Improve Your Grades with Professional Accounting Support

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Improve Your Grades with Professional Accounting Support

1. A. Dock Corporation makes two products from a common input. Joint processing costs up to the spli...

a. Dock Corporation makes two products from a common input. Joint processing costs up to the split-off point total $33,600 a year. The company allocates these costs to the joint products on the basis of their total sales values at the split-off point. Each product may be sold at the split-off point or processed further. Data concerning these products appear below:

What is the financial advantage (disadvantage) for the company of processing Product Y beyond the split-off point?

b.

Mae Refiners, Inc., processes sugar cane that it purchases from farmers. Sugar cane is processed in batches. A batch of sugar cane costs $60 to buy from farmers and $13 to crush in the company's plant. Two intermediate products, cane fiber and cane juice, emerge from the crushing process. The cane fiber can be sold as is for $29 or processed further for $13 to make the end product industrial fiber that is sold for $61. The cane juice can be sold as is for $40 or processed further for $28 to make the end product molasses that is sold for $67.

What is the financial advantage (disadvantage) for the company from processing one batch of sugar cane into the end products industrial fiber and molasses rather than not processing that batch at all?

2. Bennie Razor Company has decided to sell one of its old manufacturing machines on June 30, 2012

Bennie Razor Company has decided to sell one of its old manufacturing machines on June 30, 2012. The machine was purchased for $80,000 on January 1, 2008, and was depreciated on a straight-line basis for 10 years assuming no salvage value. If the machine was sold for $26,000, what was the amount of the gain or loss recorded at the time of the sale?

(a) $18,000 loss.

(b) $54,000 loss.

(c) $22,000 gain.

(d) $46,000 gain.

3. APCO Company manufactures various lines of bicycles. Becouse of the high volume of each line, the...

APCO Company manufactures various lines of bicycles. Becouse of the high volume of each line, the company employs a process costing system using the weighted-averege method. Blcycle parts are manufectured In the molding department and then are consolidated into a single bike unt in the molding department and transferred to the assembly department where they are assembied After assembly the bicycle is sent to the packing department Annual cost and production figures for the assembly department are presented in the schedules below Defectve bicycles are iienthed at the inspection point when the assembly labor process ts 701% complete all assembly matenals have been added at this point. The normai rejection rate for defective bicycles is 5% of defective bicycles and destroyed above the 5% quota are considered to be abnormal, All detectve bikes are removed from the production process Aasenbly Department Cost Data Transferred-in Total Coat o from Moiding Assembly Assembly Bike through Aasemblv 5106, 070 partmentHaterials Conversion Prior period coets s 86,200 Current period S7,260 s 12,610 98,760 239,510 1, 241,000 -Ti,327, 200 1 579,270 Total costs $106, 0205252, 120SL 685 Assembly Department Production Data Percentage Complete Assembiv Assembiy Bicycles Transferred-in Materials Conversion Beginning inventory Transferzed-in Erom moiding during rear Transterred out to packing during year Ending invencory 3,040 49.000 42,000 4,080 00% 100 100 12, 100 20 100 Compute the amount of the total production cost of $1,685.340 that will be associated with the following items: a. Normal spoiled units. b. Good units completed in the assembly department. c. Abnormal spoiled units. d. Ending Work-in-Process Inyentory in the assembly department. (Round your intermediate c lations to 2 decimal places and final answers to the nearest whole dollar amount.) Normal spoilage Cost of eompleted goods Abnormal spoilage Ending work-in-process inventory

4. ABC, activity area cost-driver rates, product cross-subsidization. Idaho Potatoes...

ABC, activity area cost-driver rates, product cross-subsidization. Idaho Potatoes (IP) operates at capacity and processes potatoes into potato cuts at its highly automated Pocatello plant. It sells potatoes to the retail consumer market and to the institutional market, which includes hospitals, cafeterias, and university dormitories.

IP’s simple costing system, which does not distinguish between potato cuts processed for retail and institutional markets, has a single direct-cost category (direct materials, i.e. raw potatoes) and a single indirect-cost pool (production support). Support costs, which include packaging materials, are allocated on the basis of pounds of potato cuts processed. The company uses 1,200,000 pounds of raw potatoes to process 1,000,000 pounds of potato cuts. At the end of 2011, IP unsuccessfully bid for a large institutional contract. Its bid was reported to be 30% above the winning bid. This feedback came as a shock because IP included only a minimum profit margin on its bid and the Pocatello plant was acknowledged as the most efficient in the industry.

As a result of its review process of the lost contract bid, IP decided to explore ways to refine its costing system. The company determined that 90% of the direct materials (raw potatoes) related to the retail market and 10% to the institutional market. In addition, the company identified that packaging materials could be directly traced to individual jobs ($180,000 for retail and $8,000 for institutional). Also, the company used ABC to identify three main activity areas that generated support costs: cleaning, cutting, and packaging.

Cleaning Activity Area—The cost-allocation base is pounds of raw potatoes cleaned.

Cutting Activity Area—The production line produces (a) 250 pounds of retail potato cuts per cuttinghour and (b) 400 pounds of institutional potato cuts per cutting-hour. The cost-allocation base is cuttinghours on the production line.

Packaging Activity Area—The packaging line packages (a) 25 pounds of retail potato cuts per packaginghour and (b) 100 pounds of institutional potato cuts per packaging-hour. The cost-allocation base is packaging-hours on the production line.

The following table summarizes the actual costs for 2011 before and after the preceding cost analysis:

Required

1. Using the simple costing system, what is the cost per pound of potato cuts produced by IP?

2. Calculate the cost rate per unit of the cost driver in the (a) cleaning, (b) cutting, and (c) packaging activity areas.

3. Suppose IP uses information from its activity cost rates to calculate costs incurred on retail potato cuts and institutional potato cuts. Using the ABC system, what is the cost per pound of (a) retail potato cuts and (b) institutional potato cuts?

4. Comment on the cost differences between the two costing systems in requirements 1 and 3. How might IP use the information in requirement 3 to make betterdecisions?

5. Shown below is a trial balance for Cornell Products, Inc., on December 31, after adjusting ...

Refer to the information above. Net income for the period equals:

a.$22,500.

6. Tree Seedlings has the following current-year purchases and sales for its only product. Date Activit

Tree Seedlings has the following current-year purchases and sales for its only product. Date Activities Units Acquired at Cost Units Sold at Retail Jan. 1 Beginning inventory 230 units @ $2 = $ 460 Jan. 3 Sales 138 units @ $8 Feb. 14 Purchase 372 units @ $3 = $ 1,116 Feb. 15 Sales 250 units @ $8 June 30 Purchase 280 units @ $4 = $ 1,120 Nov. 6 Sales 220 units @ $8 Nov. 19 Purchase 96 units @ $5 = $ 480 Totals 978 units $ 3,176 608 units Required: The company uses a perpetual inventory system.

a. Determine the costs assigned to ending inventory and to cost of goods sold using FIFO.

b. Determine the costs assigned to ending inventory and to cost of goods sold using LIFO.

c. Compute the gross margin for each method.

7. Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2017. The...

Gordon Chemicals Company acquires a delivery truck at a cost of $31,000 on January 1, 2017. The truck is expected to have a salvage value of $4,000 at the end of its 4-year useful life. Assuming the declining-balance depreciation rate is double the straight-line rate, compute annual depreciation for the first and second years under the declining-balance method.

8. Pillard Dry cleaners has capacity to clean up to 7, 500 garments per month. Requirements Complet...

Show transcribed image text Pillard Dry cleaners has capacity to clean up to 7, 500 garments per month. Requirements Complete the schedule below for the three volumes shown. Why does the average cost per garment change? Suppose the owner, Doug Pillard, erroneously uses the average cost per unit at full capacity to predict total costs at a volume of 4, 500 garments. Would he overestimate or underestimate his total costs? By how much? Requirement 1. Complete the following schedule for the three volumes shown. (Round all unit costs to the nearest cent and all total costs to the nearest whole dollar.)

9. The following differences between financial and taxable income were reported by Dider Corporation...

2. The following differences between financial and taxable income were reported by Dider Corporation for the current year.



(a) Excess of tax depreciation over book depreciation $60,000

(b) Interest revenue on municipal bonds $9,000

(c) Excess of estimated warranty expense over actual expenditures $54,000

(d) Unearned rent received $12,000

(e) Amortization of goodwill $30,000

(f) Excess of income reported under percentage-of-completion accounting for financial reporting over competed-contract accounting used for tax reporting $45,000

(g) Interest on indebtedness incurred to purchase tax-exempt securities $3,000

(h) Unrealized losses on marketable securities recognized for financial reporting $18,000



Assume that Dider corp. had pretax accounting income [before considering items (a) through (h)] of $900,000 for the current year. Compute the taxable income for the current year. Write your figures in the form attached and show all your work

10. Differentiate between absolute and percentage changes. Which is

Differentiate between absolute and percentage changes. Which is generally a better measure of change? Why?

11. Presented below are selected ledger accounts of Woods Corporatio

Presented below are selected ledger accounts of Woods Corporation at December 31, 2012.



Woods’s effective tax rate on all items is 34%. A physical inventory indicates that the ending inventory is $686,000.

Instructions

Prepare a condensed 2012 income statement for WoodsCorporation.

12. Sapling Learning macmillan learning Suppose that the legal reserve ratio set by the Fed is 10% an...

Sapling Learning macmillan learning Suppose that the legal reserve ratio set by the Fed is 10% and that the Fair Bank in Fairdealing, Missouri, initially has checkable deposit equal to $290 and a reserve account of $70. A customer of Fair Bank deposits $100 into her checking account. Fair Bank loans 80% of the deposit and places the rest in its reserves at the St. Louis Fed. For simplicity, assume the borrower received the loan as cash. How much does Fair Bank have in excess reserves after the deposit and loan? Number Place the figures below to represent changes in the accounts of Fair Bank and the Federal Reserve of St. Louis' balance sheets resulting from the deposit and loan +$100 $200 -$100 $200 80 10 $80 -$10 Balance Sheet: Saint Louis Fed Balance Sheet: Fair Bank Cash: Cash: Liabilities: Liabilities: Reserves: Property Net equity: Loans: Loans: Property

13. Which of the following statements is TRUE about CVS Brand products? W CVS Brand products help to...

Which of the following statements is TRUE about CVS Brand products? W CVS Brand products help to build customer loyalty and are backed by a 100% Satisfaction Guarantee O CVS Brand products help drive sales because they cost more than the national brand There are more CVS Brand products on the shelves than national brands in CVS Pharmacy Stores There are several retailers that sell CVS Brand products because of their high quality 10)CVS Health's purpose is to help people on their path to Obwer prices better health ncreased service more convenience 11)How does CVS define the value. "Innovation? LEARNet - Firefox: CVS P... LEARNet Search or find training "Where Training Clicks My Home Find Training 10)CVS Health's purpose is to help people on their path to lower prices better health increased service more convenience 11) How does CVS define the value, "Innovation"? Share and partner with people to explore and create things Demonstrate operness, curiosity, and creativity in the relentless pursuit of deliveriniscelence Treat people with respect and compassion Share and partner with people to explore and create things that we could not do on our own. 12)What is TRUE about rainchecks? They are offered to a customer as a last resort They may be issued for all regularly carried tems They expire within 60 days of being issued They are only redeemable at the CVS Pharmacy indicated 13 What tool provides feedback on the customer's patient's experience? my Customer Connection Colleague Engagement Survey LEARNet - Firefox: CVS P... Treat people with respect and compassion. Share and partner with people to explore and create things that we could not do on our own. 12)What is TRUE about rainchecks? They are offered to a customer as a last resort They may be issued for al regularly carried items They expire within 60 days of being issued They are only redeemable at the CVS Pharmacy indicated 13)What tool provides feedback on the customer's patient's experience? myCustomer Connection Coleague Engagement Survey New Hire Survey O myCustomer Experience Scorecard 14) What does G.O.T. stand for? Go Over, There Greet Otter, Thank Go, Otter. Train Greet Observe, Tan LEARNet – F

14. From the following data calculate the cost per mile of a vehicle:

From the following data calculate the cost per mile of a vehicle:

Ignore interest on capital.

15. 22. The balance sheet of Ms. Prompt Truck Rental on December 31st is as follows: After December...

22. The balance sheet of Ms. Prompt Truck Rental on December 31st is as follows:







After December 31st, M/s Prompt Truck Rental had the following transactions for a short period:



a. Bought office equipment at a cost of $2,700. Paid in cash.

b. Collected $4,000 of accounts receivable.

c. Paid $3,200 of accounts payable.

d. Borrowed $10,000 from a bank. Signed a note payable for that amount.

e. Purchased two trucks for $30,500. Paid $15,000 cash and signed a note payable for the balance.

f. Sold additional stock to investors for $75,000.



Instructions:

1. List the December 31st balances of assets, liabilities and owner's equity in tabular form as shown above.

2. Record the effects of each of the six transactions in the preceding tabular order.

3. Show the total for all columns after each transaction.

16. You have just taken out a $20,000 car loan with a 6% APR, compounded monthly. The loan is for...

You have just taken out a $20,000 car loan with a 6% APR, compounded monthly. The loan is for five years. When you make your first payment in one month, how much of the payment will go toward the principal of the loan and how much will go toward interest?

17. A study was done on the timeliness of flights (on-time vs. delayed) of two major airlines:

A study was done on the timeliness of flights (on-time vs. delayed) of two major airlines: StatsAir and AirMedian. Data were collected over a period of time from five major cities and it was found that StatsAir does better overall (i.e., has a smaller percentage of delayed flights). However, in each of the five cities separately, AirMedian does better.

Which of the following is correct?

1. (a) This situation is mathematically impossible.


2. (b) This is an example of Simpson''s Paradox.


3. (c) ""City"" is a lurking variable in this example.


4. (d) This is an example of a negative association between variables.


5. (e) Both (b) and (c) are correct.

18. During its first year of operations, the McCormick Company incurred the following manufacturing c...

During its first year of operations, the McCormick Company incurred the following manufacturing costs: Direct materials, $5 per unit, Direct labor, $3 per unit, Variable overhead, $4 per unit, and Fixed overhead, $189,000. The company produced 21,000 units, and sold 15,500 units, leaving 5,500 units in inventory at year-end. What is the value of ending inventory under absorption costing? O $66,000 $115,500 O $49,500 $189,000