Answer:
Job-Order Costing versus Process Costing
Types of businesses using job order costing:
a. Hospital services
b. Custom cabinet making
e. Airplane manufacturing (e.g., 767s)
h. Custom furniture making
i. Dental services
l. Auto repair
m. Architectural services
n. Landscape design services
Types of businesses using processing costing:
c. Toy manufacturing
d. Soft-drink bottling
f. Personal computer assembly
g. Furniture making (e.g., computer desks sold at discount stores)
j. Paper manufacturing
k. Nut and bolt manufacturing
o. Flashlight manufacturing
Explanation:
In job order costing, the manufacturer tracks its prime costs to individual products or jobs. This means that the costs of each job can be computed separately because costs are traced to each job. Under process costing, the prime costs are tracked to the department, process or batch, and not to individual products or jobs.
Employees earn vacation pay at a rate of one day per month. The company estimated and must expense $1,500 of accrued vacation benefits for the year. Which of the following is the necessary year-end adjusting entry to record accrued vacation benefits?
a) Debit Vacation Benefits Expense $1,500; credit Prepaid Vacation $1,500.
b) Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
c) Debit Payroll Tax Expense $1,500: credit Payroll Taxes Payable $1.500.
d) Debit Prepaid Vacation Benefits $1,500; credit Vacation Benefits Payable $1,500
Answer:
b) Debit Vacation Benefits Expense $1,500; credit Vacation Benefits Payable $1,500.
Explanation:
The journal entry to record the accrued vacation benefit is given below:
Vacation Benefits Expense $1,500
To Vacation Benefits Payable $1,500
(being the accrued vacation benefit is recorded)
Here vacation benefit expense is debited as it increased the assets and credited the vacation benefit payable as it also increased the liabilities
Currently, the unit selling price of a product is $350, the unit variable cost is $290, and the total fixed costs are $780,000. A proposal is being evaluated to increase the unit selling price to $390.
Required:
a. Compute the current break-even sales (units).
b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $390, and all costs remain constant.
Solution :
a). [tex]\text{The contribution margin per unit = }[/tex][tex]\text{selling price per unit - variable cost per unit}[/tex]
= $ 350 - $ 290
= $60
The current break even sales = [tex]$\frac{\text{fixed cost}}{\text{contribution margin per unit}}$[/tex]
[tex]$=\frac{780,000}{60}$[/tex]
= 13,000 units
Therefore, the current break-even sales (units) = 13,000 units
b). The Contribution Margin Ratio = Selling Price Per Unit - Variable Cost Per Unit
= $390 - $290
= $ 100
[tex]$\text{Break even sales}=\frac{\text{fixed cost}}{\text{contribution margin per unit}}$[/tex]
[tex]$=\frac{780,000}{100}$[/tex]
= 7,800 units.
So, the answer is 7800 units.
Warby Parker, an online retailer for prescription eyewear, offers a free, try-on at home program for its customers. Customers browse frames on Warby Parker’s website and select five pairs they would like to try on before buying—or not. Warby Parker handles all the shipping costs and provides all the return packaging. This relates to the________ of its products. Multiple Choice
a. relative advantage
b. complexity
c. observability
d. compatibility
e. trialability
Answer:
e. trialability
Explanation:
Trialability is the ability to give an idea, process, product, or system a trial before making a final decision.
It indicates the degree to which a product or innovation can be experimented by the customer before they finally buy.
Warby Parker has leveraged on this strategy by allowing customers browse frames on Warby Parker’s website and select five pairs they would like to try on before buying—or not. Warby Parker handles all the shipping costs and provides all the return packaging
Job candidates are leaving an office every 50 minutes. Each candidate goes through three activities during the office visit: verification, written test, and interview. Verification takes 1 minute, the written test takes 40 minutes, and the interview takes 10 minutes. Assume there is only one resource dedicated to each activity. What is the utilization of the bottleneck resource?
Answer:
80%
Explanation:
Calculation to determine the utilization of the bottleneck resource
First step is to calculate the Flow rate
Flow rate = 1/50
Flow rate = 0.02 customer per minute.
Second step is to calculate the Bottleneck capacity
Bottleneck capacity = Min(1, 1/40, 1/10)
Bottleneck capacity= 0.025 customer per minute.
Now let determine the Utilization of the bottleneck resource using this formula
Utilization of the bottleneck resource = Flow rate/Capacity
Let plug in the formula
Utilization of the bottleneck resource= 0.02/0.025
Utilization of the bottleneck resource= 80%.
Therefore the utilization of the bottleneck resource is 80%
Ace Products has a bond issue outstanding with 15 years remaining to maturity, a coupon rate of 9% with semiannual payments of $45, and a par value of $1,000. The price of each bond in the issue is $1,180.00. The bond issue is callable in 5 years at a call price of $1,090.
Required:
a. What is the bond's nominal annual yield to maturity (YTM)?
b. What is the bond's nominal annual yield to call (YTC)?
c. Assuming interest rates remain at current levels, will the bond issue be called?
Answer:
a. Nper = 30
PMT = 45
FV = `1000
Price Pv = -1180
Rate (YTM) = ?
Using the MsExcel Rate function to derive YTM
Nominal annual yield to maturity = Rate(Nper, Pmt, -Pv, Fv) * 2
Nominal annual yield to maturity = Rate(30, 45, -1180, 1000) * 2
Nominal annual yield to maturity = 7.04%
b. Nper = 10
PMT = 45
Call Price = 1090
Price Pv = -1180
Rate (YTC) = ?
Using the MsExcel Rate function to derive YTM
Nominal annual yield to call = Rate(Nper, Pmt, -Pv, Fv) * 2
Nominal annual yield to call = Rate(10, 45, -1180, 1090) * 2
Nominal annual yield to call = 6.31%
C. Yes, the bond issue should call because the YTC is less than the YTM.
Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver
Activity Cost Pool Espresso Coffee Cups Travel Coffee Mugs
Selling price $20 $25
Direct materials $6 $8
Direct labor $2 $5
Units produced 10,000 units 4,000 units
Direct labor hours 10,000 hours 6,000 hours
Estimated total overhead costs $80,000
Item Espresso coffee cups Travel coffee mugs
Pre-determined overhead rate
Total manufacturing overhead allocated
Manufacturing cost per unit
Gross profit unit
Answer:
Results are below.
Explanation:
To calculate the predetermined manufacturing overhead rate we need to use the following formula:
Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Predetermined manufacturing overhead rate= 80,000 / (10,000 + 6,000)
Predetermined manufacturing overhead rate= $5 per direct labor hour
Now, we can allocate overhead:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Espresso coffee cups= 5*10,000= 50,000
Travel coffee mugs= 5*6,000= 30,000
In unitary bases:
Espresso coffee cups= 50,000/10,000= 5
Travel coffee mugs= 30,000/4,000= 7.5
Finally, the total unitary cost and the gross profit per unit:
Espresso coffee cups:
Total unitary cost= 6 + 2 + 5= $13
Gross profit= 20 - 13= $7
Travel coffee mugs:
Total unitary cost= 8 + 5 + 7.5= $20.5
Gross profit= 25 - 20.5= $4.5
Given the following information, determine the amount of cash on the balance sheet, assuming that the company has only three assets.
Liabilities equal $3,350
Owner's equity equals $28,000
Supplies equal $2,000
Land equals $23,500
Answer:
Cash balance = $5850
Explanation:
Below is the given values and calculations:
Liabilities = $3350
Equity = $28000
Supplies = 2000
Land = $23500
Cash on the balance sheet can be determined by subtracting the sum of supplies and land from the sum of liability and equity.
Cash balance = (28000 + 3350) - (2000 + 23500)
Cash balance = $5850
Botox Facial Care had earnings after taxes of $282,000 in 20X1 with 200,000 shares of stock outstanding. The stock price was $81.80. In 20X2, earnings after taxes increased to $418,000 with the same 200,000 shares outstanding. The stock price was $94.00.
Required:
a. Compute earnings per share and the P/E ratio for 20X1.
b. Compute earnings per share and the P/E ratio for 20X2.
c. Why did the P/E ratio change? (
Answer:The earnings per share and The P/E ratio for 20X1 is $1.41 and $58.01 respectively.
The earnings per share and The P/E ratio for 20X2 is $2.09 and $44.976 respectively.
Explanation:
a. Earning per shares = Earning after Taxes / total Shares outstanding
= $282,000/200,000
= $1.41
Therefore, The earnings per share for 20X1 is $1.41
P/E RATIO = Price Per shares/Earning per shares
= $81.80/$1.41
= $58.01
Therefore, The P/E ratio for 20X1 is $58.01
b. Earning per shares = Earning after Taxes / total Shares outstanding
= $418,000/200,000
= $2.09
Therefore, The earnings per share for 20X2 is $2.09
P/E RATIO = Price Per shares/Earning per shares
= $94.00/$2,09
= $44.976
Therefore, The P/E ratio for 20X2 is $44.976
c.The P/E ratio changed from $58.01 to $44.976 because of the change in earnings per share and the stock price per share.
Gabriele Enterprises has bonds on the market making annual payments, with nine years to maturity, a par value of $1,000, and selling for $978. At this price, the bonds yield 7.4 percent. What must the coupon rate be on the bonds
Answer:
7.06%
Explanation:
The computation of the coupon rate is given below:
Given that
FV is $1,000
PV is $978
NPER is 9
RATE is 7.4%
The formula is given below:
=PMT(RATE,NPER,-PV,FV,TYPE)
After applying the above formula, the PMT is $70.57
Now the coupon rate is
= $70.57 ÷ $1,000
= 7.06%
Express net income as a common-size percentage using the following data.
Sales $45,000
Cost of goods sold $29,340
Gross profit from sales $15,660
Operating expenses $10,800
Net income $4,860.
a. 100 percent
b. 31 percent
c. 12 percent
d. 10.8 percent
Answer:
i think the answers D 10.8 percent
1. Prepare a general ledger having T-accounts for Accounts Receivable, Sales, and Sales Returns and Allowances. Post these entries to both the general ledger and the accounts receivable ledger. General Ledger Accounts Receivable Sales End.Bal End.Bal Accounts Receivable Subsidiary Ledger Ski Shop Sales Returns and Allowances End.Bal Welcome Enterprises Zia Natara End.Bal End.Bal Vail Company recorded the following selected transactions during November Current Year Debit Credit 5,238 Date General Journal Nov. 5 Accounts Receivable-Ski Shop Sales 5,238 10 Accounts Receivable-Welcome Enterprises 2,780 Sales 2,780 13 Accounts Receivable-Zia Natara 1,630 Sales 1,630 21 Sales Returns and Allowances 421 Accounts Receivable-Zia Natara 421 30 Accounts Receivable-Ski Shop 5,796 Sales 5,796
2 . Prepare a schedule of accounts receivable VAIL COMPANY Schedule of Accounts Receivable November 30, Current Year Total
Answer:
Vail Company
1. T-accounts:
a. General Ledger
Accounts Receivable
Date Account Titles Debit Credit
Nov. 5 Sales 5,238
Nov. 10 Sales 2,780
Nov. 13 Sales 1,630
Nov. 21 Sales Returns and Allowances 421
Nov. 30 Sales 5,796
Nov. 30 Balance 15,0232
Sales
Date Account Titles Debit Credit
Nov. 5 Accounts Receivable-Ski Shop 5,238
Nov. 10 Accounts Receivable-
Welcome Enterprises 2,780
Nov. 13 Accounts Receivable-Zia Natara 1,630
Nov. 30 Accounts Receivable-Ski Shop 5,796
Nov. 30 Balances 15,444
Sales Returns and Allowances
Date Account Titles Debit Credit
Nov. 21 Accounts Receivable-Zia Natara 421
b. Accounts Receivable Ledger:
Ski Shop
Date Account Titles Debit Credit
Nov. 5 Sales 5,238
Welcome Enterprises
Date Account Titles Debit Credit
Nov. 10 Sales 2,780
Zia Natara
Date Account Titles Debit Credit
Nov. 13 Sales 1,630
Nov. 21 Sales Returns and Allowances 421
Ski Shop
Date Account Titles Debit Credit
Nov. 30 Sales 5,796
Explanation:
a) Data and Analysis:
Nov. 5 Accounts Receivable-Ski Shop 5,238
Sales 5,238
Nov. 10 Accounts Receivable-Welcome Enterprises 2,780
Sales 2,780
Nov. 13 Accounts Receivable-Zia Natara 1,630
Sales 1,630
Nov. 21 Sales Returns and Allowances 421
Accounts Receivable-Zia Natara 421
Nov. 30 Accounts Receivable-Ski Shop 5,796
Sales 5,796
Nakatomi Corporation produces 10,000 units of Product A at a cost of $20 per unit. A detailed breakdown of the cost is below. Per Unit Variable costs $ 12 Allocated manufacturing overhead costs 3 Allocated general administrative costs 5 $ 20 Outside supplier's offer $ 17 What are the total relevant cost of producing the units internally
Answer: $120,000
Explanation:
Fixed costs are not considered to be relevant costs because they will be incurred by the business regardless. Variable costs are therefore the only relevant costs and in this case the variable costs are:
= Number of units * variable costs per unit
= 10,000 units * 12
= $120,000
Beta Inc. can produce a unit of Zed for the following costs: Direct material $ 10 Direct labor 20 Overhead 50 Total costs per unit $ 80 An outside supplier offers to provide Beta with all the Zed units it needs at $58 per unit. If Beta buys from the supplier, it will still incur 40% of its overhead. Beta should:
Answer: Beta should buy from the outside supplier
Explanation:
If Beta produces the product itself, only avoidable costs would be accounted for:
= Direct labor + Direct material + Unavoidable overhead
= 10 + 20 + ( (1 - 40%) * 50)
= 10 + 20 + 30
= $60
If however, Beta buys the product, they will buy at $58 per unit which is less than the $60 they would make it for.
Beta should buy the product because they will be able to save $2 per unit.
Fortune Drilling Company acquires a mineral deposit at a cost of $5,900,000. It incurs additional costs of $600,000 to access the deposit, which is estimated to contain 2,000,000 tons and is expected to take 5 years to extract. What journal entry would be needed to record the expense for the first year assuming 418,000 tons were mined
Answer and Explanation:
the journal entry is given below:
Depletion Expense $1,358,500
To Accumulated Depletion $1,358,500.
(Being depletion expense is recorded)
Here the depletion expense is debited as it increased the expense and credited the accumulated depreciation as it decreased the assets
Working note
Depletion expense is
= ($5,900,000 + $600,000) ÷ $2,000,000 × 418,000
= $1,358,500
The ACogs-153 company has provided the following data for the month of May: Inventories: Beginning Ending Work in process $ 24,000 $ 19,000 Finished goods $ 53,000 $ 57,000 Additional information: Direct materials $ 64,000 Direct labor cost $ 94,000 Manufacturing overhead cost incurred $ 70,000 Manufacturing overhead cost applied to Work in Process $ 68,000 Any underapplied or overapplied manufacturing overhead is closed out to cost of goods sold. The company's adjusted cost of goods sold (that is, cost of goods sold adjusted for underapplied or overapplied overhead) for May is:
Answer:
$209,000
Explanation:
Schedule of Cost of goods manufactured
Particulars Amount
Direct materials $64,000
Direct labor cost $94,000
Manuf. overhead cost applied to WIP $68,000
Total manufacturing costs $226,000
Add: WIP Inventory, Beginning $24,000
Less: WIP Inventory, Ending $19,000
Cost of goods manufactured $231,000
Add: Beginning Finished goods $53,000
Less: Ending Finished goods $57,000
Unadjusted cost of goods sold $207,000
Add: Underapplied manuf. overhead $2,000 ($70,000-$68,000)
Adjusted cost of goods sold $209,000
Swifty Corporation is unsure of whether to sell its product assembled or unassembled. The unit cost of the unassembled product is $24 and Swifty would sell it for $56. The cost to assemble the product is estimated at $20 per unit and the company believes the market would support a price of $69 on the assembled unit. What decision should Swifty make
Answer:
See below
Explanation:
Assembled product
Cost = $24 + $20 = $44
Selling price = $69
Profit = $69 - $44 = $25
Unassembled product
Cost = $24
Selling price = $56
Profit = $56 - $24 = $32
Therefore, Swifty corporation should sell before assembly, the company will be better off by $7
You are in desperate need for cash to pay your water bill so you head to the check-cashing store down the street. They offer to lend you $200 now but you must leave a postdated check of $212 to be cashed in 7 days. What is the effective annual rate of this short-term loan?
Answer:
1969.6%
Explanation:
The computation of the effective annual rate is given below;
Given that
It is been charged $12 for $200 loan for 7 days
So for 7 days,
the nominal interest rate is is
= 12 ÷ 200 × 100
= 6%
Now
(1+r) = (1+0.06)^{52}
(1+r) = 20.696
r = 19.696
= 1969.6%
Growing, Inc. is a firm that is experiencing rapid growth. The firm yesterday paid a dividend of $7.70. You believe that dividends will grow at a rate of 25.0% per year for two years, and then at a rate of 5.0% per year thereafter. You expect the stock will sell for $35.09 in two years. You expect an annual rate of return of 23.0% on this investment. If you plan to hold the stock indefinitely, what is the most you would pay for the stock now
Answer:
$38.98
Explanation:
The maximum amount a rational investor would pay for the stock is the present value of its future dividends and the present value of the terminal value of dividends beyond year 2(the price at the end of year 2) discounted at the investor's rate of return which is 23.0%
Year 1 dividend=$7.70*(1+25.0%)=$9.63
Year 2 dividend=$9.63*(1+25.0%)=$12.04
Share price at the end of year 2=$35.09(the 5.0% is of no use since terminal value beyond has been given)
price of the stock=$9.63/(1+23.0%)^1+$12.04/(1+23.0%)^2+$35.09/(1+23.0%)^2
price of the stock=$38.98
Starfish Enterprises produces men’s sports coats that are sold by popular department stores. Each retail order is treated as a job that accumulates materials, labor, and overhead costs for a batch of sports coats. Material costs for a selected job is $900 for a batch of 30 suit coats (units). The material cost per unit is ________. $27.00 $30.00 $27.70 $26.00
Answer:
Unitary cost= $30
Explanation:
Giving the following information:
Material costs for a selected job are $900 for a batch of 30 suit coats (units).
To calculate the unitary cost, we need to use the following formula:
unitary cost= total batch cost / number of units
unitary cost= 900 / 30
unitary cost= $30
ABC Bank requires a 20% down payment on all of its home loans. If a house
is priced at $145,000, what is the amount of the down payment required by
the bank?
A. $29,000
B. $290,000
C. $14,500
D. $18,000
In a process operation, each process has a separate department which will accumulate costs for each of the following: Multiple select question. administrative direct labor overhead sales direct materials
Answer:
overhead
direct labor
direct materials
Explanation:
Process operations can be regarded as process manufacturing it can be explained as mass production method that is been followed when producing products following a continuous flow.
It can be regarded conveyer belt system which brings about production of identical as well as standardized item with fast rate as regards the speed. It should be noted that In a process operation, each process has a separate department which will accumulate costs for ;
✓overhead ( ongoing costs that is gotten in operation of a business)
✓direct labor
✓direct materials
Many experts believe that marketing is the most important function in a company. Discuss the reasons this is a true statement. Discuss the reasons this is not a true statement.
Solution :
Marketing is considered as an important function in a company.
Marketing is an important function in any organization as it allows the business to maintain a long-lasting and an ever-present relationships with the audience. It increase the brand value and generates revenue for the organization.
Marketing is not considered as an important function in a company.
Besides marketing there are other function as well which are important for an organization. The human resource department is an important function which maintains the relationship between the employees and the management. It works for the welfare of its employees which is considered as asset to the organization.
Also attention should be given to manufacture a good product seeing the demand in the market that can be easily available and usable by the customer. More research should be done to develop a product that is best for its consumers.
The most common measure of __________ is the spread between the number of shares which advance in price and the number of shares which decline in price.
A. market breadth
B. market volume
C. odd-lot trading
D. short interest
Answer:
A)market breadth
Explanation:
Breadth of market can be regarded as indicator that is been utilized in security analysis. It can be computed on a stock market through finding the ratio of advancing stocks numbers to that of number of declining stocks.
It should be noted that the The most common measure of market breadth is the spread between the number of shares which advance in price and the number of shares which decline in price.
If a candidate is denied a license due to information obtained in the mandatory criminal background check, how
long do they have to request a hearing with NCREC?
Answer:
60 days
Rationale: The criminal background check is obtained by the candidate at NCREC.Check.com. The background check will be reviewed by NCREC after the candidate passes the examination and before a license is issued.
A firm wants to sponsor an engineering lab. This requires $2.5M to construct the lab, $1.2M to equip it, and $600,000 every 5 years for new equipment. What is the required endowment if the university will earn 6% interest on funds
Answer:
$5.47M
Explanation:
The required endowment from the sponsor is the total costs required immediately plus the present value of the new equipment that needs to be purchased every five years as shown thus:
Immediate costs=cost of lab construction+cost of equipping the lab
Immediate costs=$2.5M+$1.2M
Immediate costs=$3.7M
Present value of every 5 years equipment cost=cost/(1+interest)^n-1
interest rate=6%
n=5 years(the frequency of incurring the cost)
PV=$0.60M/(1+6%)^5-1
PV=$0.60M/0.33822558
PV=$1.77M
required endowment =$3.70M+$1.77M
required endowment =$5.47M
Potatoes and wheat output (tons per day)
Country Potatoes Wheat
United States 4 2
Ireland 3 1
The United States has a comparative advantage in producing: __________
a. wheat
b. neither
c. potatoes
d. both
Answer:
c. potatoes
Explanation:
The computation is shown below:
Opportunity cost of producing 1 tons of wheat is
for US = 4 ÷ 3 = 1.33 tons of potatoes
for Ireland = 2 ÷ 1 = 2 tons of potatoes
As the opportunity cost is higher in united states of potatoes so here the united stated should be comparative advantage in generating potatoes
A truck acquired at a cost of $195,000 has an estimated residual value of $10,200, has an estimated useful life of 56,000 miles, and was driven 5,000 miles during the year. Determine the following:
a. The depreciable cost $___________
b. The depreciation rate $__________ per mile
c. The units-of-activity depreciation for the year $__________
Answer:
a. $184,800
b. 3.3 per miles
c. 16,500
Explanation:
(a) Calculation to determine The depreciable cost
Depreciable cost =Cost - estimated residual value
Depreciable cost=$195,000- $10,200
Depreciable cost=$184,800
(b) Calculation to determine The depreciation rate
Depreciation rate = $184,800/useful life 56,000 miles
Depreciation rate =3.3per mile
(c) Calculation to determine The units-of-activity depreciation for the year
Units-of-activity depreciation =3.3per mile*5,000 miles
Units-of-activity depreciation=16,500
Therefore The units-of-activity depreciation for the year is 16,500
Tip Top Painting Company has the following production data for March: Beginning work in process inventory, 2,000 units that are 30% complete for conversion costs Units completed and transferred out, 44,000 Units in ending work in process inventory, 9,000 that are 80% complete for conversion costs Materials are added only at the beginning of the process. What is the equivalent units of production during May for direct materials if the FIFO method is used?
Answer: 51000 units
Explanation:
The equivalent units of production during May for direct materials if the FIFO method is used will be calculated thus:
Units completed and transferred out = 44,000 Units
Less: Beginning work in process inventory = 2,000
Balance = 42000
Then, the Equivalent units of materials will be:
Balance = 42000
Add: Units in ending work in process inventory = 9,000
Equivalent units of materials = 51,000 units
How does a parent perform the functions of organizing in management?
Answer:
I'll assume that the term "parent" here means parent in the conventional term as in father, mother, and children.
With this in mind, parents have the responsibility of organising the family which include their children and the affairs of the house.
Therefore, a parent performs the functions of organizing in management by:
1. Guiding their wards in management principles
2. Educating them in what they should and shouldn't do.
how many years will be required for a given sum of money to triple, if it is deposited in a bank account that pays 6% per year compound annualy
Answer:
19 years
Explanation:
the 19th year your money will triple and be worth 3.0256 times the original sum.
