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    Activity-based costing vs traditional overhead allocation

    Activity-based costing versus tradtional overhead allocation methods: Woodruff Industries manufactures and sells custom-made coffee tables. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three

    7. Net operating income

    A company has identified two methods for producing playing cards. 1 method involves using a machine having a fixed cost of $10K and variable costs of $1 per deck. The other method would use a less expensive machine (fixed cost = $5K) but it would require greater variable costs (1.50 per deck of cards. If the selling price per

    EPS vs EBIT

    Are any of the following correct? 1. Suppose Company A's EPS is expected to experience a larger % of change in sales than Company B's EPS. Other things held constant, Company A would appear to have more business risk than Company B? 2. Statement 1 would be correct if the term EBIT were substituted for EPS 3. Stateme

    Cardinals Company Financial Calculations

    Cardinals Co issued $900,000 of 8%, 4-year bonds on 6/1/05 at {96} plus accrued interest. The bonds mature on 3/1/09, and pay interest each 3/1 and 9/1. The straight line method is used to amortize any discount or premium. Compute the 1) amt of interest expense reported FYE 12/31/05 2) balance of the discount account at

    Computation of a stock price: Example problem

    (See attached file for full problem descriptions with financial information) 1. Compute the stock price for Cain if it sells at 18 times earnings per share and EBIT is 40,000 2. Calloway cab company determines its break-even strictly on the basis of csh expenditures related to fixed cost. Its total fixed cost are 400,00,

    Accounting Debate Questions for Standards and Implementation

    Provide a two or three sentence response that argues for or against (indicate which) each of these statements: a. Accounting is an exact science b. Mangers choose accounting procedures that produce the most accurate picture of the company's operating performance and financial condition. c. Accounting standards in the Un

    Solve equations by grafting, substitution, addition method

    Solve by graphing, indicate whether each system is independent, inconsistent, or dependent. 1. x + y = 5 x - y = -1 2. y = -x y = -x + 3 Solve by substitution, indicate whether each system is independent, inconsistent, or dependent. 3. x - y = 3 3x - 2y = 3 4. 2x - y = 3 6x - 9 = 3y Solve by the addition metho

    Accounting multiple choice questions explained in this solution

    Definitional 1. A (n) __________ is a legal entity created by a state, and it is separated from its owners and managers. 2. The ________ _____ lists the firm's assets as well as claims against those assets. 3. The debt ratio, which is the ratio of ______ ___ to ________ ________, measures proportion of funds supplied b

    Capital stock transactions

    On the basis of the explanation for each entry, prepare the entry that should have been made for the capital stock transactions.

    Cardinals Company Transactions Bonds

    Cardinals Co purchased some equipment on 12/31/05 by issuing a $525,000, 3%, 5-year note calling for 5 equal annual payments, the first of which to be made on 12/31/06. The appropriate rate of interest for this type of activity is 10%. Since this is a below market interest note, the net method of recording is utilized. Co

    Calculating Collection Float

    Lock Boxes. Anne Teak, the financial manager of a furniture manufacturer, is considering operating a lock-box system. She forecasts that 400 payments a day will be made to lock boxes with an average payment size of $2,000. The bank's charge for operating the lock boxes is $.40 a check. The interest rate is .015 percent per day.

    Should the company invest money in one or two of these projects? Which ones?

    Here is the project: Spend $200,000 to increase plant capacity for Product B. The new capacity will cause profits to increase by $200,000 per year in the first year. The sales forecast is estimated to be 80% accurate. The other project is Upgrade the MIS system for the company. There is a 100% certainty I will have manpower s

    The Pacific Company Manufactures a Single Product

    Use the following to answer question 22: The Pacific Company manufactures a single product. The following data relate to the year just completed: Variable cost per unit: Production $43 Selling and administrative $15 Fixed costs in total: Production $145,000 Selling and adminis

    Overhead Budgeting

    Use the following to answer questions 12-13: The Culver Company is preparing its Manufacturing Overhead Budget for the third quarter of the year. Budgeted variable factory overhead is $3.00 per unit produced; budgeted fixed factory overhead is $75,000 per month, with $16,000 of this amount being factory depreciation. 12. I

    Variance Analysis

    Spacely Sprockets 2001 Budget Executive Summary File: SGMU M:MSMFin642Spacely-Budget.xls Last Revised: 12/17/01 Prepared by: Tom Gruber General Budget calls for reasonable increases in sales, prices and expenses except for labor. We have to keep overtime under control to return to profitability. Sales Set re

    Variance Analysis

    Westport Furniture 2001 Budget Executive Summary General To hit Mr. Westports profit goal of $70000, our 2001 budget is very aggressive in expense reductions (especially in direct labor) and somewhat optimistic on revenue given the pressure from plastic tables. Margin widens 5% points from 28% to 33%. Sales We have fo

    Death Spiral for Insurance Companies Profitability

    An insurance company has the following profitability analysis of its services: Life Insurance Auto Insurance Home Insurance Revenues $5,000,000 $10,000,000 $3,000,000 Commissions (1,000,000) (2,000,000) (600,000) Payments (3,000,000) (7,300,000) (2,000,000) Fixed Costs (500,000)

    Choosing Performance Measures

    The president of the Canby Insurance Company has just read an article on the balanced scorecard. A company has a balanced scorecard when there is a set of performance measures that reflect the diverse interests and goals of all the stakeholders (shareholders, customers, employees, and society) of the organization. Presently, Can

    Indirect cost rate per truck trip budgeted costs

    14-19 Fruit juice, inc. processes orange juice as its East Miami plant and grapefruit juice at its West Miami plant. It purchases oranges and grapefruit from growers' cooperatives in the Orlando area. It owns its own trucking fleet. It takes the same mileage to go to each Miami plant from Orlando. The trucking fleet is run as a

    Walters Company: incremental monthly revenue, accounting for joint costs

    This problem is titled Processing Further. # 2 Walters Company is considering producing 120,000 pounds of paperclips and 140,000 pounds of staples each month from their current production of grade A and Grade B wiring. The following are the expenditures to date: Jan 1 $100,000 Bulk steel purchase Jan 2 - Feb 15 $150,0

    Accounting Equation Chart

    The balance sheet at 12/31/04 and 12/31/05 show the following: Current Assets Long Term Assets C Liabilities LT Liabilities Owners Equity 04 ? ? $360,000 ? ? 05 ? $750,000 ? ?

    Stock valuation: Company ABC

    Company ABC's earnings and dividends will grow at 6% during the next five years. Its growth will stop after year 5. In year 6 and afterward, it will pay out all earnings as dividends. Assume next year's EPS is $10 and the dividend is $5 and the market capitalization rate is 9%. What is ABC's stock price?

    Solving a residual income equation (what is the right formula)?

    A google search has left me still confused as to what the "right" residual income equation is: http://swoba.hhs.se/hastba/abs/hastba1999_010.htm Help please: kindly write all the CALCULATIONS IN an EXCEL SPREADSHEET, so I can follow and better understand exactly what goes into a firm price's calcuation and a residual income c