ACC 560 Week 2 Assignment
P1-2A Copa Company, a manufacturer of stereo systems, started its production in October 2008. For the preceding 3 years Copa had been a retailer of stereo systems. After a thorough survey of stereo system markets, Copa decided to turn its retail store into a stereo equipment factory.
Raw materials cost for a stereo system will total $74 per unit. Workers on the production lines are on average paid $12 per hour. A stereo system usually takes 5 hours to complete. In addition, the rent on the equipment used to assemble stereo systems amounts to $4,900 per month. Indirect materials cost $5 per system. A supervisor was hired to oversee production; her monthly salary is $3,000.
Janitorial costs are $1,300 monthly. Advertising costs for the stereo system will be $8,500 per month. The factory building depreciation expense is $7,200 per year. Property taxes on the factory building will be $9,000 per year.
Required:
(a) Prepare an answer sheet. Assuming that Copa manufactures, on average, 1,300 stereo systems per month, enter each cost item on your answer sheet, placing the dollar amount per month under the appropriate headings. Total the dollar amounts in each of the columns.
(b) Compute the cost to produce one stereo system.
Click here for the solution: Copa Company, a manufacturer of stereo systems, started its production in October 2008 (ACC 560 Week 2)
Showing posts with label ACC 560. Show all posts
Showing posts with label ACC 560. Show all posts
Monday, October 26, 2015
Wednesday, October 14, 2015
Mozena Corporation manufactures a single product (ACC 560 Week 4)
ACC 560 Week 4 Assignment
E5-6 Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.
Production in Units 3,000
Production Costs
Direct Materials $7,500
Direct labor 15,000
Utilities 1,800
Property taxes 1,000
Indirect labor 4,500
Supervisory salaries 1,800
Maintenance 1,100
Depreciation 2,400
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Mozena Corporation manufactures a single product (ACC 560 Week 4)
E5-6 Mozena Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. The utilities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.
Production in Units 3,000
Production Costs
Direct Materials $7,500
Direct labor 15,000
Utilities 1,800
Property taxes 1,000
Indirect labor 4,500
Supervisory salaries 1,800
Maintenance 1,100
Depreciation 2,400
Instructions
(a) Identify the above costs as variable, fixed, or mixed.
(b) Calculate the expected costs when production is 5,000 units.
Click here for the solution: Mozena Corporation manufactures a single product (ACC 560 Week 4)
Sunday, October 4, 2015
Lewis Manufacturing Company has four operating divisions
ACC 560 Week 5 Assignment
P7-5A Lewis Manufacturing Company has four operating divisions. During the first quarter of 2008, the company reported aggregate income from operations of $176,000 and the following divisional results.
Division I II III IV
Sales $250,000 $200,000 $500,000 $400,000
Cost of goods sold 200,000 189,000 300,000 250,000
Selling and administrative expenses 65,000 60,000 60,000 50,000
Income (loss) from operations - $15,000 - $49,000 $140,000 $100,000
Analysis reveals the following percentages of variable costs in each division.
I II III IV
Cost of goods sold 70 % 90 % 80 % 75 %
Selling and administrative expenses 40 70 50 60
Discontinuance of any division would save 50% of the fixed costs and expenses for that division.
Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued.
Instructions
(a) Compute the contribution margin for Divisions I and II.
(b) Prepare an incremental analysis concerning the possible discontinuance of (1) Division I and (2) Division II. What course of action do you recommend for each division?
(c) Prepare a columnar condensed income statement for Lewis Manufacturing, assuming Division II is eliminated. Use the CVP format. Division II’s unavoidable fixed costs are allocated equally to the continuing divisions.
(d) Reconcile the total income from operations ($176,000) with the total income from operations without Division II.
Click here for the solution: Lewis Manufacturing Company has four operating divisions
P7-5A Lewis Manufacturing Company has four operating divisions. During the first quarter of 2008, the company reported aggregate income from operations of $176,000 and the following divisional results.
Division I II III IV
Sales $250,000 $200,000 $500,000 $400,000
Cost of goods sold 200,000 189,000 300,000 250,000
Selling and administrative expenses 65,000 60,000 60,000 50,000
Income (loss) from operations - $15,000 - $49,000 $140,000 $100,000
Analysis reveals the following percentages of variable costs in each division.
I II III IV
Cost of goods sold 70 % 90 % 80 % 75 %
Selling and administrative expenses 40 70 50 60
Discontinuance of any division would save 50% of the fixed costs and expenses for that division.
Top management is very concerned about the unprofitable divisions (I and II). Consensus is that one or both of the divisions should be discontinued.
Instructions
(a) Compute the contribution margin for Divisions I and II.
(b) Prepare an incremental analysis concerning the possible discontinuance of (1) Division I and (2) Division II. What course of action do you recommend for each division?
(c) Prepare a columnar condensed income statement for Lewis Manufacturing, assuming Division II is eliminated. Use the CVP format. Division II’s unavoidable fixed costs are allocated equally to the continuing divisions.
(d) Reconcile the total income from operations ($176,000) with the total income from operations without Division II.
Click here for the solution: Lewis Manufacturing Company has four operating divisions
Mucky Duck makes swimsuits and sells these suits directly to retailers
ACC 560 Week 5 Assignment
E8-3 Mucky Duck makes swimsuits and sells these suits directly to retailers. Although Mucky Duck has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $110. Given its experience, Mucky Duck believes the All-Body suit would have the following manufacturing costs.
Direct materials $25
Direct labor 30
Manufacturing overhead 45
Total costs $100
Instructions:
a) Assume that Mucky Duck uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All-Body swimsuit?
b) Assume that Mucky Duck uses target costing. What is the price that Mucky Duck would charge the retailer for the All-Body swimsuit?
c) What is the highest acceptable manufacturing cost Mucky Duck would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $25 per unit? (Assume target costing.)
Click here for the solution: Mucky Duck makes swimsuits and sells these suits directly to retailers
E8-3 Mucky Duck makes swimsuits and sells these suits directly to retailers. Although Mucky Duck has a variety of suits, it does not make the All-Body suit used by highly skilled swimmers. The market research department believes that a strong market exists for this type of suit. The department indicates that the All-Body suit would sell for approximately $110. Given its experience, Mucky Duck believes the All-Body suit would have the following manufacturing costs.
Direct materials $25
Direct labor 30
Manufacturing overhead 45
Total costs $100
Instructions:
a) Assume that Mucky Duck uses cost-plus pricing, setting the selling price 25% above its costs. What would be the price charged for the All-Body swimsuit?
b) Assume that Mucky Duck uses target costing. What is the price that Mucky Duck would charge the retailer for the All-Body swimsuit?
c) What is the highest acceptable manufacturing cost Mucky Duck would be willing to incur to produce the All-Body swimsuit, if it desired a profit of $25 per unit? (Assume target costing.)
Click here for the solution: Mucky Duck makes swimsuits and sells these suits directly to retailers
Wordsmith is a publishing company with a number of different book lines (ACC 560 Week 5)
ACC 560 Week 5 Assignment
P8-4A Wordsmith is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Pronto Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Wordsmith, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 500 pages of print. A manager from Business Books, one of the Wordsmith's book lines, has approached the manager of the printing operation offering to pay $0.007 per page for 1,200 copies of a 500-page book. The book line pays outside printers $0.009 per page. The printing operation's variable cost per page is $0.006.
Instructions:
Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following situations.
(a) Assume that the printing operation is booked solid for the next two years, and it would have to cancel an obligation with an outside customer in order to meet the needs of the internal division.
(b) Assume that the printing operation has available capacity.
(c) The top management of Franco believes that the printing operation should always do the printing for the company’s magazines. On a number of occasions it has forced the printing operation to cancel jobs with outside customers in order.
(d) Calculate the change in contribution margin to each division, and to the company as a whole, if top management forces the printing operation to accept the $0.007 per page transfer price when it has no available capacity.
Click here for the solution: Wordsmith is a publishing company with a number of different book lines (ACC 560 Week 5)
P8-4A Wordsmith is a publishing company with a number of different book lines. Each line has contracts with a number of different authors. The company also owns a printing operation called Pronto Press. The book lines and the printing operation each operate as a separate profit center. The printing operation earns revenue by printing books by authors under contract with the book lines owned by Wordsmith, as well as authors under contract with other companies. The printing operation bills out at $0.01 per page, and a typical book requires 500 pages of print. A manager from Business Books, one of the Wordsmith's book lines, has approached the manager of the printing operation offering to pay $0.007 per page for 1,200 copies of a 500-page book. The book line pays outside printers $0.009 per page. The printing operation's variable cost per page is $0.006.
Instructions:
Determine whether the printing should be done internally or externally, and the appropriate transfer price, under each of the following situations.
(a) Assume that the printing operation is booked solid for the next two years, and it would have to cancel an obligation with an outside customer in order to meet the needs of the internal division.
(b) Assume that the printing operation has available capacity.
(c) The top management of Franco believes that the printing operation should always do the printing for the company’s magazines. On a number of occasions it has forced the printing operation to cancel jobs with outside customers in order.
(d) Calculate the change in contribution margin to each division, and to the company as a whole, if top management forces the printing operation to accept the $0.007 per page transfer price when it has no available capacity.
Click here for the solution: Wordsmith is a publishing company with a number of different book lines (ACC 560 Week 5)
Friday, September 25, 2015
Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
ACC 560 Week 6 Assignment
P9-6A Glendo Industries' balance sheet at December 31, 2008, is presented below.
GLENDO INDUSTRIES
Balance Sheet
December 31, 2008
Assets
Current assets
Cash $7,500
Accounts receivable 82,500
Finished goods inventory (2,000 units) 30,000
Total current assets 120,000
Property, plant, and equipment
Equipment $40,000
Less: Accumulated depreciation 10,000 30,000
Total assets $150,000
Liabilities and Stockholders' Equity
Liabilities
Notes payable $25,000
Accounts payable 45,000
Total liabilities 70,000
Stockholders' equity
Common stock $50,000
Retained earnings 30,000
Total stockholders' equity 80,000
Total liabilities and stockholders' equity $150,000
Additional information accumulated for the budgeting process is as follows.
Budgeted data for the year 2009 include the following.
4th Qtr.
of 2009 Year 2009
Total
Sales budget (8,000 units at $35) $84,000 $280,000
Direct materials used 17,000 69,400
Direct labor 12,500 56,600
Manufacturing overhead applied 10,000 54,000
Selling and administrative expenses 18,000 76,000
To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2009, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Glendo Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,000 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 30% of income before income taxes.
All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2009, the company expects to purchase additional equipment costing $19,000. It expects to pay $8,000 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2009, includes amounts due suppliers (see above) plus other accounts payable of $5,700. In 2009, the company expects to declare and pay a $5,000 cash dividend. Unpaid income taxes at December 31 will be $5,000.The company's cash budget shows an expected cash balance of $7,950 at December 31, 2009.
Instructions
Prepare a budgeted income statement for 2009 and a budgeted balance sheet at December 31, 2009. In preparing the income statement, you will need to compute cost of goods manufactured (direct materials + direct labor + manufacturing overhead) and finished goods inventory (December 31, 2009).
Click here for the solution: Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
P9-6A Glendo Industries' balance sheet at December 31, 2008, is presented below.
GLENDO INDUSTRIES
Balance Sheet
December 31, 2008
Assets
Current assets
Cash $7,500
Accounts receivable 82,500
Finished goods inventory (2,000 units) 30,000
Total current assets 120,000
Property, plant, and equipment
Equipment $40,000
Less: Accumulated depreciation 10,000 30,000
Total assets $150,000
Liabilities and Stockholders' Equity
Liabilities
Notes payable $25,000
Accounts payable 45,000
Total liabilities 70,000
Stockholders' equity
Common stock $50,000
Retained earnings 30,000
Total stockholders' equity 80,000
Total liabilities and stockholders' equity $150,000
Additional information accumulated for the budgeting process is as follows.
Budgeted data for the year 2009 include the following.
4th Qtr.
of 2009 Year 2009
Total
Sales budget (8,000 units at $35) $84,000 $280,000
Direct materials used 17,000 69,400
Direct labor 12,500 56,600
Manufacturing overhead applied 10,000 54,000
Selling and administrative expenses 18,000 76,000
To meet sales requirements and to have 3,000 units of finished goods on hand at December 31, 2009, the production budget shows 9,000 required units of output. The total unit cost of production is expected to be $20. Glendo Industries uses the first-in, first-out (FIFO) inventory costing method. Selling and administrative expenses include $4,000 for depreciation on equipment. Interest expense is expected to be $3,500 for the year. Income taxes are expected to be 30% of income before income taxes.
All sales and purchases are on account. It is expected that 60% of quarterly sales are collected in cash within the quarter and the remainder is collected in the following quarter. Direct materials purchased from suppliers are paid 50% in the quarter incurred and the remainder in the following quarter. Purchases in the fourth quarter were the same as the materials used. In 2009, the company expects to purchase additional equipment costing $19,000. It expects to pay $8,000 on notes payable plus all interest due and payable to December 31 (included in interest expense $3,500, above). Accounts payable at December 31, 2009, includes amounts due suppliers (see above) plus other accounts payable of $5,700. In 2009, the company expects to declare and pay a $5,000 cash dividend. Unpaid income taxes at December 31 will be $5,000.The company's cash budget shows an expected cash balance of $7,950 at December 31, 2009.
Instructions
Prepare a budgeted income statement for 2009 and a budgeted balance sheet at December 31, 2009. In preparing the income statement, you will need to compute cost of goods manufactured (direct materials + direct labor + manufacturing overhead) and finished goods inventory (December 31, 2009).
Click here for the solution: Glendo Industries' balance sheet at December 31, 2008, is presented below (ACC 560 Week 6)
(ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
ACC 560 Week 6 Assignment
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
E9-3 Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008). The practice is divided into three departments: auditing, tax, and consulting. Billable hours for each department, by quarter, are provided below.
Department Quarter 1 Quarter 2 Quarter 3 Quarter 4
Auditing 2,200 1,600 2,000 2,400
Tax 3,000 2,400 2,000 2,500
Consulting 1,500 1,500 1,500 1,500
Average hourly billing rates are: auditing $80, tax $90, and consulting $100.
Instructions
Prepare the service revenue (sales) budget for 2008 by listing the departments and showing for each quarter and the year in total, billable hours, billable rate, and total revenue.
Click here for the solution: (ACC 560 Week 6) Roche and Young, CPAs, are preparing their service revenue (sales) budget for the coming year (2008)
Thursday, September 24, 2015
(ACC 560 Week 10 Assignment) Nordstrom, Inc. operates department stores in numerous states
ACC 560 Week 10 Assignment
E14-5 Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2005, are as follows.
NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year
Cash and cash equivalents $ 361 $ 340
Receivables (less allowance of 19 and 20) 646 667
Merchandise inventory 917 902
Prepaid expenses 53 46
Other current assets 595 570
Total current assets $2,572 $2,525
Total current liabilities $1,341 $1,123
For the year, net sales were $7,131, and cost of goods sold was $4,559 (in millions).
Instructions
(a) Compute the four liquidity ratios at the end of the year.
(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores.
Click here for the solution: (ACC 560 Week 10 Assignment) Nordstrom, Inc. operates department stores in numerous states
E14-5 Nordstrom, Inc. operates department stores in numerous states. Selected financial statement data for the year ending January 29, 2005, are as follows.
NORDSTROM, INC.
Balance Sheet (partial)
(in millions) End-of-Year Beginning-of-Year
Cash and cash equivalents $ 361 $ 340
Receivables (less allowance of 19 and 20) 646 667
Merchandise inventory 917 902
Prepaid expenses 53 46
Other current assets 595 570
Total current assets $2,572 $2,525
Total current liabilities $1,341 $1,123
For the year, net sales were $7,131, and cost of goods sold was $4,559 (in millions).
Instructions
(a) Compute the four liquidity ratios at the end of the year.
(b) Using the data in the chapter, compare Nordstrom’s liquidity with (1) that of J.C. Penney Company, and (2) the industry averages for department stores.
Click here for the solution: (ACC 560 Week 10 Assignment) Nordstrom, Inc. operates department stores in numerous states
Sunday, September 20, 2015
For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data (ACC 560 Week 10 Assignment)
ACC 560 Week 10 Assignment
E14-12 For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data.
Income before income taxes $540,000
Income tax expense (30% $390,000) 117,000
Income before extraordinary items 423,000
Extraordinary loss from flood 150,000
Net income $273,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
a) Prepare a correct income statement, beginning with income before income taxes.
b) Explain in memo form why Molini's reported income statement data are incorrect
Click here for the solution: For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data (ACC 560 Week 10 Assignment)
E14-12 For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data.
Income before income taxes $540,000
Income tax expense (30% $390,000) 117,000
Income before extraordinary items 423,000
Extraordinary loss from flood 150,000
Net income $273,000
The flood loss is considered an extraordinary item. The income tax rate is 30% on all items.
Instructions
a) Prepare a correct income statement, beginning with income before income taxes.
b) Explain in memo form why Molini's reported income statement data are incorrect
Click here for the solution: For its fiscal year ending October 31, 2008, Molini Corporation reports the following partial data (ACC 560 Week 10 Assignment)
Subscribe to:
Posts (Atom)