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
Showing posts with label directly. Show all posts
Showing posts with label directly. Show all posts
Sunday, October 4, 2015
Monday, August 3, 2015
Match the statement with the term most directly associated with it
DO IT! 9-4 Match the statement with the term most directly associated with it.
Goodwill Amortization
Intangible assets Franchise
Research and development costs
1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
2. The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
5. The excess of the cost of a company over the fair market value of the net assets acquired.
Click here for the solution: Match the statement with the term most directly associated with it
Goodwill Amortization
Intangible assets Franchise
Research and development costs
1. Rights, privileges, and competitive advantages that result from the ownership of long-lived assets that do not possess physical substance.
2. The allocation of the cost of an intangible asset to expense in a rational and systematic manner.
3. A right to sell certain products or services, or use certain trademarks or trade names within a designated geographic area.
4. Costs incurred by a company that often lead to patents or new products. These costs must be expensed as incurred.
5. The excess of the cost of a company over the fair market value of the net assets acquired.
Click here for the solution: Match the statement with the term most directly associated with it
Saturday, July 11, 2015
Watson Technical Institute (WTI), a school owned by Tom Watson, provides training to individuals who pay tuition directly to the school
Watson Technical Institute (WTI), a school owned by Tom Watson, provides training to individuals who pay tuition directly to the school. WTI also offers training to groups in off-site locations. Its unadjusted trial balance as of December 31, 2005, follows. WTI initially records prepaid expenses and unearned revenues in balance sheet accounts. Descriptions of items a through h that require adjusting entries on December 31, 2005, follow.
Additional Information Items
a. An analysis of the school’s insurance policies shows that $3,000 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,600 are available at year-end 2005.
c. Annual depreciation on the equipment is $12,000.
d. Annual depreciation on the professional library is $6,000.
e. On November 1, the school agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,200, and the client paid the first five months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2006.
f. On October 15, the school agreed to teach a four-month class (beginning immediately) for an individual for $3,000 tuition per month payable at the end of the class. The services are being provided as agreed, and no payment has yet been received. g. The school’s two employees are paid weekly. As of the end of the year, two days’ wages have accrued at the rate of $100 per day for each employee.
h. The balance in the Prepaid Rent account represents rent for December.
Required
1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance.
2. Prepare the necessary adjusting journal entries for items a through h and post them to the T-accounts. Assume that adjusting entries are made only at year-end.
3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance.
4. Prepare Watson Technical Institute’s income statement and statement of owner’s equity for the year 2005 and prepare its balance sheet as of December 31, 2005.
Check (2e) Cr.Training Fees Earned, $4,400; (2f ) Cr.Tuition Fees Earned, $7,500; (3) Adj.Trial balance totals, $301,500; (4) Net income, $38,500; Ending T.Watson, Capital $62,100
Click here for the solution: Watson Technical Institute (WTI), a school owned by Tom Watson, provides training to individuals who pay tuition directly to the school
Additional Information Items
a. An analysis of the school’s insurance policies shows that $3,000 of coverage has expired.
b. An inventory count shows that teaching supplies costing $2,600 are available at year-end 2005.
c. Annual depreciation on the equipment is $12,000.
d. Annual depreciation on the professional library is $6,000.
e. On November 1, the school agreed to do a special six-month course (starting immediately) for a client. The contract calls for a monthly fee of $2,200, and the client paid the first five months’ fees in advance. When the cash was received, the Unearned Training Fees account was credited. The fee for the sixth month will be recorded when it is collected in 2006.
f. On October 15, the school agreed to teach a four-month class (beginning immediately) for an individual for $3,000 tuition per month payable at the end of the class. The services are being provided as agreed, and no payment has yet been received. g. The school’s two employees are paid weekly. As of the end of the year, two days’ wages have accrued at the rate of $100 per day for each employee.
h. The balance in the Prepaid Rent account represents rent for December.
Required
1. Prepare T-accounts (representing the ledger) with balances from the unadjusted trial balance.
2. Prepare the necessary adjusting journal entries for items a through h and post them to the T-accounts. Assume that adjusting entries are made only at year-end.
3. Update balances in the T-accounts for the adjusting entries and prepare an adjusted trial balance.
4. Prepare Watson Technical Institute’s income statement and statement of owner’s equity for the year 2005 and prepare its balance sheet as of December 31, 2005.
Check (2e) Cr.Training Fees Earned, $4,400; (2f ) Cr.Tuition Fees Earned, $7,500; (3) Adj.Trial balance totals, $301,500; (4) Net income, $38,500; Ending T.Watson, Capital $62,100
Click here for the solution: Watson Technical Institute (WTI), a school owned by Tom Watson, provides training to individuals who pay tuition directly to the school
Subscribe to:
Posts (Atom)