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Cost Accounting: Activity Based Costing

"This is illogical," said Mike Rafferty, president of XYZ Company. "Unit sales this year were the same as last year, but our bottom line profits have more than doubled. Who made the accounting mistake�"the people or the computer?" The income statements to which Mr. Rafferty was referring are shown below (based on the absorp

Rocky Mountain Manufacturing: Flexible Budgeting

Exercise 15.2 Flexible budgeting Rocky Mountain Manufacturing produces a single product. The original budget for November was based on expected production of 35,000 units; actual production for November was 33,250 units. The original budget and actual costs incurred for the manufacturing department follow: Orig

Standard Costs and Variances: Dresser Company

Dresser Company uses a standard cost system and sets predetermined overhead rates on the basis of direct labor-hours. The following data are taken from the company's budget for the current year: Denominator activity (direct labor-hours).................................................9,000 Variable manufacturing overhead cos

Managing Assets

One of your long-standing clients is a domestic manufacturer, who up until now has not only manufactured their products solely in the US but also only sold their products in the US. About a month ago, their CEO visited and said they were planning to "go global"; this would include both sourcing of manufactured parts from oversea

Scenario: Control procedures that prevent/detect the theft of cash

The following is an excerpt from a conversation between two sales clerks, Tracy Rawlin and Jeff Weimer. Both Tracy and Jeff are employed by Magnum Electronics, a locally owned and operated electronics retail store. Tracy: Did you hear the news? Jeff: What news? Tracy: Bridget and Ken were both arrested this morning. Je

Accounting for Income Taxes: AT&T's 2000 Annual Report

In AT&Ts 2000 annual report, the company reported long-term deferred tax assets of $4,523,000,000 and current deferred tax assets of $1,791,000,000. Disclosure Note 15 reported, in part: At December 31, 2000, we had net operating loss carry-forwards (tax-effected), excluding Excite@Home, for federal and state income ta

income tax: small business stock

Problem 7-35 Bad Debt and § 1244 Stock and Capital Loss Limit (LO. 1, 2) Mabel and Jack file a joint return. For the current year, they had the following items: Salaries $120,000 Loss on sale of § 1244 stock acquired two years ago 105,000 Gain on sale of § 1244 stock acquired six months ago 20,000 Nonbusiness bad

Book Exercise for Swannworth Inc.

Swannworth Inc., expects its overhead costs for the coming fiscal period to be $78,300. Total direct labor charges should be 3,000 hours at $10 per hour plus 900 hours at $l5 per hour. a. Compute the predetermined overhead rate, using direct labor dollars as the allocation base. b. Ignoring the information given above, consi

Common-Size Percentage for Net Income

Foreign Travel Services has net income of $48,400, total assets of $219,000, total equity of $154,800, and total sales of $311,700. What is the common-size percentage for the net income? A. 9.00 percent B. 13.90 percent C. 15.53 percent D. 22.10 percent E. 31.27 percent Delmont Movers has a profit margin of 6.2 percent

Capital Gains Taxes

James Welling, a 37 year old engineer has an appointment to meet you in about an hour. As you are reviewing his accounts, you notice that he is a fairly active trader. He seems to do pretty well with returns that outpace the averages, but you can't help wonder how much he ends up paying each year in capital gains taxes. As his

Agency Analysis

Identify a public agency - either at the local, state, or federal levels - that has undergone significant change in the last 25 years. You may choose an agency that you have had personal experience with, or you may choose a public agency that you are familiar with from the news or from academic study. Assess the scope of servi

Choosing the best buy

I am having extreme difficulty with this question. The following is an excerpt from a conversation between Eric Jackson and Carlie Miller. Eric is debating whether to buy a stereo system from First Audio, a locally owned electronics store, or Dynamic Sound Systems, an online electronics company. Eric: Carlie, I don't know

Maximization of Profits

A trendy French restaurant is one of the first businesses to open in a small corner of a commercial building still under construction. The restaurant has received rave reviews and has lines of diners waiting for tables most nights. a. In the short run (next few months), what measures should the restaurant take to maximize it

Calculating Manufacturing Overhead

I require some assistance calculating manufacturing overhead. Mathewson Industries has recently switched its method of applying manufacturing overhead from a single predetermined overhead rate based on direct labor hours to activity-based costing (ABC). Assume that the direct labor rate is $18.00 per hour and that there were

Regression Analysis: Scatterplot, Sales Price Drivers

Regression Project Answer the following questions (each question should be a separate worksheet tab labeled as q1, q2, etc.) (point values for each component are noted): 1. (12) For each of the six potential sales price drivers (sq footage, baths, bedrooms, year built, car garage size, and fenced (yes=1, no = 0)) do each o

Activity-Based Costing (ABC) & Statement of Cost of Goods Manufactured

Both questions are correctly formatted in the two attachments. Thanks in advance for the guidance. __________________________________ 1. Kinney Industries has recently switched its method of applying manufacturing overhead from a single predetermined overhead rate based on direct labor hours to activity-based costing (ABC).

International Tax Planning

-How exactly does international tax planning assist a U.S. citizen avoid taxes? -For a U.S. multi-location manufacturer, how might they use transfer pricing to reduce their tax liability. Assume a firms steel mill, makes steel which goes to its machining operation, and the machining operation ships parts to an assembly plant. E

Nonprofit versus for-profit expenditures

1. Prepare, side by side, the correct journal entry for the identical transaction: a. once for a nonprofit entity b. once for a for-profit company 2. Include notes for each transaction Transaction 1: Assume a nonprofit has a restricted fund for capital asset purchases. Compare the journal entr

Tax Advantages and Disadvantages

The town of Seaside has decided to construct a new sea aquarium to attract tourist. The cost of the measure is to be paid by a special tax. Although most of the townspeople believe the sea aquarium is a good idea, there is disagreement about how the tax should be levied. Suggest three different methods of levying the tax and

Incremental Unlevered Net Income

1. Sheppard industries evaluating a proposal expand current distribution facilities. Management projected produce cash flows years (in millions) Year 1 2 Revenues 1200 1400 Operating expense 450

Medical Expense Deduction and State Income Tax Deduction

Question 1: Medical Expense Deduction and Reimbursement (LO. 2) Hunter and Cynthia are married and together have AGI of $100,000 in 2012. They have three dependents and file a joint return. They pay $3,000 for a high-deductible health insurance policy and contribute $2,400 to a qualified Health Savings Account. During the

Starling Coating and substitution

Starling Coating produces weatherproofing coatings that protect metal from oxidation. One of Starling's patented coatings, zurtan, is composed of two inputs, magna45 and zelon. While both inputs are required, they can be substituted for each other. The following table describes how many P gallons of magna45 and zelon are require

Preparing a statement of cashflows

1) Prepare an ending 1998 Income Statement and Balance Sheet from the following information: Sales $800,000; Cost of Goods Sold $300,000; Accounts Receivables $20,000; Bonds Outstanding $160,000; Accounts Payable $20,000; Advertising Expense $1,000; Administrative Expenses $35,000; Interest Expense $24,000; Depreciation Expense

Company Overview Milestone

Find two annual reports from competing publicly traded companies of your choice. Prepare an overview of the two companies including a brief synopsis of the industry the companies are in, the market share each company holds, and the length of time each company has been in business.

A Discussion On Taxation

In order to prepare the new staff for the upcoming tax season, you have decided to hold 1-week training. 1. What type of tax rate structure does the U.S. tax system apply? 2. What are the individual tax forms, and what factors are used to determine which one to use? 3. What is taxable income, and how is it determined?