Interest 2,250.00
09/30 Credit memo 1,385.00

From Els Company’s Accounting Records:

Cash Receipts Deposited: Cash Disbursements:

Date Cash Debit Check No. Cash Credit
Sept. 5 1,103.75 5901 1,824.25
12 2,226.90 5902 731.90
21 4,093.00 5903 399.10
25 2,351.70 5904 2,050.00
30 1,582.75 5905 937.00
11,358.10 5906 859.30
5907 213.85
5908 276.00
5909 1,807.65
9,099.05

Cash Acct. No. 101
Date Explanation PR Debit Credit Balance
Aug. 31 Balance 15,278.15
Sept. 30 Total receipts 11,358.10 26,636.25
30 Total disbursements 9,099.05 17,537.20

Check No. 5904 for computer equipment:
Entered in accounting records 2,050.00
Correct amount of check 2,080.00

Collection of Note:
Credit memorandum from bank 1,400.00
Bank collection fee 15.00

Check figures:
(1) Reconciled balance $18,326
(2) Credit Note Receivable 1,400

Check No. 5904 is correctly drawn for $2,080 to pay for computer equipment; however, the recordkeeper
misread the amount and entered it in the accounting records with a debit to Computer
Equipment and a credit to Cash of $2,050. The NSF check shown in the statement was originally
received from a customer, S. Nilson, in payment of her account. Its return has not yet been
recorded by the company. The credit memorandum is from the collection of a $1,400 note for Els
Company by the bank. The bank deducted a $15 collection fee. The collection and fee are not yet
recorded.
Required
1. Prepare the September 30, 2005, bank reconciliation for this company.
2. Prepare the journal entries to adjust the book balance of cash to the reconciled balance.
Analysis Component
3. The bank statement reveals that some of the prenumbered checks in the sequence are missing.
Describe three situations that could explain this.

cost accounting 421126

Aug 29, 2021 | Uncategorized

Eppes Plating Company plans to sell 120,000 units of a certain product line at a price of $6. There are 10,000 units of the product in the inventory at January 1 and the inventory is to be increased 20% during the year. Two types of materials are used to make the product. Four units of Material A each costing 30 cents are required for each unit of product, and two units of Material B costing 40 cents are required for each unit of product. On January 1 there are 10,000 units of Material A in inventory and 5,000 units of Material B. Plans for the year indicate that 12,000 units of Material A and 6,000 units of Material B are to be produced in 15 minutes of direct labor time. Direct labor is paid at the rate of $8.00 an hour. The variable manufacturing overhead varies at the rate of $.50 per direct labor hour and the fixed manufacturing overhead for the year is estimated at $140,000. Required: a. Prepare a production budget for the year. b. Prepare a materials purchases budget for the year. c. Prepare a labor cost budget for the year. d. Prepare a budget for manufacturing overhead for the year.

a equipment was purchased for 800 000 on january 1 2014 it 421137

Aug 29, 2021 | Uncategorized

A) Equipment was purchased for $800,000 on January 1, 2014. It has an estimated useful life of 8 years and a residual value of $120,000. Depreciation is being computed using the straight line method. What amount should be shown for the Equipment, net of accumulated depreciation, in the company’s December 31, 2015 balance sheet?

a. $595,000.

b. $630,000.

c. $510,000.

d. $715,000.

B) Joe’s Copy Shop bought equipment for $60,000 on January 1, 2013. Joe estimated the useful life to be 3 years with no salvage value, and the straight line method of depreciation will be used. On January 1, 2014, Joe decides that the business will use the equipment for a total of 5 years. What is the revised depreciation expense for 2014?

a. $10,000.

b. $15,000.

c. $20,000.

d. $8,000.

C) Wells Company’s delivery truck, with a cost of $56,000 was destroyed by fire. At the time of the fire, the balance of the Accumulated Depreciation account amounted to $38,000. The company received $32,000 reimbursement from its insurance company. The gain or loss as a result of the fire was

a. $14,000 gain.

b. $24,000 gain.

c. $24,000 loss.

d. $14,000 loss.

questions 421142

Aug 29, 2021 | Uncategorized

EQUITY FUNDING CORPORATION OF AMERICA

Introduction:

Equity Funding was a financial institution primarily engaged in life insurA?­ance. In 1964, its top management commenced to perpetrate a fraud that would take almost ten years to discover. The intent of the fraud was to inflate earnings so that management could benefit through trading their securities at high prices.

History:

In 1960, Equity Funding Corporation of America was founded by four individuals, who assumed equal partnership interests in the firm. Soon after its formation, two of the partners resigned, leaving the small company to Stanley Goldblum, who held the title of president, and Michael Riordan who served as Chairman of the Board. The principle line of business was the selling of life insurance policies. In 1960 Equity Funding Corporation of America began its innovative “Equity Funding Program,” in which it sold life insurance and a mutual fund investment in single packages. Under the program, customers would sign up to buy mutual fund shares every year, and then borrow against them to pay annual premiums on an insurance policy. The development of this innovative financial investment was the trademark of Equity Funding. In 1964, Equity Funding went public and was soon recognized across the country as one of the most innovative companies in the conservative world of life insurance.

Michael Riordan was killed January 1965 in a mudslide that destroyed his home in the Brentwood suburb of Los Angeles, California. With Riordan gone, Stanley Goldblum was appointed the Chairman of the Board. Fred Levin who was a company employee since 1967 was selected by Goldblum to serve as the executive vice president in charge of life insurance operations. Together Goldblum and Levin significantly increased Equity Funding’s revenue and earnings under aggressive, growth oriented management policies.

By 1972, Equity Funding was one of the ten largest life insurance companies in the United States and was the fastest growing company in the industry. When Equity Funding went public in 1964, its assets totaled $9 million and its pretax earnings was $620,000. Eight years later, Equity Funding total assets approached $500 million with pretax earnings of $26 million. Because of the great success of Equity Funding, security analysts recommended Equity Funding common stock as their most popular investment.

As a result of the rise in stock prices in the early 1970s, Goldblum and Levin became staggeringly wealthy and even though both men came from modest backgrounds, they were accepted into the intermost circles of Los Angeles’ celebrity social circuit. Goldblum was a college dropout working in a meat packing plant ten years earlier. Levin on the other hand earned a law degree from DePaul University in Chicago and worked briefly with the state’s regulatory agency whose responsibility was to oversee the state’s insurance industry. While Levin was quick witted and charming and enjoyed wining and dining business associates, Goldblum was a loner who preferred to spend long hours working out on weights. Goldblum saw great promise in Levin when he joined Equity Funding in 1967. Levin reportedly had no qualms about humiliating employees publicly and kept a tight rein over the insurance sales personnel that he supervised. Levin saw advantages of having a network of well connected friends and business associates and used this to his advantage. Both men were widely respected in their professions.

Fraud:

The Equity Funding fraud, like most financial fraud, had a modest beginning. Goldblum was concerned that Equity Funding’s earnings were too low. The scandal began with the overstating the commissions earned on sales. In order to keep share prices up, Mr. Goldblum instructed his CFO to make fictitious entries in certain receivable and income accounts. Goldblum supplied his subordinates with inflated earnings per share figure and instructed them to make whatever increases necessary to support this figure.

The fraud progressed through three major stages: the “inflated earnings phase,” the “foreign phase,” and the “insurance phase.” The inflated earnings phase involved inflating income with bogus commissions supposedly earned through 1oans made to customers. Equity Funding had a funded life insurA?­ance program whereby customers who bought mutual fund shares could obA?­tain a loan from the company to pay the premium on a life insurance policy. After some years the customer would sell off the mutual fund holdings to repay the loan. The mutual fund shares should have appreciated sufficiently so only a partial sale of shares would be required. Thus, the customer had the cash value of the insurance policy and the remaining mutual fund shares as assets from the investment.

The inflated earnings obtained via bogus commissions were supported by manual entries made on the company’s books. Even though supporting docuA?­mentation did not exist for the entries, the company’s auditors failed to detect the fraud. However, the inflated assets did not bring about cash inflows, and the, company started to suffer severe cash shortages because of real operating losses.

To remedy the cash shortage situation, the fraud moved into the second stage, the foreign phase. The company acquired foreign subsidiaries and used these subsidiaries in complex transfers of assets. Funds were brought into the parent company to reduce the funded loans asset account and falsely repreA?­sent customer repayments of their loans. However, even this scheme proved inadequate.

The third stage, the insurance phase, involved the resale of insurance poliA?­cies to other insurance companies. This practice is not unusual in the insurA?­ance business when one company needs cash immediately and another comA?­pany has a cash surplus. Equity Funding created bogus policies. In the short run it attempted to solve its cash problems by selling these policies to another insurance company. In the long run, however, the purchasing company exA?­pected cash receipts from premiums on the policies. Since these policyholders did not exist, Equity Funding either paid premium through the sale of more fake policies or pretended that the policyholder had died. Thus, it was only a matter of time before the fraud could no longer be concealed.

The computer was not used in the fraud until the insurance phase. The task of creating the bogus policies was too big to be handled manually. InA?­stead, a program was written to generate policies. These policies were coded as the now infamous “Class 99.”

Discovery

In the spring of 1973, Equity Funding collapsed in a period of a few weeks when a disgruntled employee who was involved in the fraud but had been fired by Equity Funding management disclosed the existence of a massive financial fraud within the company. The story was so bizarre that many parties associated with the company refused to believe the story. At the request of Equity Funding’s court appointed bankruptcy trustee, the accounting firm of Touche Ross performed a lengthy audit. This audit disclosed that the company had generated more than $2 billion of fictitious insurance policies. Most of these bogus insurance policies were sold to reinsurance companies. To disguise the fictitious nature of these policies from insurance examiners and outside auditors, Goldblum and other company executives would regularly hold midnight “file stuffing” parties. These parties were held to generate supporting documentation for the thousands of nonexistent policyholders that had allegedly purchased life insurance policies from Equity Funding.

The truth was that Equity Funding was never profitable. Prior to collapsing, the company was technically insolvent even though Goldblum had just issued a press release reporting record earnings for 1972, up 17 percent over 1971.

The most alarming feature of this fraud was the number of individuals who were aware of its existence. Dozens of individuals, both Equity Funding employees and external third parties, helped perpetuate and/or conceal the company’s fraudulent schemes. Eventually, federal prosecutors would convict or obtain guilty pleas from twenty two individuals associated with the company, including three of the company’s independent auditors. As many as fifty additional Equity Funding employees, primarily clerical personnel, participated directly or indirectly in the fraud; however, prosecutors chose not to bring criminal charges against them.

The investigation into the Equity Funding fraud revealed that Goldblum and Levin gradually and deliberately induce their co conspirators to become involved in the fraud. More often than not, these individuals were persuaded with significant monetary rewards in the form of stock rights, large salaries and bonuses, and exorbitant expense accounts while Goldblum and other executives reaped the greatest reward from the sale of their Equity Funding stock. In fact, Goldblum reportedly earned more than $5 million from the sale of his stock.

The motivation behind this major fraud appeared to be Goldblum’s persistence to keep the price of the stock high. In fact during 1972, several of Equity Funding co conspirators pleaded with Goldblum to report flat earnings for a period of years. They argued that by doing so the company would have an opportunity to stop the fraudulent practices and become a total legitimate operation. Goldblum refused to cooperate, pointing out that it reported earnings did not increase each year, the company’s stock price would fall.

To protect this scam, Equity Funding executives went to great lengths to conceal their fraudulent activities from the insurance examiners and independent auditors. Examples of these activities included Levin ordering the Equity Funding offices that were being used by the state insurance examiners to be bugged so that he would know the specific questions or issues that they were addressing. Also, company officials ushered out several auditors from their offices on the pretense of lunch at an elegant and busy local restaurant hoping that they would leave their files unlocked. In fact the auditors did and while at lunch other company employees were copying down the insurance policy numbers that had been randomly selected by the auditors for testing. With these numbers on hand, company employees could ensure that these selected files could be created and pass audit inspection.

Aftermath

The stockholders and companies that Equity Funding defrauded suffered hundreds of million dollars in losses. In fact, the value of the stock dropped by more than $15 billion within one week. The conspirators received modest sentences compared to the losses they inflicted.

Goldblum served four years in the Terminal Island federal prison in Long Beach, California, before being paroled. Goldblum returned to the business world as president and chief executive officer of a company that operated a chain of medical care clinics. The auditor of this company at the time was Seidman & Seidman. This was the same audit firm that audited Equity Funding. Shortly after Goldblum was hired, Seidman & Seidman resigned and forfeited the $40,000 annual audit fee because they did not want to be associated with another company that had Goldblum as its chief executive officer.

Levin served only two and one half years at the same facility before being paroled. In fact after his release from prison, he embezzled $250,000 from a small plastics company while acting as its president.

Questions

1. Is it necessary or appropriate for independent auditors to trust the executives of a client? If so, to what extent should auditors trust client management?

2. In evaluating the integrity of the executives of a prospective client, what types of information should auditors obtain, and from what sources would they generally collect this information?

3. In your opinion, was it appropriate for Seidman & Seidman to resign as the audit firm of Goldblum’s new company after he was elected its president and chief executive officer? Under what conditions is it appropriate for a professional firm, such as a CPA firm, to choose not to provide professional services to a company or individual requesting such services?

4. In your opinion, what did the Seidman & Seidman do to contribute to the continued success of the Equity Funding fraud? What could they have done to detect the fraud earlier?

In analyzing this case, take the components of the control environment and discuss how each factor was present or lacking in this situation.

accounting 421147

Aug 29, 2021 | Uncategorized

Ergo Products manufactures a variety of ergonomic household tools including a cordless drill. The cordless drill comes with a battery recharger. Currently, the company manufactures its own recharger for the drill with the following unit costs when 5,000 rechargers are produced each year:

Direct materials

$3.00 per unit

Direct labor

$3.00 per unit

Variable overhead

$1.00 per unit

Fixed overhead

$2.00 per unit

Another manufacturer has offered to supply Ergo with a recharger for a cost of $8 each. Ergo has determined that if they accept the offer, 80% of the fixed overhead allocated to the rechargers will be avoidable.

Question: By what amount will the company’s net income increase or decrease if they outsource? Be sure to indicate if net income would increase or decrease.

Answer: $________

esposito is an italian subsidiary 421162

Aug 29, 2021 | Uncategorized

Esposito is an Italian subsidiary of a U.S. Company. Esposito’s ending inventory is valued at the average cost for the last quearter of the year. The following account balances are available for Esposito for 2011:

Beginning inventory E 20,000 (E = Euro)

Purchases E400,000

Ending inventory E15,000

Relevant exchange rates follow:

4th quarter average, 2010 $.93 = E1 (E = Euro)

December 31, 2010 .94 = E1

Average 2011 .96 = E1

4th quarter average, 2011 .99 = E1

December 31, 2011 1.01 = E1

1. Compute the cost of goods sold for 2011 in U.S. dollars using the temporal method

2. Compute the cost of goods sold for 2011 in U.S. dollars using the current rate method

3. Compute ending inventory for 2011 under the temporal method

4. Compute ending inventory for 2011 under the current rate method

accounting 421206

Aug 29, 2021 | Uncategorized

Question 1 A&O Corp. had the following selected account balances as of 12/31/2012 before adjusting entries were made. Cash $90,000 Insurance expense 18,000 Accounts receivable 16,000 Supplies 6,400 Equipment 90,000 Accumulated depreciation 28,000 Unearned advertising revenue 5,000 Salaries expense 10,000 Rent expense 18,000 A&O’s accountant has provided you the following information: Insurance was paid in advance on 10/1/2012 for a one year period starting 10/1/2012 and the entire amount ($18k) was recorded in the insurance expense account.

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Question 1 A&O Corp. had the following selected account balances as of 12/31/2012 before adjusting entries were made. Cash?$90,000??Insurance expense? 18,000??Accounts receivable?16,000??Supplies? 6,400??Equipment?90,000??Accumulated depreciation? 28,000??Unearned advertising revenue?5,000??Salaries expense? 10,000??Rent expense?18,000?? A&O’s accountant has provided you the following information: Insurance was paid in advance on 10/1/2012 for a one year period starting 10/1/2012 and the entire amount ($18k) was recorded in the insurance expense account. Supplies remaining on hand at the end of the year were $3,000. Equipment was purchased on 10/1/2012 and it is being depreciated over 10 years by the straight line method. The salvage value of the equipment is $0. A&O has completed 50% advertising services due to clients, whose advance cash payments were recorded above. Rent ($18,000) was paid in advance on 11/30/2012, for 6 months (11/30/2012 to5/31/2013) and A&O recorded the entire amount as rent expense on that date. Prepare the adjusting journal entries for each of the 5 items above (do not write any explanations). Show all supporting computations. Use the answer sheet provided. Question 2 Presented below is the pretax information for Aloma Corporation, for the year 2012: Sales?$6,000,000??Cost of goods sold? 2,950,000??Interest revenue?60,000??Loss from abandonment of plant assets?300,000??Selling expenses?600,000??Administrative expenses?440,000??Unusual and infrequent loss from earthquake?90,000??Gain on disposal of a segment of the business. The corporation will no longer be in that business in the future.? 290,000?? Instructions: Present all applicable information in a proper format (according to GAAP), to prepare a multiple step income statement. The company has 300,000 shares outstanding and a federal tax rate of 30%. Prepare an EPS section in proper format (round to two decimals). Use the answer sheet provided. Question 3…

Attachments:

Accting.docx

you are an accountant in the budgetary projections and special 273607

Aug 29, 2021 | Uncategorized

You are an accountant in the budgetary, projections, and special projects department of American Conductor, Inc., a large manufacturing company. The president, William Brown, asks you on very short notice to prepare some sales and income projections covering the next 2 years of the company’s much heralded new product lines. He wants these projections for a series of speeches he is making while on a 2 week trip to eight East Coast brokerage firms. The president hopes to bolster American’s stock sales and price.

You work 23 hours in 2 days to compile the projections, hand deliver them to the president, and are swiftly but graciously thanked as he departs. A week later you find time to go over some of your computations and discover a miscalculation that makes the projections grossly overstated. You quickly inquire about the president’s itinerary and learn that he has made half of his speeches and has half yet to make. You are in a quandary as to what to do.

Instructions

(a) What are the consequences of telling the president of your gross miscalculations?

(b) What are the consequences of not telling the president of your gross miscalculations?

(c) What are the ethical considerations to you and the president in this situation?

zelmer company uses budgets in controlling costs the august 201 273619

Aug 29, 2021 | Uncategorized

Zelmer Company uses budgets in controlling costs. The August 2010 budget report for the company’s Assembling Department is as follows.

?

The monthly budget amounts in the report were based on an expected production of 60,000 units per month or 720,000 units per year. The Assembling Department manager is pleased with the report and expects a raise, or at least praise for a job well done. The company president, however, is unhappy with the results for August, because only 58,000 units were produced.

Instructions

(a) State the total monthly budgeted cost formula.

(b) Prepare a budget report for August using flexible budget data. Why does this report provide a better basis for evaluating performance than the report based on static budget data?

(c) In September, 64,000 units were produced. Prepare the budget report using flexible budget data, assuming

(1) Each variable cost was 10% higher than its actual cost in August, and

(2) Fixed costs were the same in September as inAugust.

allison sheriff controller of an oil exploration division has 273635

Aug 29, 2021 | Uncategorized

Allison Sheriff, controller of an oil exploration division, has just been approached by Tim Wilson, the divisional manager. Tim told Allison that the projected quarterly profits were unacceptable and that expenses need to be reduced. He suggested that a clean and easy way to reduce expenses is to assign the exploration and drilling costs of four dry holes to those of two successful holes. By doing so, the costs could be capitalized and not expensed, reducing the costs that need to be recognized for the quarter. He further argued that the treatment is reasonable because the exploration and drilling all occurred in the same field; thus, the unsuccessful efforts really were the costs of identifying the successful holes. ?oBesides,?? he argued, ?oeven if the treatment is wrong, it can be corrected in the annual financial statements. Next quarter’s revenues will be more and can absorb any reversal without causing any severe damage to that quarter’s profits. It’s this quarter’s profits that need some help.?? Allison was uncomfortable with the request because generally accepted accounting principles do not sanction the type of accounting measures proposed by Tim.

Required:

1. Using the code of ethics for management accountants, recommend the approach that Allison should take.

2. Suppose Tim insists that his suggested accounting treatment be implemented. What should Allison do?

assume that a company has recently switched to jit manufacturing 273637

Aug 29, 2021 | Uncategorized

Assume that a company has recently switched to JIT manufacturing. Each manufacturing cell produces a single product or major subassembly. Cell workers have been trained to perform a variety of tasks. Additionally, many services have been decentralized. Costs are assigned to products using direct tracing, driver tracing, and allocation. For each cost listed, indicate the most likely product cost assignment method used before JIT and after JIT. Set up a table with three columns: Cost Item, Before JIT, and After JIT. You may assume that direct tracing is used whenever possible, followed by driver tracing, with allocation being the method of last resort.

a. Inspection costs

b. Power to heat, light, and cool plant

c. Minor repairs on production equipment

d. Salary of production supervisor (department/cell)

e. Oil to lubricate machinery

f. Salary of plant supervisor

g. Costs to set up machinery

h. Salaries of janitors

i. Power to operate production equipment

j. Taxes on plant and equipment

k. Depreciation on production equipment

l. Raw materials

m. Salary of industrial engineer

n. Parts for machinery

o. Pencils and paper clips for production supervisor (department/cell)

p. Insurance on plant and equipment

q. Overtime wages for cell workers

r. Plant depreciation

s. Materials handling

t. Preventive maintenance

at the end of 2010 hender chemicals began to implement 273640

Aug 29, 2021 | Uncategorized

At the end of 2010, Hender Chemicals began to implement an environmental quality management program. As a first step, it identified the following costs in its accounting records as environmentally related for the year just ended:

2010

Settling personal injury claims ………………. $1,200,000

Treating and disposing of toxic waste ………… 4,800,000

Cleanup of chemically contaminated soil …….. 1,800,000

Inspecting products and processes ……………… 600,000

Operating pollution control equipment ………….. 840,000

Licensing facilities for producing contaminants … 360,000

Evaluating and selecting suppliers ………………. 120,000

Developing performance measures ……………….. 60,000

Recycling products ……………………………….. 75,000

Required:

1. Prepare an environmental cost report by category. Assume that total operating costs are $60,000,000.

2. Create a pie chart to illustrate the relative distribution percentages for each environmental cost category. Comment on what this distribution communicates to a manager.

avery corporation s northwestern factory provided the following 273641

Aug 29, 2021 | Uncategorized

Avery Corporation’s northwestern factory provided the following information for the last calendar year:

Beginning inventory:

Direct materials ………………$50,800

Work in process ……………… 58,500

Ending inventories:

Direct materials ………………$21,500

Work in process ……………… 23,500

During the year, direct materials purchases amounted to $150,000, direct labor cost was $200,000, and overhead cost was $324,700. There were 100,000 units produced.

Required:

1. Calculate the total cost of direct materials used in production.

2. Calculate the cost of goods manufactured. Calculate the unit manufacturing cost.

3. Of the unit manufacturing cost calculated in Requirement 2, assume $1.70 is direct materials and $3.24 is overhead. What is the prime cost per unit? Conversion cost per unit?

classify each of the following actions as either being associate 273663

Aug 29, 2021 | Uncategorized

Classify each of the following actions as either being associated with the financial accounting system (FS) or the cost management system (CMS):

a. Determining the future cash flows of a proposed JIT manufacturing system

b. Filing financial reports with the SEC

c. Determining the cost of a customer

d. Issuing a voluntary annual report on environmental costs and issues

e. Reducing costs by eliminating activities that do not add value

f. Preparing a performance report that compares actual costs with budgeted costs

g. Preparing financial statements that conform to GAAP

h. Determining the cost of a supplier

i. Using cost information to decide whether to accept or reject a special order

j. Reporting a large contingent liability to current and potential shareholders