Excel in Accounting with Winter Semester Support
1. Describe the features of a CVP income statement that make
Describe the features of a CVP income statement that make it more useful for management decision making than the traditional income statement that is prepared for external users.
2. Joint-cost allocation, sales value, physical measure, NRV methods. Instant Foods produces two types...
Joint-cost allocation, sales value, physical measure, NRV methods. Instant Foods produces two types of microwavable products—beef-flavored ramen and shrimp-flavored ramen. The two products share common inputs such as noodle and spices. The production of ramen results in a waste product referred to as stock, which Instant dumps at negligible costs in a local drainage area. In June 2012, the following data were reported for the production and sales of beef-flavored and shrimp-flavored ramen:
A | B | C | |
1 | Joint Costs | ||
2 | Joint costs (costs of noodles, spices, and other inputs and processing to splitoff point) | $240,000 | |
3 | |||
4 | Beef Ramen | Shrimp | |
5 | Beginning inventory (tons) | 0 | 0 |
6 | Production (tons) | 10,000 | 20,000 |
7 | Sales (tons) | 10,000 | 20,000 |
8 | Selling price per ton | $ 10 | $ 15 |
Due to the popularity of its microwavable products, Instant decides to add a new line of products that targets dieters. These new products are produced by adding a special ingredient to dilute the original ramen and are to be sold under the names Special B and Special S, respectively. The following is the monthly data for all the products:
A | B | C | D | E | |
11 | Joint Costs | Special B | Special S | ||
12 | Joint costs (costs of noodles, spices, and other inputs and processing to split off point) | $240,000 | |||
13 | Separable costs of processing 10,000 tons of Beef Ramen into 12,000 tons of Special B | $48,000 | |||
14 | Separable cost of processing 20,000 tons of Shrimp Ramen into 24,000 tons of Special S | $168,000 | |||
15 | |||||
16 | Beef | Shrimp | Special B | Special S | |
17 | Beginning inventory (tons) | 0 | 0 | 12,000 | 24,000 |
18 | Production (tons) | 10,000 | 20,000 | 0 | 0 |
19 | Transfer for further processing (tons) | 10,000 | 20,000 | ||
20 | Sales (tons) | 12,000 | 24,000 | ||
21 | Selling price per ton | $ 10 | $ 15 | $ 18 | $ 25 |
1. Calculate Instant’s gross-margin percentage for Special B and Special S when joint costs are allocated using the following:
a. Sales value at split off method
b. Physical-measure method
c. Net realizable value method
2. Recently, Instant discovered that the stock it is dumping can be sold to cattle ranchers at $5 per ton. In a typical month with the production levels shown, 4,000 tons of stock are produced and can be sold by incurring marketing costs of $10,800. Sherrie Dong, a management accountant, points out that treating the stock as a joint product and using the sales value at split off method, the stock product would lose about $2,228 each month, so it should not be sold. How did Dong arrive at that final number, and what do you think of her analysis? Should Instant sell the stock?
Cutterski Corporation manufactures a propeller. Shown below is Cutterski’s cost structure:
| Variable | Total fixed |
| cost per | cost for the |
| propeller | year |
Manufacturing cost | $114 | $810,000 |
Selling and administrative | $20 | $243,000 |
In its first year of operations, Cutterski produced 60,000 propellers but only sold 54,000.
What is the total cost that would be assigned to Cutterski"s finished goods inventory at the end of the first year of operations under the variable costing method?
A) $765,000
B) $684,000
C) $804,000
D) $912,000
4. Jesse Company adjusts its accounts monthly and closes its accounts on December 31. On October 31, 20
Jesse Company adjusts its accounts monthly and closes its accounts on December 31. On October
31, 2015, Jesse Company signed a note payable and borrowed $150,000 from a bank for a period
of six months at an annual interest rate of 6 percent.
a. | How much is the total interest expense over the life of the note? How much is the monthly interest expense? (Assume equal amounts of interest expense each month.) |
b. | In the companyAc€?cs annual balance sheet at December 31, 2015, what is the amount of the liability to the bank? |
c. & d. | Prepare the journal entry to record issuance of the note payable on October 31, 2015 and the adjusting entry to accrue interest on the note at December 31, 2015. Record entry to obtain from bank six-month loan with interest at 6% a year. Record entry to accrue interest expense for December on note payable. |
5. The following information relates to Metlock, Inc. for the year 2017. After analyzing the data, ...
Please answer the folowing question correctly, I will rate thanks! The following information relates to Metlock, Inc. for the year 2017. After analyzing the data, compute net income. Prepare a comprehensive income statement for the year ending December 31, 2017.
6. A car dealer acquires a used car for $20,000, terms FOB shipping point. Additional costs in obtai...
A car dealer acquires a used car for $20,000, terms FOB shipping point. Additional costs in obtaining and offering the car for sale include $120 for transportation-in, $780 for import duties, $160 for insurance during shipment, $150 for advertising, and $1, 700 for sales staff salaries. For computing inventory, what cost is assigned to the used car?
Determine whether or not each of the following activities is a data - mining task. Discuss your answer.
(a) Dividing the customers of a company according to their age and sex.
(b) Classifying the customers of a company according to the level of their debt.
c) Analyzing the total sales of a company in the next month based on current – month sales.
(d) Classifying a student database based on a department and sorting based on student dentification numbers.
(e) Determining the influence of the number of new University of Louisville students on the stock market value.
(f) Estimating the future stock price of a company using historical records.
(g) Monitoring the heart rate of a patient with abnormalities.
(h) Monitoring seismic waves for earthquake activities.
(i) Extracting frequencies of a sound wave.
(j) Predicting the outcome of tossing a pair of dice.
8. 78.Quirk Company purchased office supplies costing $4,000 and debited Office Supplies for the full..
78.Quirk Company purchased office supplies costing $4,000 and debited Office Supplies for the full amount. At the end of the accounting period, a physical count of office supplies revealed $1,600 still on hand. The appropriate adjusting journal entry to be made at the end of the period would be
a.Debit Office Supplies Expense, $1,600; Credit Office Supplies, $1,600.
b.Debit Office Supplies, $2,400; Credit Office Supplies Expense, $2,400.
c.Debit Office Supplies Expense, $2,400; Credit Office Supplies, $2,400.
d.Debit Office Supplies, $1,600; Credit Office Supplies Expense, $1,600.
79.If an adjustment is needed for unearned revenues, the
a.liability and related revenue are overstated before adjustment.
b.liability and related revenue are understated before adjustment.
c.liability is overstated and the related revenue is understated before adjustment.
d.liability is understated and the related revenue is overstated before adjustment.
80.If an adjustment is needed for prepaid expenses, the
a.asset and related expense are overstated before adjustment.
b.asset and related expense are understated before adjustment.
c.asset is understated and the related expense is overstated before adjustment.
d.asset is overstated and the related expense is understated before adjustment.
81.Depreciation expense for a period is computed by taking the
a.original cost of an asset – accumulated depreciation.
b.depreciable cost ÷ depreciation rate.
c.cost of the asset ÷ useful life.
d.market value of the asset ÷ useful life.
82.Accumulated Depreciation is
a.an expense account.
b.an owner's equity account.
c.a liability account.
d.a contra asset account.
83.Hardy Company purchased a computer for $2,400 on December 1. It is estimated that annual depreciation on the computer will be $480. If financial statements are to be prepared on December 31, the company should make the following adjusting entry:
a.Debit Depreciation Expense, $480; Credit Accumulated Depreciation, $480.
b.Debit Depreciation Expense, $40; Credit Accumulated Depreciation, $40.
c.Debit Depreciation Expense, $1,920; Credit Accumulated Depreciation, $1,920.
d.Debit Office Equipment, $2,400; Credit Accumulated Depreciation, $2,400.
84.Meyer Realty Company received a check for $21,000 on July 1 which represents a 6 month advance payment of rent on a building it rents to a client. Unearned Rent was credited for the full $21,000. Financial statements will be prepared on July 31. Meyer Realty should make the following adjusting entry on July 31:
a.Debit Unearned Rent, $3,500; Credit Rental Revenue, $3,500.
b.Debit Rental Revenue, $3,500; Credit Unearned Rent, $3,500.
c.Debit Unearned Rent, $21,000; Credit Rental Revenue, $21,000.
d.Debit Cash, $21,000; Credit Rental Revenue, $21,000.
85.As prepaid expenses expire with the passage of time, the correct adjusting entry will be a
a.debit to an asset account and a credit to an expense account.
b.debit to an expense account and a credit to an asset account.
c.debit to an asset account and a credit to an asset account.
d.debit to an expense account and a credit to an expense account.
86.A company usually determines the amount of supplies used during a period by
a.adding the supplies on hand to the balance of the Supplies account.
b.summing the amount of supplies purchased during the period.
c.taking the difference between the supplies purchased and the supplies paid for during the period.
d.taking the difference between the balance of the Supplies account and the cost of supplies on hand.
87.If a company fails to make an adjusting entry to record supplies expense, then
a.owner's equity will be understated.
b.expense will be understated.
c.assets will be understated.
d.net income will be understated.
Calculate the earnings of workers A, B and C under the Straight Piece Rate System and Merrick’s
Differential Piece Rate System from the following particulars.
Normal rate per hour: Rs.5.40
Standard time per unit: 1 minute
Output per day is as follows.
Worker A – 390 units
Worker B – 450 units
Worker C – 600 units.
Working hours per day are 8
A company has its factories at two locations. Rowan plan is in use at location A and Halsey plan at location B. Standard time and basic rate of wages are same for a job which is similar and is carried out on similar machinery. Time allotted is 60 hours. Job at location A is completed in 36 hours while at B, it has taken 48 hours. Conversion costs at respective places are Rs.1224 and Rs.1500. Overheads account for Rs.20 per hour.
Required:
I] To find out the normal wage rate and,
II] To compare the respective conversion cost.
10. Atlas Inc Atlas Inc. is a toy bicycle manufacturing company producing a five9inch small version of..
Atlas Inc Atlas Inc. is a toy bicycle manufacturing company producing a five9inch small version of the bike that Lance Armstrong rode to win his first Tour de France. The assembly line at Atlas Inc. consists of seven work stations, each performing a single step. Stations and processing times are summarized here:
Step 1 (30 sec.): The plastic tube for the frame is cut to size.
Step 2 (20 sec.): The tube is put together.
Step 3 (35 sec.): The frame is glued together.
Step 4 (25 sec.): The frame is cleaned.
Step 5 (30 sec.): Paint is sprayed onto the frame.
Step 6 (45 sec.): Wheels are assembled.
Step 7 (40 sec.): All other parts are assembled to the frame.
Under the current process layout, workers are allocated to the stations as shown here:
Worker 1: Steps 1, 2
Worker 2: Steps 3, 4
Worker 3: Step 5
Worker 4: Step 6
Worker 5: Step 7
a.) What is the bottleneck in this process?
b.) What is the capacity of this assembly line, in finished units/hour?
c.) What is the utilization of Worker 4, ignoring the production of the first and last units?
d.) What is the average labor utilization of the workers, ignoring the production of the first and last units?
e.) Assume the workers are paid $15 per hour. What is the cost of direct labor for the bicycle?
11. David Segal started a business. During the first month (October
David Segal started a business. During the first month (October 20--), the following transactions occurred.
(a) Invested cash in the business, $15,000.
(b) Bought office supplies for $3,800: $1,800 in cash and $2,000 on account.
(c) Paid one-year insurance premium, $1,000.
(d) Earned revenues amounting to $2,700: $1,700 in cash and $1,000 on account.
(e) Paid cash on account to the company that supplied the office supplies in transaction (b), $1,800.
(f) Paid office rent for the month, $650.
(g) Withdrew cash for personal use, $150.
REQUIRED
Show the effect of each transaction on the individual accounts of the expanded accounting equation: Assets = Liabilities + Owner’s Equity (Capital – Drawing + Revenues – Expenses). After transaction (g), report the totals for each element. Demonstrate that the accounting equation has remained in balance.
12. Harstin Corporation has provided the following data: Sales $625,000 Gross margin $70,000 Net...
Harstin Corporation has provided the following data: Sales $625,000 Gross margin $70,000 Net operating income $50,000 Stockholders' equity $90,000 Average operating assets $250,000 Residual income $20,000 The turnover for the past year was:
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Harstin Corporation has provided the following data: Sales$625,000Gross margin$70,000Net operating income$50,000Stockholders' equity$90,000Average operating assets$250,000Residual income$20,000The turnover for the past year was: A) 2.5B) 6.94C) 2.98D)
37) How often should managerial accounting reports be prepared?
A) Annually
B) Quarterly
C) Monthly
D) As often as necessary
38) Which of the following statements is true regarding managerial accounting information?
A) It is audited by CPAs.
B) It emphasizes relevance.
C) It is prepared annually and quarterly.
D) It must be prepared in conformity with generally accepted accounting principles (GAAP).
39) The focus of management accounting is on
A) tax preparation.
B) external reporting.
C) internal reporting.
D) auditing.
40) Which of the following people is most likely to only use financial accounting information?
A) Vice president of plant operations
B) Product manager
C) Plant manager
D) Bank loan officer
41) Managerial accounting would use which of the following types of information?
A) Forecasts of future earnings
B) Financial information
C) Nonfinancial information
D) All of the above
42) Which of the following persons or groups would be least likely to receive detailed managerial accounting reports?
A) CEO
B) Plant managers
C) Current shareholders
D) Sales territory managers
43) ________ is designed to meet the needs of internal decision makers.
A) Tax accounting
B) Managerial accounting
C) Financial accounting
D) Audit accounting
44) The primary goal of managerial accounting is to provide information to
A) internal decision-makers.
B) shareholders.
C) creditors.
D) both shareholders and creditors.
45) The primary goal of financial accounting is to provide information for
A) governmental regulators.
B) creditors.
C) potential investors.
D) all of the above.
46) Which of following statements is true?
A) Managerial accounting focuses on historical transactions.
B) Financial accounting focuses on future data.
C) Management accounting focuses on relevant data.
D