WoolCorp buys sheep’s wool from farmers. The company began operations in January of this year, and is making decisions on product offerings, pricing, and vendors. The company is also examining its method of assigning overhead to products. You’ve just been hired as a production manager at WoolCorp.Currently WoolCorp makes two products: (1) raw, clean wool to be used as stuffing or insulation and (2) wool yarn for use in the textile industry.The company would like you to evaluate its costing methods for its raw wool and wool yarn.Single Plantwide RateWoolCorp is currently using the single plantwide factory overhead rate method, which uses a predetermined overhead rate based on an estimated allocation base such as direct labor hours or machine hours. The rate is computed as follows:Single Plantwide Factory Overhead Rate= (Total Budgeted Factory Overhead) ÷ (Total Budgeted Plantwide Allocation Base)WoolCorp has been using combing machine hours as its allocation base.The company would like to consider activity-based costing. In order to understand their current system better, you evaluate WoolCorp’s current method of costing for raw wool and wool yarn. The production staff has compiled the following information for you on the production of 550 pounds of either raw wool or wool yarn:Factory Overhead Type Budgeted Factory OverheadSorting $25,600Cleaning $38,400Combing $1,200Raw Wool Wool YarnHours of combing machine use required 70 30In the following table, use combing machine hours as the allocation base for assigning overhead costs to each product. When required, round your answers to the nearest dollar.Single Plantwide Factory Overhead Rate:Raw Wool Wool YarnAllocated factory overhead cost Activity-Based CostingIn order to compare WoolCorp’s current method with activity-based costing, you interview the production staff and compile the following information, which relates to the costs for raw wool and wool yarn.Type of Cost Activity Base Total CostSorting Hours of sorting $25,600Cleaning Units of cleaning machine power $38,400Combing Hours of combing machine use $1,200Raw Wool Wool YarnHours of sorting required 800 3,200Units of cleaning machine power required 1,920 4,480Hours of combing machine use required 70 30In the following table, calculate and enter the activity rate for each of the three activities. If required, round your answers to the nearest cent.Activity Activity RateSorting Cleaning Combing In the following table, allocate the costs of sorting, cleaning, and combing based on the rates of activity consumed by each product’s process. When required, round your answers to the nearest dollar.Raw Wool Wool YarnSorting cost $ $Cleaning cost Combing cost Total cost $ $Final QuestionAnswer the question below.After reviewing your work on the Traditional Costing and Activity-Based Costing panels, which of the two costing methods would you recommend to WoolCorp, and why?Traditional costing, because it is a tried-and-true method used for the entire life of the company.Since the methods both give the same costs for each product, there is no advantage to either method.The company should use whichever method is the cheapest to implement.Activity-based costing, because it recognizes differences in how each product uses factory overhead activities, yielding more accurate product costs.
Answer:
WoolCorp
1. Single Plantwide Factory Overhead Rate: $652
2. Comparison of WoolCorp’s current method with activity-based costing:
Raw Wool Wool Yarn
Allocated factory
overhead cost $45,640 $19,560
Activity-Based Costing $17,840 $47,640
3. Calculation of and entering the activity rate for each of the three activities:
Activity Activity Rate
Sorting $6.40 ($25,600/4,000)
Cleaning $6.00 ($38,400/6,400)
Combing $12.00 $1,200/100)
4. Allocation of the costs of sorting, cleaning, and combing to product:
Raw Wool Wool Yarn
Sorting cost $5,120 $20,400
Cleaning cost 11,520 26,880
Combing cost 840 360
Total cost $17,840 $47,640
5. Recommended method of costing:
Activity-based costing, because it recognizes differences in how each product uses factory overhead activities, yielding more accurate product costs.
Explanation:
Key Decisions: product offerings, pricing, and vendors
Problem: method of assigning overhead to products
Products:
(1) raw, clean wool to be used as stuffing or insulation and
(2) wool yarn for use in the textile industry
Requirement: evaluate its costing methods for its raw wool and wool yarn.
Traditional Costing Method : Predetermined overhead rate computed as follows:
Single Plantwide Factory Overhead Rate= (Total Budgeted Factory Overhead) ÷ (Total Budgeted Plantwide Allocation Base) combing machine hours
Data for the production of 550 pounds of either raw wool or wool yarn:
Factory Overhead Type Budgeted Factory Overhead
Sorting $25,600
Cleaning $38,400
Combing $1,200
Total overhead $65,200
Raw Wool Wool Yarn
Hours of combing
machine use required 70 30
Compiled Information:
Type of Cost Activity Base Total Cost Rate
Sorting Hours of sorting $25,600
Cleaning Units of cleaning
machine power $38,400
Combing Hours of combing
machine use $1,200
Raw Wool Wool Yarn Total
Hours of sorting required 800 3,200 4,000
Units of cleaning machine
power required 1,920 4,480 6,400
Hours of combing
machine use required 70 30 100
What happened to assets, earnings, dividends, and cash flows during the financial year?
Accounting practice in the United States follows the generally accepted accounting principles (GAAP) developed by the Financial Accounting Standards Board (FASB), which is a nongovernmental, professional standards body that monitors accounting practices and evaluates controversial issues. The Securities and Exchange Commission (SEC) requires all publicly traded companies to periodically report their financial information.
A publicly held corporation must publish an annual report that contains the balance sheet, income statement, statement of cash flows, statement of stockholders’ equity, and other financial information for analysis.
The following table lists descriptions of the major financial statements and reports that a firm publishes. Identify the correct statement or report for each description.
Description
Statement or Report
Explains the changes in a company’s stockholders’ equity over the accounting year. Balance Sheet, Statement of Stockholders equity ,income statement,Statement of cashflows, anual report
Provides details about the flow of funds from operating, investing, and financing activities. statement of cashflows,balance sheet,income statement, anual report,stockholders equity
Is issued once a year by a corporation and contains basic financial statements and an analysis of past performance and future prospects. Statement of CashFlows, Balance sheet, Income Statement, Anual Report, Statment of Stockholders equity
Has three segments that when analyzed together give an idea of what the company owns and what it owes. Same drop-down choices as previous question above!
Gives details about the firm’s sales, costs, and profits for the past accounting period. Same drop-down choices as above from previosus question
Accountants focus on creating financial statements, whereas finance professionals use these statements to evaluate a firm and answer questions about its performance. Indicate which financial statement you would refer to when answering the questions in the following table:
Balance Sheet
Statement of Cash Flows
Does the firm generate enough internal funds to support anticipated investment, or does additional outside capital need to be raised?
Can the firm meet all its short-term obligations using its current assets?
The annual report is very important for investors, because the information contained in the annual report:
A: Helps investors forecast expected earnings and dividends.
B: Shows the prices at which each investor purchased the company’s stocks and bonds.
Answer:
Identification of the correct statement or report for each description:
Statement or Report
a1) Explains the changes in a company’s stockholders’ equity over the accounting year. Balance Sheet, Statement of Stockholders equity, income statement, Statement of cash flows, annual report
2) Provides details about the flow of funds from operating, investing, and financing activities. statement of cash flows, balance sheet,income statement, annual report,stockholders equity
Is issued once a year by a corporation and contains basic financial statements and an analysis of past performance and future prospects. Statement of Cash Flows, Balance sheet, Income Statement, Annual Report, Statement of Stockholders equity
Has three segments that when analyzed together give an idea of what the company owns and what it owes. Balance sheet
Gives details about the firm’s sales, costs, and profits for the past accounting period. Income Statement
b) Statements to refer to when answering the questions in the following table:
1. Does the firm generate enough internal funds to support anticipated investment, or does additional outside capital need to be raised?
Statement of Cash Flows
2. Can the firm meet all its short-term obligations using its current assets?
Balance Sheet
c) The annual report is very important for investors, because the information contained in the annual report:
A: Helps investors forecast expected earnings and dividends.
Explanation:
Companies usually issue Annual Reports which contain the following financial statements: Balance sheet, Income Statement, and Statement of Cash Flows, including a Statement of Stockholders equity , among other information. The above financial statements are important to the various stakeholders, including existing and potential investors, governmental bodies, social organizations, employees, suppliers, customers, and the society at large because some key economic decisions are based on them.
Marc and Michelle are married and earned salaries this year of $71,600 and $14,850, respectively. In addition to their salaries, they received interest of $350 from municipal bonds and $1,450 from corporate bonds. Marc contributed $3,450 to an individual retirement account, and Marc paid alimony to a prior spouse in the amount of $2,450. Marc and Michelle have a 10-year-old son, Matthew, who lived with them throughout the entire year. Thus, Marc and Michelle are allowed to claim a $2,000 child tax credit for Matthew. Marc and Michelle paid $7,900 of expenditures that qualify as itemized deductions and they had a total of $6,710 in federal income taxes withheld from their paychecks during the course of the year. (Use the tax rate schedules.)a. What is Marc and Michelle's gross income?Description AmountCorporate bond interest Marc's salary Michelle's salary Gross income b. What is Marc and Michele's adjusted gross income?
Answer and Explanation:
Adjusted gross income abbreviated AGI is the tax payers gross income minus deductions used in arriving at taxable income(AGI less allowable deductions)
Please find attached calculations for gross income and AGI for the couple
Neil Webster is the sole proprietor of Prestigious Pugs, a business specializing in the sale of high-end pet gifts and accessories. Prestigious Pugs' sales totaled $1,105,000 during the most recent year. During the year, the company spent $55,000 on expenses relating to website maintenance, $30,500 on marketing, and $29,500 on wrapping, boxing, and shipping the goods to customers. Prestigious Pugs also spent $638,000 on inventory purchases and an additional $19,500 on freight-in charges. The company started the year with $16,250 of inventory on hand and ended the year with $16,000 of inventory. Prepare Prestigious Pugs' income statement for the most recent year.
Answer and Explanation:
The Preparation of the income statement is shown below:-
Prestigious Pugs
Income Statement
For the most recent year
Particulars Amount
Sales $1,105,000
Less: Cost of goods sold ($657,750)
Gross profit $447,250
Less : Operating expenses
website maintenance expenses ($55,000)
Marketing expenses ($30,500)
wrapping, boxing, and shipping Exp ($29,500) ($115,000)
Net income $332,250
Working note:
Beginning inventory $16,250
Add: Inventory purchase $657,500
($638,000 + 19,500)
Total goods available for sale $673,750
Less: Ending inventory ($16,000)
Cost of goods sold $657,750
Consider two neighboring island countries called Felicidad and Bellissima. They each have 4 million labor hours available per month that they can use to produce jeans, corn, or a combination of both. The following table shows the amount of jeans or corn that can be produced using 1 hour of labor.
Country Jeans Corn
(Pairs per hour of labor) (Bushels per hour of labor)
Felicidad 8 32
Bellissima 12 24
Initially, suppose Bellissima uses 1 million hours of labor per month to produce jeans and 3 million hours per month to produce corn while Felicidad uses 3 million hours of labor per month to produce jeans and 1 million hours per month to produce corn. Consequently, Felicidad produces 24 million pairs of jeans and 32 million bushels of corn, and Bellissima produces 12 million pairs of jeans and 72 million bushels of corn. Assume there are no other countries willing to trade goods, so, in the absence of trade between these two countries, each country consumes the amount of jeans and corn it produces.
Felicidad's opportunity cost of producing 1 pair of jeans is (1/2 bushel, 1/4 bushel, 2 bushel, 4 bushel) of corn, and Bellissima's opportunity cost of producing 1 pair of jeans is (1/2 bushel, 1/4 bushel, 2 bushel, 4 bushel) of corn. Therefore, (Bellissima, Felicidad) has a comparative advantage in the production of jeans, and (Bellissima, Felicidad) has a comparative advantage in the production of corn.
Suppose that each country completely specializes in the production of the good in which it has a comparative advantage, producing only that good. In this case, the country that produces jeans will produce ______million pairs per month, and the country that produces corn will produce_________million bushels per month.
In the following table, enter each country's production decision on the third row of the table (marked "Production").
Suppose the country that produces jeans trades 26 million pairs of jeans to the other country in exchange for 78 million bushels of corn.
In the following table, select the amount of each good that each country exports and imports in the boxes across the row marked "Trade Action," and enter each country's final consumption of each good on the line marked "Consumption."
When the two countries did not specialize, the total production of jeans was 36 million pairs per month, and the total production of corn was 104 million bushels per month. Because of specialization, the total production of jeans has increased by________million pairs per month, and the total production of corn has increased by________million bushels per month.
Because the two countries produce more jeans and more corn under specialization, each country is able to gain from trade.
Calculate the gains from trade—that is, the amount by which each country has increased its consumption of each good relative to the first row of the table. In the following table, enter this difference in the boxes across the last row (marked "Increase in consumption").
Answer:
Bellisima's opportunity cost:
Production of corn per million hours of labor = 12 / 24 = 0.5 pairs of jeans of corn Production of jeans per million hours of labor = 24 / 12 = 2 bushels of cornFelicidad's opportunity cost:
Production of corn per million hours of labor = 8 / 32 = 0.25 pairs of jeans of corn Production of jeans per million hours of labor = 32 / 8 = 4 bushels of cornFelicidad has a comparative advantage int he production of corn while Bellisima has a comparative advantage in the production of jeans.
If both countries specialize:
Felicidad will produce 128 million bushels of corn.Bellisima will produce 48 million pairs of jeans.Total production of corn has increased by 24 million bushels.
Total production of jeans has increased by 12 million pairs.
Assuming that Bellisima trades 26 million pairs of jeans and Felicidad exchanges 78 million bushels of corn, then:
Felicidad's consumption of jeans will increase by 2 million pairs, while their consumption of corn will increase by 50 million bushels. Bellisima's consumption of jeans will increase by 10 million pairs, while their consumption of corn will increase by 6 million bushels.Which career requires LESS education than an Auditor?
a) Accountant
b) Bookkeeper
c) Credit Analyst
d) Financial Manager
The following book and fair values were available for Westmont Company as of March 1.
Book Value Fair Value
Inventory $ 231,000 $ 191,750
Land 822,000 1,119,750
Buildings 2,130,000 2,447,250
Customer relationships 0 867,750
Accounts payable (104,000) (104,000)
Common stock (2,000,000)
Additional paid-in capital (500,000)
Retained earnings, 1/1 (417,500)
Revenues (464,500)
Expenses 303,000
Arturo pays cash of $4,365,500 to acquire Westmont. No stock is issued and Arturo pays $47,500 for legal fees to complete the transaction.
Prepare Arturo % u 2019s journal entry to record its acquisition of Westmont.
Answer And Explanation:
Please see answer and explanation attached
Bakker Corporation applies manufacturing overhead on the basis of direct labor-hours. At the beginning of the most recent year, the company based its predetermined overhead rate on total estimated overhead of $97,500 and 3,000 estimated direct labor-hours. Actual manufacturing overhead for the year amounted to $99,400 and actual direct labor-hours were 2,850. The applied manufacturing overhead for the year was:________
Answer:
Allocated MOH= $92,625
Explanation:
First, we need to calculate the predetermined overhead rate:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 97,500 / 3,000
Predetermined manufacturing overhead rate= $32.5 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Allocated MOH= 32.5*2,850
Allocated MOH= $92,625
The accounts in the ledger of Hickory Furniture Company as of December 31, 2019, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally omitted. Accounts Payable $34,000 Accounts Receivable 68,000 Cash ? Elaine Wells, Capital 158,650 Elaine Wells, Drawing 37,000 Fees Earned 566,600 Insurance Expense 10,750 Land 155,250 Miscellaneous Expense 15,850 Notes Payable 74,000 Prepaid Insurance 5,100 Rent Expense 107,700 Supplies 3,400 Supplies Expense 14,150 Unearned Rent 16,400 Utilities Expense 75,900 Wages Expense 317,300 Miscellaneous Expense 9,500
The accounts in the ledger of Hickory Furniture Company as of December 31, 2016, are listed in alphabetical order as follows. All accounts have normal balances. The balance of the cash account has been intentionally omitted.
Accounts Payable $ 42,770 Notes Payable $ 50,000
Accounts Receivable 116,900 Prepaid Insurance 21,600
Cash ? Rent Expense 48,000
Elaine Wells, Capital 75,000 Supplies 4,275
Elaine Wells, Drawing 24,000 Supplies Expense 6,255
Fees Earned 745,230 Unearned Rent 12,000
Insurance Expense 3,600 Utilities Expense 26,850
Land 50,000 Wages Expense 580,700
Miscellaneous Expense 9,500
Prepare an unadjusted trial balance, listing the accounts in their normal order and inserting the missing figure for cash.
X
Unadjusted Trial Balance
Prepare an unadjusted trial balance, listing the accounts in their normal order and inserting the missing figure for cash.
Hickory Furniture Company
UNADJUSTED TRIAL BALANCE
December 31, 2016
ACCOUNT TITLE DEBIT CREDIT
1 Cash
2 Accounts Receivable
3 Supplies
4 Prepaid insurance
5 Land
6 Accounts Payable
7 Unearned Rent
8 Notes Payable
9 Elaine Wells, Capital
10 Elaine Wells, Drawing
11 Fees Earned
12 Wages Expense
13 Rent Expense
14 Utilities Expense
15 Supplies Expense
16 Insurance Expense
17 Miscellaneous Expense
18 Totals
Answer:
fr3
Explanation:
654
Read the following scenario and answer the question in 5 sentences at least.You have started a successful business and are now ready to buy some property as your storefront location. You find one piece of property on a prime corner lot downtown. The owner of that property is willing to sell it to you with a quitclaim deed. The property has been in his family for multiple generations and he is not sure if any cousins have a legitimate claim to the property. You find another piece of property of similar size that is in a slightly less ideal location, but the owner is willing to sell it to you with a warranty deed. Based on your knowledge of the types of deeds, briefly discuss the risks involved in buying each property, which one might cost you more, and who has the burden of cost if a claim comes against the title of the property after the purchase.
Answer:
A quitclaim deed is actually very risky in this case. The alleged owner will sell you the property but if anyone else (the cousins maybe) makes any claim on the property and their claim is valid, then you will have to pay them money. In this case it is a gamble really, if the cousins do not make any claim, then you got a great deal, but if the cousins make a valid then you lost a lot of money. Is it really worth it? I doubt it. When a deal is to good to be true, it is actually not a good deal at all.
On the other hand, a warranty deed will provide you protection against any possible claim from any third party, including cousins, any other type of relative, mortgages, delinquent taxes, etc. A warranty deed protects the buyer and any possible future claim must be settled by the seller.
Mike, Matt, Brooke, and Kellie decide to go into business together. The form a limited partnership where Mike, Matt, and Brooke are the limited partners. They contribute the following amounts: Mike - 25,000 Matt - 10,000 Brooke - 10,000 Kellie - 5,000
Additionally, the partnership agreement states that all profits are to be distributed equally. Mike will perform services for the company and will be paid $100,000 a year for those services. The company will be able to deduct this amount from net income. In the first year of operations, the company had the following items of income:
Services - 160,000
Expenses - 24,000
Depreciation - 28,000
Finally, no one withdraw any money from the partnership, save Matt who withdraws $15,000.
What is the maximum Kellie can withdraw without having a gain in excess of basis?
Answer:
$7,000
Explanation:
the partnership's net income = $160,000 - $100,000 - $24,000 - $28,000 = $8,000
since net income is divided equally among the 4 partners, then each partner is allocated $2,000
Kellie's capital account = $5,000 + $2,000 (her share of profits) = $7,000
if she withdraws more than $7,000, then she should report a gain in excess of basis
The following errors occurred in posting from a two-column journal:
A credit of $8,770 to Accounts Payable was not posted.
A debit of $1,200 to Cash was posted to Miscellaneous Expense.
A credit of $270 to Cash was posted as $720.
A debit of $8,510 to Wages Expense was posted as $8,150.
An entry debiting Accounts Receivable and crediting Fees Earned for $8,000 was not posted.
A debit of $830 to Accounts Payable was posted as a credit.
A debit of $2,200 to Supplies was posted twice.
Required:
a. Indicate by "yes" or "no" whether the trial balance would be out of balance.
b. If the answer to (a) is "yes", indicate the amount by which the trial balance totals would differ.
Answer:
Please find attached solution to the above question
Explanation:
Please find attached solution to the above - a and b
Regarding the error 6,
• The $830 gained increased to accounts payable, hence must be deducted from accounts payable.
• Again, debit $830 for recording the payment.
Suppose Procter & Gamble sells about 20 million bars of soap per week, but the demand is not constant and production management would like to get a better handle on how sales are distributed over the year. Let the following sales figures given in units of million bars represent the sales of bars per week over 1 year (in no particular order).
17.1 22.3 17 25.2 19.6 12.2 18.3 26.3 15.4 19.9 13.6 23.9 17.4 21.5 39.8 30.6 15 20.4 20.7 25.2 18.5 20.3 21.3 26.2 20.6 15.5 22.5 26.9 18.4 23.6 21.4 32.8 20 19.1 23.4 26.3 20.9 20.4 23.1 26.6 19.3 15.4 22.8 24.3 18.2 20.3 21.4 26.2 14.7 24.4 24 23.8
Required:
a. Construct a histogram chart to represent the data.
b. Creating a chart is not useful in and of itself unless it is properly interpreted. Write a brief analysis of the graph. What do you see in the graph that might be helpful to the production and sales people?
Answer:
Kindly check explanation
Explanation:
Given the data :
17.1
22.3
17
25.2
19.6
12.2
18.3
26.3
15.4
19.9
13.6
23.9
17.4
21.5
39.8
30.6
15
20.4
20.7
25.2
18.5
20.3
21.3
26.2
20.6
15.5
22.5
26.9
18.4
23.6
21.4
32.8
20
19.1
23.4
26.3
20.9
20.4
23.1
26.6
19.3
15.4
22.8
24.3
18.2
20.3
21.4
26.2
14.7
24.4
24
23.8
From the histogram plot generated below, it enabled us to get a better annd clearer distribution of weekly sales of the company's product over the course of a year. Most of the weekly sales recorded lies between 15 - 30 million units, with a sale of 20 - 25 million units being sold during 23 different weeks. The sales unit fell below 15 million units on 3 different occasions (weeks) and a maximum sale of 39.8 million units in a single week within the year.
what contributes to an empolyee's self worth which in turn increases productivity and reduces absenteeism
Answer:
The factors that contribute to an employee's self-worth is thought to be linked to employees productivity, motivation, performance, job satisfaction, emotional stability, effective stress and conflict management.
Explanation:
The productivity of an employee, a business or an economy can be calculated based on its performance and efficiency. When we measure labour productivity, we compare a given output with the amount of labour required for that output.
On the other hand, Absenteeism is the behaviour of a person who is often absent when he should be present.
The concept of an employee's self-worth is being recognized for its vital role both in terms of identity formation and in adaptive terms. However, factors that contribute to an employee's self-worth is thought to be linked to employees productivity, motivation, performance, job satisfaction, emotional stability, effective stress and conflict management.
Princeton Fabrication, Inc., produced and sold 1,400 units of the company's only product in March. You have collected the following information from the accounting records:
Sales price (per unit) $137
Manufacturing costs:
Fixed overhead (for the month) 15,400
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Marketing and administrative costs:
Fixed costs (for the month) 25,200
Variable costs (per unit) 5
Find the following:1. Variable manufacturing cost per unit.2. Full cost per unit.3. Variable cost per unit.4. Full absorption cost per unit.5. Prime cost per unit.6. Conversion cost per unit.7. Profit margin per unit.8. Contribution margin per unit.9. Gross margin per unit.
Answer:
Princeton Fabrication, Inc.
1. Variable Manufacturing cost per unit:
$66
2. Full Manufacturing cost per unit:
= $77
3. Variable cost per unit:
$71
4. Full absorption cost per unit:
$100
5. Prime Cost per unit:
$42
6. Conversion Cost per unit:
$69
7. Profit margin per unit:
$37
8. Contribution Margin per unit:
$71
9. Gross margin per unit:
$60
Explanation:
a) Data and Calculations:
Quantity produced and sold in March = 1,400
Sales price (per unit) $137
Manufacturing costs:
Fixed overhead (for the month) 15,400
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Marketing and administrative costs:
Fixed costs (for the month) 25,200
Variable costs (per unit) 5
b) Variable Manufacturing cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Total variable cost per unit $66
c) Full Manufacturing cost per unit:
Variable cost ($66 x 1,400) = $92,400
Fixed overhead (for the month) 15,400
Total manufacturing cost = $107,800
$107,800/ 1,400 = $77
d) Variable cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Variable overhead (per unit) 24
Variable costs (per unit) 5
Total variable costs per unit $71
e) Full absorption cost per unit:
Total variable costs ($71 * 1,400) = $99,400
Total fixed costs: manufacturing 15,400
Total fixed marketing & admin 25,200
Total absorption costs = $140,000
unit absorption cost = $140,000/1,400 = $100
f) Prime Cost per unit:
Direct labor (per unit) 8
Direct materials (per unit) 34
Prime cost per unit $42
g) Conversion Cost per unit:
Direct materials (per unit) 34
Overhead cost per unit 35 (fixed overhead + variable overhead) per Conversion cost per unit = $69
h) Profit margin per unit:
Selling price $137
Full cost 100
Profit margin $37
i) Contribution Margin per unit:
Selling price $137
Variable manufacturing cost $66
Contribution margin per unit $71
j) Gross margin per unit:
Selling price $137
Manufacturing cost 77
Gross margin $60
Which statement best describes a business creating an incentive?
Answer:
C
Explanation:
a. On July 1, Lopez Company paid $2,200 for six months of insurance coverage. No adjustments have been made to the Prepaid Insurance account, and it is now December 31.
b. Zim Company has a Supplies account balance of $7,000 at the beginning of the year. During the year, it purchased $3,000 of supplies. As of December 31, a physical count of supplies shows $1,300 of supplies available.
Required:
Prepare the year-end adjusting entries to reflect expiration of the insurance and correctly report the balance of the Supplies account and the Supplies Expense account as of December 31.
Answer and Explanation:
The Journal entries are shown below:-
1. Insurance expenses Dr, $2,200
To Prepaid insurance $2,200
(Being insurance coverage expired is recorded)
2. Supplies expenses Dr, $11,300 ($7,000 + $3,000 + $1,300)
To Supplies $11,300
(Being supplies expenses is recorded)
These two entries should be considered
On the last day of December 2021, Coaster Trucks entered into a transaction that resulted in a receipt of $300,000 cash in advance related to services that will be provided during January 2022. During December of 2021, the company also performed $165,000 of services which were neither billed nor paid. Prior to December adjustments and before these two transactions were recorded, the company’s trial balance showed service revenue of $1,425,790 at December 31, 2021. There are no other prepaid services yet to be delivered, and during the month all outstanding accounts receivable from prior months were collected.1. If Camrey's trucks makes the appropirate adjusting entry, how much will service revenue will be reflected on the december 31, 2021 income statement?
2. If Camrey's Trucks makes the appropriate adjusting entry, how much will be reported on the December 31, 2021 Balance sheet as unearned revenue?
3. If Camrey's turcks make the appropriate adjusting entry, how much will be reported on the December 31, 2022 Balance sheet as accounts receivable?
Answer:
$1,590,790 $300,000 $165,000Explanation:
1. The company performed services but did not record them. Those services were for 2021 and so should be counted in 2021's income statement.
= 1,425,790 + 165,000
= $1,590,790
2. Coaster Trucks received $300,000 even though they have not yet provided the services for it.
The Unearned revenue = $300,000
3. Coaster Company had performed services worth $165,000 that were neither billed nor paid for. When they record t, it will be owed to them so it will be an Account Receivable.
Accounts Receivable = $165,000
Victory Company uses weighted-average process costing to account for its production costs. Conversion cost is added evenly throughout the process. Direct materials are added at the beginning of the process. During November, the company transferred 700,000 units of product to finished goods. At the end of November, the work in process inventory consists of 180,000 units that are 30% complete with respect to conversion. Beginning inventory had $420,000 of direct materials and $139,000 of conversion cost. The direct material cost added in November is $2,220,000, and the conversion cost added is $3,254,000. Beginning work in process consisted of 60,000 units that were 100% complete with respect to direct materials and 80% complete with respect to conversion. Of the units completed, 60,000 were from beginning work in process and 640,000 units were started and completed during the period.
Required:
a. Determine the equivalent units of production with respect to (a) direct labor and (b) direct materials.
b. Compute both the direct labor cost and the direct materials cost per equivalent unit.
c. Compute both direct labor cost and direct materials cost assigned to (a) units completed and transferred out and (b) ending goods in process inventory.
Answer:
a) equivalent units:
EUP for materials = 880,000 units
EUP for conversion costs = 754,000 units
b) cost per equivalent unit:
materials cost per EUP = $3 per EUP
conversion costs per EUP = $4.50 per EUP
c) costs assigned to units transferred out and ending WIP:
units transferred out = $5,250,000
ending WIP = $783,000
Explanation:
units transferred out 700,000
ending WIP 180,000
100% completed for materials
30% completed for conversion costs
beginning WIP:
materials $420,000
conversion costs $139,000
materials added during September $2,220,000
conversion costs added during September $3,254,000
total materials costs = beginning WIP + added costs = $420,000 + $2,220,000 = $2,640,000
total conversion costs = beginning WIP + added costs = $139,000 + $3,254,000 = $3,393,000
a) equivalent units:
EUP for materials = 700,000 + 180,000 = 880,000
EUP for conversion costs = 700,000 + (180,000 x 30%) = 754,000
b) cost per equivalent unit:
materials cost per EUP = $2,640,000 / 880,000 = $3
conversion costs per EUP = $3,393,000 / 754,000 = $4.50
c) costs assigned to units transferred out and ending WIP:
units transferred out = 700,000 x $7.50 = $5,250,000
ending WIP = (180,000 x $3) + (54,000 x $4.50) = $783,000
There is a 3% defect rate at a specific point in a production process. If an inspector is placed at this point, all the defects can be detected and eliminated. The inspector would cost $8 per hour and could inspect units in the process at the current production rate of 30 per hour. If no inspector is hired and defects are allowed to pass this point, there is a cost of $10 per defective unit to correct the defects later on.
Assume that the line will operate at the same rate (i.e., the current production rate) regardless of whether the inspector is hired or not.
A. If an inspector is hired, what will be the inspection cost per unit?
B. If an inspector is not hired, what will be the defective cost per unit?
C. Should an inspector be hired based on costs alone?
Answer:
A. $2.67 per unit
B. $0.3 per unit
C. Yes
Explanation:
A. Calculation for what will be the inspection cost per unit If an inspector is hired,
Using this formula inspection cost
Inspection cost=Cost of inspector/inspection rate per hour
Inspection cost = 8/30
Inspection cost = $2.67 per unit
Therefore what will be the inspection cost per unit If an inspector is hired is $2.67 per unit
B. Calculation for what will be the defective cost per unit If an inspector is not hired,
Using this formula formula
No inspection =(Defective average *Inspection rate * Correction cost) /Inspection rate
Let plug in the formula
No inspection=0.03*30 per hour *$10 each/30 per hour
No inspection =9/30
No inspection = $0.3 per unit
Therefore what will be the defective cost per unit If an inspector is not hired is $0.3 per unit
C. Yes the inspector should be hired based on the costs alone.
You are considering a stock investment in one of two firms (Lots of Debt, Inc. and Lots of Equity, Inc.), both of which operate in the same industry. Lots of Debt, Inc. finances its $34.25 million in assets with $32.25 million in debt and $2.00 million in equity. Lots of Equity, Inc. finances its $34.25 million in assets with $2.00 million in debt and $32.25 million in equity.
Calculate the debt ratio for each company. (Round your answers to 2 decimal places.)
Answer:
Lots of debt incorporation debt ratio= 9.41%
Lots of equity incorporation debt ratio= 5.8%
Explanation:
The debt ratio of Lots of debt incorporation can be calculated as follows
= Total debt /Total assets
= $32.25/$34.25
= 0.941×100
= 9.41%
The debt ratio of Lots of equity incorporation can be calculated as follows
= Total debt/Total assets
= 2/34.25
= 0.058×100
= 5.8%
This is the trial balance of Blossom Company on September 30.
BLOSSOM COMPANY
Trial Balance
September 30, 2022
Debit Credit
Cash $ 23,240
Accounts Receivable 6,640
Supplies 5,020
Equipment 10,920
Accounts Payable $ 8,840
Unearned Service Revenue 4,020
Common Stock 19,040
Retained Earnings 13,920 $45,820 $45,820
The October transactions were as follows.
Oct.
5 Received $1,470 in cash from customers for accounts receivable due.
10 Billed customers for services performed $5,020.
15 Paid employee salaries $1,380.
17 Performed $560 of services in exchange for cash.
20 Paid $1,800 to creditors for accounts payable due.
29 Paid a $340 cash dividend.
31 Paid utilities $440.
Answer:
1. Cash (Dr.) $1,470
Accounts receivable (Cr.) $1,470
2. Account Receivable (Dr.) $5,020
Revenue (Cr.) $5,020
3. Salaries Expense (Dr.) $1,380
Cash (Cr.) $1,380
4. Cash (Dr.) $560
Revenue (Cr.) $560
5. Accounts Payable (Dr.) $1,800
Cash (Cr.) $1,800
6. Dividend Paid (Dr.) $340
Cash (Cr.) $340
7. Utilities Expense (Dr.) $440
Cash (Cr.) $440
Explanation:
The Blossom company has incurred expenses and various transactions which are recorded in the journal ledger to form the trial balance of the company. These transaction are recorded according to the company's expense and then these expense are charged to their respective accounts.
Presented below are the basic assumptions and principles underlying financial statements. a. Historical cost principle d. Going concern assumption b. Economic entity assumption e. Monetary unit assumption c. Full disclosure principle f. Periodicity assumption Identify the basic assumption or principle that is described below. 1. The economic life of a business can be divided into artificial time periods. select a letter 2. The business will continue in operation long enough to carry out its existing objectives. select a letter 3. Assets should be recorded at their cost. select a letter 4. Economic events can be identified with a particular unit of accountability. select a letter 5. Circumstances and events that make a difference to financial statement users should be disclosed. select a letter 6. Only transaction data that can be expressed in terms of money should be included in the accounting records. select a letter
Answer with Explanation:
Requirement 1. The economic life of a business can be divided into artificial time periods.
It is a periodicity assumption which says that the business time periods can be used to prepare financial statement as per the need of the management or other organization to make meaningful decisions.
Requirement 2. The business will continue in operation long enough to carry out its existing objectives.
It is going concern assumption which says that the company will continue its business for foreseeable future and thus the financial reporting exists. If this assumption wasn't present then the financial reporting would had only included "How to prepare financial statements on breakup basis?". Which is the situation when the company goes bankrupt and we have to prepare in breakup basis which says that the business will not continue for the foreseeable future.
Requirement 3. Assets should be recorded at their cost.
It is based on Historical cost principle which says that the contracts formed and the prices agreed would be incorporated in the financial reporting.
Requirement 4. Economic events can be identified with a particular unit of accountability.
It is Economic entity assumption which says that every stakeholder is an entity. For example, engineer, schools, leather company, Honda company, Gucci, Boss inc, etc are the examples of economic entity.
Requirement 5. Circumstances and events that make a difference to financial statement users should be disclosed.
It is talking about Disclosure principle which says that the circumstances and events that has potential to alter the decision making of the user of financial statement, must be disclosed in notes to financial statements.
Requirement 6. Only transaction data that can be expressed in terms of money should be included in the accounting records.
The statement is clear reflection of Monetary Unit assumption which says that the dealings of company that can be measured in financial terms can only be recorded in the books of accounts.
This information relates to Monty Real Estate Agency.
Oct. 1 Stockholders invest $34,040 in exchange for common stock of the corporation.
2 Hires an administrative assistant at an annual salary of $32,880.
3 Buys office furniture for $4,110, on account.
6 Sells a house and lot for E.C. Roads; commissions due from Roads, $10,780 (not paid by Roads at this time).
10 Receives cash of $165 as commission for acting as rental agent renting an apartment.
27 Pays $690 on account for the office furniture purchased on October 3.
30 Pays the administrative assistant $2,740 in salary for October
Journalize the transactions. (If no entry is required, select "No entry for the account titles and enter o for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually. Record journal entries in the order presented in the problem.) Date Account Titles and Explanation Debit Credit
Answer:
Journal Entries
Date Account Titles and Explanation Debit Credit
Oct. 1 Cash $34,040
Common Stock $34,040
(To record the cash is invested in the business)
Oct. 2 No Journal Entry $0
Oct. 3 Office Furniture $4,110
Accounts Payable $4,110
(To record the purchase of office furniture on account)
Oct. 6 Accounts Receivable $10,780
Service Revenue $10,780
(To record the services provided but cash is not yet collected)
Oct. 10 Cash $165
Service Revenue $165
(To record the services provided by cash)
Oct. 27 Accounts Payable $690
Cash $690
(To record the payment made on accounts payable
relating to office furniture)
Oct. 30 Salaries Expense $2,740
Cash $2,740
(To record the payment of salaries to the assistant)
A Nike women’s-only store in California offers women’s running, training and sportswear products and also contains an in-store fitness studio for group and personal fitness training sessions. The store consistently earns profits in excess of $500,000 per year and is located on prime real estate in the center of town. The store owner pays $15,000 per month in rent for the building. A real estate agent approached the owner and informed her that she could add $8,000 per month to her firm’s profits by renting out the portion of her store that she uses as a fitness studio. While the prospect of acquiring this rental income was enticing, the owner believed the use of that space as a fitness studio was an important contributor to her store’s profits.
What is the opportunity cost of continuing to operate the fitness studio within the store?
$______
Answer:
$8000
Explanation:
Opportunity cost or implicit cost is the cost of the next best option forgone when option is chosen over other options
By continuing to operate the fitness studio, the store owner is giving up the opportunity to earn $8000 from renting it. This is the opportunity cost
In a certain economy, when income is $500, consumer spending is $350. The value of the multiplier for this economy is 3.33. It follows that, when income is $1000, consumer spending is
Answer: $700
Explanation:
The multiplier can used to calculate the Marginal propensity to consume.
Multiplier = 1 / Marginal propensity to save
3.33 = 1 / MPS
MPS = 1/3.33
= 30%
Marginal propensity to save + Marginal propensity to consume = 1
30% + MPC = 1
MPC = 70%
This means that for every $1 increase in income, 70% is spent on consumption.
If income is $1,000, consumption is;
= 70% * 1,000
= $700
Part A Smith Company experienced the following accounting events during 2018:
1. Smith Company was started on January 1 when it issued common stock for $2,000 cash.
2. During the year, the company recognized $1,500 of consulting revenue on account.
3. The company collected $1,200 cash from accounts receivable.
4. Smith accrued salary expense during the year of $900.
5. Paid $700 of the salaries payable liability
6. Paid dividends of $100 to the stockholders.
7. Paid $360 cash for an insurance policy that covered the company for one year beginning March 1, 2018.
8. On November 1, 2018, Smith collected $2,880 cash in advance for consulting services to be provided under a one-year contract.
9. Recognized insurance expense (Policy in event 7) for ten months.
10. Recognized income earned under the one-year contract at December 31, 2018.
Part B Smith Company experienced the following accounting events during 2019
1. Smith Company issued additional common stock for $3,000 cash.
2. During the period, Smith recognized $2,700 of consulting revenue eamed on account.
3. Smith collected $2,800 cash from accounts receivable.
4. Smith accrued salary expense of $1,500.
5. The company paid $1,350 of the salaries payable liability.
6. Smith paid dividends of $300 to the stockholders.
7. Paid $420 cash to renew the insurance policy for another one-year term.
8. Smith adjusted the books to reflect the insurance expense that had been incurred in 2019 (described in event 7 of 2018).
9. Smith adjusted the books to reflect the revenue earned in 2019 under the one-year consulting contract that began in 2018 (event 8 in 2018).
Required I. 2. Record the events using the horizontal financial statements model. For 2018 and 2019, prepare an income statement, a statement of retained earnings, a balance sheet, and a statement of cash flows. Assets Liabilities Equity Event Cash Accts PrepaidSalaries UnearnedCom Retained Revenue Expese Cash Flow Activity Type Recciv Insurance Stock Earnings 2014
Beg. Bal S- 0 S- S- 0 S- S- 0 S- 0 S- 0 10 End. Bal. 2015 Beg. Bal 5 S- 0 S- 0 S. S- 0 s- 0 S- 0 End. Bal.
Answer:
1. Cash (Dr.) $2,000
Common Stock (Cr.) $2,000
2. Accounts Receivable (Dr.) $1,500
Revenue (Cr.) $1,500
3. Cash (Dr.) $1,200
Accounts Receivable (Cr.) $1,200
4. Salaries expense accrued (Dr.) $900
Salaries payable (Cr.) $900
5. Salary Payable (Dr.) $700
Cash (Cr.) $700
6. Dividends paid (Dr.) $100
Cash (Cr.) $100
7.Prepaid Insurance (Dr.) $360
Cash (Cr.) $360
8. Cash (Dr.) $2,880
Unearned revenue (Cr.) $2,880
9. Insurance Expense (Dr.) $290
Prepaid Insurance (Cr.) $290
10. Unearned revenue (Dr.) $2,880
Revenue (Cr.) $2,880.
Explanation:
Smith company has started its business and incurred the transactions. These transactions need to be recorded to charge each and every expense in their respective accounts. The expenses are recorded in the journal entries and then ledger accounts will be formed to summaries all the expenses in their respective account heads.
The company currently has an operating cycle of 76.4 days. The company is implementing some operational changes that are expected to increase the accounts receivable period by 2.2 days, decrease the inventory period by 5.3 days, and increase the accounts payable period by 1.5 days. What is expected to be the new operating cycle
Answer:
73.3 days
Explanation:
Calculation for what is expected to be the new operating cycle
Using this formula
Operating cycle = (Current operating system+Expected increase accounts receivable period)-Decrease in inventory period
Let plug in the formula
Operating cycle =(76.4 days+2.2 days)-5.3 days
Operating cycle=78.6 days-5.3days
Operating cycle=73.3days
Therefore what is expected to be the new operating cycle will be 73.3 days
Life, Inc. experienced the following events in Year 1, its first year of operation:
1. Performed counseling services for $21,200 cash.
2. On February 1, Year 1, paid $14,400 cash to rent office space for the coming year.
3. Adjusted the accounts to reflect the amount of rent used during the year.
Required:
Based on this information alone:
A. Record the events in accounts under an accounting equation.
LIFE, INC.
Effect of Events on the Accounting Equation
Assets = Stockholders Equity
Event Cash Prepaid Rent = Retained Earnings
1 Performed services 28,400 28.400
2 Prepaid rent (19,800) 19.800
3 Used rent
Totals 8,600 19.800 = 28.400
B. Prepare an income statement, balance sheet, and statement of cash flows for the Year 1 accounting period.
C. Ignoring all other future events, what is the amount of rent expense that would be recognized in Year 2?
Answer and Explanation:
Life Inc.
Statement of Cash Flows
For Year Ended December 31, 2018
A. Effect of events on Accounting Equation
S. no. Event Assets = Liabilities +
Stockholders' Equity
Cash Prepaid Rent = Retained Earnings
1. Performed
Counseling
services $21,200 $21,200
2. Prepaid Rent -$14,400 $14,400
3. Used Rent -$13,200 -$13,200
($14,400 × 11 ÷ 12)
Total $6,800 $1,200 $8,000
B. The preparation of Income statement is prepared below:-
Life Inc.
Income statement
For the year 1
Particulars Amount
Service Revenue $21,200
Rent Expense -$13,200
Net Income $8,000
Life Inc.
Balance Sheet
For the year 1
Particulars Amount
Assets:
Cash $6,800
Prepaid Rent $1,200
Total Assets $8,000
Liabilities & Stockholder's Equity:
Retained Earnings $8,000
Total liabilities and
Stockholder's Equity $8,000
Life Inc.
Statement of Cash Flows
For Year 1
Particulars Amount
Cash Flows from operating activities:
Cash received from
customers $21,200
Cash paid for rent -$14,400
Net Cash provided by operating
activities $ 6,800
Cash flow from investing
activities $0.00
Cash flow from financing
activities $0.00
Net Increase (Decrease) in
Cash $6,800
Cash balance at the beginning
of year $0.00
Cash balance at end of year $6,800
c. The computation of the amount of rent expense that would be recognized in Year 2 is shown below:-
Amount of rent expense that will be recognized in Year 2 = Ending balance in prepaid rent = $1,200
Click this link to view O'NET's Work Activities section for Accountants. Note that common activities are listed toward
the top, and less common activities are listed toward the bottom. According to O*NET, what are some common work
activities performed by Accountants? Check all that apply.
evaluating information
performing general physical activities
handling and moving objects
interacting with computers
processing information
getting information
Answer - 1 4 5 6
Explanation:
Answer:
1,4,5,6
Explanation: