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Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients. In using air transportation and then expedited truck carriers to deliver specialty items to customers outside of a designated delivery range, Miller Meats is using ________.

2012-03-04T21:41:00.000-08:00

Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
In using air transportation and then expedited truck carriers to deliver specialty items to customers outside of a designated delivery range, Miller Meats is using ________.
a. all of its supply chain
b. all of its value delivery network
c. direct marketing channels
d. intermodal transportation
e. a horizontal marketing system

Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients. Which of the following is one of Miller Meat Company's upstream partners?

2012-03-04T21:38:00.002-08:00

Miller Meat Company contracts with several Midwestern farmers to raise beef and pork for its meat processing center. To guarantee freshness, Miller Meat Company relies on a vast distribution network. For delivery to local grocers in Indiana, Miller Meat uses its own fleet of refrigerated trucks; delivery to these Indiana grocers constitutes 65 percent of Miller Meat's business. For deliveries in Illinois, Wisconsin, and points directly west of the Mississippi River, Miller Meat Company contracts with a refrigerated fleet that specializes in expediting smaller shipments. For faster delivery during peak times, Miller Meat Company often uses its own trucks to deliver to the expedited fleet's consolidation point from its distribution warehouse in Indiana. During the holiday season, however, several specialty distributors contract with Miller Meat Company to package specialty meats in gift boxes, then ship them directly to the recipients. For these specialty shipments within Indiana, Illinois, and Wisconsin, Miller uses its normal delivery mode. For all other specialty shipments, Miller ships from its distribution warehouse via air, then contracts with expedited carriers in various cities to deliver to the recipients.
Which of the following is one of Miller Meat Company's upstream partners?
a. local grocers in Indiana who sell the company's products
b. Midwestern farmers who raise beef and pork for the meat processing center
c. the refrigerated fleet that expedites small shipments
d. air carriers that take Miller's specialty shipments
e. recipients of Miller's gift boxe

Microfiber Inc. has provided the following data from its activity-based costing system: Activity Cost Pools Total Cost Total Activity Designing products $387,539 6,512 product design hours Setting up batches $45,389 786 batch set-ups Assembling products $27,345 4,081 assembly hours The activity rate for the “designing products” activity cost pool is:

2012-03-04T21:37:00.002-08:00

Microfiber Inc. has provided the following data from its activity-based costing system:
Activity Cost Pools Total Cost Total Activity
Designing products $387,539 6,512 product design hours
Setting up batches $45,389 786 batch set-ups
Assembling products $27,345 4,081 assembly hours

The activity rate for the “designing products” activity cost pool is:
A. $387,539 per design hour
B. $40.45 per design hour
C. $70.68 per design hour
D. $59.51 per design hour

Materiality is based upon which factor(s)?

2012-03-04T21:36:00.000-08:00

Materiality is based upon which factor(s)?
a) Timeliness of an item.
b) Amount and nature of an item.
c) Consistency of an item.
d) Relevance of an item.

Martha is managing a project that has a degree of operating leverage equal to 1.8. What was the percentage change in the sales quantity if her operating cash flow rose by 6.3 percent?

2012-03-04T21:35:00.000-08:00

Martha is managing a project that has a degree of operating leverage equal to 1.8. What was the percentage change in the sales quantity if her operating cash flow rose by 6.3 percent?

Managers should consider ethical aspects of their decisions because:

2012-03-04T21:34:00.000-08:00

Managers should consider ethical aspects of their decisions because:
a) of their company’s code of conduct
b) good ethics is good business
c) otherwise they may be in legal trouble
d) they are all trained to do so

Management control:

2012-03-04T21:32:00.002-08:00

Management control:
a) is the process of deciding which products to produce
b) is the process of comparing actual results to budget
c) is the process of deciding whether to close the Livonia plant
d) is the process of determining how much tax should be paid this year

Liabilities are best defined as:

2012-03-04T21:31:00.002-08:00

Liabilities are best defined as:
a) Amounts the company expects to collect in the future from customers.
b) Debts or obligations the company owes resulting from past transactions.
c) The amounts that owners have invested in the business.
d) Payments to stockholders.

Level sets of frequent, consistent cash flows are called

2012-03-04T21:30:00.005-08:00

Level sets of frequent, consistent cash flows are called
a) loans.
b) budgets.
c) annuities.
d) bills.

Large, highly-rated firms sometimes sell commercial paper

2012-03-04T21:30:00.002-08:00

Large, highly-rated firms sometimes sell commercial paper
a) To borrow funds at a lower rate than through a bank.
b) To borrow funds when they cannot obtain a loan from a bank.
c) Because they can't borrow anywhere else.
d) To improve their credit rating.
.

Jupiter Corp. owns material that originally cost $50,000. It can be sold “as is” for $24,600, but if processed at a cost of $3,200, it could be sold for $26,000. The incremental effect on the company’s overall profit of processing and selling the material rather than selling it “as is” would be:

2012-03-04T21:28:00.005-08:00

Jupiter Corp. owns material that originally cost $50,000. It can be sold “as is” for $24,600, but if processed at a cost of $3,200, it could be sold for $26,000. The incremental effect on the company’s overall profit of processing and selling the material rather than selling it “as is” would be:
A. $22,800
B. -$1,800
C. -$3,200
D. -$7,600

John Mayes opened Sparkle Janitorial in 2005. John began by acquiring two contracts for office cleaning services from two local manufacturing facilities. For two years, John and his wife, Barb, performed the cleaning services alone. After acquiring three additional cleaning contracts in 2007, John hired two employees. "Up to that point, we had room to grow but we really had no advertising plan," John stated. "We were relying mostly on word-of-mouth." By 2010, Barb hired another two full-time employees to begin Sparkle's new endeavor: carpet cleaning in homes and offices. "Competition was getting tough for both of our services at that point," Barb added. "We ran a local radio spot three times each week. Then we had an advertiser print coupons on placemats. That gave us a little more exposure." John and Barb Mayes admit that they never realized the value of a sound promotional plan before now. "We wish we would have put together something catchy with a jingle long before now," they said. Which of the following would be the LEAST effective way for John and Barb to reach new potential customers?

2012-03-04T21:28:00.002-08:00

John Mayes opened Sparkle Janitorial in 2005. John began by acquiring two contracts for office cleaning services from two local manufacturing facilities. For two years, John and his wife, Barb, performed the cleaning services alone. After acquiring three additional cleaning contracts in 2007, John hired two employees.
"Up to that point, we had room to grow but we really had no advertising plan," John stated. "We were relying mostly on word-of-mouth."
By 2010, Barb hired another two full-time employees to begin Sparkle's new endeavor: carpet cleaning in homes and offices.
"Competition was getting tough for both of our services at that point," Barb added. "We ran a local radio spot three times each week. Then we had an advertiser print coupons on placemats. That gave us a little more exposure."
John and Barb Mayes admit that they never realized the value of a sound promotional plan before now. "We wish we would have put together something catchy with a jingle long before now," they said.
Which of the following would be the LEAST effective way for John and Barb to reach new potential customers?
a. word-of-mouth influence
b. buzz marketing
c. public relations
d. network television advertising
e. direct marketing

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals On Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow:

2012-03-04T21:27:00.002-08:00

Jackson County Senior Services is a nonprofit organization devoted to providing essential services to seniors who live in their own homes within the Jackson County area. Three services are provided for seniors—home nursing, Meals On Wheels, and housekeeping. In the home nursing program, nurses visit seniors on a regular basis to check on their general health and to perform tests ordered by their physicians. The Meals On Wheels program delivers a hot meal once a day to each senior enrolled in the program. The housekeeping service provides weekly housecleaning and maintenance services. Data on revenue and expenses for the past year follow:

Total Home Nursing Meals On Wheels House
keeping
Revenues $900,000 $ 260,000 $ 400,000 $ 240,000
Variable expenses 490,000 120,000 210,000 160,000
Contribution margin 410,000 140,000 190,000 80,000
Fixed expenses:
Depreciation 68,000 8,000 40,000 20,000
Liability insurance 42,000 20,000 7,000 15,000
Program administrators’ salaries 115,000 40,000 38,000 37,000
General administrative overhead* 180,000 52,000 80,000 48,000
Total fixed expenses 405,000 120,000 165,000 120,000
Net operating income (loss) $ 5,000 $ 20,000 $ 25,000 $ (40,000)

*Allocated on the basis of program revenues.

The head administrator of Jackson County Senior Services, Judith Miyama, is concerned about the organization’s finances and considers the net operating income of $5,000 last year to be too small. (Last year’s results were very similar to the results for previous years and are representative of what would be expected in the future.) She feels that the organization should be building its financial reserves at a more rapid rate in order to prepare for the next inevitable recession. After seeing the above report, Ms. Miyama asked for more information about the financial advisability of discontinuing the housekeeping program.
The depreciation in housekeeping is for a small van that is used to carry the housekeepers and their equipment from job to job. If the program were discontinued, the van would be donated to a charitable organization. Depreciation charges assume zero salvage value. None of the general administrative overhead would be avoided if the housekeeping program were dropped, but the liability insurance and the salary of the program administrator would be avoided.

Required:
1a. What is the impact on net operating income by discontinuing housekeeping program? (Input the amount as a positive value. Omit the "$" sign in your response.)
Decrease in net operating income by $
1b. Should the housekeeping program be discontinued?
2. Would a segmented income statement format be more useful to management in assessing the long-run financial viability of the various services.

Incremental revenue is the additional revenue received as a result of selecting one decision alternative over another.

2012-03-04T21:25:00.002-08:00

Incremental revenue is the additional revenue received as a result of selecting one decision alternative over another.
A) True
B) False

In which of the following periods should the expense for warranty costs be recorded?

2012-03-04T21:24:00.002-08:00

In which of the following periods should the expense for warranty costs be recorded?
a. The period when the product is sold
b. The period when the product is repaired or replaced
c. The period when cash is paid to repair or replace the product
d. The period when cash is collected for the sale of the product

In the operating activities section of the statement of cash flows, we start with net income when using:

2012-03-04T21:23:00.002-08:00

In the operating activities section of the statement of cash flows, we start with net income when using:
a) the direct method.
b) the indirect method.
c) both the direct and the indirect method.
d) neither the direct nor the indirect method.

In the Fidel Castro/Stroh's commercial we viewed in class, the ad used Fidel Castro (speaking English) to hold your attention, the objectives of the add we to ______________.

2012-03-04T21:22:00.002-08:00

In the Fidel Castro/Stroh's commercial we viewed in class, the ad used Fidel Castro (speaking English) to hold your attention, the objectives of the add we to ______________.
a. Persuade you to drink Stroh's Beer
b. To make you aware of Stroh's Light
c. To make you aware that Stroh's Light is "Fire Brewed"
d. Both A & C

In the current year, a company sells 1,000 units of a product for $100 each. Each product is sold with a one-year warranty. It is estimated that warranty costs will be 10% of the cost of the product. Historically, 60% of the warranty repairs are completed in the year of sale and 40% of the warranty repairs are completed in the year after the sale. What is the correct amount of warranty expense for the current year? a. $10,000

2012-03-04T21:20:00.005-08:00

In the current year, a company sells 1,000 units of a product for $100 each. Each product is sold with a one-year warranty. It is estimated that warranty costs will be 10% of the cost of the product. Historically, 60% of the warranty repairs are completed in the year of sale and 40% of the warranty repairs are completed in the year after the sale. What is the correct amount of warranty expense for the current year?
a. $10,000
b. $ 6,000
c. $ 4,000
d. $12,000

In the case of services, captive product pricing is called ________ pricing.

2012-03-04T21:20:00.002-08:00

In the case of services, captive product pricing is called ________ pricing.
a. by-product
b. optional product
c. two-part
d. bundle
e. segmented

In December, 2011, Quebecor Printing received magazine subscriptions for 2012 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?

2012-03-04T21:19:00.000-08:00

In December, 2011, Quebecor Printing received magazine subscriptions for 2012 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?
a) Debit Cash, $500; credit Subscription Revenue, $500.
b) Debit Cash, $500; credit Unearned Revenue, $500.
c) Debit Subscription Revenue, $200; credit Cash, $200.
d) No journal entry is necessary.

In a recent radio spot, John and Barb gave a quick explanation of Sparkle's cleaning process and a description of the value consumers receive for their money. This is an example of a(n) ________.

2012-03-04T21:13:00.002-08:00

In a recent radio spot, John and Barb gave a quick explanation of Sparkle's cleaning process and a description of the value consumers receive for their money. This is an example of a(n) ________.
a. emotional appeal
b. standard appeal
c. rational appeal
d. moral appeal
e. social appeal

In a period when inventory costs are rising, the inventory method that most likely results in the highest ending inventory is:

2012-03-04T21:12:00.003-08:00

In a period when inventory costs are rising, the inventory method that most likely results in the highest ending inventory is:
a) Lower-of-cost-or-market method.
b) Weighted-average cost.
c) FIFO.
d) LIFO.

In a period when inventory costs are falling, the lowest taxable income is most likely reported by using the inventory method of:

2012-03-04T21:12:00.000-08:00

In a period when inventory costs are falling, the lowest taxable income is most likely reported by using the inventory method of:
a) Weighted average.
b) LIFO.
c) Moving average.
d) FIFO.

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be

2012-03-04T21:11:00.000-08:00

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be
a) Disclosed, but not reported as a liability.
b) Disclosed and reported as a liability.
c) Neither disclosed nor reported as a liability.
d) Reported as a liability, but not disclosed.

If demand falls by 1 percent when price is increased by 2 percent, then ________.

2012-03-04T21:10:00.002-08:00

If demand falls by 1 percent when price is increased by 2 percent, then ________.
a. elasticity is -1/2
b. demand is inelastic
c. demand is elastic
d. buyers are not price sensitive
e. elasticity is -1/2 and demand is inelastic

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored)

2012-03-04T21:09:00.002-08:00

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored)
A) If fixed costs increase, net income will decrease by the contribution margin ratio times the amount of the increase in fixed costs.
B) If sales increase by 20%, net income will also increase by 20%, assuming that fixed costs are not equal to zero.
C) If variable costs double, net income will decrease by 50%.
D) Net income will decrease by the decrease in number of units sold times the contribution margin per unit.

How many joint products can come from a set of common inputs?

2012-03-04T21:08:00.002-08:00

How many joint products can come from a set of common inputs?
A) no more than four
B) only two or three
C) It depends on the process involved.
D) one

How is gross profit margin calculated? A. Cost-of-goods/revenue B. Gross profit/net profit C. Gross profit/revenue D. Sales/gross profit ...

2012-03-04T21:07:00.003-08:00

Q:
How is gross profit margin calculated?
A. Cost-of-goods/revenue
B. Gross profit/net profit
C. Gross profit/revenue
D. Sales/gross profit

How do most employers pay employees? a. By check b. By electronic fund transfer c. By cash payments d. Both A and B are common ways for employers ...

2012-03-04T21:07:00.000-08:00

Q:
How do most employers pay employees?
a. By check
b. By electronic fund transfer
c. By cash payments
d. Both A and B are common ways for employers to pay employees

Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of u...

2012-03-04T21:05:00.003-08:00

Q:
Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of use of machinery to produce. Motorcycle Y sells for $12,000, has variable costs (labor and material) of $8,000, and requires 2 hours of use of machinery to produce. Harley Davidson has excess capacity of 5,000 hours of use of machinery. Which motorcycle should it produce?
a. Motorcycle X because it has a higher contribution margin of $8,000.
b. Motorcycle Y because it has a higher contribution margin per hour of $2,000.
c. Motorcycle X because it has a higher contribution margin per hour of $4,000.
d. Motorcycle Y because it has a higher contribution margin of $4,000.

Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6...

2012-03-04T21:05:00.000-08:00

Q:
Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows:
Direct materials $5.40
Direct labor 8.00
Variable manufacturing overhead 3.20
Fixed manufacturing overhead 15.00
Total cost per part $31.60
An outside supplier has offered to sell 21,000 units of part S-6 each year to Han Products for $28.70 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $87,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.
Required:
(a) What is the total amount of avoidable costs if Han buys the units from an outside supplier?
(b) How much will profits increase or decrease if the outside supplier's offer is accepted?

Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter foreve...

2012-03-04T21:03:00.002-08:00

Q:
Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter forever. If your required rate of return is 6%, what price you should pay for the stock?

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a con...

2012-03-03T03:57:00.001-08:00

Q:

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be

a) Disclosed, but not reported as a liability.

b) Disclosed and reported as a liability.

c) Neither disclosed nor reported as a liability.

d) Reported as a liability, but not disclosed.

If demand falls by 1 percent when price is increased by 2 percent, then ________. a. elasticity is -1/2 b. demand is inelastic c. demand is elastic...

2012-03-03T03:55:00.001-08:00

Q:

If demand falls by 1 percent when price is increased by 2 percent, then ________.

a. elasticity is -1/2

b. demand is inelastic

c. demand is elastic

d. buyers are not price sensitive

e. elasticity is -1/2 and demand is inelastic

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored) A) If ...

2012-03-03T03:54:00.001-08:00

Q:

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored)

A) If fixed costs increase, net income will decrease by the contribution margin ratio times the amount of the increase in fixed costs.

B) If sales increase by 20%, net income will also increase by 20%, assuming that fixed costs are not equal to zero.

C) If variable costs double, net income will decrease by 50%.

D) Net income will decrease by the decrease in number of units sold times the contribution margin per unit.

How many joint products can come from a set of common inputs? A) no more than four B) only two or three C) It depends on the process involved. D) ...

2012-03-03T03:53:00.001-08:00

Q:

How many joint products can come from a set of common inputs?

A) no more than four

B) only two or three

C) It depends on the process involved.

D) one

How is gross profit margin calculated? A. Cost-of-goods/revenue B. Gross profit/net profit C. Gross profit/revenue D. Sales/gross profit ...

2012-03-03T03:51:00.001-08:00

Q:

How is gross profit margin calculated?

A. Cost-of-goods/revenue

B. Gross profit/net profit

C. Gross profit/revenue

D. Sales/gross profit

How do most employers pay employees? a. By check b. By electronic fund transfer c. By cash payments d. Both A and B are common ways for employers .

2012-03-03T03:50:00.001-08:00

Q:

How do most employers pay employees?

a. By check

b. By electronic fund transfer

c. By cash payments

d. Both A and B are common ways for employers to pay employees

Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of u...

2012-03-03T03:49:00.001-08:00

Q:

Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of use of machinery to produce. Motorcycle Y sells for $12,000, has variable costs (labor and material) of $8,000, and requires 2 hours of use of machinery to produce. Harley Davidson has excess capacity of 5,000 hours of use of machinery. Which motorcycle should it produce?

a. Motorcycle X because it has a higher contribution margin of $8,000.

b. Motorcycle Y because it has a higher contribution margin per hour of $2,000.

c. Motorcycle X because it has a higher contribution margin per hour of $4,000.

d. Motorcycle Y because it has a higher contribution margin of $4,000.

Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6...

2012-03-03T03:48:00.001-08:00

Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6 is as follows:

Direct materials $5.40

Direct labor 8.00

Variable manufacturing overhead 3.20

Fixed manufacturing overhead 15.00

Total cost per part $31.60

An outside supplier has offered to sell 21,000 units of part S-6 each year to Han Products for $28.70 per part. If Han Products accepts this offer, the facilities now being used to manufacture part S-6 could be rented to another company at an annual rental of $87,000. However, Han Products has determined that two-thirds of the fixed manufacturing overhead being applied to part S-6 would continue even if part S-6 were purchased from the outside supplier.

Required:

(a) What is the total amount of avoidable costs if Han buys the units from an outside supplier?

(b) How much will profits increase or decrease if the outside supplier's offer is accepted?

Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter foreve..

2012-03-03T03:46:00.001-08:00

Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter forever. If your required rate of return is 6%, what price you should pay for the stock?

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top mil...

2012-03-03T03:45:00.001-08:00

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top milling schools in Switzerland, and rapidly progressed to become the head miller at a flourmill in Africa then the USA. Grant has had a close association with bakers through his work; his product has after all been the core raw material of bakers on three continents. In the last ten years, he has observed a gradual change in the bread industry, and in particular he has noticed changes in consumer preferences.

After having worked for large corporations for a long time, Grant is considering starting up his own company with a couple of partners. At first he was inclined to start a small mill. He however found that the initial investment was prohibitive. Considering his skills a while longer, he realized that he was in an enviable position to shift from milling into specialty milling and baking. He would no longer be running large mills. He found that the prospect of trying his hand at very specialized milling, such as stone grinding, to be very appealing. This was accentuated by the possibility of combining his milling skills with those of a colleague, Emily, a baker. Together they could redefine the idea of an artisan bakery. Grant was sure that they could succeed at this endeavor.

Grant and Emily, to see whether their idea held any water, decided to conduct a forecast and analysis of their potential business. They ran several surveys in the local area to determine the market demand, competition, and pricing of potentially competing products. They also experimented with different products, milling and baking a variety of breads. Many of these they offered as samples and received overwhelmingly positive feedback. They estimated their product costs from these initial experiments.

The first step; gathering data, completed, they are now faced with making sense of all of the information. They would like to conduct an analysis for the first five years of operations.
Production

From the market analyses that Grant and Emily conducted, they estimated that they would be able to sell 100,000 loaves of bread in their first year. By the second year this will increase to 150,000 loaves, then 175,000 loaves in the third year. By the fourth and fifth year, production should level off at about 200,000 loaves. Emily compared some of the different results that they got from the various surveys and came to the conclusion that this estimate could very well vary by +/-5%.
Pricing and Sales

From the many surveys that Emily and Grant conducted, and in particular from the sample loaves that they distributed, they received feedback that they could get a premium price for their bread. They had collected the prices of competing bakeries around town, and came up with the following data:

Bakery

Price for loaf of premium bread

Uptown

$2.75

Mass Bakers

$2.65

Crusty’s

$2.95

Grant found that high-end artisan bakeries in neighboring towns charge a premium of 20 to 30 cents per loaf. In all of these markets more than one bakery has been established. Grant estimates that their premium could be even higher. After quite some consultation it was determined that they would charge $3.10 per loaf of bread. Emily and Grant agree that they might have to alter their pricing to establish themselves, for marketing, to build their market share or even to remain competitive with future competition. Their price might vary anywhere from $2.80 to $3.40.
Variable Costs

From their early experiments they estimated that their first loaves of bread would have a variable cost of about $8/loaf. The experiments have provided them with quite a bit of confidence in this number but they realize that in actual production conditions, it might be as low as $7/loaf and as high as $9/loaf. Their initial cost estimates were not only surprising, but also very discouraging. They realized that they could never compete or make a profit with these costs. As they experimented they found that they became more efficient as they produced more samples. Grant, who had a strong interest and background in production from his years working in large mills realized that there was a significant learning curve in their production. He estimated that the learning rate (based on Wright’s equation/curve) was most likely about 92%. Since he did not have a large data set to estimate this from, the thought that there was an outside chance (about 10%) that the learning rate might be 91% or 10% that it might be 93%.
Fixed Costs

Based on a production analysis Emily and Grant have determined that they will have some fixed costs, which will largely be driven by their labor costs. They intend to hire proficient laborers and train them. Their loaded labor cost will be $45,000 per laborer. Depending on the employee, experience, training and market conditions, they estimate that there is a 20% chance that the labor cost might be as low as $37,500 and a 20% chance that it is as high as $51,000.

They have also determined that their fixed costs will be lumpy. They will need 1 laborer up to 140,000 loaves of production. From 140,000 to 180,000 loaves of production they will need two employees. Above 180,000 loaves of production per year will require three employees.
Investment and Salvage

Emily and Grant will require equipment for their venture ranging from a small roller mill to a stone oven that will be needed to bake the artisan bread. The stone oven is more expensive than an electric oven. In all of their experiments Emily could not replicate the flavor that is obtained from the stone oven using an electric one. All in all, they will have to purchase and install about $200,000 worth of equipment.

Machinery of this nature is generally depreciated according to a 7 year MACRS schedule.

They have estimated that the equipment will have a market value of $130,000 in five years time, although there is a 20% chance of it being as low as $90,000 or a 20% chance of the salvage value being as high as $144,000 depending on the market and demand for the equipment necessary to produce artisan breads.
Taxes

Given the business size, they estimate that they will be required to pay 29% taxes on operating income and ordinary gains. Capital gains will be levied a 15% tax.
Required Returns

Emily and Grant estimate that their minimum cost of capital is approximately 6%, which they would have to get on even the least risky endeavors.

These values are further adjusted depending on the project.

Projects with longer payback periods will have a premium of up to 10% added to the minimum values. Projects with a payback in the first year are not assessed a premium. Projects with a payback period of 2 years (rounded up to end of year) are assessed 4%, projects with a payback of 3 or 4 years (rounded up to end of year) are assessed 6%. Projects with a longer payback period are assessed 10%.

Projects also have a premium added to them for the amount of debt that is taken to finance the project. Projects with higher debt loads are viewed as riskier. Projects with less than 2/5 of the value covered by financing are not assessed a premium. Projects that borrow up to 60% of the investment have a 6% premium added to them, and projects that borrow up to 80% of the investment may have a premium of up to 12% added. A project with more that 80% debt is assessed a full 24%.

Projects with high uncertainty and sensitivity to estimated values are adjusted by up to another 8%.
Requirements

You are required to develop a full analysis based on the information provided. You should minimally be able to show:

The expected cash flows and all the assumptions made in their determination.
An analysis of the cash flows that include the main analysis measures such as the IRR, NPV, etc. You should discuss these results, and in particular, you should be able to identify any peculiarities should they arise.
You must conduct an analysis of the risk, based primarily on the sensitivity of the analysis.
It is expected that you minimally conduct a Monte Carlo Analysis
State your assumptions in this analysis.
Discuss the possible implications of some of the assumptions that you made throughout your analysis.

Submit your results in the form of a well-supported report. This means that note every table, calculation, number need be included. Use diagrams, etc. to synthesize your findings.

Submit an Excel Spreadsheet showing your working and calculations. The spreadsheet should be tidy and clear.

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top mil..

2012-03-03T03:01:00.001-08:00

Q:
Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top milling schools in Switzerland, and rapidly progressed to become the head miller at a flourmill in Africa then the USA. Grant has had a close association with bakers through his work; his product has after all been the core raw material of bakers on three continents. In the last ten years, he has observed a gradual change in the bread industry, and in particular he has noticed changes in consumer preferences.
After having worked for large corporations for a long time, Grant is considering starting up his own company with a couple of partners. At first he was inclined to start a small mill. He however found that the initial investment was prohibitive. Considering his skills a while longer, he realized that he was in an enviable position to shift from milling into specialty milling and baking. He would no longer be running large mills. He found that the prospect of trying his hand at very specialized milling, such as stone grinding, to be very appealing. This was accentuated by the possibility of combining his milling skills with those of a colleague, Emily, a baker. Together they could redefine the idea of an artisan bakery. Grant was sure that they could succeed at this endeavor.
Grant and Emily, to see whether their idea held any water, decided to conduct a forecast and analysis of their potential business. They ran several surveys in the local area to determine the market demand, competition, and pricing of potentially competing products. They also experimented with different products, milling and baking a variety of breads. Many of these they offered as samples and received overwhelmingly positive feedback. They estimated their product costs from these initial experiments.
The first step; gathering data, completed, they are now faced with making sense of all of the information. They would like to conduct an analysis for the first five years of operations.
Production
From the market analyses that Grant and Emily conducted, they estimated that they would be able to sell 100,000 loaves of bread in their first year. By the second year this will increase to 150,000 loaves, then 175,000 loaves in the third year. By the fourth and fifth year, production should level off at about 200,000 loaves. Emily compared some of the different results that they got from the various surveys and came to the conclusion that this estimate could very well vary by +/-5%.
Pricing and Sales
From the many surveys that Emily and Grant conducted, and in particular from the sample loaves that they distributed, they received feedback that they could get a premium price for their bread. They had collected the prices of competing bakeries around town, and came up with the following data:
Bakery
Price for loaf of premium bread
Uptown
$2.75
Mass Bakers
$2.65
Crusty’s
$2.95
Grant found that high-end artisan bakeries in neighboring towns charge a premium of 20 to 30 cents per loaf. In all of these markets more than one bakery has been established. Grant estimates that their premium could be even higher. After quite some consultation it was determined that they would charge $3.10 per loaf of bread. Emily and Grant agree that they might have to alter their pricing to establish themselves, for marketing, to build their market share or even to remain competitive with future competition. Their price might vary anywhere from $2.80 to $3.40.
Variable Costs
From their early experiments they estimated that their first loaves of bread would have a variable cost of about $8/loaf. The experiments have provided them with quite a bit of confidence in this number but they realize that in actual production conditions, it might be as low as $7/loaf and as high as $9/loaf. Their initial cost estimates were not only surprising, but also very discouraging. They realized that they could never compete or make a profit with these costs. As they experimented they found that they became more efficient as they produced more samples. Grant, who had a strong interest and background in production from his years working in large mills realized that there was a significant learning curve in their production. He estimated that the learning rate (based on Wright’s equation/curve) was most likely about 92%. Since he did not have a large data set to estimate this from, the thought that there was an outside chance (about 10%) that the learning rate might be 91% or 10% that it might be 93%.
Fixed Costs
Based on a production analysis Emily and Grant have determined that they will have some fixed costs, which will largely be driven by their labor costs. They intend to hire proficient laborers and train them. Their loaded labor cost will be $45,000 per laborer. Depending on the employee, experience, training and market conditions, they estimate that there is a 20% chance that the labor cost might be as low as $37,500 and a 20% chance that it is as high as $51,000.
They have also determined that their fixed costs will be lumpy. They will need 1 laborer up to 140,000 loaves of production. From 140,000 to 180,000 loaves of production they will need two employees. Above 180,000 loaves of production per year will require three employees.
Investment and Salvage
Emily and Grant will require equipment for their venture ranging from a small roller mill to a stone oven that will be needed to bake the artisan bread. The stone oven is more expensive than an electric oven. In all of their experiments Emily could not replicate the flavor that is obtained from the stone oven using an electric one. All in all, they will have to purchase and install about $200,000 worth of equipment.
Machinery of this nature is generally depreciated according to a 7 year MACRS schedule.
They have estimated that the equipment will have a market value of $130,000 in five years time, although there is a 20% chance of it being as low as $90,000 or a 20% chance of the salvage value being as high as $144,000 depending on the market and demand for the equipment necessary to produce artisan breads.
Taxes
Given the business size, they estimate that they will be required to pay 29% taxes on operating income and ordinary gains. Capital gains will be levied a 15% tax.
Required Returns
Emily and Grant estimate that their minimum cost of capital is approximately 6%, which they would have to get on even the least risky endeavors.
These values are further adjusted depending on the project.
Projects with longer payback periods will have a premium of up to 10% added to the minimum values. Projects with a payback in the first year are not assessed a premium. Projects with a payback period of 2 years (rounded up to end of year) are assessed 4%, projects with a payback of 3 or 4 years (rounded up to end of year) are assessed 6%. Projects with a longer payback period are assessed 10%.
Projects also have a premium added to them for the amount of debt that is taken to finance the project. Projects with higher debt loads are viewed as riskier. Projects with less than 2/5 of the value covered by financing are not assessed a premium. Projects that borrow up to 60% of the investment have a 6% premium added to them, and projects that borrow up to 80% of the investment may have a premium of up to 12% added. A project with more that 80% debt is assessed a full 24%.
Projects with high uncertainty and sensitivity to estimated values are adjusted by up to another 8%.
Requirements
You are required to develop a full analysis based on the information provided. You should minimally be able to show:
The expected cash flows and all the assumptions made in their determination.
An analysis of the cash flows that include the main analysis measures such as the IRR, NPV, etc. You should discuss these results, and in particular, you should be able to identify any peculiarities should they arise.
You must conduct an analysis of the risk, based primarily on the sensitivity of the analysis.
It is expected that you minimally conduct a Monte Carlo Analysis
State your assumptions in this analysis.
Discuss the possible implications of some of the assumptions that you made throughout your analysis.
Submit your results in the form of a well-supported report. This means that note every table, calculation, number need be included. Use diagrams, etc. to synthesize your findings.
Submit an Excel Spreadsheet showing your working and calculations. The spreadsheet should be tidy and clear.

Glade Company produces a single product. The costs of producing and selling a single unit of this product at the company’s current activity leve...

2012-03-03T02:59:00.001-08:00

Q:
Glade Company produces a single product. The costs of producing and selling a single unit of this product at the company’s current activity level of 8,000 units per month are:

Direct materials $ 2.50
Direct labor $ 3.00
Variable manufacturing overhead $ 0.50
Fixed manufacturing overhead $ 4.25
Variable selling and administrative expenses $ 1.50
Fixed selling and administrative expenses $ 2.00
The normal selling price is $15 per unit. The company’s capacity is 10,000 units per month. An order has been received from a potential customer overseas for 2,000 units at a price of $12.00 per unit. This order would not affect regular sales.

Required:
1. If the order is accepted, by how much will monthly profits increase or decrease? (The order would not change the company’s total fixed costs.) (Input the amount as a positive value. Omit the "$" sign in your response.)
Monthly profits would increase by $

2. Assume the company has 500 units of this product left over from last year that are inferior to the current model. The units must be sold through regular channels at reduced prices. What unit cost is relevant for establishing a minimum selling price for these units? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Relevant cost per unit $

Generally Accepted Accounting Principles (GAAP) are best defined as: a) Standards or methods for presenting financial accounting information. b) Gov...

2012-03-03T02:56:00.001-08:00

Q:
Generally Accepted Accounting Principles (GAAP) are best defined as:
a) Standards or methods for presenting financial accounting information.
b) Government-mandated rules that companies must follow.
c) Rules that best estimate profitability for a company.
d) The group of individuals that create and enforce all accounting rules

Fraudulent reporting by management could include: a) Fictitious revenues from a fake customer. b) Improper asset valuation. c) Mismatching revenues...

2012-03-03T02:55:00.001-08:00

Q:
Fraudulent reporting by management could include:
a) Fictitious revenues from a fake customer.
b) Improper asset valuation.
c) Mismatching revenues and expenses.
d) All of the above.

Fraudulent reporting by management could include: a) Fictitious revenues from a fake customer. b) Improper asset valuation. c) Mismatching revenues...

2012-03-03T02:53:00.001-08:00

Q:
Fraudulent reporting by management could include:
a) Fictitious revenues from a fake customer.
b) Improper asset valuation.
c) Mismatching revenues and expenses.
d) All of the above.

For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax? a. Only the FICA tax and the federal unemplo...

2012-03-03T02:52:00.001-08:00

Q:
For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax?
a. Only the FICA tax and the federal unemployment
b. The FICA tax and the state and federal unemployment taxes
c. Only the state and federal unemployment taxes
d. Only the FICA tax

Firms are less affected by competitors' pricing strategies under than under . a. monopolistic competition; oligopolistic competition...

2012-03-03T02:51:00.001-08:00

Q:
Firms are less affected by competitors' pricing strategies under ________ than under ________.
a. monopolistic competition; oligopolistic competition
b. pure competition; monopolistic competition
c. oligopolistic competition; pure competition
d. oligopolistic competition; monopolistic competition
e. pure competition; a pure monopoly

Energy Tech company issued an 8% (semiannual payment) 20 year bond 5 years ago.a.If the yield of similar bond today is 6%, what is the bond price? Wha...

2012-03-03T02:49:00.001-08:00

Q:
Energy Tech company issued an 8% (semiannual payment) 20 year bond 5 years ago. a. If the yield of similar bond today is 6%, what is the bond price? What is the current yield? b. If you expect company to call the bond 3 years from today and will pay the principal plus two years coupon interests as penalty what price you should pay for this bond?

EBIT is as important measure in companies because: A. It is free cash flow B. It subtracts interest and taxes from net income to get a truer picture...

2012-03-03T02:45:00.001-08:00

Q:
EBIT is as important measure in companies because:
A. It is free cash flow
B. It subtracts interest and taxes from net income to get a truer picture of the business
C. It indicates the profitability of a company’s operations
D. It is the key measure of earnings before indirect costs and transfers

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows to firm (FCFFs) during the next 3 yea...

2012-03-03T02:44:00.001-08:00

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows to firm (FCFFs) during the next 3 years, after which FCFF is expected to grow at a constant 7 percent rate. Dozier's cost of capital is WACC = 13%.
Note: This question requires you to compute value using our two stage supernormal growth model developed in class (see slides 22+ in Stock Valuation: Intrinsic). Recall, we had a model where the first stage was two years (this example is three years) and where we calculated the terminal value using the Gordon Growth (also called Constant Growth) model. Since we are using FCFF and WACC, you are computing the value of the firm. For c., you need to recall how in the Corporate Value slides we went from computing the value of the firm to the value of the stock by making adjustments for non financial assets such as marketable securities and adjustments for debt.

Year
1
2
3
Free cash flow to firm ($ millions)
- $20
$30
$40
a. What is Dozier's terminal, or horizon, value? (Hint: Find the value of all free cash flows beyond Year 3 discounted back to Year 3.). Round your answer to two decimal places.
million
b. What is the current value of operations for Dozier? Round your answer to two decimal places.
million
c. Suppose Dozier has $11 million in marketable securities, $120 million in debt, and 12 million shares of stock. What is the intrinsic price per share of the STOCK? Round your answer to two decimal places.

Dinkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows. Project Granada Project Jackson Project Dorantes Capital investment $178,250 $189,750 $210,600 Annual net income: Year 1 14,950 20,125 31,625 2 14,950 18,975 25,875 3 14,950 17,825 24,725 4 14,950 13,225 15,525 5 14,950 9,775 14,375 ________________________________________________ Total 74,750 79,925 112,125 Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.) Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)

2012-03-03T02:40:00.001-08:00

Dinkel Company is considering three long-term capital investment proposals. Each investment has a useful life of 5 years. Relevant data on each project are as follows.

Project Granada Project Jackson Project Dorantes
Capital investment $178,250 $189,750 $210,600
Annual net income:
Year 1 14,950 20,125 31,625
2 14,950 18,975 25,875
3 14,950 17,825 24,725
4 14,950 13,225 15,525
5 14,950 9,775 14,375
________________________________________________
Total 74,750 79,925 112,125

Depreciation is computed by the straight-line method with no salvage value. The company's cost of capital is 15%. (Assume that cash flows occur evenly throughout the year.)

Compute the cash payback period for each project. (Round answers to 2 decimal places, e.g. 10.50.)

Dexter Products, Inc., manufactures and sells a number of items, including an overnight case. The company has been experiencing losses on the overnigh...

2012-03-03T01:02:00.001-08:00

Q:
Dexter Products, Inc., manufactures and sells a number of items, including an overnight case. The company has been experiencing losses on the overnight case for some time, as shown on the following contribution format income statement:

Dexter Products, Inc.
Income Statement—Overnight Cases
For the Quarter Ended June 30
Sales $ 450,000
Variable expenses:
Variable manufacturing expenses $ 130,000
Sales commissions 48,000
Shipping 12,000
Total variable expenses 190,000
Contribution margin 260,000
Fixed expenses:
Salary of product-line manager 21,000
General factory overhead 104,000 *
Depreciation of equipment (no resale value) 36,000
Advertising—traceable 110,000
Insurance on inventories 9,000
Purchasing department 50,000 †
Total fixed expenses 330,000
Net operating loss $ (70,000 )
*Allocated on the basis of machine-hours.
†Allocated on the basis of sales dollars.

Discontinuing the overnight cases would not affect the company’s sales of its other product lines, its total general factory overhead, or its total purchasing department expenses.

Required
a. Compute the increase or decrease of net operating income if the overnight case are continued or discontinued. (Leave no cells blank - be certain to enter "0" wherever required. Input all amounts as positive except Decreases in Sales, Decreases in Contribution Margin, and Net Losses which should be indicated by a minus sign. Omit the "$" sign in your response.)

Keep
Overnight
Cases Drop
Overnight
Cases
Net Operating
Income
Sales $
Variable expenses:
Variable manufacturing expenses
Sales commissions
Shipping
Total variable expenses
Contribution margin
Fixed expenses:
Salary of line manager
General factory overhead
Depreciation of equipment
Advertising—traceable
Insurance on inventories
Purchasing department
Total fixed expenses
Net operating Income (loss) $
b. Would you recommend that the company discontinue the manufacture and sale of overnight cases?

Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $21,000, whereas the gas-powered truck will cost $17,230. The cost of capital that applies to both investments is 11 percent. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,100 per year and those for the gas-powered truck will be $5,300 per year. Calculate the NPV and IRR for each type of truck, and decide which to recommend. Calculate the NPV for each type of truck. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, 1000.88 would be entered as 1001.

2012-03-03T00:58:00.001-08:00

Q:
Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $21,000, whereas the gas-powered truck will cost $17,230. The cost of capital that applies to both investments is 11 percent. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,100 per year and those for the gas-powered truck will be $5,300 per year. Calculate the NPV and IRR for each type of truck, and decide which to recommend.

Calculate the NPV for each type of truck. Round your answers to the nearest dollar, if necessary. Enter each answer as a whole number. For example, 1000.88 would be entered as 1001.

Davis Industries must choose between a gas-powered and an electric-powered forklift truck for moving materials in its factory. Since both forklifts perform the same function, the firm will choose only one. (They are mutually exclusive investments.) The electric-powered truck will cost more, but it will be less expensive to operate; it will cost $21,000, whereas the gas-powered truck will cost $17,230. The cost of capital that applies to both investments is 11 percent. The life for both types of truck is estimated to be 6 years, during which time the net cash flows for the electric-powered truck will be $6,100 per year and those for the gas-powered truck will be $5,300 per year. Calculate the NPV and IRR for each type of truck, and decide which to recommend.

2012-03-03T00:57:00.001-08:00

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%. Which of the following would be included in the entry to record the payroll for January?

2012-03-03T00:55:00.001-08:00

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8 Which of the following would be included in the entry to record the payroll taxes imposed on Lone Star Company for January?

2012-03-03T00:51:00.001-08:00

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8 Which of the following would be included in the entry to record the payroll taxes imposed on Lone Star Company for January?

2012-03-03T00:50:00.001-08:00

Customer profitability analysis might result in:

2012-03-03T00:49:00.001-08:00

Customer profitability analysis might result in:
A. dropping some customers that are unprofitable.
B. lowering price or offering incentives to profitable customers.
C. giving incentives to all customers to place orders online.
D. All of the above.

Crystal Waters Winery is a small but growing boutique winery in the Margaret River district, Western Australia. • You are a HR consultant and Jacques called you in to provide him with advice about how to proceed. You are required to write a report to Jacques, addressing the following issues: • explain how human resource planning can be used to determine how Crystal Waters Winery can move from the current staffing position to the desired staffing position; • explain how job analysis can be applied to design the specific jobs (also provide an example of a job description for one of the new jobs • recommend a recruitment and selection process that Crystal Waters Winery should follow; and • discuss how a systematic training process can be followed to ensure that employees perform their jobs effectively. Complete tutorial of 2400 words is attached here. Note: These are not my questions; i am just suggesting tutorial of these questions

2012-03-03T00:48:00.001-08:00

Crystal Waters Winery is a small but growing boutique winery in the Margaret River district, Western Australia. • You are a HR consultant and Jacques called you in to provide him with advice about how to proceed. You are required to write a report to Jacques, addressing the following issues: • explain how human resource planning can be used to determine how Crystal Waters Winery can move from the current staffing position to the desired staffing position; • explain how job analysis can be applied to design the specific jobs (also provide an example of a job description for one of the new jobs • recommend a recruitment and selection process that Crystal Waters Winery should follow; and • discuss how a systematic training process can be followed to ensure that employees perform their jobs effectively. Complete tutorial of 2400 words is attached here. Note: These are not my questions; i am just suggesting tutorial of these questions

Cost-plus contracts are common in which of the following industries?

2012-03-03T00:47:00.001-08:00

Cost-plus contracts are common in which of the following industries?
A. manufactured home builders
B. soft drink bottlers
C. defense contractors
D. newspaper publishers

Consider the two mutually exclusive projects: t=0 t=1 t=2 t=3 A ($4500) $2590 $2010 $1465 B ($4600) $2630 $2025 $1600 Provide the NPV profiles of the two projects. (8 points) Which project will you accept at the crossover rate and why? (4 pts) You can use excel or the calculator for calculations.

2012-03-03T00:45:00.001-08:00

Consider the two mutually exclusive projects:
t=0 t=1 t=2 t=3
A ($4500) $2590 $2010 $1465
B ($4600) $2630 $2025 $1600
Provide the NPV profiles of the two projects. (8 points) Which project will you accept at the crossover rate and why? (4 pts) You can use excel or the calculator for calculations.

Consider the following cash flows for Davie Corp.

2012-03-03T00:43:00.001-08:00

Consider the following cash flows for Davie Corp.
T CF
0 -10,000
1 2000
2 3500
3 5500
4 3300
If the WACC for Davie Corp is 8.2%, what is the project NPV and should this project be accepted?

Common stockholders usually have all of the following rights except:

2012-03-03T00:42:00.001-08:00

Common stockholders usually have all of the following rights except:
a) To receive dividends when declared.
b) To share in the distribution of assets.
c) To elect board of directors.
d) To participate in the day-to-day operations.

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor quantity variance was

2012-03-03T00:41:00.001-08:00

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor quantity variance was
a. $4,880 F
b. $4,800 U
c. $3,280 U
d. $4,880 U

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor price variance was

2012-03-03T00:40:00.001-08:00

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor price variance was
a. $1,680 U
b. $6,480 U
c. $6,480 F
d. $4,800 U

Cash flows from investing activities do not include:

2012-03-03T00:39:00.001-08:00

Cash flows from investing activities do not include:
a) Proceeds from the sale of land.
b) Proceeds from the issuance of common stock.
c) Proceeds from the sale of marketable securities.
d) Cash outflows from acquiring land.

Carter Company records sales on account of $950,500. The company operates in a state that imposes a 5% sales tax. Which of the following would be the amount of the sales tax payable to the state?

2012-03-03T00:38:00.001-08:00

Carter Company records sales on account of $950,500. The company operates in a state that imposes a 5% sales tax. Which of the following would be the amount of the sales tax payable to the state?
a. $47,525
b. $50,500
c. $45,000
d. It is impossible to determine with the information given.

Care and Serve Co.is trying to ascertain what the selling price of a new product should be if the project is to break-even on a cash basis at a quantity of 1,200 units. The projections include fixed costs of $2,400, variable costs per unit of $7.09, and a depreciation expense of $400. What is the price they should charge?

2012-03-03T00:37:00.001-08:00

Q:
Care and Serve Co.is trying to ascertain what the selling price of a new product should be if the project is to break-even on a cash basis at a quantity of 1,200 units. The projections include fixed costs of $2,400, variable costs per unit of $7.09, and a depreciation expense of $400. What is the price they should charge?

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

2012-03-03T00:36:00.001-08:00

Car company is considering two capital investment proposals regarding each project are provided below :

Project Soup project Nuts
Initial investment $600,000 $900,000
Annual net income 30,000 63,000
Net annual cash inflow 150,000 213,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-

The company requires a 10% rate of return on all new investments
The annual rate of return for project nuts is
a- 7%
b- 10%
c- 25%
d- 50%

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

2012-03-03T00:35:00.001-08:00

Car company is considering two capital investment proposals regarding each project are provided below :

Project Soup project Nuts
Initial investment $600,000 $900,000
Annual net income 30,000 63,000
Net annual cash inflow 150,000 213,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-

The company requires a 10% rate of return on all new investments
The internal rate of return for project nuts is approximately
a- 10%
b- 11%
c- 12%
d- 9%

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

2012-03-03T00:34:00.001-08:00

Car company is considering two capital investment proposals regarding each project are provided below :

Project Soup project Nuts
Initial investment $600,000 $900,000
Annual net income 30,000 63,000
Net annual cash inflow 150,000 213,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-

The company requires a 10% rate of return on all new investments
The net present value for project nuts is
a- $ 972,678.9
b- $ 927,876.9
c- $27,876.9
d- $27,678.9

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

2012-03-03T00:33:00.001-08:00

Car company is considering two capital investment proposals regarding each project are provided below :

Project Soup project Nuts
Initial investment $600,000 $900,000
Annual net income 30,000 63,000
Net annual cash inflow 150,000 213,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-

The company requires a 10% rate of return on all new investments
The cash payback period for project soup is
a. 20 years
b. 10 years
c. 5 years
d. 4years

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0- The company requires a 10% rate of return on all new investments The profitability index for project nuts is

2012-03-03T00:32:00.001-08:00

Car company is considering two capital investment proposals regarding each project are provided below :

Project Soup project Nuts
Initial investment $600,000 $900,000
Annual net income 30,000 63,000
Net annual cash inflow 150,000 213,000
Estimated useful life 5 years 6 years
Salvage value -0- -0-

The company requires a 10% rate of return on all new investments
The profitability index for project nuts is
a. 1.00
b. 1.03
c. 0.97
d. 0.79

Bruno’s, Inc. is analyzing two machines to determine which one they should purchase. The company requires a 14 percent rate of return and uses straight-line depreciation to a zero book value. Machine A has a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Bruno’s purchase and why? (Round your answer to whole dollars)

2012-03-03T00:31:00.001-08:00

Bruno’s, Inc. is analyzing two machines to determine which one they should purchase. The company requires a 14 percent rate of return and uses straight-line depreciation to a zero book value. Machine A has a cost of $290,000, annual operating costs of $8,000, and a 3-year life. Machine B costs $180,000, has annual operating costs of $12,000, and has a 2-year life. Whichever machine is purchased will be replaced at the end of its useful life. Which machine should Bruno’s purchase and why? (Round your answer to whole dollars)

Breakeven point using the contribution margin approach is calculated by:

2012-03-03T00:30:00.001-08:00

Breakeven point using the contribution margin approach is calculated by:
a.) Adding fixed and variable costs and dividing by the sales price per unit.
b.) Subtracting variable costs from sales price and dividing that number by the selling price per unit.
c.) Subtracting variable costs from the selling price, adding fixed costs, and dividing by the number of units produced.
d.) Subtracting variable costs per unit from selling price per unit and dividing that number into total fixed costs.
e.) A & C only

Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:

2012-03-03T00:28:00.001-08:00

Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:

Department
Total Bath Kitchen
Sales $ 5,000,000 $ 1,000,000 $ 4,000,000
Variable expenses 1,900,000 300,000 1,600,000
Contribution margin 3,100,000 700,000 2,400,000
Fixed expenses 2,700,000 900,000 1,800,000
Net operating income (loss) $ 400,000 $ (200,000 ) $ 600,000
A study indicates that $370,000 of the fixed expenses being charged to the Bath Department are sunk costs or allocated costs that will continue even if the Bath Department is dropped. In addition, the elimination of the Bath Department would result in a 10% decrease in the sales of the Kitchen Department.

Required:
If the Bath Department is dropped, what will be the effect on the net operating income of the company as a whole? (Input the amount as a positive value. Omit the "$" sign in your response.)
Decrease in net operating income $

Booker Company reported sales revenue for 2007 of $800,000. The products were sold with a six-month warranty. Members of Booker's management estimate the cost of the warranty will be equal to 3% of sales revenue. Which of the following is included in the entry to record the repair of a product under warranty?

2012-03-03T00:27:00.003-08:00

Q:
Booker Company reported sales revenue for 2007 of $800,000. The products were sold with a six-month warranty. Members of Booker's management estimate the cost of the warranty will be equal to 3% of sales revenue. Which of the following is included in the entry to record the repair of a product under warranty?
a. A debit to estimated warranty payable for $24,000
b. A credit to estimated warranty payable when the products are repaired or replaced
c. A debit to estimated warranty payable in 2007 for $24,000
d. A debit to warranty expense of $24,000

Bold Face manufactures TV’s. The company’s color TV’s are very popular, but it has an inventory of 500 large screen, black and white TV’s for which there is little demand. Bold Face is considering the following options for disposing of these TV’s:

2012-03-03T00:27:00.001-08:00

Q:
Bold Face manufactures TV’s. The company’s color TV’s are very popular, but it has an inventory of 500 large screen, black and white TV’s for which there is little demand. Bold Face is considering the following options for disposing of these TV’s:
1. Sell them to a discount mail-order company at a total price of $40,000. The mail-order firm would then sell these large screen TV’s at a unit price of $200.
2. Convert them to color TV’s at a remanufacturing cost of $400 per unit. These TV’s then could be sold to TV stores for $1,000 each.
The black and white TV’s had been manufactured at a cost of $300 per unit. The cost of manufacturing color TV’s of the same size, however, normally amounts to $410 per unit.

Instructions
a. Perform an incremental analysis of the revenue, costs, and gross profit resulting from converting the black and white TV’s to color as compared with selling them to the mail-order firm.
b. Identify any sunk costs, out-of-pocket costs, and possible opportunity costs.
c. Indicate which of these options you would select and explain your reasoning, assuming that Bold Face currently:
1. Has substantial excess capacity.
2. Is operating at full capacity manufacturing color TV’s.

Barnyard, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $506,500, Interest expense = $45,000, and Taxes = $158,500. Barnyard's has no preferred stock outstanding and 140,000 shares of common stock outstanding. What are its the 2008 earnings per share?

2012-03-03T00:25:00.001-08:00

Q:
Barnyard, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $506,500, Interest expense = $45,000, and Taxes = $158,500. Barnyard's has no preferred stock outstanding and 140,000 shares of common stock outstanding. What are its the 2008 earnings per share?

a) $2.49
b) $3.30
c) $3.62
d) $2.16

Q: Bank of Land lends you money today but requires no payments for 3 years. However, during this interest deferred period the loan accumulated interest at 6% rate, compounded quarterly. The bank amortizes the loan over five year period, requiring quarterly payments and continuing charge 6% annual interest rate, compounded quarterly. What will be the quarterly payment will be on today’s loan of $20,000?

2012-03-03T00:24:00.001-08:00

Q:
Bank of Land lends you money today but requires no payments for 3 years. However, during this interest deferred period the loan accumulated interest at 6% rate, compounded quarterly. The bank amortizes the loan over five year period, requiring quarterly payments and continuing charge 6% annual interest rate, compounded quarterly. What will be the quarterly payment will be on today’s loan of $20,000?

Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation?

2012-03-03T00:23:00.001-08:00

Q:
Away Travel filed suit against West Coast Travel seeking damages for copyright violations. West Coast Travel's legal counsel believes it is reasonably possible that West Coast Travel will settle the lawsuit for an estimated amount in the range of $100,000 to $200,000, with all amounts in the range considered equally likely. How should West Coast Travel report this litigation?
a) As a liability for $100,000 with disclosure of the range.
b) As a liability for $150,000 with disclosure of the range.
c) As a liability for $200,000 with disclosure of the range.
d) As a disclosure only. No liability is reported

At Dec 31st the douglas corporation reported the following results for the year. Cash sales $3,600,000 Credit sales $2,926,000 in addition, its unadjusted trial base include the following items: Account receivable $943,000 (Dr) Allowance for doubtful accounts $12,300 (cr)

2012-03-03T00:22:00.001-08:00

At Dec 31st the douglas corporation reported the following results for the year.
Cash sales $3,600,000
Credit sales $2,926,000

in addition, its unadjusted trial base include the following items:
Account receivable $943,000 (Dr)
Allowance for doubtful accounts $12,300 (cr)
Instruction:
1) Prepare the necessary adjusting entries for Douglas to recognize bad debts using these three different assumptions ( independent assumptions):
a) Bad debts are estimated to be 3.2% of credit sales
b) Bad debts are estimated to be 1.7% of total sales
c) Using the aging analysis 7% of year-end gross accounts receivables are not collectible

2) Which of those three approaches (from #1) would provide the highest bad debt expense for the year?
3) Compute the net realizable value (nrv) for accounts receivables after the adjustment for bad debt under each scenario
4) Which of these methods is called the balance sheet approach? Why?
5) If you were the CEO of this company, and were paid a bonus based on net income. Which approach would produce the best outcome for you?

Aspen company produces widgets. August production costs are below: Widgets produced 80,000 Direct material (variable) $20,000 Direct labor (vari...

2012-03-03T00:21:00.001-08:00

Aspen company produces widgets. August production costs are below:
Widgets produced 80,000
Direct material (variable) $20,000
Direct labor (variable) $40,000
Supplies (variable) $20,000
Supervision (fixed) $30,000
Depreciation (fixed) $25,000
Other (fixed) $5,000
Total $140,000
In September, Aspen expects to produce 100,000 widgets. Assuming no structural changes
In August, the actual direct material costs were $24,000 and Aspen produced and sold 90,000 widgets. The direct material performance variance (difference) is?
a) $4,000 unfavorable
b) $4,000 favorable
c) $1,500 unfavorable
d) $1,500 favorable

Aspen company produces widgets. August production costs are below: Widgets produced 80,000 Direct material (variable) $20,000 Direct labor (vari...

2012-03-03T00:19:00.001-08:00

Q:
Aspen company produces widgets. August production costs are below:
Widgets produced 80,000
Direct material (variable) $20,000
Direct labor (variable) $40,000
Supplies (variable) $20,000
Supervision (fixed) $30,000
Depreciation (fixed) $25,000
Other (fixed) $5,000
Total $140,000
In September, Aspen expects to produce 100,000 widgets. Assuming no structural changes, what is Aspen’s production cost per widget for September?
a) $1.60
b) $1.75
c) $1.40
d) $1.00

Armstrong Helmet Company manufactures a unique model of bicycle helmet. The company began operations December 1, 2008. Its accountant quit the second week of operations, and the company is searching for a replacement. The company has decided to test the knowledge and ability of all candidates interviewing for the position. Each candidate will be provided with the information below and then asked to prepare a series of reports, schedules, budgets, and recommendations based on that information. The information provided to each candidate is as follows.

2012-03-03T00:18:00.001-08:00

:
Armstrong Helmet Company manufactures a unique model of bicycle helmet. The company began operations December 1, 2008. Its accountant quit the second week of operations, and the company is searching for a replacement. The company has decided to test the knowledge and ability of all candidates interviewing for the position. Each candidate will be provided with the information below and then asked to prepare a series of reports, schedules, budgets, and recommendations based on that information. The information provided to each candidate is as follows.

Cost Items and Account Balances
Administrative salaries $15,500
Advertising for helmets 11,000
Cash, December 1 –0–
Depreciation on factory building 1,500
Depreciation on office equipment 800
Insurance on factory building 1,500
Miscellaneous expenses—factory 1,000
Office supplies expense 300
Professional fees 500
Property taxes on factory building 400
Raw materials used 70,000
Rent on production equipment 6,000
Research and development 10,000
Sales commissions 40,000
Utility costs—factory 900
Wages—factory 70,000
Work in process, December 1 –0–
Work in process, December 31 –0–
Raw materials inventory, December 1 –0–
Raw materials inventory, December 31 –0–
Raw material purchases 70,000
Finished goods inventory, December 1 –0–
Production and Sales Data
Number of helmets produced 10,000
Expected sales in units for December ($40 unit sales price) 8,000
Expected sales in units for January 10,000
Desired ending inventory 20% of next month's sales
Direct materials per finished unit 1 kilogram
Direct materials cost $7 per kilogram
Direct labor hours per unit .35
Direct labor hourly rate $20
Cash Flow Data
Cash collections from customers: 75% in month of sale and 25% the following month.
Cash payments to suppliers: 75% in month of purchase and 25% the following month.
Income tax rate: 45%.
Cost of proposed production equipment: $720,000.
Manufacturing overhead and selling and administrative costs are paid as incurred.
Desired ending cash balance: $30,000.
EXERCISES
Instructions
Using the data presented above, do the following.

1 Classify the costs as either product costs or period costs using a five-column table as shown below. Enter the dollar amount of each cost in the appropriate column and total each classification.

Product Costs
Item Direct Materials Direct Labor Manufacturing Overhead Period Costs

2 Classify the costs as either variable or fixed costs. Assume there are no mixed costs. Enter the dollar amount of each cost in the appropriate column and total each classification. Use the format shown below. Assume that Utility costs—Factory are a fixed cost.

Item Variable Costs Fixed Costs Total Cost
3 Prepare a schedule of cost of goods manufactured for the month of December 2008.

4 Determine the cost of producing a helmet.

5 Identify the type of cost accounting system that Armstrong Helmet Company is probably using at this time. Explain.

6 Under what circumstances might Armstrong use a different cost accounting system?

7 Compute the unit variable cost for a helmet.

8 Compute the unit contribution margin and the contribution margin ratio.

9 Calculate the break-even point in units and in sales dollars.

10 Prepare the following budgets for the month of December 2008.
(a) Sales.

(b) Production.

(c) Direct materials.

(d) Direct labor.

(e) Selling and administrative expenses.

(f) Cash.

(g) Budgeted income statement.

11 Prepare a flexible budget for manufacturing costs for activity levels between 8,000 and 10,000 units, in 1,000 unit increments.

12 Identify one potential cause of materials, direct labor, and manufacturing overhead variances in the production of the helmet.

13 Determine the cash payback period on the proposed production equipment purchase, assuming a monthly cash flow as indicated in the cash budget (requirement 10f).

Apple pays its managers $100,000, $200,000, and $300,000 for every 100,000, 200,000, and 300,000 units produced, respectively. Apple’s management costs are:

2012-03-03T00:17:00.001-08:00

Q:
Apple pays its managers $100,000, $200,000, and $300,000 for every 100,000, 200,000, and 300,000 units produced, respectively. Apple’s management costs are:
a. Fixed
b. Variable
c. Step
d. Mixed

Q: Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March. Date Activities Units Acquired at Cost Units Sold at Retail Mar.1 Beginning inventory 50units $50.00/unit Mar.5 Purchase 200 units @ $55.00/unit Mar.9 Sales 210units@ $85.00/unit Mar.18 Purchase 60 units @ $60.00/unit Mar.25 Purchase 100 units @ $62.00/unit Mar.29 Sales 80 units @ $95.00/unit Totals 410 unit’s 290 units Required: 1. Compute cost of goods available for sale and the number of units available for sale. 2. Compute the number of units in ending inventory. 3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 40 units from beginning inventory and 170 units from the March 5 purchase; the March 29 sale consisted of 20 units from the March 18 purchase and 60 units from the March 25 purchase. (Due to rounding, the sum of Cost of Goods Sold and Ending inventory may not equal the Cost of Good available for sales. 4. Compute gross profit earned by the company for each of the four costing methods.

2012-03-03T00:16:00.001-08:00

Q:
Anthony Company uses a perpetual inventory system. It entered into the following purchases and sales transactions for March.
Date Activities Units Acquired at Cost Units Sold at Retail
Mar.1 Beginning inventory 50units $50.00/unit
Mar.5 Purchase 200 units @ $55.00/unit
Mar.9 Sales 210units@ $85.00/unit
Mar.18 Purchase 60 units @ $60.00/unit
Mar.25 Purchase 100 units @ $62.00/unit
Mar.29 Sales 80 units @ $95.00/unit Totals 410 unit’s 290 units
Required:
1. Compute cost of goods available for sale and the number of units available for sale.
2. Compute the number of units in ending inventory.
3. Compute the cost assigned to ending inventory using (a) FIFO, (b) LIFO, (c) weighted average, and (d) specific identification. For specific identification, the March 9 sale consisted of 40 units from beginning inventory and 170 units from the March 5 purchase; the March 29 sale consisted of 20 units from the March 18 purchase and 60 units from the March 25 purchase. (Due to rounding, the sum of Cost of Goods Sold and Ending inventory may not equal the Cost of Good available for sales.
4. Compute gross profit earned by the company for each of the four costing methods.

Allocation of overhead based on volume such as direct labor hours:

2012-03-03T00:15:00.001-08:00

Q:
Allocation of overhead based on volume such as direct labor hours:
A. must be used for external financial reporting
B. is always used in activity-based costing
C. will over-allocate overhead to high-volume products and under-allocate to low-volume products
D. will over-allocate overhead to low-volume products and under-allocate to high-volume products

All the following are NOT discretionary fixed costs except:

2012-03-03T00:14:00.001-08:00

Q:
All the following are NOT discretionary fixed costs except:
A.) Insurance
B.) R&D
C.) Utilities
D.) Commissions
E.) Labor
F.) C & D Only

Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand. In considering that most young households have limited financial resources, Alden has attempted to engage in target costing. "In doing this," Milt Alden stated, "we have better control over keeping price right in line with customers." Alden manufactures a three-speed blender, its top seller, and a five-speed blender. The hand mixers are manufactured in two styles-a small handheld mixer with two rotating beaters and a similar style that comes with an optional stand and attached mixing bowl. Alden's temperature-controlled skillets are manufactured in one style with three color options. "Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low." If Alden raises the price on the handheld mixer by 2 percent and quantity demanded falls by 10 percent, what is the price elasticity of demand? a. -5

2012-03-03T00:13:00.001-08:00

:
Alden Manufacturing produces small kitchen appliances-blenders, hand mixers, and electric skillets-under the brand name First Generation. Alden attempts to target newlyweds and first-time home buyers with this brand.
In considering that most young households have limited financial resources, Alden has attempted to engage in target costing. "In doing this," Milt Alden stated, "we have better control over keeping price right in line with customers."
Alden manufactures a three-speed blender, its top seller, and a five-speed blender. The hand mixers are manufactured in two styles-a small handheld mixer with two rotating beaters and a similar style that comes with an optional stand and attached mixing bowl. Alden's temperature-controlled skillets are manufactured in one style with three color options.
"Our product offerings are narrower," Milt Alden added, "but our line workers know each product like the back of their hands. This allows us to produce superior products while holding our prices low."
If Alden raises the price on the handheld mixer by 2 percent and quantity demanded falls by 10 percent, what is the price elasticity of demand?
a. -5
b. -8
c. -12
d. 5
e. 12

ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was...

2012-03-03T00:11:00.001-08:00

Q:
ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was six years with a residual value of $20,000 and ABO uses straight-line depreciation, which of the following is true regarding the entry to record the sale of the truck?
a) Credit Gain $5,000.
b) Debit Loss $5,000.
c) Credit Accumulated Depreciation $40,000.
d) Credit Truck $100,000.

ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was...

2012-03-02T23:01:00.001-08:00

Aberdeen Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $...

2012-03-02T22:59:00.001-08:00

Q:
Aberdeen Corp. uses activity-based costing system with three activity cost pools. The following information is provided:
Costs: Wages and salaries $ 220,000
Depreciation 120,000
Utilities 100,000
Total $440,000

Activity Cost Pools
Assembly Setting Up Other Total
Wages and salaries 60% 30% 10% 100%
Depreciation 35% 45% 20% 100%
Utilities 30% 40% 30% 100%

How much total cost would be allocated to the Assembly activity cost pool?
A. $204,000
B. $174,000
C. $440,000
D. $162,000

ABC and XYZ Companies have the following sales, variable cost, and fixed cost. If sales increase by $10,000 at each company, then: ABC XYZ Sales $50...

2012-03-02T22:58:00.003-08:00

Q:
ABC and XYZ Companies have the following sales, variable cost, and fixed cost. If sales increase by $10,000 at each company, then:
ABC XYZ
Sales $50,000 $50,000
Variable Costs $10,000 $30,000
Fixed Costs $30,000 $10,000
a. ABC profits will increase by $2,000.
b. XYZ profits will increase by $4,000.
c. ABC and XYZ profits will increase by $4,000 and $6,000.
d. XYZ profits will increase by $8,000.

A typical use of managerial accounting is to: a) help investors and creditors assess the financial position of the company b) help management get a ..

2012-03-02T22:58:00.001-08:00

Q:
A typical use of managerial accounting is to:
a) help investors and creditors assess the financial position of the company
b) help management get a clean audit report
c) help the marketing manager decide which product promotion to implement
d) help the SEC decide whether management is in compliance of its policies

A trial balance represents the: a) Source documents used to determine the effects of transactions on the company's accounts. b) List of all accounts...

2012-03-02T22:57:00.001-08:00

Q:
A trial balance represents the:
a) Source documents used to determine the effects of transactions on the company's accounts.
b) List of all accounts and their balances at a particular date to ensure that debits equal credits.
c) Chronological record of all transactions affecting the company.
d) Process of transferring debit and credit information from the journal to the accounts in the general ledger.

A trial balance can best be explained as a list of: a) The income statement accounts used to calculate net income. b) Revenue, expense, and dividend...

2012-03-02T22:55:00.001-08:00

Q:
A trial balance can best be explained as a list of:
a) The income statement accounts used to calculate net income.
b) Revenue, expense, and dividend accounts used to show the balances of the components of retained earnings.
c) The balance sheet accounts used to show the equality of the accounting equation.
d) All accounts and their balances at a particular date.

A sale on credit ends up on the income statement as revenue and as what on the balance sheet? A. Accounts receivable B. Long-term assets C. Short-t...

2012-03-02T22:54:00.001-08:00

Q:
A sale on credit ends up on the income statement as revenue and as what on the balance sheet?
A. Accounts receivable
B. Long-term assets
C. Short-term liability
D. Operating cash flow

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Materiality is based upon which factor(s)?

Martha is managing a project that has a degree of operating leverage equal to 1.8. What was the percentage change in the sales quantity if her operating cash flow rose by 6.3 percent?

Managers should consider ethical aspects of their decisions because:

Management control:

Liabilities are best defined as:

Level sets of frequent, consistent cash flows are called

Large, highly-rated firms sometimes sell commercial paper

Incremental revenue is the additional revenue received as a result of selecting one decision alternative over another.

In which of the following periods should the expense for warranty costs be recorded?

In the operating activities section of the statement of cash flows, we start with net income when using:

In the Fidel Castro/Stroh's commercial we viewed in class, the ad used Fidel Castro (speaking English) to hold your attention, the objectives of the add we to ______________.

In the case of services, captive product pricing is called ________ pricing.

In December, 2011, Quebecor Printing received magazine subscriptions for 2012 from a customer, who paid $500 in cash. What would be the appropriate journal entry for this event?

In a recent radio spot, John and Barb gave a quick explanation of Sparkle's cleaning process and a description of the value consumers receive for their money. This is an example of a(n) ________.

In a period when inventory costs are rising, the inventory method that most likely results in the highest ending inventory is:

In a period when inventory costs are falling, the lowest taxable income is most likely reported by using the inventory method of:

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a contingent liability should be

If demand falls by 1 percent when price is increased by 2 percent, then ________.

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored)

How many joint products can come from a set of common inputs?

How is gross profit margin calculated? A. Cost-of-goods/revenue B. Gross profit/net profit C. Gross profit/revenue D. Sales/gross profit ...

How do most employers pay employees? a. By check b. By electronic fund transfer c. By cash payments d. Both A and B are common ways for employers ...

Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of u...

Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6...

Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter foreve...

If management can estimate the amount of loss that will occur due to litigation against the company, and the likelihood of the loss is probable, a con...

If demand falls by 1 percent when price is increased by 2 percent, then ________. a. elasticity is -1/2 b. demand is inelastic c. demand is elastic...

If a company is currently operating at its breakeven point, which of the following statements is true? (Income tax considerations are ignored) A) If ...

How many joint products can come from a set of common inputs? A) no more than four B) only two or three C) It depends on the process involved. D) ...

How is gross profit margin calculated? A. Cost-of-goods/revenue B. Gross profit/net profit C. Gross profit/revenue D. Sales/gross profit ...

How do most employers pay employees? a. By check b. By electronic fund transfer c. By cash payments d. Both A and B are common ways for employers .

Harley Davidson sells motorcycle X and Y. Motorcycle X sells for $10,000, has variable cost (labor and material) of $2,000, and requires 10 hours of u...

Han Products manufactures 21,000 units of part S-6 each year for use on its production line. At this level of activity, the cost per unit for part S-6...

Green Co. just paid dividend of $1 per share. The company predicts that the dividend will increase 7% for next 5 years and 5 percent thereafter foreve..

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top mil...

Grant has been working in the baking industry for about two decades. He started out as a miller in a company in Germany, trained at one of the top mil..

Glade Company produces a single product. The costs of producing and selling a single unit of this product at the company’s current activity leve...

Generally Accepted Accounting Principles (GAAP) are best defined as: a) Standards or methods for presenting financial accounting information. b) Gov...

Fraudulent reporting by management could include: a) Fictitious revenues from a fake customer. b) Improper asset valuation. c) Mismatching revenues...

Fraudulent reporting by management could include: a) Fictitious revenues from a fake customer. b) Improper asset valuation. c) Mismatching revenues...

For which of the following taxes is there a ceiling on the amount of annual earnings subject to the tax? a. Only the FICA tax and the federal unemplo...

Firms are less affected by competitors' pricing strategies under ________ than under ________. a. monopolistic competition; oligopolistic competition...

Energy Tech company issued an 8% (semiannual payment) 20 year bond 5 years ago.a.If the yield of similar bond today is 6%, what is the bond price? Wha...

EBIT is as important measure in companies because: A. It is free cash flow B. It subtracts interest and taxes from net income to get a truer picture...

Dozier Corporation is a fast-growing supplier of office products. Analysts project the following free cash flows to firm (FCFFs) during the next 3 yea...

Dexter Products, Inc., manufactures and sells a number of items, including an overnight case. The company has been experiencing losses on the overnigh...

Dan Jones and Pat Smith are the only two employees of Lone Star Company. In January, 2009, Dan's gross pay was $4,400 and Pat's gross pay was $5,200. All earnings are subject to FICA taxes of 8%. Which of the following would be included in the entry to record the payroll for January?

Customer profitability analysis might result in:

Cost-plus contracts are common in which of the following industries?

Consider the two mutually exclusive projects: t=0 t=1 t=2 t=3 A ($4500) $2590 $2010 $1465 B ($4600) $2630 $2025 $1600 Provide the NPV profiles of the two projects. (8 points) Which project will you accept at the crossover rate and why? (4 pts) You can use excel or the calculator for calculations.

Consider the following cash flows for Davie Corp.

Common stockholders usually have all of the following rights except:

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor quantity variance was

Cola co manufactures a product with a standard direct labor cost of two hours at $24.00 per hour. During july 2,000 units were produced using 4,200 hours at $24.40 per hour. The labor price variance was

Cash flows from investing activities do not include:

Carter Company records sales on account of $950,500. The company operates in a state that imposes a 5% sales tax. Which of the following would be the amount of the sales tax payable to the state?

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

Car company is considering two capital investment proposals regarding each project are provided below : Project Soup project Nuts Initial investment $600,000 $900,000 Annual net income 30,000 63,000 Net annual cash inflow 150,000 213,000 Estimated useful life 5 years 6 years Salvage value -0- -0-

Breakeven point using the contribution margin approach is calculated by:

Boyle’s Home Center, a retailing company, has two departments, Bath and Kitchen. The company’s most recent monthly contribution format income statement follows:

Bold Face manufactures TV’s. The company’s color TV’s are very popular, but it has an inventory of 500 large screen, black and white TV’s for which there is little demand. Bold Face is considering the following options for disposing of these TV’s:

Barnyard, Inc.'s 2008 income statement lists the following income and expenses: EBIT = $506,500, Interest expense = $45,000, and Taxes = $158,500. Barnyard's has no preferred stock outstanding and 140,000 shares of common stock outstanding. What are its the 2008 earnings per share?

At Dec 31st the douglas corporation reported the following results for the year. Cash sales $3,600,000 Credit sales $2,926,000 in addition, its unadjusted trial base include the following items: Account receivable $943,000 (Dr) Allowance for doubtful accounts $12,300 (cr)

Aspen company produces widgets. August production costs are below: Widgets produced 80,000 Direct material (variable) $20,000 Direct labor (vari...

Aspen company produces widgets. August production costs are below: Widgets produced 80,000 Direct material (variable) $20,000 Direct labor (vari...

Apple pays its managers $100,000, $200,000, and $300,000 for every 100,000, 200,000, and 300,000 units produced, respectively. Apple’s management costs are:

Allocation of overhead based on volume such as direct labor hours:

All the following are NOT discretionary fixed costs except:

ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was...

ABO purchased a truck at the beginning of 2012 for $140,000. They sold the truck at the end of 2013 for $95,000. If the expected life of the truck was...

Aberdeen Corp. uses activity-based costing system with three activity cost pools. The following information is provided: Costs: Wages and salaries $...

ABC and XYZ Companies have the following sales, variable cost, and fixed cost. If sales increase by $10,000 at each company, then: ABC XYZ Sales $50...

A typical use of managerial accounting is to: a) help investors and creditors assess the financial position of the company b) help management get a ..

A trial balance represents the: a) Source documents used to determine the effects of transactions on the company's accounts. b) List of all accounts...

A trial balance can best be explained as a list of: a) The income statement accounts used to calculate net income. b) Revenue, expense, and dividend...

A sale on credit ends up on the income statement as revenue and as what on the balance sheet? A. Accounts receivable B. Long-term assets C. Short-t...

Firms are less affected by competitors' pricing strategies under than under . a. monopolistic competition; oligopolistic competition...