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Downhill Pty Ltd.: Overhead Cost

AQ-2 Downhill Pty Ltd. manufactures snow skis and snow boards. Overhead costs are currently allocated using a plantwide overhead rate based on direct labour hours, but the company is contemplating a shift to activity-based costing for overhead. The following data relate to 2009: Downhill Pty Ltd Budgeted Overhead Costs for

Prioritizing Projects

Companies often prioritize projects in the following four categories: Absolutely essential, Highly necessary, Economically justified, and All other. Provide one example for each category. Why do firms do this type of categorization?

Accumulated Retained Earnings Impact the Book Value

Explain how accumulated retained earnings impact the book value of a firm's stock. Say the current market price of this firm's stock on the NYSE is $56.25 per share and the book value of the stock is $45 per share: 1. Give two reasons why the market book share prices might be different. Be specific. 2. If the market fo

Variable Overhead Efficiency Variance Calculations

1. V Company's product has a labor standard of 2 hours per unit. For 2011, it estimates its production will be 200,000 units (400,000 DLHs). It budgets total overhead at $900,000, which results in a fixed overhead rate of $1.50 per hour. Actual data for the year includes: Actual production, 198,000 units (440,000 DLHs), Actual v

Impairment of intangible assets

A toffee company discovers that its competitor is producing and selling what appears to be its patented toffee-coated popcorn for a cheaper price. The company sues its competitor for patent infringement, but its defense is unsuccessful and it loses the lawsuit. The company's chief financial officer adds the cost for the defense

Income Taxes

California Surplus Inc. qualifies to use the installment-sales method for tax purposes and sold an investment on an installment basis. The total gain of $75000 was reported for financial reporting purposes in the period of sale. The installment period is 3 years; one-third of the sale price is collected in 2012 and the rest in 2

Capital Gain: Net Returns and Long/Short-Term Gains

(Only 2 Questions) 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

Determination of Missing Account Balances and Values

Balances & Values Determine the missing values (A,B,C,D, & E). Revenues................................................260 Expenses................................................ 210 Dividends Declared.................................30 Additional Investment by Ow

Special Order: Williams Company

1. Determine how many additional direct labor hours will be required each month to fill the Glasgow order. 2. Prepare an analysis showing the impact on operating profits of accepting the Glasgow order. 3. What is the minimum unit price management could accept for the Glasgow order without reducing operating income. 4. Use the

Purchasing a New Television

Assume you want to purchase a new TV. Your current TV was purchased 3 years ago for $200. You have gathered the following information about the two models in final consideration: Factors Xenabox 1000 BigScreen 1050 Screen Size 32 inch 32 inch Picture Quality Great

Deferred Tax Assets

A company reports deferred tax assets of $200 M. * Describe how deferred tax assets relating to accruals arise * Explain how deferred tax assets relating to loss carry forwards arise * A company reports an increase of its deferred tax asset valuation allowance of $3 M in 2012. How does this affect income?

Comprehensive Variance Analysis for Turner Corporation

Turner Corporation produces overdrive transmission parts for several small specialty automobile companies. Prior to founding the firm, Benson Turner, the company's president, had an illustrious stock-car-racing career. After several serious injuries, Benson's family convinced him that it was time to retire from the sport and pur

Exercise 9.2 Calculate Earned Revenues 9.5 Gross Profit

Exercise 9.2 Calculate Earned Revenues Kirkland Theater sells season tickets for six events at a price of $180. In pricing the tickets, the planners assigned the leadoff event a value of $45 because the program was an expensive symphony orchestra. The last five events were priced equally; 1,200 season tickets were sold for

Business Combinations and Consolidation Promulgations

Many companies choose to combine or consolidate their companies when they see an opportunity for economic growth. This arrangement could be a joint venture, merger, combination, or a consolidation. While these terms seem similar, they have very different meanings when it comes to financial reporting. Companies will often choose

Creating the Lowest Overall Combined Tax Liability

Mary (Who is single with no dependants and who does not itemize) owns 100% of Beezer Tweezer Co, which is organized as a C-Corporation. Beezer Tweezer has $400,000 of taxable income in 2011 and Mary has $34,500 of outside taxable income before any wage compensation from Beezer Tweezer. Assuming reasonable compensation for Mary's

How to calculate return on investment (ROI)

Frazier Company's revenues are $300 on invested capital of $240. Expenses are currently 84% of sales. If Frazier Company can reduce its expenses to 70% of sales, return on investment will be ________.

Accounting Questions Pertaining to the CPA

A. Which of the following is not a purpose of the Sarbanes-Oxley Act? 1. Regulate the auditors of public companies 2. Ensure the adherence of relevant laws and regulations 3. Enhance corporate reporting and disclosure 4. Clarify sound corporate governance I would said that the answer here is 3 - corporate reporting and disc

Accounting Research Methodology

Please explain to me the accounting research methodologies of deductive, inductive and pragmatic research methods. Give me some examples to reinforce these methods.

Cash flows from operating, investing, and financing activities

The following information is available from Gray Co.'s accounting records for the year ended December 31, 2010 (amounts in million): Cash dividends declared and paid - $350 Retirement of bonds payable at maturity - $200 Interest and taxes paid - $150 Proceeds of common stock issued - $550 Proceeds from the sale of land -

Accounts Payable Calculations and Discounts

You work in the Accounts Payable Department in a small company. One of your duties is to determine payment dates for invoices to take advantage of discounts offered by vendors. You then file the invoices by payment date in a tickler file. You check the tickler file each day to see what invoices should be paid in the next couple

Overhead Cost Calculation for an Individual Lawyer

A lawyer allocates overhead costs based on his hours working with different clients. The lawyer expects to have $200,000 in overhead during the year and expects to work on clients' cases for 2,000 hours during the year. In addition, he wants to pay himself $50 per hour for working with clients. The lawyer, however, does not bill

Annual Increase in Income Realized

Your firm has $45.0 million invested in accounts receivable, which is 90 days of net revenues. If this value could be reduced to 50 days, what annual increase in income would your firm realize if the increase in cash could be invested at 7.5 percent? A. $20.0 million B. $1.5 million C. $1.875 million D. Non

Forensic Accounting: Cash Disbursements

Cash Disbursements. Please respond to the following: -Estimate the effects of falsifying records, diverting cash to ghost employees, and duplicating expenses on a small, midsize, and large business. -Choose a small, midsize, or large business and put safeguards into place.

Computing EVA and Comparing Performance

A company that uses EVA reported the following results for 20X4 and 20X5 (in millions): ..............................................20X4............20X5 Pretax operating Income.......5,698...........5,700 Cash Taxes...........................1,676...........1,600 Average adjusted invested capital was $20,308 million in

Ending owner's equity of a business

2) Determine the ending owner's equity of a business having a beginning owner's equity of$10,227, additional investments of $4,533, withdrawals of $1,210, and revenue of $8,254, and expenses before adjustment amounted to $273. The adjustments totaled $6,291. Explain your answer (in 300 words). $____________

Penelope, Mark, and John Entity Selection

After 20+ years of working for other firms, Penelope (Enrolled Agent, age 41), Mark (CPA, age 43) and John (CVA, age 65) want to leave the firms they are currently employed by and become their own bosses. Penelope specializes in Taxes, Mark is the Auditor and John is a Business Valuation expert. There are so many options avai

Predetermined Overhead Rate and Applied Overhead

1. Amanda Bitsworth manufactures votive candles. Overhead is applied to products on the basis of direct labor hours. Last year, total overhead costs were expected to be $85,000. Actual overhead costs totaled $63,000 for 6,500 actual hours. At the end of the year, overhead was under-applied by $4,000. A) Calculate the predeter

Residual Income Long Beach Pharmaceutical Company

Long Beach Pharmaceutical Company has two divisions, which reported the following results for the most recent year. Division I Division II Income $900,000 $200,000 Average invested capital $6,000,000 $1,000,000 ROI