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    American car manufacturers

    Do you think that American car manufacturers need to reduce their cost struggle (employee labor) to become competitive? Or is the entire industry cyclical with even Toyota struggling during this recession?

    Incremental Analysis and Special Orders

    Henson Company produces golf discs which it normally sells to retailers for $7 each. The cost of manufacturing 20,000 golf discs is: Materials $ 10,000 Labor 30,000 Variable overhead 20,000 Fixed overhead 40,000 Total $100,000 Henson also incurs 5% sales commission ($0.35) on each disc sold. Wood Corporation offers

    Should Shannon Inc. Buying The Lamp Shades

    Shannon Inc has been manufacturing its own shades for its table lamps. The company is currently operating at 100% of capacity. Variable manufacturing overhead is charged to production at the rate of 50% of direct labor cost. The direct materials and direct labor cost per unit to make the lamp shades are $4.00 and $6.00 respectiv

    Corporate Non-liquidating Distributions

    Parking Space Inc. distributed $18,000 to Speedways Inc., a 15 percent shareholder. Parking Space's E&P applicable to Speedways' distribution is $5,000 and Speedways had a basis in its stock of $7,000. a. How much dividend income does Speedways have? b. How much and what kind of taxable income does Speedways have because o

    Fixed Costs and Variable Costs

    Costs can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are running a restaurant and have identified certain costs along with the number of annual units sold of 1000. Item: Raw Materials (cost for hamburgers) Total Annual Cost: 650

    Income Tax: Conversion of a Personal Residence to a Rental

    A tax problem about how and where to report rental income items on income tax return forms: Decision to sell or rent a condo for extra income to pay off the house. Have had condo rented for 5 years. Mike purchased a condo for $125,000. A similar condo recently sold for $165,000. They still owed $87,000 in mortgage payments. T

    Reasons for Retail Chains Closing

    "Look at the number of retail chains that have had to close their doors. I am not sure how much was due to competition or how much was on consumers who over extended their credit and defaulted on their payments. This would cause these chains to lose money." I believe that even though the credit situation paid a major role in t

    Overhead costs

    Overhead costs always present problems for managers because most of them are indirect costs. Not only that, several of these costs are fixed. So the question is how to evaluate overhead costs especially when activity may vary while the costs may remain the same.

    Flexible budgets for performance evaluation

    Why is the flexible budget appropriate for evaluation of performance? Is there any reason why a company should prepare a static budget since its poorly suited for evaluating performance?

    Economic incidence of tax; prepayment of interest

    True and False 1. The person who pays a tax directly to the government bears the economic incidence of the tax. 2. A cash basis taxpayer must account for any prepayment of interest expense under the accrual method.

    Net Profit for ABC Credit Standards

    ABC is considering relaxing its credit standards. It expects the proposal will increase sales by 20% from $10 million. The ACP will increase from 35 to 50 days, and bad debts are expected to increase from 2% of sales to 7%. Variable costs are 60% of sales and fixed cost are $2.5 million a year. The opportunity cost is 16%. Assum

    Accounting Variance Calculations

    Please see attached question. A company produces the follow incomplete information regarding actual and budgeted direct material and production: Budgeted Actual Units produced 1,500 UNITS ? units Material used 6,000 kg 6,640 kg Price pad per kg $? $2.10 The following variances are known Material p


    Please see attachment. Question 4 Blastoff Inc. manufactures sophisticated products used in the agriculture industry. The company has been approached by a customer who wants to buy 400 identical products at $200 per unit over the next 12 months. The data in respect of the production of each individual unit is as follows:

    Bank Sectors Assistance

    "The banking sector does need to have assistance because their failures affect the whole economic sector. These institutions will need to provide capital when the economy eventually changes from a recession to expansion. This in turn will need funding from the banks. This also affects people on a personal level. People will

    Make or Buy Analysis for JMorgan

    The president of JMorgan has equipment for producing subassemblies is worn out, the decision need to be made quickly, if the company should rent new equipment and continue to make its subassemblies internally or whether it should discontinue production of its subassemblies and purchase them from an outside supplier Alternativ

    Absorption Costing for a Single Product: Example Problem

    A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price $100 Units in beginning inventory $0 Units produced $2,400 Units sold $2,100 Units in ending inventory $300 Variable cost per unit: Direct materials $31

    Income statements for variable costing methods

    1) In an income statement prepared using the variable costing method, fixed selling and administrative expenses would: a) be used in the computation of the contribution margin. b) be used in the computation of net operating income but not in the computation of the contribution margin c) be treated the same as

    Costs can be classified into two categories, fixed and variable costs.

    Costs can be classified into two categories, fixed and variable costs. These costs behave differently based on the level of sales volumes. Suppose we are running a restaurant and have identified certain costs along with the number of annual units sold of 1000. Item: Raw Materials (cost for hamburgers) Total Annual Cost: 650

    Balance in Investment Account: Tess Corp Example

    Tess Corp acquires a 25% interest in Gardean Co. on Jan 1, 2004, for $550,000. At that time, Gardean had 1,000,000 shares of its $1 par common stock issued and outstanding. During 2004, Gardean paid cash dividends of $330,000 and thereafter declared and issued a 5% common stock dividend when the market value was $3 per share. Ga

    Maximum Acceptable Price Quotation

    4. Evan Company manufactures and sells several products, one of which is called a slip differential. The company normally sells 30,000 units of the slip differential each month. At this activity level, unit costs are Direct materials $4 Direct labor 3 Variable manufacturing overhead 4 Fixed manufacturing over

    Vaughn Corp

    Vaughn Corporation had net operating income of $380,000 and average operating assets of $2,000,000. The corporation requires a return on investment of 18%. Show all calculations supporting your responses! Required : a.Calculate the company's return on investment (ROI) and residual income (RI). b.Vaughn Corporation is

    Intermediate accounting II

    On Feb 1, 2004, one of the huge warehouses of RME Fireworks Company exploded. Windows in houses and other buildings within a one-mile radius of the explosion were severely damaged, and a number of people were injured. As of feb 15, 2004 (when the Dec 31, 2003, financial statements were completed and sent to the publisher for pri

    Intangible assets

    On May 31, 2004, Porter Company paid $2,100,000 to acquire all of the common stock of Dryer Corporation, which became a division of Porter. Dryer reported the following balance sheet at the time of the acquisition: Current assets $500,000 current liabilities $400,000 noncurrent assets $1,800,000 long-term li


    Assume that the following data relative to Eddy company for 2004 is available: Net Income: $1,400,000 Transactions in Common shares change cumulative 1/1/04, beginning number 500,000 3/1/04 (60,000) 440,000 6/1/04

    Segment Income stat

    SetAttached Problem. 3. The Stanley Company produces and markets two product lines: Racquets and Gloves. The following data were gathered on activities during the third quarter: Racquets Gloves Sales in units 1,000 5,000 Sales price per unit $100 $40 Variable production costs per unit $20 $8 Traceab

    Sterling Company

    Attached Problem. 2. The Sterling Company uses a standard cost system in which manufacturing overhead costs are applied to the units of the company's single product on the basis of direct labor-hours (DLHs). The standard cost card for the product follows: Standard Cost Card-per unit of product: Direct materials, 4 yards

    Adjusting Entry - Unearned Rent

    Adjusting Entries: Unearned rent at 1/1/06 was $3,300 and at 12/31/06 was $9,000. The records indicate cash receipts from rental sources during 2006 amounted to $40,000, all of which was credited to the Unearned Rent Account. You are to prepare the missing adjusting entry. For each journal entry write Dr for debit and Cr for cre

    Value of Tax Shields

    Quiz 15-4 Value of Tax Shields. Establishment Industries borrows $550 million at an interest rate of 6.2 percent. It expects to maintain this debt level into the far future. What is the present value of interest tax shields? Establishment will pay tax at an effective rate of 30 percent. Enter interest rate and tax rate as