Why would the vice president of a company who receives an annual bonus based on profitability of the company want you to create a income statement that classified startup costs, research costs and development costs as a product costs? What are the ethical considerations of reporting startup costs as product costs? As a cor
LBG Co. had a sheet metal cutter that cost $72,000 on January 5, 1999. This old cutter had an estimated life of ten years and a salvage value of $12,000. On April 3, 2004, the old cutter is exchanged for a similar cutter (a similar asset) with a market value of $36,000. LBG Co. also received $9,000 cash. Assume that the last fis
Jantz Corporation purchased a machine on July 1, 2001, for $250,000. The machine was estimated to have a useful life of 10 years with an estimated salvage value of $14,000. During 2004, it became apparent that the machine would become uneconomical after December 31, 2008, and that the machine would have no scrap value. Accumulat
On January 1, 2004, the Accumulated Depreciation, Machinery account of a particular company showed a balance of $740,000. At the end of 2004, after the adjusting entries were posted, it showed a balance of $790,000. During 2004, one of the machines which cost $250,000 was sold for $121,000 cash. This resulted in a loss of $8,000
1. Tom has investments in 4 passive activity partnerships purchased several years ago. For 2006 in income and losses were as follows: ACTIVITY INCOME (LOSS) A $50,000 B (50,000) C (20,000) D
Case 1 ("Predetermined Rate") Hoy Heating and Air Conditioning Company repairs heating and cooling equipment. Each time a service technician completes a job, a time sheet is turned in and the job cost is computed. The company calculates the cost of each job by adding the cost of any materials used on the job, the labor cost o
Is it true or false statement? Including manufacturing overhead costs in product costs ensures that each product will earn a profit.
Johnson Company has observed that at an activity level of 5,000 units the cost for maintenance is $6,500 and at 10,000 units the cost for maintenance is $9,000. Using the high-low method, the cost formula for maintenance is $4,000 plus $.50 per unit $3,000 plus $.60 per unit $.90 per unit $1.30 per unit
Sales for a retail store were $250,000. Net Operating Income totaled $30,000 and cost of goods sold was $110,000. If the contribution margin was $100,000. What would the total variable selling and administrative costs have been?
Stuart Company is a merchandising company. During the next month, the company expects to sell 450 units. The company has the following revenue and cost structure: Selling price per unit.......... $230 Cost per unit...................... $120 Sales commission............... 12% of sales Advertising expense.......
Cranbrook Company has the following data for the month of March: Sales.......................................................... $30,000 Fixed manufacturing overhead................. $5,500 Direct labor................................................ $7,250 Fixed selling expense......................
If a company in computing its predetermined overhead rate included its factory insurance cost twice. Then does this result in the ending balance: of Finished Goods to be understated or the credits to the Manufacturing Overhead account to be understated or the Cost of Goods Manufactured to be overstated or the Net Operating
Which of the following would most likely be included as part of manufacturing overhead in the production of a wooden table? The amount paid to the individual who stains the table. The commission paid to the salesperson who sold the table. The cost of glue used in the table. The cost of the wood used in the table. I
I:4-60 Alice Johnson, Social Security number 222-23-3334, is a single taxpayer and is employed as a secretary by State University of Florida. She has the following items pertaining to her income tax return for 2005: 1) Received a $20,000 salary from her employer, who withheld $3,000 federal income tax. 2) Received a gift
Vannorman Corporation processes sugar beets in batches. A batch of sugar beets costs $75 to buy from farmers and $11 to crush in the company's plant. Two intermediate products, beet fiber and beet juice, emerge from the crushing process. The beet fiber can be sold as is for $11 or processed further for $20 to make the end produc
Gallerani Corporation has received a request for a special order of 5,200 units of product A90 for $20.8 each. Product A90's unit product cost is $14.6, determined as follows: Direct materials $ 5.6 Direct labor 4.2 Variable manufacturing overhead 1.8 Fixed manufacturing overhead 3 Unit product cost $14.6 Direct
Hodge Inc. has some material that originally cost $73,300. The material has a scrap value of $57,100 as is, but if reworked at a cost of $1,600, it could be sold for $54,400. What would be the incremental effect on the company's overall profit of reworking and selling the material rather than selling it as is as scrap? -$4
The management of Bonga Corporation is considering dropping product D74F. Data from the company's accounting system appear below: Sales $760,000 Variable expenses $480,000 Fixed manufacturing expenses $266,000 Fixed selling and administrative expenses $312,000 All fixed expenses of the company are fully allocated
Exercise 13-6 Sell or Process Further [LO6] Solex Company manufactures three products from a common input in a joint processing operation. Joint processing costs up to the split-off point total $104,000 per year. The company allocates these costs to the joint products on the basis of their total sales value at the split-off p
Question 2: Rebelo Corporation is presently making part E07 that is used in one of its products. A total of 19,000 units of this part are produced and used every year. The company's Accounting Department reports the following costs of producing the part at this level of activity: Per Unit Direct materials $3.4 Dire
5-44 Netting Gains and Losses. Trisha, whose tax rate is 35%, sells the following capital assets in 2007 with gains and losses as shown: Asset Gain or (loss) Holding Period A $15,000 15 months B 7,000 20 months
Trisha, whose tax rate is 35%, sells the following capital assets in 2007 with gains and losses as shown: Asset Gain or (loss) Holding Period A $15,000 15 months B 7,000 20 months C (3,000) 14 months a. Determine Trisha's increase in tax liability as a result of the three
Please explain what the meaning by the phrase "absorption of uncertainty" means.
Wright inc produces three products. Data concerning the selling prices and unit costs of the three products appear below: Product C D E Selling price
The following standards have been established for a raw material used to make product I 98: Standard quantity of the material per unit of output 4.5 pounds Standard price of the material $ 13.90 per pound The following data pertain to a recent month's operations: Actual material purchased
Assume that the following cases are independent and rely on the following data. Make the necessary entries on the books of both companies. See attached file for data. Case 1: Bakken Co. and Farley Co. traded the above equipment. Assume the transaction has commercial substance. Case 2: Bakken Co. and Farley Co. traded
A staff assistant at Lincoln Corporation recently determined that the first four units completed in a new manufacturing process took 2000 hours to complete or an average of 500 hours per unit. The assistant also found that when the cumulative output produced doubles, the average labor time declines by 10%. On the basis of this i
How do you think you could take variance information and find that some error in calculations have been made....any ideas?
Describe how accounts receivable arise and how they accounted for, including the use of a subsidiary ledger and an allowance account.
How is the cost principle applied to plant assets, acquisitions, including lump-sum purchases?