The total manufacturing cost of Job 550 is the sum of direct materials cost, direct labor cost, and manufacturing overhead cost. The selling price for Job 550 is the total manufacturing cost multiplied by the markup percentage.
Explanation:To compute the plantwide predetermined overhead rate, you need to divide the total estimated manufacturing overhead costs by the total estimated allocation base. In this case, the allocated base is the direct labor-hours. So, the plantwide predetermined overhead rate can be calculated as $350,000 / 125,000 = $2.80 per direct labor-hour.
To compute the total manufacturing cost of Job 550, you need to add together the direct materials cost, direct labor cost, and manufacturing overhead cost. In this case, the direct materials cost is $201, the direct labor cost is $240, and the manufacturing overhead cost (calculated using the plantwide predetermined overhead rate) is $2.80 x 15 hours = $42. The total manufacturing cost of Job 550 is $201 + $240 + $42 = $483.
If Landen uses a markup percentage of 200% of its total manufacturing cost, the selling price for Job 550 would be calculated as $483 x 200% = $966.
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Final answer:
The plantwide predetermined overhead rates are calculated using direct labor-hours or machine-hours; Job 550's total manufacturing cost and selling price are determined based on these rates. Different production methods are analyzed for cost-effectiveness by comparing the total costs, which include labor and machine costs.
Explanation:
To compute the plantwide predetermined overhead rate using direct labor-hours, we sum the fixed manufacturing overhead cost ($350,000) with the variable cost per direct labor-hour ($3.80) multiplied by the total estimated direct labor-hours (125,000). The total manufacturing cost of Job 550 includes the direct materials, direct labor cost, and the applied overhead. When using a markup of 200% on the total manufacturing cost, the selling price for Job 550 is calculated accordingly. On the other hand, if machine-hours are used as the base for the plantwide predetermined overhead rate, the calculation involves the fixed manufacturing overhead cost and the variable cost per machine-hour ($7.60) multiplied by the total estimated machine-hours (62,500).
When evaluating different methods of production, the total costs including the cost of labor and machine are considered to determine the most cost-effective method. In the numerical examples provided, adjustments in the cost of machines affect the overall costs systematically, allowing comparison and selection of the optimal production method based on cost efficiency.
In using the net present value method, only projects with a zero or positive net present value are acceptable because:
a. the return from these projects equals or exceeds the cost of capital
b. a positive net present value on a particular project guarantees company profitability
c. the company will be able to pay the necessary payments on any loans secured to finance the project
d. Both a and b are correc
Answer:
Option A
Explanation:
When you use a net present value method you are discounting the estimated cash flows of your project applying an interest rate that is related to your cost of capital. So, if your projects discounted cash flows are greater than zero it means that your project profitability is greater than your alterative project.
Projects with a zero or positive net present value are acceptable because the return from these projects equals or exceeds the cost of capital
Net present value is the present value of after-tax cash flows from an investment less the amount invested.
Net present value is a capital budgeting method.
Capital budgeting methods are used to determine the profitability of a project that is about to be undertaken
Only projects with a positive Net Present Value should be accepted. A project with a negative Net Present Value should not be chosen because it isn't profitable. When choosing between positive Net Present Value projects, choose the project with the highest Net Present Value first because it is the most profitable.
Projects with zero Net Present Value, earn just what it costs to undertake the project
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Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. a. If the rate of interest is 0.83% a month, calculate the present value of the payments to Kangaroo Autos.
Answer:
8,938.0168
Explanation:
Kangaroo Autos is offering free credit on a new $10,000 car. You pay $1,000 down and then $300 a month for the next 30 months. Turtle Motors next door does not offer free credit but will give you $1,000 off the list price. If the rate of interest is 0.83% a month, the present value of the payments to Kangaroo Autos is 8,938.0168.
The present value of the payments to Kangaroo Autos is approximately $8,333.63.
To calculate the present value of the payments to Kangaroo Autos, we can use the formula for the present value of an annuity:
[tex]PV=\frac{PMT×(1−(1+r) −n )}{r}[/tex]
Where:
PMT = Payment per period ($300)
r = Interest rate per period (0.83% or 0.0083)
n = Number of periods (30 months)
Plugging in these values:
[tex]PV= \frac{300×(1−(1+0.0083) −30 ) }{0.0083} ≈$8,333.63[/tex]
The present value of the payments to Kangaroo Autos is approximately $8,333.63. This is the equivalent lump sum that would need to be invested now to cover the series of future payments at an interest rate of 0.83% per month.
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Which of the following is true of resources? A. Their availability is unlimited. B. They are inputs used to produce goods and services. C. When resource availability is increased, scarcity is eliminated. D. Both b and c.
Answer: D. Both b and c
Explanation: Resources are a set of elements available to solve a need, they are usually used as raw material to supply companies, however their availability may be limited, so there may be a shortage that is the lack of something in the market, given this situation should be increased the amount available for production to be continued.
The following events occurred for Favata Company: Received $12,000 cash from owners and issued stock to them. Borrowed $9,000 cash from a bank and signed a note due later this year. Bought and received $1,000 of equipment on account. Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600. Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account. Required: For each of the events in above, prepare journal entries. (If no entry is required for a transaction/event, select "No Journal Entry Required" in the first account field.)
Answer:
The journal entries is as follows:
(1) Received $12,000 cash from owners and issued stock to them
Cash A/C Dr. $12,000
To Stock capital a/c $12,000
(2) Borrowed $9,000 cash from a bank and signed a note due later this year.
Cash a/c Dr. $9,000
To Notes Payable(short term) $9,000
(3) Bought and received $1,000 of equipment on account.
Equipment a/c Dr. $1,000
To Vendor's a/c $1,000
(4) Purchased land for $16,000; paid $1,400 in cash and signed a long-term note for $14,600.
Land a/c Dr. $16,000
To cash a/c $1,400
To Note payable(long term) $14,600
(5) Purchased $5,000 of equipment; paid $1,400 in cash and charged the rest on account.
Equipment a/c Dr. $5,000
To cash a/c $1,400
To Vendor's a/c $3,600
Eaton Tool Company has fixed costs of $210,600, sells its units for $58, and has variable costs of $32 per unit. a. Compute the break-even point. b. Ms. Eaton comes up with a new plan to cut fixed costs to $160,000. However, more labor will now be required, which will increase variable costs per unit to $35. The sales price will remain at $58. What is the new break-even point?
Answer:
A)Break-even point= 8100 units
B) Break-even point= 6957 units
Explanation:
Giving the following information:
Fixed costs of $210,600
Price per unit= $58
Variable costs of $32 per unit.
A)Break-even point= fixed costs/contribution margin= 210600/(58-32)= 8100 units
B) Fixed cost= 160000
Unitary variable cost= $35
Break-even point= 160000/(58-35)= 6957 units
Which of the following is an example of lose-lose negotiation? a) Buying a car from a second-hand car dealership at the asking price b) Taking time off from a project to help another team c) Disagreeing with a project idea while not providing an alternative d) Agreeing to share resources for the benefit of all involved in a project e) Discussing a problem with all parties concerned and finding a middle ground
Answer:
c) Disagreeing with a project idea while not providing an alternative
Explanation:
Lose - lose negotiation is a term used to describe a negotiation in which both parties cannot agree to a common negotiation, and then it further leads to failure of a contract on both ends, as both do not agree.
In case both parties agree to a negotiation it is termed as win - win negotiation, in which the contract survives, with a positive outlook.
Now, if any party disagree to any component of a project with no alternative, there will be a lose - lose negotiation.
A lose-lose negotiation is one where all parties come out worse off or fail to achieve their objectives. In this case, the lose-lose example is disagreeing with a project idea without providing any alternative solution, which hinders progress and leaves all involved parties without a satisfactory outcome.
Explanation:An example of a lose-lose negotiation would be c) Disagreeing with a project idea while not providing an alternative. In this scenario, neither party stands to benefit or achieve a satisfactory outcome. If a group member opposes an idea and fails to propose a constructive alternative, no progress is made, and the project may suffer as a result. It stands in contrast to win-win negotiations, where all parties involved can benefit, or to scenarios involving compromise or logrolling, where concessions are made but all parties can still get some of what they want.
In the given context of group problem solving, effective decision-making and negotiation strategies are critical to moving a project forward and ensuring that group goals are met. When individuals are unwilling to budge on their positions or interests, especially without offering viable alternatives, it can lead to a stalemate, where the status quo prevails, potentially leaving all parties dissatisfied, which is reflective of a lose-lose outcome.
Veronica had been getting red patches on her face after using a protein-based lotion manufactured by Nature Life Research Lab. On consulting a dermatologist, she learned that the lotion's steroid levels were beyond the standard levels permitted by the government and the damage caused by the lotion was irreversible. Which of the following will address Veronica's grievances? A. Laws related to property rights B . Product liability laws C. Intellectual property laws D. Foreign Corrupt Practices Act E. Sarbanes-Oxley Act
Answer: Product liability laws
Explanation: It is the branch of law that deals with the suppliers or distributors of products that causes injuries to the customers that consumed them. As per these laws the responsibility in case of defect lies with the sellers in the distribution channel.
In the given case, Veronica, has been getting red patches on her faces after using a defective product.
Hence, from the above we can conclude that the correct option is B.
My existing business generate $135000 in EBIT. The corporate tax rate applicable to my business is 35%. Deprecaition reported in the financial statement is $25714. I don't need to spend any more for new equipment; however, I need $20250 additiona cash. I need to purchase $10800 in additional supplies such tableclothes and napkins on credit. It is also estimated that my accrual including taxes and wage payable will increase by $6750. Based on the information provided what will be my Free Cash Flow (FCF)?
Answer: $99,964
Explanation:
Given that,
EBIT = $135,000
Corporate tax rate = 35% of $135,000 = $47,250
Depreciation = $25,714
Need additional cash = $20,250
Additional supplies = $10,800
Accrual including taxes and wage payable will increase by $6,750
Operating cash flow = EBIT - Taxes + Depreciation
= $135,000 - $47,250 + $25,714
= $113,464
Investment in operating capital = Additional capital expenditure + Increase in NWC( net working capital)
= $0 + [($20,250 + $10,800) - ($10,800 + $6750)
= $13,500
Free Cash Flow (FCF) = Operating cash flow - Investment in operating capital
= $113,464 - $13,500
= $99,964
Kanban is a term used to indicate some type of Visual Signal in the replenishment process. Which statement best describes the use of Kanban in reducing inventories in a Just-in-Time type of Operation? A. An operator asks the next station's operator to help him fix his machine. B. A supervisor signals to several work centers that the production rate should be changed. C. A "supplier" work center signals the downstream workstation that a batch has been completed. D. A "customer" work center signals to the "supplier" workstation that more parts are needed. E. A supervisor tells the operators to stay busy and start producing parts for next month.
Answer:
D. A "customer" work center signals to the "supplier" workstation that more parts are needed.
Explanation:
The Kanban system or procedure is based in signals that travel with the product all over its production process from the start up to the final client.
When a "customer work center" takes away some material from the warehouse, the "kanban" or signal travels with the material. So this is a "pull" system guided by the demand.
The signal (kanban) is how the client let the supply work center know that a new material is needed in the warehouse.
For all of this, de correct answer is D.A "customer" work center signals to the "supplier" workstation that more parts are needed.
Final answer:
Kanban is used as a visual signal to manage the replenishment process and reduce inventories in a Just-in-Time type of operation which is Option D. The customer work center signals the supplier workstation when more parts are needed.
Explanation:
In a Just-in-Time type of operation, Kanban is used as a visual signal to manage the replenishment process and reduce inventories. The best description of the use of Kanban in this context is option D: A 'customer' work center signals to the 'supplier' workstation that more parts are needed.
Kanban operates on the principle of pull-based production, where each workstation only produces parts when there is a demand for them. The 'customer' work center initiates a Kanban signal to the 'supplier' workstation when it requires more parts. This ensures that inventory levels are kept low and production is aligned with demand.
For example, in a car manufacturing plant, if the assembly line requires more tires, the 'customer' work center would send a Kanban signal to the 'supplier' workstation responsible for producing tires.
A corn futures contract closed yesterday at a price of $2.40 a bushel. The maximum daily price range is $0.40 and the daily price limit is $0.20. Therefore, the: Question 1 options: a) highest closing price for today is $2.80 a bushel. b) most the price can fluctuate today is $0.20 a bushel. c) minimum change in the price today is $0.20 a bushel. d) lowest closing price for today is $2.20 a bushel.
Answer:
D -lowest closing price for today is $2.20 a bushel.
Explanation:
Range refers to the difference between the highest and lowest value of any variable for a given time period. The daily price limit refers to the maximum increase in price or the price decline that is allowed for a futures contract in one given trading session relative to the previous day's settlement price.
With this in mind, the right option is
D -lowest closing price for today is $2.20 a bushel.
This is worked out as $2.40 - $0.20 = $2.20
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With the advent of inexpensive accounting programs (like QuickBooks) how have our jobs, which respect to manually inputting information, in accounting been made easier in terms of: (1) journalizing (2) posting (3) Unadjusted and Adjusted Trial Balance (4) Financial Statement (income, balance sheet, state of cash flows, etc.)?
Answer:
1. Journal entries are quicker and more comfortable in the manual accounting
2. Posting is easier in computer software-based accounting
3. Trial balance adjustment in manual accounting is tricky. However, a lengthy process may pose a challenge for computerized accounting.
4. Financial statements are more straightforward in software-based accounting than manual accounting
Explanation:
The introduction of accounting software such as QuickBooks has transformed the working for accounting professionals. The conventional accounting system replacement has made the job more comfortable. However, there are new challenges added, such as learning the software, making error-free inputs, and pace of computer-related entries. However, considering that once these skills are learned, the overall job is easier than before.
1. Journal entries in manual are made quicker, and errors can be rectified. However, entries are linked automatically to their respective ledgers that solve the challenges with compound entries
2. Posting is simpler in software as the general ledger is created on a single click. Manual posting requires time and efforts
3. Adjusted entries need to manual input in conventional method to create the adjusted trial balance whereas, in software, its added through adjusting journal entries.
4. Financial statements are much more straightforward in software as they are available on one click, whereas in manual accounting, they are required to be calculated.
Baker Fine Foods has beginning inventory for the year of $15,000. During the year, Baker purchases inventory for $130,000 and ends the year with $27,000 of inventory. Baker will report cost of goods sold equal to:
$118,000.
$130,000.
$157,000.
$142,000.
Answer:
COGS = 118,000
Explanation:
From the inventory identity we will solve for COGS
[tex]$$Beginning Inventory + Purchase = Ending Inventory + COGS[/tex]
the right side is the origin of the goods, are either purchased or come from prior period
the left side, is the destination, the use of the goods, it could either be sold or is still in stocks.
Now, to sovle, we plug our values and clear for COGS
15,000 + 130,000 = 27,000 + COGS
COGS = 15,000 + 130,000 - 27,000
COGS = 118,000
Serena Corporation uses estimated manufacturing overhead costs of $880,600 and estimated direct labor hours of 200,000 in establishing manufacturing overhead rates. Allocated manufacturing overhead was $1,012,100 and actual manufacturing overhead was $970,500. What were the number of actual direct hours worked? (Round intermediary calculations to the nearest cent and the final answer to the nearest dollar.)
Answer:
the actual hours were 229,866
Explanation:
[tex]\frac{Cost\: Of \:Manufacturing \:Overhead}{Cost \:Driver}= Overhead \:Rate[/tex]
the predetermined overhead rate will be the quotient between the expected overhead and the expected value of the cost driver.
880,600 / 200,000 = 4.403
If we allocated 1,012,100
then actual hours x 4.403 = 1,012,100
actual hours = 1,012,100 / 4.403 = 229.866,000
the actual hours were 229,866
Answer:
The number of actual direct hours worked is $229,866 hours
Explanation:
In this question, first, we have to compute the predetermined overhead rate which is shown below:
Predetermined overhead rate = (Estimated manufacturing overhead costs) ÷ (Estimated direct labor hours)
= $880,600 ÷ $200,000
= $4.403
Now the number of actual direct hours worked equals to
= (Allocated manufacturing overhead) ÷ (Predetermined overhead rate)
= ($1,012,100) ÷ ($4.403)
= $229,866 hours
You won a lottery and you have two options for receiving the money. You can receive a lump sum of $50,000 today or receive future payments of $8,000 every year for ten years (first payment will start in one year). The discount rate is 7%. Which option should you take and why?
Answer:
If there is no pressure for taking the money today the second option is a better deal: 56,188.65 to 50,000
Explanation:
We will check if the present value of the 10 years annuity of 8,000 discounted at 7% is better than 50,000 today:
[tex]C \times \frac{1-(1+r)^{-time} }{rate} = PV\\[/tex]
C 8,000 dollars
time 10 years
rate 7% = 7/100 = 0.07
[tex]8000 \times \frac{1-(1+0.07)^{-10} }{0.07} = PV\\[/tex]
PV $56,188.6523
If the CPI was 95 in 1955 and is 475 today, then $100 today purchases the same amount of goods and services as...
a. $20.00 purchased in 1955.
b. $4.75 purchased in 1955.
c. $500 purchased in 1955.
d. $95.00 purchased in 1955.
Answer:
The correct answer is option a.
Explanation:
The CPI or consumer price index is a tool to measure inflation in the economy. It includes a basket of goods and services generally consumed by households. Changes in the price of these goods and services are calculated to measure the inflation rate.
In the year 1955, the CPI was 95.
In the current year, the CPI is 475.
This means that today $100 will be able to purchase
= [tex]\$ 100 \ \times\ \frac{95}{475}[/tex]
= $20
$100 in current year will be able to purchase the same amount of goods and services that $20 purchased in the year 1995.
The CPI is a measure of the average change over time in prices. $100 today would purchase the same amount as $4.21 in 1955.
Explanation:The CPI (Consumer Price Index) is a measure of the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.
Given that the CPI was 95 in 1955 and is 475 today, we can calculate the percentage increase in the CPI over this time period: (475 - 95) / 95 = 400 / 95 = 4.21.
This means that prices have increased by 4.21 times since 1955. So, $100 today would purchase the same amount of goods and services as $4.21 purchased in 1955.
In the ABC partnership (to which Daniel seeks admittance), the capital balances of Albert, Bert, and Connell, who share income in the ratio of 5:3:2 are:
Albert 500000
Bert 300000
Connell 200000
Based on the preceding information, what amount of goodwill will be recorded if Daniel invests $450,000 for a one-third interest?
A. $0
B. $10,000
C. $50,000
D. $100,000
Answer: Option (c) is correct.
Explanation:
Given that,
Income sharing ratio = 5:3:2
Albert's capital = $500,000
Bert's capital = $300,000
Connell's capital = $200,000
If Daniel invests $450,000 for 1/3 rd interest then,
Total capital = $500,000 + $300,000 + $200,000
= $1,000,000
Therefore, total capital of the partnership will be;
= [tex]1,000,000\times\frac{3}{2}[/tex]
= $1,500,000
So,
Share of Daniel will be = $1,500,000 – $1,000,000
= $500,000
Hence,
Value of Goodwill = Share of Daniel - Amount invested by Daniel
= $500,000 - $450,000
= $50,000
S&L Financial buys and sells securities that it typically classifies as available-for-sale. On December 27, 2018, S&L purchased Coca-Cola bonds at par for $715,000 and sold the bonds on January 3, 2019, for $717,500. At December 31, the bonds had a fair value of $713,500. When it purchased the Coca-Cola bonds, S&L Financial decided to elect the fair value option for this investment. What pretax amounts did S&L include in its 2018 and 2019 net income as a result of this investment (ignoring interest)?
Answer:
2018 loss for 1,500
2019 gain for 4,000
Explanation:
purchase at 715,000
December 31th 713,500
adjusting entry december 31th
loss on investment 1,500 debit
marketable securities 1,500 credit
january 3rd, 2019
cash 717,500 debit
gain on investemnt 4,000 credit
martetable securities 713,500 credit
to record gain on investment
Answer the following questions using the information below: Berman's Camera Shop has prepared the following flexible budget for September and is in the process of interpreting the variances. F denotes a favorable variance and U denotes an unfavorable variance. Flexible Variances Budget Price Efficiency Material A $40,000 $1,000F $3,000U Material B 60,000 500U 1,500F Direct labor 80,000 500U 2,500F The most likely explanation of the above variances for Material A is that:
Answer:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Explanation:
The variances for Materials A can indicate that the business purchases a lower quality materials, therefore cheaper.
Which produce a favorable price variance because, this lower quality had a lower price per unit of material.
This lower quality makes the manufacturing process use more materials, generating an unfavorable quantity variance as, the the standard materials would use less quantity.
Final answer:
The favorable price variance indicates a lower purchasing cost for Material A, while the unfavorable efficiency variance suggests inefficient use of the material in production.
Explanation:
The most likely explanation for the variances for Material A at Berman's Camera Shop, where there is a $1,000 favorable price variance but a $3,000 unfavorable efficiency variance, is that the purchasing department secured a lower price than expected for Material A, which resulted in a favorable price variance. However, more of Material A was used than planned in the production process, leading to an unfavorable efficiency variance. This suggests that the materials may have been used inefficiently or that there was waste during the production process.
For Eckstein Company, the predetermined overhead rate is 136% of direct labor cost. During the month, Eckstein incurred $102,000 of factory labor costs, of which $85,300 is direct labor and $16,700 is indirect labor. Actual overhead incurred was $121,008. Collapse question part (a1) Compute the amount of manufacturing overhead applied during the month. Manufacturing overhead applied $
Answer:
Allocated overhead applied= $116008
Explanation:
Giving the following information:
The predetermined overhead rate is 136% of direct labor cost.
During the month, Eckstein incurred $102,000 of factory labor costs.
$85,300 is direct labor and $16,700 is indirect labor.
The actual overhead incurred was $121,008.
We need to determine the allocated overhead applied:
allocated overhead applied= overhead rate*direct labor
allocated overhead applied= 1.36*85300= $116008
Answer:
Allocated overhead applied= $116008
Explanation:
Giving the following information:
The predetermined overhead rate is 136% of direct labor cost.
During the month, Eckstein incurred $102,000 of factory labor costs.
$85,300 is direct labor and $16,700 is indirect labor.
The actual overhead incurred was $121,008.
We need to determine the allocated overhead applied:
allocated overhead applied= overhead rate*direct labor
allocated overhead applied= 1.36*85300= $116008
Donna Bader spent her final year at college studying the effect of various economic factors on the economy of developing nations. Based on the results of her study, she concluded that globalization does these countries more harm than good. Which of the following statements, if true, strengthens Donna's argument? People in low-wage nations have a high mortality rate and no access to healthcare facilities. Because of the increase in employment opportunities, workers from developing countries flock to developed countries. Low-wage nations tend to have poorly developed transport and communication systems. Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Answer:
Many companies take advantage of lenient labor laws by setting up facilities in low-income countries.
Explanation:
Globalization is an economic and political phenomenon that has transformed the relations of production and labor. The companies started to produce in countries where the labor is cheaper, becoming consequently more competitive.For the development of firms and the evolution of capitalism globalization is a very positive phenomenon. However, globalization has some deleterious effects. Some multinational companies take advantage of flaws in the labor laws of underdeveloped countries to exploit the labor of the people of those countries. With low wages and poor social security, people in these countries consume less, get sicker and have less access to goods and services. This hinders human development and hence the productivity and economy of these countries.
Brushy Mountain Mining Company's coal reserves are being depleted, so its sales are falling. Also, environmental costs increase each year, so its costs are rising. As a result, the company's earnings and dividends are declining at the constant rate of 10% per year. If D0 = $2 and rs = 13%, what is the estimated value of Brushy Mountain's stock? Do not round intermediate calculations. Round your answer to the nearest cent.
Answer:
The estimated value of Brushy Mountain's stock is $41.40
Explanation:
For computing the estimated value of stock, we need to apply the formula which is shown below:
= (D0 × (1 +g) ) ÷ (rs - g)
where,
The D0 would be a 0 year dividend
g = earning and dividend rate
rs = required rate of return
Now put these values to the above formula
So, the answer would be equal to
= $2 × (1 - 0.10) ÷ {13% - (- 10%)}
= $2 × 0.90 ÷ 23%
= $2 × 20.7
= $41.40
Since in the question, the growth rate is declining so we add the minus sign before writing the earning and the dividend rate.
The following standards have been established for a raw material used to make product O84: Standard quantity of the material per unit of output 8.9 meters Standard price of the material $ 19.00 per meter The following data pertain to a recent month's operations: Actual material purchased 5,300 meters Actual cost of material purchased $ 104,520 Actual material used in production 5,100 meters Actual output 680 units of product O84 The direct materials purchases variance is computed when the materials are purchased. What is the materials price variance for the month
Answer:
Purchase price variance=(19,72-19)*596=$429,12
Explanation:
The direct material variance is the difference between the standard cost of materials resulting from production activities and the actual costs incurred. The direct material variance is comprised of two other variances, which are:
- Purchase price variance
- Material yield variance
Purchase price variance: This is the difference between the standard and actual cost per unit of the direct materials purchased, multiplied by the standard number of units expected to be used in the production process. This variance is the responsibility of the purchasing department.
Purchase price variance=(actual price - standard price)*standard units
In this exercise:
Standard price= $19 meter
Standard units=5300/8,9=596 units
Actual price=104520/5300= $19,72
Purchase price variance=(19,72-19)*596=$429,12
A manager checked production records and found that a worker produced 185 units while working 50 hours. In the previous week, the same worker produced 116 units while working 40 hours. Compute Current period productivity and Previous period productivity. (Round your answers to 2 decimal places.)
Answer:
Current Period Productivity= 3.7units/hour
Previous Period Productivity= 2.9units/hour
Explanation:
Giving the following information:
Worker produced 185 units while working 50 hours.
In the previous week, the same worker produced 116 units while working 40 hours.
We will compute productivity based on units per hour.
Worker productivity= Total units/total hours
Current Period Productivity= 185/50= 3.7units/hour
Previous Period Productivity= 116/40= 2.9units/hour
Kilt Company had the following information for the year:
Direct materials used $ 110,000
Direct labor incurred (5,000 hours) $ 150,000
Actual manufacturing overhead incurred $ 166,000
Kilt Company used a predetermined overhead rate of $42.00 per direct labor hour for the year and estimated that direct labor hours would total 5,500 hours. Assume the only inventory balance is an ending Work in Process balance of $17,000. How much overhead was applied during the year?
Answer:
The applied overhead is $231,000
Explanation:
The computation of the applied overhead is shown below:
= Predetermined overhead rate × direct labor hour
= $42 × 5,500 hours
= $231,000
Since the predetermined overhead rate is given in the question, so there is no need to re calculate it.
And, the other items which are mentioned in the question are not considered in the computation part. Hence, these items would be ignored
Taser Industries must decide whether to make or buy some of its components. The costs of producing 175,000 battery packs for its product are as follows: Direct Materials $15,000 Direct Labor $5,000 Variable overhead $6,000 Fixed overhead $9,000 The company has an opportunity to purchase the battery packs for $0.18 per unit, which would eliminate all variable costs, and $2,000 of fixed costs. Based on your analysis, what is the net income increase or decrease if the company purchases the battery packs
Answer:
It is cheaper to produce in-house. Cost savings= $3500
Explanation:
We need to find whether it is better to produce in-house or to purchase to a supplier.
Q= 175000
Produce in house:
Direct Materials $15,000
Direct Labor $5,000
Variable overhead $6,000
Fixed overhead $9,000
Total cost= $35000
Outsource:
Purchase Cost= 175000q*$0.18= $31500
Fixed Cost= (9000-2000)= $7000
Total cost=$38500
It is cheaper to produce in-house. Cost savings= $3500
he Alpine House, Inc., is a large retailer of snow skis. The company assembled the information shown below for the quarter ended March 31: Amount Sales $ 1,107,000 Selling price per pair of skis $ 410 Variable selling expense per pair of skis $ 45 Variable administrative expense per pair of skis $ 17 Total fixed selling expense $ 155,000 Total fixed administrative expense $ 110,000 Beginning merchandise inventory $ 70,000 Ending merchandise inventory $ 100,000 Merchandise purchases $ 280,000 Required: 1. Prepare a traditional income statement for the quarter ended March 31. 2. Prepare a contribution format income statement for the quarter ended March 31. 3. What was the contribution margin per unit?
Answer:
Instructions are listed below
Explanation:
1) The general structure of an income statement proceeds as follow:
Revenue/Sales (+)
Cost of Goods Sold (COGS) (-)
=Gross Profit
Marketing, Advertising, and Promotion Expenses (-)
General and Administrative (G&A) Expenses (-)
=EBITDA
Depreciation & Amortization Expense (-)
=Operating Income or EBIT
Interest (-)
Other Expenses (-)
=EBT (Pre-Tax Income)
Income Taxes (-)
=Net Income
In this exercise:
Revenues= 1107000
COGS= Beginnig inventory + purchase - ending inventory= 250000
Gross profit= $857000
Administrative expense= $17 *2700q+110000= 155900
Selling expense= $155,000 + 45*2700q= 276500
EBITDA= 424600
2)A Contribution Margin Income Statement is a special format of the income statement that segregates the variable and fixed expenses involved in running a business. It shows the revenue generated after deducting all variable and fixed expenses separately.
Sales= 1107000
Variable costs:
Cost of goods sold= 250000
Variable Selling expense= $45*2700= 121500
Variable administration expense= 17*2700= 45900
Total variable costs= 417400
Contribution Margin= 689600
Fixed costs:
Selling expense= 155000
administration expense= 110000
Total fixed cost= 265000
Net profit= 424600
3) Unitary contribution margin= contribution margin/Q= 689600/2700= $255.41
The Allowance for Bad Debts account has a debit balance of $ 9 comma 000$9,000 before the adjusting entry for bad debts expense. After analyzing the accounts in the accounts receivable subsidiary ledger, the company's management estimates that uncollectible accounts will be $ 12 comma 000$12,000. What will be the amount of the adjustment in the Allowance for Bad Debts account?
Answer:
the amount of the adjustment in the Allowance for
Bad Debts account $3.000
Explanation:
Initial Balance
Allowance for Uncollectible Accounts $ 9.000
END Balance
Allowance for Uncollectible Accounts $ 12.000
The adjustment entry in the accountig will be
Bad debt expense $ 3.000
Allowance for Uncollectible Accounts $ 3.000
Taco Casa is considering installing touch screen terminals for patrons to place their food orders. They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals. What are the marginal costs of installing another terminal at a location?
Answer:
The marginal cost of each screen is $10,000.
Explanation:
Giving the following information:
They discovered that installation costs at stores with four screens were $60,000 but were $80,000 at stores with six terminals.
The marginal cost of each screen is $10,000. And the fixed costs are $20,000.
Six screens= 20000 + 10000*6= $80,000
At the beginning of Year 1, a company reported a balance in common stock of $154,000 and a balance in retained earnings of $54,000. During the year, the company issued additional shares of stock for $44,000, earned net income of $34,000, and paid dividends of $10,400. In addition, the company reported balances for the following assets and liabilities on December 31. Assets Liabilities Cash $ 53,000 Accounts payable $ 8,600 Supplies 11,300 Utilities payable 3,200 Prepaid rent 26,000 Salaries payable 3,900 Land 220,000 Notes payable 19,000 Required: Prepare a statement of stockholders’ equity. Prepare a balance sheet.
Answer:
statement of stockholders' equity
for the year 1
Common Stock Retained Earings Total
Balance Jan 1 154,000 54,000 208,000
Net Earnings 34,000 34,000
Dividends -10,400 -10,400
Stock issued 44,000 44,000
Balance, Dec 31 198,000 77,600 275,600
Assets Liability
Cash 53,000 Account Payable 8,600
Supplies 11,300 Utilities Payable 3,200
Prepaid Rent 26,000 Salaries Payable 3,900
Land 220,000 Note payable 19,000
Common Stock 198,000
Retained Earnings 77,600
Total Assets 310,300 Total Liab + SE 310,300
Explanation:
For the stockholder statment, we simply post the values of the first part.
Then for the balance sheet: We will work with the numbers given in the the second part.
The payable are the liabilities, the rest are assets.
Finally, we transfer the stock value from the Stockholders statemnet
and check the total for each column
Garden Variety Flower Shop uses 670 clay pots a month. The pots are purchased at $2.40 each. Annual carrying costs per pot are estimated to be 10 percent of cost, and ordering costs are $10 per order. The manager has been using an order size of 2,000 flower pots. a.What additional annual cost is the shop incurring by staying with this order size?
Answer:
The additional cost that Garden Variety Flower Shop is incurring in is Inventory.
Explanation:
Giving the following information:
Garden Variety Flower Shop uses 670 clay pots a month.
The pots are purchased at $2.40 each.
Annual carrying costs per pot = 10 percent of the cost.
Ordering costs are $10 per order.
The manager has been using an order size of 2,000 flower pots.
The additional cost that Garden Variety Flower Shop is incurring in is Inventory. Inventory cost includes the costs to hold inventory, as well as to administer the related paperwork. This cost is examined by management as part of its evaluation of how much inventory to keep on hand. This can result in changes in the order fulfillment rate for customers, as well as variations in the production process flow.