activities produced the following income (losses).
Activity A($75,000)
Activity B($25,000)
Activity C$40,000
Net passive loss($60,000)
Maurice’s suspended losses are as follows.
information is contained below.
· Selling price per unit $50
· Variable manufacturing costs per unit produced (DM, DL, and variable MOH) $24
· Variable operating expenses per unit sold $5
· Fixed manufacturing overhead (MOH) in total for the year $135,000
· Fixed operating expenses in total for the year $55,000
· Units produced during the year 15,000
· Units sold during the year 13,000
(a) Prepare the income statement using variable costing. (10 points)
(b) Prepare the income statement using absorption costing. (10 points)
(c) Please explain the difference in operating income between the two methods. (5 points) (Points : 25)
2. (TCO 8) Bestick Company manufactures and sells trophies for winners of athletic events. The company normally charges $65 per trophy. The average costs for a trophy is shown below.
Direct materials: $15
Direct labor: 10
Variable manufacturing overhead: 5
Variable marketing expenses: 3
Fixed manufacturing overhead: 12 ($1,200,000 fixed manufacturing overhead/100,000 trophies)
Total costs: $45
Bestick Company has enough idle capacity to accept a one-time only special order for 1,000 trophies at $55 per trophy. Bestick Company will not incur any variable marketing expenses for this order and no additional fixed costs.
Required:
Should the company accept this special order? Please state your decision and provide numerical support for your decision. (Points : 25)
3. (TCO 7) Lee Company makes 30,000 units per year of Part X for use in one of its products. Lee Company incurred the following manufacturing costs when producing the 30,000 units of Part X.
Direct materials $800,000
Direct labor 450,500
Variable manufacturing overhead 95,000
Fixed manufacturing overhead 110,000
Total $1,455,500
Required
Assume Lee Company has no alternative use for the facilities presently devoted to production of Part X and that none of the fixed costs are avoidable. If the outside supplier offers to sell Part X for $45.00 each, should Lee Company accept the offer? Please clearly state your answer and support your answer with appropriate calculations. (Points : 25)
4. (TCO 9) Melinda Corp buys equipment for $75,000 that will last for 5 years. The equipment will generate cash flows of $24,000 per year and will have no salvage value at the end of its life. Ignore taxes. Use 12% required rate of return.
Required
(a) What is the present value (PV) of this investment at 12%? (5 points)
(b) What is the net present value (NPV) of this investment? Should Melinda Corp buy the equipment based on NPV? Justify your decision. (10 points)
(c) What is the internal rate of return (IRR) of this investment? (5 points)
(d) What is the payback period? (5 points) (Points : 25)
5. (TCO 3) XYZ Company uses process costing to track its costs in two sequential production departments: Forming and Finishing. The following information is provided regarding the Forming department.
Forming Department
Month Ended June 30
Unit information
Beginning work in process, June 1 — 6,000
Started into production during June — 30,000
Completed and transferred to Finishing department during June — 22,000
Ending work in process, June 30 (25% complete as to direct materials and 40% complete as to conversion costs) — 14,000
Cost information
Beginning work in process as of June 1 consists of $10,000 of direct materials costs and $5,500 of conversion costs) — $15,500
Direct materials used in June — $27,000
Conversion costs incurred in June — $14,850
Required
(a) Calculate the equivalent units for conversion costs. (Show your work)
(b) Calculate the cost per equivalent unit for conversion costs. (Show your work)
6. (TCO 4) Johnson Company produces and sells a single product whose selling price is $80.00 per unit and whose variable expense is $50.00 per unit. The company’s fixed expense is $270,000 per month.
(a) What is the CM ratio (express your answer as a percentage to two decimal places)? (5 points)
(b) How many units must be sold to break-even for the month? (10 points)
(c) How many units do we need to sell to earn a profit of $240,000 for the month? (10 points)
7. (TCO 2) Lisa Inc. estimates that its employees will utilize 200,000 direct labor hours during the coming year. Total overhead costs are estimated to be $6,700,000 and machine hours are estimated to be 100,000. Actual labor hours are 225,000. Actual machine hours are 90,000.
If Lisa Inc. allocates overhead based on direct labor hours, what is the predetermined manufacturng overhead rate? (Points : 25)
what safeguards can be recommended to an organizations to improve on avoiding breaches?
you make your choice
Case Study 1
Chapter 3 – Job Order Costing
Team Assignment
(2-3 Team members recommended)
CASE 3–29 Ethics and the Manager [Course Objective B] Terri Ronsin had recently been transferred to the Home Security Systems Division of National Home Products. Shortly after taking over her new position as divisional controller, she was asked to develop the division’s predetermined overhead rate for the upcoming year. The accuracy of the rate is important because it is used throughout the year and any overapplied or underapplied over- head is closed out to Cost of Goods Sold at the end of the year. National Home Products uses direct labor-hours in all of its divisions as the allocation base for manufacturing overhead.
To compute the predetermined overhead rate, Terri divided her estimate of the total manufacturing overhead for the coming year by the production manager’s estimate of the total direct labor-hours for the coming year. She took her computations to the division’s general manager for approval but was quite surprised when he suggested a modification in the base. Her conversation with the general manager of the Home Security Systems Division, Harry Irving, went like this:
Ronsin: Here are my calculations for next year’s predetermined overhead rate. If you approve, we can enter the rate into the computer on January 1 and be up and running in the job-order costing system right away this year.
Irving:Thanks for coming up with the calculations so quickly, and they look just fine. There is, how- ever, one slight modification I would like to see. Your estimate of the total direct labor-hours for the year is 440,000 hours. How about cutting that to about 420,000 hours?
Ronsin: I don’t know if I can do that. The production manager says she will need about 440,000 direct labor-hours to meet the sales projections for the year. Besides, there are going to be over 430,000 direct labor-hours during the current year and sales are projected to be higher next year.
Irving: Teri, I know all of that. I would still like to reduce the direct labor-hours in the base to some- thing like 420,000 hours. You probably don’t know that I had an agreement with your predecessor as divisional controller to shave 5% or so off the estimated direct labor-hours every year. That way, we kept a reserve that usually resulted in a big boost to net operating income at the end of the fiscal year in December. We called it our Christmas bonus. Corporate headquarters always seemed as pleased as punch that we could pull off such a miracle at the end of the year. This system has worked well for many years, and I don’t want to change it now.
Required:
Assume the following information:
| Direct Materials | $40 | per unit |
| Direct Labor | $20 | per unit |
| Total Estimated Manufacturing Overhead | $8,400,000 | |
| Manufacturing overhead is allocated based on estimated direct-labor hours.
Each unit of product requires 1 direct labor hour. |
Deliverables:
This question was created from Chapter 10 https://www.coursehero.com/file/20432699/Chapter-10/
This question was created from ch 7 problems https://www.coursehero.com/file/18202066/ch-7-problems/
i have an accounting 429 exam i need help who can do it in 1 hour ???
statement? Explain your answer .
surrounding corporate formation are no exception to this rule. We know that a corporation is generally seen as a separate taxable entity from its shareholders. As a result, corporate formations, which involve transfers of property between the shareholders and the corporation, would be taxable to both the corporation and the shareholders. It’s no surprise that this result would often discourage corporate formation. Congress remedied this particular problem by enacting Section 351, and your text details how this provision operates.
Did Congress craft a provision that allows corporations and their shareholders to avoid taxation on these transactions permanently, or did it have something else in mind? Support your answer!
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